Business Environment Report: Analysis of Marks and Spencer Operations

This report provides a detailed analysis of the business environment of Marks and Spencer (M&S). It begins with an introduction to the business environment and its importance for organizational success. The report then explores the company's nature, size, and scope, highlighting its operations in the UK and its multinational presence. Task 1 focuses on different types and purposes of organizations. Task 2 examines the relationship between various organizational functions (marketing, human resources, production, finance, and R&D) and their alignment with company objectives, emphasizing M&S's flat organizational structure and employee involvement. Task 3 delves into the positive and negative impacts of the macro-environment on M&S's business operations, utilizing a PESTLE analysis to assess political, economic, social, technological, and legal factors. The report concludes by discussing the implications of these factors on M&S's strategies and performance. The report also covers P1, P2, P3 and P4 learning outcomes.

Business Environment

INTRODUCTION
Business environment can be defined as the place in which various actions and dealings
of the business are being conducted in an effective style so that aims and objectives of the
organisation can be achieved in a proper way. It consists of some internal and external sections
which have the impact on the operations of company which also includes its employees, partners,
customers etc. This is very important for each and every organisation to interpret the
surroundings in which they suit it and then decide their business operations as it will help them
in making huge profit in the market and achieving growth and development as well (Agarwal,
Grassl and Pahl, 2012). The company which will be mentioned in this assignment is Marks and
Spencer. This can be considered as an efficient clothing and retaining establishment in UK which
is handling in several other sectors successfully. The assignment will mention the details related
to nature, size and scope of the company which is being operating in various types of business
surroundings. Along with this, their interrelation with other organizational roles and their linkage
with the targets of the company will be achieved. This will also help in assisting and assimilating
the positive and negative effects of the small environmental factors of the company.
TASK 1
P1 Different types and purposes of organisations
Matter present in Presentation
P2 Size and Scope of various types of organisations
Matter present in Presentation

TASK 2
P3 Relationship between different organisational functions and its link with organisation
objectives
This is well known about every company that it is created in relation to
different aims and objectives therefore the operations done by them in the business
environment is also different. So, it is very important for these companies to design
their organisational structure as their goals and objectives so that it can be achieved
in an effective manner (Dahan and et.al., 2010). Since Marks and Spencer is a
operating in a public limited company and the employees are more than 85000 in
no. It is considered as a multinational company which is dealing in so many
segments like Food products, luxury items etc. and to produce these things they
will need money so that all these operations are completed effectively.
This has also been observed that Marks and Spencer is having a flat
organisational structure since all their operations are being conducted by their
employees who are working in their store. Through these types of structures, Marks
and Spencer is providing motivation and encouragement to their employees so that
they participate in the decision making process of the company which is conducted
to carry out to make new plans and policies for the company. Since the referred
company is having so many employees so if the company will include them in the
decision-making process then it will be very beneficial for the company.
There are various types of functions and activities that are performed by the
employees of Marks and Spencer. The functions are like Human resource
management, R&D department, Accounts and Management, sales and finance etc. It
is very much necessary for the companies to recruit the employees who are efficient
in their work so that their skills can be helpful for the company in achieving their
goals and objectives (Fernando, 2011). Also, it is crucial for them to make sure that
all the functions are being designed as per the structure of the company so that it
can assist in achieving the aims and objectives in a proper manner.
Therefore, the interrelatedness between the structure of organisation along with the
functions being followed are determined as under:

Marketing Department : This can be considered as the most important function for
each and every company because through this only function only company is able to
sell their goods and services inside the market area ( Gebauer, Paiola and Edvardsson,
2010). Because of this function, management is able to know the needs and demands
of the customers through which they can produce goods and services in that form
itself. This department is having a positive factor that it is having connection with
all the other departments and functions that are performing their activities in the
company. So, it will eventually help in achieving competitive advantages in the
market.
Human Resource Department – This can also be regarded as one of the most
important department of the company because it is these people only who are having
the responsibility to recruit correct and effective people in the company. If they will
perform their work in a proper manner then company will be able to make an
effective team who is doing their work in a productive manner. Through this, they
will provide help to other departments as well.
Production and Operations - It is that department which is having the
responsibilities of producing all the types of goods and services within the
company. The functions that are included in this are being performed at the starting
point only. The people who are working in this department is having a clear picture
of the type of goods that are required to be produced by the company and thus they
produce their products as per the demands and needs of the employees as well.
Marks and Spencer is also producing and designing various types of goods and
services so that they can satisfy the needs and demands of the customers.
Accounting and Finance - Under this department, a strong connection is being
considered between monetary transactions which are being occurring in the nation
on regular basis. It is also necessary to know that it is these departments who are
allotting money to various other departments of the company because of which all
the functions will be carried out in a positive manner. It includes creation of assets,
doing survey in markets etc. So, by presence of this department organisation will
also perform (Halbert and Ingulli, 2011).

Research and development – It is that department who is having the responsibility
of analysing the needs and demands of customers so that customers can get their
products as per their needs and demands. Even if it is large or small company, a
detailed research analysis is required to be conducted so that they can attain the
goal of the company.
TASK 3
P4 Positive and negative impact of Macro environment on Business operations
There are so many factors which is available on the business environment and
is also having strong effect on the activities of the company but the company is not
having any control on the external factors. The factors can be both internal and
external. Both these factors are having both positive and negative effects on the
operations of the company (Hamilton and Webster, 2015). It is impacting the rules and
policies which is being performed by the management of the company. In Marks and
Spencer also, they are following various policies which is playing a very important
part in the company as it is helping them in achieving their goals and objectives as
well. So, the management will make use of PESTLE Analysis to get to know about
the positive and negative impacts of the factors of the company. So, PESTLE
analysis of Marks and Spencer is conducted as follows :
Political factor – Under this, the rules and regulations which are designed by
the government are considered. So, it is said that if any new law will be introduced
by them then it will give a deep impact on the functioning that are being done by
the conducted inside the company. So, it is very much necessary for the company to
be aware about these additions by the government.
Affirmative effects –The good thing which is included by this development is that
it will assist in conducting the operations of the company in more proper way.
Through the introduction of Free trade policy, company will be able to do their
operations in more proper manner. Effect of Brexit can also be noticed due to this.
Destructive effects – This is also required to be noticed that Organisations like
Marks and Spencer will be able to attain the assets at a developed price and this will
not be a profitable situation for the company as through this, they might loose their

customers as well. So, it is required that the companies should maintain good
relation with these government bodies so that they can accept these changes in a
suitable manner and benefits the whole organisation as whole (López-Gamero, Molina-
Azorín and Claver-Cortés, 2011).
Economical factor – These are the factors which is having their relation with
the factors like inflation,growth rate. Wages etc. of a particular company. These
factors are having different perspectives in every country and since Marks and
Spencer is also operating in so many countries therefore they are required to focus
on these factors very carefully. This is very much necessary to make sure that if any
kind of changes will be introduced inside the economy then it will have a strong
effect on the sales function of the company and the growth factor is also
impacted(Mahmood and Hanafi, 2013). Due to this, management of Marks and Spencer
is obliged to implement these changes that are inserted in the business
environment.
Affirmative effects - Its optimistic impacts are like when there will be increase in
prices of the products then the flowing of assets will increase which will that will
benefit the people in a positive manner and more money will be collected by them
and thus chances of doing more sales will increase.
Destructive effects – It is necessary for the management to remember that the
business environment is being working in a dynamic environment so they have to
include the changes that are happening in them on non-stop manner so that they can
remain in trends all the time.
Social Factor – These are the kind of factors that includes various types of
changes and modifications in the demographic areas of the business environment.
These areas include social mobility, labour, living style etc. It can also be said that
the major development in the companies are because of these elements itself.
Positive effects – It can be assumed that because of these elements, Marks and
Spencer will be able to grab several opportunities that are present in the business
environment. This has become possible only because the people in management will
be in touch with the people living in society and it also aids them in making new
customers.

Negative effects – Under this, it is being described that there are various chances
when any kind of product is being launched by the company but it does not match
with the demands of the customers then in such case it might have a negative
impact.
Technological Factor – In this factor, it is discussed that many new
technologies are being introduced by the researchers in the society which is being
used by various companies so as to do their operations in more effective manner.
Marks and Spencer is also doing their operations by using various types of
technologies and it is helping them in becoming more efficient ( Agarwal, Grassl and
Pahl, 2012).
Positive effects – This factor is having a positive impact on the business activities
of Marks and Spencer as through this they will be able to complete all the activities
within specified time and achieve efficiency as well.
Negative effects – They will have to invest more amount of funds for implementing
technologies in the company.
Legal Factor – It includes the law which is created by government and it is
needed to be implemented by every organisation ( Aterido, Hallward-Driemeier and
Pagés, 2011).
Positive effects – If Marks and Spencer will follow all the laws then it will bring
them into a safer zone as all their activities will be considered as legal and it will
help them in making a good image in front of the customers as well.
Negative effects – Following these laws sometimes may also lead to disrespecting
their own management policies.
Environmental Factor - Under this element, all the resources which are
present in the business environment that are having a powerful consequence on the
company is being considered.
Positive effects - By considering this element, it can be noticed that this will help
in reducing red tapism and thus activities will be implemented in a proper manner.
Negative effects – The company is required to decline all paper work and start
using internet activity because of which decline in inadequate work get done.

TASK 4
P5 Internal and External analysis of Marks and Spencer
While doing analysis of the internal environment, the association is needed to
conduct SWOT ANALYSIS and for external analysis, they are necessary to do
Pestle and all these will be implemented by administration of Marks and Spencer
(Auzair, 2011Avramenko, 2012).
Therefore, Swot analysis of Marks and Spencer is being conducted in the following
manner:
Strengths Weaknesses
 Company have positive reputation and
great brand name icon in the
marketplace.
 It is also enjoying unique selling points
associated with the products.
 They are maintaining effectively
designed infrastructure and enterprise
environment.
 They are one of the most awarded
companies of the industry.
 There are several problems in the
environment of company as the
management is under pressure because
of miserable performance of their
clothing commercial enterprise sector.
 A deduction in the pre-tax profits can
also be seen as this is reduced down by
9.7%.
 In comparison to their competitors, the
products of their prices is high.
 All the consumers are not at all happy
with the kind of products and services
they are receiving from the brand.
Opportunities Threats
 They have opportunities in developing
the commercial enterprise under online
sales market.
 It has also gained effective trans-
actioning in the banking sector.
 It is growing at a very slow speed in the
market which has become a threat to
them.
 There are so many solid competitors
present in the market which can create
problem for the company in doing their
operations.

Its PESTLE analysis are as follows:-
FACTORS EXPLANATION
Governmental  They are working in constantly changing political climate
 Frequently building policies of government
 Policies related to tax.
Economic  They are showcasing rise in the income of the people of UK.
 Providing opportunities for employment.
Societal  Focus on the frequently changing taste of consumers.
 They are having a strong political brand image by following the
policies.
Technical  Technological Changes are having a positive impact on the
economy.
 They are providing various types of information and
communication solutions.
Lawful  They are having policies for standard packaging and are using
Eco-friendly material as well.
Environmental  They need to focus on waste management.
 Introduction of programmes titled as Plan A for bring off the
waste resources of company.
P6 Interrelation of Strength and weakness with external Macro factors
It is extremely crucial to relate strengths and weaknesses of the organisation
with the external environment factor so that they could be examined and appropriate
decisions could be formed. The strengths and weaknesses of a business could be
further influenced by the factor persistent in the external environment, therefore it
is essential to analyse them so that sustainability of the business could be
maintained.

Strengths of a business states the area in which a business performing in the decent
manner. Marks and Spencer is known to be possess a strong distribution network which is being
further strengthened due to political stability which has been offered by the government. The
advancement in terms of technology have helped this organisation to venture into E-commerce
platforms. The Plan- A which has been launched by the company stands appropriate in terms of
environmental concerns and have uplifted reputation and credibility in the market. This
organisation have been working strongly on social grounds as well as it has been successful in
catering distinct demands of people in the ideal manner.
Weaknesses which are being possessed by this organisation have been
enhanced as well due to dynamics in the external environment factors. Marks and
Spencer have been performing poor when it comes to financial grounds which is
further enhanced due to Britain opting out of European Union. This feature have
brought major slowdown in the economy for a short period further decreasing
revenue attained by this company. The availability of similar product that too priced
lower than M&S have emerged to be a major setback on economic grounds for this
organisation. This organisation have been involved in a financial dispute with
Frascati Landlord which has emerged to be a major weakness on legal aspects.
CONCLUSION
From the above report, it can be concluded that business environment is a very important
part of a business organisation since from here only all the resources are obtained and all the
operations are being performed. These kinds of environment are considered as dynamic in nature
and changes with time so it is required that the management should understand all of these
changes so that it does not have any bad impact on them. In this report, different types of
companies are discussed who are doing their operations in the same business environment but
their size,scope and legal structure are very different. There are various kinds of tools and
techniques also like Pestle which helps the company in measuring the impact of environmental
activities in the business. Also, strengths and weaknesses are also required to be known so as to
apply appropriate strategies which is effective for the company in achieving their long term
goals.