Business Environment Analysis and Impact on Marks and Spencer (2024)

This report provides a comprehensive analysis of the business environment, focusing on Marks and Spencer (M&S). It begins with an executive summary highlighting the importance of balancing internal and external factors for organizational success. The report delves into different types of organizational structures (private, public, voluntary) and their characteristics, followed by an examination of M&S's size and scope, comparing it with other organizations like the BBC and Oxfam. The report explores the link between organizational structure, size, scope, and business objectives, particularly focusing on how M&S aims to achieve customer satisfaction and profitability. It then analyzes various organizational functions like finance, marketing, operations, and HR, and their impact on M&S's growth. The report also conducts SWOT analysis, examining the internal and external factors affecting the company, including the impact of the macro-environment. Finally, it concludes by summarizing the key findings and the strategic implications for M&S.

BUSINESS AND BUSINESS ENVIRONMENT

Executive Summary:
The following report is surfaced on the topic “business and business environment”. Business
environment plays the key role in an organisation. The external environment includes social,
ethical, political and economical aspects that affect the business. On the other hand the internal
environment includes the employees of the company, its stakeholders and management. A
balancer must be created between the external and internal environment of an organisation in
order to increase the overall output of the organisation. This report is dealt with a UK based
retail company known as Marks and Spencer. In the chosen company it has been seen that the
departments are interred linked with each other in order to achieve the goal of the organisation.
After completing the SWOT analysis on the strength and weakness of the company it has be
found that in 2017 the company has earned 115.7 million profit and is functioning worldwide.

Table of Contents
Introduction....................................................................................................................................4
P1. Types of organization and their structure................................................................................4
P2. Size and scope of the organisations.......................................................................................6
M1 Link of structure, size and scope to the business objectives and products and services. .....7
P3. Different Organisational function of an organisation and how, it enhance the growth of the
organisation...................................................................................................................................8
M2 Advantages, disadvantages and impact of inter relation of departments in an organisation. .9
D1 Impact of Inter Relation on an organisation and complexities of different organisational
structure ........................................................................................................................................9
P4. Impacts of macro environment on an organisation:..............................................................10
P5. Internal and External analysis of strengths and weaknesses:..............................................12
P6. Relation of strengths and weaknesses with external macro factors:....................................15
Conclusion:..................................................................................................................................16
References:.................................................................................................................................17

Introduction
The internal and external factor that affects the business organization is known as business
environment. The factors of external environment are political, social, technical and ethical
issues. The factors that is included in the organization’s internal environment arte employees,
management, working atmosphere, etc. There must be proper balance between the external and
the internal environment of an organization to enhance the performance of the organization.
Recently Marks and Spencer has overcome a great economic turmoil because of the sound
balance created between the external and the internal environment. In the assignment the
business environment of Marks and Spencer will be discussed.
P1. Types of organization and their structure
In the market there are various types of organizations based on their structure, Size and market
share. The organizations are explained below:
Private organization:
Private organization is a type of organization which, is owned by an individual. The main motive
of the private organization is to earn maximum profit. The private sectors are short lived in the
economy because any time an individual can close the organization if it does not earn any profit.
The rate of unemployment is very high in private sectors because the level of job satisfaction is
too low. Private organization often neglects the employees well being because their main motive
is to earn profit. The market share of the private organization is low compared to the public
sector. Private organization often compromise with the quality of the product in order to earn
maximum profit. Private organization follow single line structure that is the structure is based
on hierarchy.
Private sectors are ruled by the state legislature. All the activities of the private sectors are
intervened by the state legislature of the concerned area. Sometimes multinational corporations
are also involved to check the workings of the private sector. It has been often seen that the state
legislation perform evil practices with a particular company. Sometimes the owner of the private
organization choosers self rule so, that there is no external intervention in the organization.
Legal structure
In private business the liability of member is based upon the share they hold in the firm.
The number of shareholder cannot exceed more than 50. A private firm cannot sold there share
publicly without offering their shareholders first. A private firm in order to register themselves

need to have more than 50 employees and more than 2 directors. Other than this the annual
turnover should more than 10.2 million and asset worth 501 million.
Public organization:
A public organization is run by group of individuals having same business motive. A public
sector organization has two fold objectives it looks after the wellbeing of the employees as well
as the profit of the organisation. Job security in the public sector is much more than a private
sector. The market share of the public sector organisation is much more compared to the private
sector. Government sectors are based on the rules and regulations made by the government of
the concerned geographical area.
The organisational structure of the public sector is explained below:
Vertical; Structure: Most of the government organisation follows this structure. In this structure
the concentration of employees remain less at the top and more at the middle and base.
Horizontal Structure: In this structure the concentration of employees increases down the row. In
this structure the number of supervisors is less compared to general employees.
Divisional Structure: To enhance the efficiency of the employees' government sectors divide the
employees according to their responsibilities.
The firm can sold its share in stock exchange. The minimum share capital should be up to
50,000 and paid share capital should be at least 12,500. IN order to become private firm they are
required to make changes in Memorandum and Article of Association and have to resubmit them
in the registrar.
Voluntary Organisation:
Voluntary organization is a type of an organisation run by group of individuals who have some
common economic interest. Voluntary organisation is divided into various sectors like charity
sector, the third sector and non profit sector. Voluntary organisation falls in between private and
public sector. They address the issues that are not taken care by the private and public sector.
Voluntary organisations are partially ruled by the charities they are registered. In order to
register themselves under the Charities Act 2006, the organisation is required to demonstrate that
its set up with aim that are charitable and their work are carried out for public benefits. An
organisation established for charitable purpose mustr register themselves with Charity
commission only if it has income over £5,000 a year.

Organisational structures have some complexities that are needed to be overcome by the
organisation to increase the productivity of the organisation. The complexities of the
organisational structure are explained below:
In private sectors the employees are often dominated by their superiors and their well being is
also neglected as they follow a hierarchy organisational structure. On the other hand public
sectors follow a structural flowchart. The structure of public sector organisations is horizontal
structure where, minimum employees are present at the top of the organisation and maximum in
the ground level of the organisation. Then comes the vertical structure where, employees of the
organisation are placed horizontally. Lastly comes the divisional structure where the employees
are divided according to their skills and responsibilities in order to enhance the productivity of
the organisation.
P2. Size and scope of the organisations
In the market there are various types of organisations which, differs from one another in
their size, structure and market shares. Different types of organisations explained below:
Scope and Size of Mark & Spencer:
Mark and Spencer is the first corporate retail of UK. It has earned a profit of one billion in its
initial days. Presently it earns 115.7 million profits. It operations worldwide. Mark and Spencer
have 979 stores in UK and in India it has 58 stores. Internationally nit has 454 stores. It operates
in Spain, Turkey, Poland,etc. Beside clothing now they sell food product. In recent time the firm
has seen growth in its market share, the number has reached to the number of 28.2% which is the
growth of total 1.3%. The latest sale of the firm in year 2017 was recorded £49,897
It has hospitality and home store outlets as well. In Order to enhance the overall productivity of
the company it has also initiated online marketing. In order to functions globally the company
has launched various social media campaign.
Scope and size of BBC:
British Broadcasting Corporation is the world’s oldest broadcasting house with it’s
headquartering at London. It has engaged more than 20 thousand employee worldwide. It
provides worldwide service. Presently, BBC has launched online website to provide service
worldwide. It earns the revenue of 4.963 billion and it is considered as the most trusted media
organisation in the world. In order to increase the overall viewer ship they are going to launch
online video streaming software so that broadcast live videos (Bharadwa et al. 2013, p.540).

Oxfam International:
Oxfam International is a non profitable organisation which assesses the working of various
voluntary organisations of UK. It is divided into various committees to perform social activities
like eradicating poverty, illiteracy and health related issues. The organisation has launched their
website so, that people can come to know about them globally. It functions in various regions
like Belgium, France, Germany and India.
Mission
The main mission of the Mark and Spencer is to expand their business and customer base
so that more profitability can be bought in the firm. On the other hand the main function of BBC
is to provide their viewer with authentic information and gain employee satisfaction.
Scope
M & S have great chance of success in the international market of developing countries.
With changes in trade law, it will work in the benefit of the firm. This will play major role in the
growth of the firm and will also optimize their profitability. BBC is already a global company
that is operating in many countries. In current time the firm is focusing on their scope of
development. The firm is paying special attention on their employee relation so that trust and
loyalty can be gained.
Objectives
The main objective of the Mark and Spencer keep getting better so that they can provide
better services to their customers and earn customer satisfaction. Other than this they are also
working to improve the involvement of customer toward the firm. They are providing their
employees with better training so that they can treat their customer fairly and can perform their
work better.
M1 Link of structure, size and scope to the business objectives and products and services.
The main aim of the firm is to sustain in market for longer period and optimize their
profitability while gaining customer satisfaction. The size of firm will help them in reaching to
the customer of different area and providing them with quality services. The main scope of the
firm is to increase their customer satisfaction so that profitability could be earn, in order to so the
firm will try to make major changes in their services and product so that they can meet the
demand. This show how structure, size and scope are linked with business objectives.

P3. Different Organisational function of an organisation and how, it enhance the growth of
the organisation.
All Organisations are divided into various departments who perform different activities to
enhance the overall productivity of the organisation. The functions of the organisation are
marketing, finance, operations and HR. The organisational functions of Marks and Spencer are
as follows:
Finance: This is one of the major departments of the concerned organisation. Finance
department of an organisation looks after the budgeting of the organisation. The finance
department of Marks and Spencer maintains the budget of the organisation b reducing the
company’s unnecessary expenditure. By retaining the amount of the profit the organisation
provides best priced to the customers.
Marketing: The marketing department of an organisation performs the promotional activities. It
helps the company to reach to its targeted audience so, that it can earn profit. The marketing
team of the company enhances the overall productivity.
The marketing team of Marks & Spencer attracts customers and retain the old customers. The
marketing team of the organisation has launched website of the company so, that it can reach to
its targeted audience within no time. Various marketing campaigns are launched by the
marketing department so, that the overall output of the organisation (Werbach and Hunter, 2012,
p.548).
Operations: The buying and selling activities of the company are looked by the operation
department of the company. The supply strategy of the company ( Marks and Spencer) has been
revised by the operation department to reduces unnecessary supply expenditure.
Human resource: The human Resource department of the organisation looks after the training,
selection and recruiting process of an organisation. In Marks and Spencer the HR department
provides periodical training to the employees so, that they can enhance their skills. So, that the
overall productivity of the organisation increases (Boons and Lüdeke, 2013, p.304).
In an organization the departments are interrelated with each other to enhance the overall output
of the organisation. Interrelation and coordination among various depart also improves the
overall working environment of the organisation. It also creates job satisfaction among the
employees of the organisation because the work pressure gets divided among the departments.

The divisions of an organisation increase the efficiency of the workers. Lastly inter relation
between the department enhances the overall communication process of an organisation.
In Marks and Spencer inter relation among the departments benefits the stakeholders of the
company because they get a chance to earn a huge amount of profit. The inter relation between
the department of the company has increased the sale of the company and has made the company
world’s leading retail (Weiss, 2014, p. 504).
M2 Advantages, disadvantages and impact of inter relation of departments in an
organisation
Department inter relation has several merits and demerits that affects the company’s growth in
the market. The merits and the demerits are explained below:
Increases efficiency: inter relation between the departments of the organisation increases the
efficiency of the employees as they need to do only some specific job (Prajogo, 2016, p.23).
Variety of Job: According to Wild (2014, p. 504) in an organisation employees are often shifted
from one department to another department therefore the employees get various work to do in
order to increase their efficiency.
Communication process: Inter relation between the departments help to enhance the
communication process among the workers of the organisation.
Work diversity; Interrelation among the employee’s increases the diversity of the work place.
Disadvantages of Inter relation among the department are as follows:
Work becomes difficult: Inter relation among the department increases the work pressure among
the workers.
Dissatisfaction among the workers; Sometimes inter relation of the department creates
dissatisfaction among the workers because they might need to works in which they are not
skilled.
Improper distribution of work: interrelation among the department’s leads to improper
distribution of work among the workers.
D1 Impact of Inter Relation on an organisation and complexities of different organisational
structure

Inter relation among the department increases the overall output of the company in the
competitive market. It also increases the efficiency among the workers of the organisation and
also promotes diversity in the workplace along with effective communication. For instance the
operational department of the firm work closely with marketing and information department, this
both department provide production department with valuable input regarding the perception and
demands of the customers. This help the production team in adding additional features in the
product that can help them in attracting the customer and providing them with customer
satisfaction.
Complexities in organisational structure
Organisational complexity can be defined as the resources involved in an organisation,
department, system, team, process or a project. For e.g. in order to resolve single problem if fifty
people are involved than we can say that firm has complex structure. Its generally found in tall
structure organisation. Its also one of the reason why M&S decided to adopt flat structure in their
working.
P4. Impacts of macro environment on an organisation:
Political factors ECs free trade permission which has helped it
immensely.
Brexit related issues will be impacting the
business of M&S in terms of import and export.
UK legislations related to energy efficiency is
tight the business and operations of M&S is being
affected.
Economic factors · UK economy is decreasing and was 1.8%
in the year 2016.
The August inflation rate of UK has scaled to
2.9%.

Social factors The demographic complexities of the UK have
mixed impact over the business scenario.
· The decrease in the number of young
population has affected the clothing b business of
the UK.
· The diverse religious trend of UK has
diversified the taste of the customers and thus has
presented larger opportunity in front of M&S.
Technological factors · The advancement in the technological
aspects in the UK market has influenced the
business of M&S largely.
· The advent of online shopping will
enhance the customer connection of the entity and
thus create loyal customer base for it.
Legal factors · Being in the retail sector and being largely
depended on the services of the employees for
productivity, the employment related legislations
such as minimum working hour act and leave
related acts influences the business.
Environmental factors · The increasing environmental awareness
among the consumers has forced the entity to
adopt environment friendly approach.
· In this regard, eco-friendly clothing and
organically grown foods are being promoted by
the company.
Impacts:
Political: According to Carroll et al. (2014, p. 60) the political aspects like EC permission and
others have impacted the M&S business in dual way. The permission has helped the organisation
to operate in all over Europe simultaneously. On the contrary, Brexit has forced the organisation

make changes in its source of goods procurement and labour market. After Brexit the political
instability in the nation has increased. Many of the firm has complained that because of this
instability the investors are reluctant on investing in the firm in the fear of loss.
Economic: Economic perspective like developed economy has assisted the organisation in
keeping the product prices in a set standard. On the other hand, aspects like inflation and
negative growth of economy have posed threats to the market growth of the company. Other
than this the increase in the labour cost has increased the basic operation cost of the firm which
will have adverse effect on the profitability of the firm because of the high inflation rates.
Social: The increasing demographical diversification in the nation has helped the organisation in
devising different taste in terms of cloths and foods. It has also helped in product diversification.
On the other hand, decrease in the young population has surfaced to be a potential alarm for the
progressive clothing business of the company (Drucker, 2017, p. 300). The people now a days
prefer to shop in the bulk its good that Mark and Spencer provide both food and food items that
help them in attracting people.
Technological: The advent of technological advancement has impacted positively on the growth
of the organisation. It has helped the organisation to promote the products and services in an
easier way and in less time. But the [potential negative impacts include enhanced security issues.
Customers are to some extent less attracted towards these technologies as they offer minimum
privacy (Ebert et al. 2016, p. 20).
Legal: Different laws regarding both employees and the employer have been blissful for the
company to create the brand image. On the contrary, employment related laws has restricted the
power of the organisation in different functional regards and has thus exercised negative impact
on the entity.
Environmental: Environmental concern has become one of the governing aspects of business
environment now a day. The organisation M&S has been impacted in both negative and positive
ways from this. An Eco-friendly operation has earned the company fame in the niche market. On
the other hand, this has increased the operation cost of the organisation which can be deemed as
a financial burden for the entity.
P5. Internal and External analysis of strengths and weaknesses: