Business Environment: Organization Analysis & Macro Environment Impact

This report provides a comprehensive analysis of the business environment, focusing on different types of organizations, including public, private, and voluntary sectors, and their legal structures. It explores the size and scope of these organizations, examining how their structure, size, and scope link to their business objectives and the products and services they offer. The report also demonstrates the interrelationship of various functions within an organization, such as marketing, finance, and human resources, and how these functions link to the organizational structure. Furthermore, it uses contemporary examples to illustrate the positive and negative influences of the macro environment on business operations, employing PESTLE and SWOT analyses to identify strengths, weaknesses, opportunities, and threats. The analysis justifies how these factors influence decision-making within organizations, providing valuable insights into the complexities of the business environment.

Business and Business Environment

Table of contents
Introduction........................................................................................................................4
LO1: Explain the different types of organizations, including their size and scope............5
P1. Explain different types and purposes of organizations; public, private and voluntary
sectors and legal structures...............................................................................................5
P2. Explain the size and scope of a range of different types of organizations.................6
M1. Analyze how the structure, size and scope of different organizations link to the
business objectives and product and services offered by the organization......................8
LO2: Demonstrate the interrelationship of the various functions within an organization
and how they link to organizational structure..................................................................10
Explain the relationship between different organizational functions and how they link to
organizational objectives and structure [P3]....................................................................10
To achieve M2, you should analyze the advantages and disadvantages of the
interrelationships between organizational functions and the impact that they can have
upon organizational structure..........................................................................................12
LO3: Use contemporary examples to demonstrate both the positive and negative
influence/impact the macro environment has on business operations...........................13
Using PESTLE identify the positive and negative impact the macro environment has
upon the business operations of your chosen organization. You should support your
answer by specific examples from your chosen organization [P4].................................13
Using SWOT or TOWS conduct an internal and external analysis of your chosen
organization in order to identify its strengths and weaknesses and explain how strengths
and weaknesses interrelate with external macro factors [P5, P6]..................................16
To achieve M4, you should apply appropriately SWOT/TOWS analysis and justify how
they influence decision-making by your chosen organization.........................................18
Conclusion.......................................................................................................................19
Reference list...................................................................................................................20

Introduction
Business can be understood as organized efforts of various teams and employees to
supply consumers with products and services for a profit. Business can vary in their
size, depending on number of employees or revenue generated in every quarter.
Businesses can be public, private and voluntary. Primarily, the purpose of businesses is
to build profits and growth. The term ‘Business Environment’ refers to forces, factors
and institutions, that are beyond the control of business and they affect the functioning
of the business enterprise. These factors may include suppliers, competitors,
government policies, technological factors, customers etc. These factors are
uncontrollable in nature and can directly or indirectly affect the business, its location, the
distribution system, personnel policies. Understanding the various components of
business environment like political aspects, socio-cultural aspects, the political
framework is important for running the business smoothly. In this study, concept of
different types of business and various components of the environment that affect the
business are discussed.

LO1: Explain the different types of organizations, including their size and scope
P1. Explain different types and purposes of organizations; public, private and
voluntary sectors and legal structures.
In the market of UK there are mainly three types of organizational structure prevailing they are
public, private and voluntary.
Public organizations
These organizations are also known as the State sector. The public organizations
consist of both the public services and public enterprises. This sector of the economy
consist of the organizations providing service to the public which can include military,
police, public education, infrastructural organizations building bridges, roads, water
supply to the public and this organization also provide health care to the public residing
within their society. The main motive or purpose of their organization is to provide
service to the public and not profit making and even if they generate profit it is their
responsibility to implement that profit for the welfare of the society (Brewster and
Hegewisch, 2017). Here, considering Network Rail as the public organization, providing
the transport facility and the scope for job to the public of UK. The legal structures that
the Network Railway consists are mainly the boards of directors who are accountable
for the management of the organization. There are mainly two types of members
present in the board of directors they are the organizations who are holding the licenses
to operate the business and the other members of the organization are elected by the
independent panel of the government and they serve the company for a term of three
years.
Private Organizations
Private organization are the organization which are owned or governed by public of an
economy structure and the main motive of the private organizations are to make profit
out of the economy and to grow their business market. Another objective of the private

organization is to provide more amount of job scope to the people than that of the Public
organizations. The private organization can be anything providing any service or
product which the public of that economy requires. The private organizations have
different types of structure keeping in mind the nature of the work and the objective that
the organization needs to achieve. Here considering Marks and Spencer as the private
organization, proving a different range of goods and service to the people of UK. The
structure that is prevailing within the Marks and Spencer is a flat organizational structure
which means that the business or the organization is limited to different levels of
management varying between administration level and a front line employees. The main
motive of this structure is to minimize administrative indulgence and to make the worker
more skill efficient in order to make the most benefit out of them (Chelladurai et
al,.2017).
Voluntary organizations
A group of members or voluntary groups that provide non-profitable service to the
society are known as Voluntary organization. In a voluntary organization the
membership of the members are also not necessarily voluntary. In many areas they are
also called the common interest groups. These groups include charities, NGOs,
professional associations, trade unions, environmental groups. In these organization is
it mandatory that the volunteers are paid for what they are doing. In these voluntary
groups the different group from different background comes in an agreement to achieve
a purpose which is actually for the benefit of the society. Here considering Water Aid as
the voluntary organization of UK, providing water help to 34 countries around the globe.
The purpose of this origination is to provide water facility, hygiene education to those
countries that are under privilege in water facility since 1981. The legal structure of this
organization consists of board of trustees, chief executives, president, vice president
and the local partners. With this legal structure Water Aid, the voluntary organization
serve their noble works to the different part of the world (Fehon and Garrard, 2017).

P2. Explain the size and scope of a range of different types of organizations
The size of an organization can affect the business process and quality of the service or
the product served to their customers. The organization are categorised under size by
their number of employees and the number of market shares available.
Size and scope of Public organization (Network Rail)
Network Rail, being a public sector comprise of more than 37,000 employees. By the
number of the existing employees we can easily get that this organization will be
categorised under a large sized organization. There must be proper management
control and decision making process within this large public organization which can
result in a better quality of service to their customers. Better training and better quality of
service can be done with the help of better training process and recruitment process.
Not only the use of labour but also the best possible use of technology can enhance the
quality of service and reduce the use of labours in the organization (Fehon and Garrard,
2017).
Size and scope of Private Organizations (Marks and Spencer)
Marks and Spencer consists of 84,939 numbers of employees working inside the
organization, which makes Marks and Spencer to fall under large business size.. It is a
private retail store which was established in 1884 and is considered to be the first retail
store of Britain. The company being a worldwide based private company increases the
scope for employment within the mass and also helps the economy by providing the
right quality of taxation. The use of technology like internet and other social platforms
can enhance the business reach. The market of Marks and Spencer can also be
increased by providing more amount of labour power in the different regional market
(Jegers and Verschueren, 2016).
Size and scope of Voluntary organizations (Water Aid)

Water Aid is an international voluntary organization consisting of employers within the
range of 500 to 1000, which conclude that this company can be categorized under
medium sized business houses. This organization was established on July, 1981 and
their main motive is to educate the mass about the importance of water and healthy
sanitation. This organization serves 34 countries around the globe about the water
education and hygiene education. The scope of this company can be increased by the
modern use of technology and different mediums of information flow to enter the market
where it is still unexplored and lacking in health, water and safe sanity education. The
chain of communication can be improved to provide better quality service to the mass
and creating an impression more firmly overly (Grobler et al., 2015).
M1. Analyze how the structure, size and scope of different organizations link to
the business objectives and product and services offered by the organization
The analyses of the organizations are as follows:
Network Rail: The Network rail follows a “Matrix” structure within their business and as
it is a large sized company, the matrix structure will help the organization to set a high
objective and by following the structure, the organization can easily achieve the
estimated mission. The matrix structure also helps the each employee of the
organization to participate in each and every level of decisions of the organization- thus
making the decision a much more valid one.
Marks and Spencer: This organization follows the “Horizontal” structure of
management, which reduces the involvement of third parties within the business and
other managerial executives with their customer creating a better impact on the
customers’ minds. Since the involvement of the third parties is greatly avoided, so it
helps in creating an effective communication system among the organization and the
employees of the organization (Jenkins, 2017).
Water Aid: As this is a non-profit seeking organization, it follows a “Linear”
organizational structure, which helps the organization in making easy decision-making

and implementation of the policies. In linear structure, there is straight managerial level
so it also becomes easy to understand and that helps the organization to function well.
The structure is much like that of hierarchy and hence information flows directly from the
higher to the lower managerial level without much loss in information and data (Spear et
al., 2017).

LO2: Demonstrate the interrelationship of the various functions within an
organization and how they link to organizational structure
Explain the relationship between different organizational functions and how they
link to organizational objectives and structure [P3]
There are a number of departments that are present in any organization and
maintaining proper inter relationship among them actually facilitates the overall
development of the organization. As identified by Kadelbach (2017), the different
departments that are present in an organization may include the marketing, finance,
human resource and the research and development wing. Maintaining a proper inter
relationship actually facilitates that the activities and the operations of the business are
carried out in a proper and effective manner. Maintaining a proper inter relationship
among the different organizational functions and structures is often considered as the
key to success for the different organizations.
Inter relationship among the sales and the research and development department
It is quite an obvious fact that the marketing and the research and development
department needs to maintain a proper inter wined relationship among them. The
marketing department of Mark and Spencer’s is entitled with the responsibility of
positioning the brand as well as creating a suitable image of the organization in the
market. The marketing department actually plays a pivotal role in promoting the different
mission, goals and vision of the organization. It needs to be mentioned in this regard
that the marketing department actually helps in maintaining a proper relationship among
the organization and the customers of the organization. The researches carried out by
the marketing department helps in estimating the exact demand of the product and the
services. The reports are then submitted to the research and the development wing and
it is the duty of the research and the development wing to develop new products or
modify the existing ones accordingly. Thus a proper inter relationship among the
marketing and the research and development wing helps in accessing what the

customers actually wants and it helps to modify the products of the organization
accordingly.
Interrelationship among the marketing and the finance department
The finance department forms the backbone of the whole organization and as stated by
(Kramer, 2018), practically none of the duties of the organization are possible without
proper sanction from the finance department of the organization. Whenever the
marketing department conducts a proper survey, it is needful for the department to take
proper permissions from the finance department of the organization to carry out the
different activities of the organization. The budget that is prepared by the marketing
department needs to be sanctioned by the finance department of the organization for its
approval. A proper inter relationship among the finance department and the marketing
department helps the marketing department in conducting the different activities of the
organization effectively, it ensures the seamless activities of the organization (Sharma
et al., 2017).
Inter relationship among the human resource and the marketing department
It is quite an obvious fact that the marketing department actually requires huge amount
of work force for conducting the different market research activities of the organization.
The job of the human resource department is to recruit individuals who are effective
enough in carrying out the different activities of the organization. A proper inter
relationship among the marketing and the human resource department helps in
maintaining the different activities of the organization effectively. This type of activities,
help the human resource department in analyzing the exact criteria of the individuals
that are needed by the organization. As identified by Spear et al. (2017), this type of
inter-relationship turns out to be effective both for the marketing and the human
resource department. On one hand, it helps the marketing department to convey as to
what type of individuals is actually needed by the organization. On the other hand, it
also enhances the overall work force of the organization
Inter relationship among the finance and the research and development wing

The research and development wing of Mark and Spencer’s help in analyzing the
different new and effective technologies as well as products that may be useful for
satisfying the customers of the organization. It is an obvious fact that whatever steps
are taken by the organization, it will always require some sorts of financial support and
this is exactly where the importance of the finance department pops up. Just like the
marketing department, all of the activities that are designed by the research and the
development wing need to be sanctioned by the finance department for ensuring the
different activities that are thus designed by them. Thus a proper inter relationship
among the finance and the research and the development wing aids the overall
development of the research and the development wing and hence of the organization
(Spear et al.,2017)..
To achieve M2, you should analyze the advantages and disadvantages of the
interrelationships between organizational functions and the impact that they can
have upon organizational structure.
However, the disadvantages that are obtained from these type of activities should also
be considered to a great extent. The greatest of the disadvantages that are obtained
from these type of organizations are that often maintaining an effective inter relationship
among the different organizational functions creates ample commotion and confusion in
the organization. There are a number of instances where maintaining a proper inter
relationship among the different organizational functions have affected the overall
organizational structure and functions in an adverse manner (Spear et al., 2017).

LO3: Use contemporary examples to demonstrate both the positive and negative
influence/impact the macro environment has on business operations
Using PESTLE identify the positive and negative impact the macro environment
has upon the business operations of your chosen organization. You should
support your answer by specific examples from your chosen organization [P4].
To identify influence of outer environment on the business enterprise, the first step is to
perform PESTLE analysis. Its gives a general overview and offers a comprehensive
outlook on the firms strategic business environment. Marks and Spencer is a major
retail company headquartered in United Kingdom, its deals with clothing, home product
and food products. The positive and negative impacts of PESTLE are discussed in
detail in the following section:
Factors Analysis Positive Negative
Political According to the
analysts, the
European commission
has decided to make
trade agreements
free. Lot of
geopolitical unrest
and global
uncertainties are
factors that may
directly influence
organizations sales
and revenue (Spear
et al.,2017)
No positive impacts
have been identified
so far
Due to eased product
imports, there has
been a dip in sourcing
costs. The company’s
sales decreased in
the last quarter of
2016 due to which its
plan to enter new
markets failed. The M
& S saw stalled
growth in 2016 and
closing of its twelve
stores in its
international
business.
Economical The economic
conditions of UK are
not at all appreciable.
No positive impacts
have been identified
so far
This situation has of
course created
adverse situations