Business Environment Analysis: Types, Functions, and Macro Impact

This report provides a comprehensive analysis of the business environment, focusing on different types of organizations (public, private, and voluntary sectors) and their legal structures. It discusses the size and scope of these organizations, along with the relationship between their functional units and organizational objectives. The report evaluates the impact of the macro environment, using PESTLE analysis, on business operations, with specific examples from Marks & Spencer. Internal and external analyses are conducted to identify strengths and weaknesses, and the interrelation between these factors and the macro environment is discussed. The report uses Marks & Spencer as a case study to illustrate these concepts, covering aspects like marketing, HR, operations, and R&D, and their contributions to achieving organizational goals.

Business & the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
P1 Discuss different types and purposes of organizations such as public, private and voluntary
sectors & their legal structures....................................................................................................3
P2 Discuss size and scope of different types of organizations....................................................6
P3 Discuss the relationship between different organizational functions and their linkage to
organizational objectives and structure.......................................................................................8
P4 Evaluate the impacts of macro environment on business operations with specific examples.
...................................................................................................................................................10
P5 Evaluate internal and external analysis of selected organizations to identify strengths and
weaknesses.................................................................................................................................12
P6 Discuss how strengths and weaknesses interrelate with external macro factors..................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment consist of different factors that impacts the business performance
in both negative or positive manner. Business environment is The market place where in the
business operates, these involves internal and external forces of the business. The internal forces
of the business environment consist of factors which are controllable within the business
organisation, the external forces of the business contain factors that are uncontrollable and are
outside the business organisation. In order to support The report with relevant information and
example, Marks & Spencer is the chosen organisation to complete this report. Marks & Spencer
is a British global organisation which was founded in the year 1884 by Michael marks and
Thomas Spencer. The organisation is headquartered in London, UK. The organisation is
famously known for delivering its quality output and customer oriented services. The association
delivers number of services such as clothing, beauty products, bank services, food services,
home improvement items. This report covers types and the purposes of different organizations,
size and scope of different organizations, relationship between the functional units and the
linkage with organizational objectives, the positive and the negative impacts of external
environmental factors, internal analysis in order to evaluate the dream areas and the strengths of
the business and lastly how the strengths and weaknesses pertains to the macro environment
(Akhmetshin and et.al., 2017).
MAIN BODY
P1 Discuss different types and purposes of organizations such as public, private and voluntary
sectors & their legal structures
Public Sector Private Sector Voluntary Sector
Definition Public limited
organizations are
defined by such
businesses which are
listed under the
London stock
Private Limited
organizations are
such organizations
that are not listed
under the London
stock exchange.
Voluntary
organizations are
such organizations
that are operated for
improving the
societal development

exchange in UK.
These businesses are
generally with large
number of
shareholders and
enjoys certain set of
benefits apart from its
Ethical Brand image
in the market place,
these businesses Can
raise capital through
public finances and
have large number of
shareholders in order
to bear the losses and
business expenses
which helps in
reducing the financial
burden on liability of
the business.
(Calabrese and et.al.,
2018).
These businesses are
owned by sole
traders, private
investors or even
partnership. unlike
public limited
companies these
businesses cannot
raise funds from
public sources. With
number of
shareholders the
profit is distributed as
dividend to the
shareholders, the
business is being
controlled solely by
the owner of the
business and the
personal finances are
kept separate from
the business
transactions.
in the country. These
are also called as
non-profit
organizations.
Purpose The purpose of such
organisation is to
operate as a public
body and deliver
products and services
that brings utility to
the general public.
These includes public
The primary purpose
of such businesses is
to maximize profits
by delivering
products and services
as per the market
demand and trends.
The sole purpose of
such businesses is not
profit maximization
but to raise voices for
social issues and
concerns in order to
improve the societal
development and

infrastructure to
fasten economic
development and
societal development.
social welfare. These
businesses are been
funded by different
private and public
investors and
operated as per the
regulations
formulated by the
government of the
country.
Examples The example of
public limited
company is Tesco
which is a British
multinational
company
headquartered in
England, UK. The
company was
founded in the year
1919 by Jack Cohen.
It is a big retailer that
is famously known
for its services, the
association delivers
groceries and
consumer utility
products to its
customers. (Čepel
and et.al., 2018).
Example of private
limited company is
Virgin Atlantic which
is a British
multinational
company
headquartered in
England, UK. The
company was
founded in the year
1984 by Alan Hellary
and Randolph Fields.
The business delivers
airline services by
covering 30
destinations with the
fleet size of 38
Operating in
hospitality business
sector.
The example of
voluntary
organisation is
cancelled research
organisation which is
based out of UK. The
business is operated
for the sole purpose
of carrying research
campaigns in order to
educate the people
about cancer disease,
information about the
causes and prevention
of the disease by
maintaining a healthy
lifestyles and
eradicate the root
causing problem of
cancer from the
society.

Legal structure Tesco delivers
services to its
customers by
supermarkets, hyper
supermarkets and
stores and other
physical outlets to
deliver services and
products at one stop.
(Eling and Schaper,
2017).
Virgin airline
segregate the
business functional
unit into different
segments such as
managing bookings,
frontline workers,
customer oriented
services and
experience, customer
service and other
functional units in
order to function
different business
activities.
Cancer research, a
non-profit
organisation delivers
awareness and crucial
information to the
general public. This
association conducts
its operation by
consulting with
different doctors and
other health
professionals in order
to gather relevant and
precise information.
The associations have
nine clinical trial
units, seven
experimental cancer
medicine Centre,
seven graduate
training programs and
other pertaining units
in order to maintain a
proper flow of
carrying different
business objectives.
(Fabuš, 2017).
P2 Discuss size and scope of different types of organizations.

Micro enterprises Small Enterprises Large Enterprises
Size Micro Businesses as
such businesses that
have a turnover less
than £2 million and
house number of
employees less than
10.
Small-scale
businesses are such
businesses that have
an annual turnover
less than £10 million
and deployed
employees less than
50.
Large businesses are
such businesses that
have an annual
turnover of more than
or approx. £2 trillion
and a minimum of
5000 employees.
Scope Micro enterprises or
businesses that have a
low financial
capability and human
capital in order to
maintain the business
functioning the sole
purpose of such
business is to sustain
in the market and
grow the number of
sales, these
businesses hardly to
earn revenue in order
to cover the overall
business cost. One
such example of
micro business is
bass brewing
Company which is a
brewery based out of
south Wales. The
Small businesses of
such businesses that
are owned by sole
traders or other
private Partners with
minimum capital and
working staff. The
primary goal of such
businesses is to
acquire brand name
in the marketplace
and fulfil the
profitability margin
of the business. The
government of UK
delivers financial and
non-financial
Solutions to support
the growth of small-
scale businesses and
enhance the
economic
Large businesses as
such businesses that
are operated for the
sole purpose for
enhancing the
business activities
and accomplish
competitive
advantage. The focus
of Such businesses is
to maintain the
goodwill in the
market place by
delivering and
innovating products
and services Which
best suits the market
trend in demand.
These businesses
accomplish continues
improvement by
adopting to latest

company was
founded by Sarah
Jones. (Georgescu
and Popescul, 2015).
development and
social development in
the country. One such
an example of small-
scale business is
Marshfield bakery
Ltd which is based
out of UK with a total
strength of 82
employees delivering
bakery products to its
customers. (Grigore
and Drăgan, 2015).
technologies Another
tactic in order to
accomplish
economies to scale.
One such examples
of large business is
marks & Spencer
which has total 1519
physical outlets
globally, the revenue
on by the Association
is approx. £10.2
billion in the year
2020. The
organisation have a
total 75,000
employees deployed
in the business.
P3 Discuss the relationship between different organizational functions and their linkage to
organizational objectives and structure.
There are different functional units in Marks & Spencer wherein these functional units
work in collaboration and cooperation with each other in order to rightly focus on group goals
and accomplish organizational objectives as per the determined deadlines and standard. The
functional units and their linkage to organizational objectives and structure are discussed below
in brief:
Marketing & Research and development department: the marketing department are deployed
with responsibilities in order to manage promotional activities and formulate strategies to
enhance the sales and profitability margin of the business. Wherein the research and

development department is deployed in order to find out the latest customer preferences and
trends so that timely changes and improvements can be adopted to the market offerings and the
business function. The marketing and research and development department works in
coordination with each other where in the marketing department consults with the RND
department of accessing the information about the market environment and formulate write an
effective marketing campaign. The research and development department also delivers the
effectiveness of the market offerings and the marketing campaign in the marketplace in order to
evaluate that how far the business has been successful for communicating and matching the
customer and market expectations.
Human Resource and operation department: the human resource department is deployed in
order to shoulder responsibilities for managing the internal human capital and business
performance. Where in operational department in Marks & Spencer is deployed in order to
manage the day today business functioning and meet the working standards and expectations of
the business. Operational department has to perform number of activities such as relationship
with the suppliers, meeting the expectations of supply and demand in the market place, managing
the stock availability and so on. The human resource and operation department works in
collaboration with each other Where in the HR manager of the association delegates and assigns
job positions and work roles to different employees in the operational department. The
operational department communicate about the workforce required and the total number of
vacancies. The HR department for the carry out the process for recruiting and staffing employees
at the operational unit. The HR manager recruits the most skilled and talented candidates, access
the performance of the employees working in order to meet the performance as per the quality
standards determined by the business (Groşanu and et.al., 2015).
Research and Development and Sales department: the research and development department
carries activity in order to access information About the market environment by the measure of
market survey and research, draw a relevant statistic in data and communicate it to the business
executives. The sales department is deployed in order to manage activities to estimate sales per
unit, the grey areas other shortcomings in the sales margin and so on. Sales department and
research and development department works in coordination with each other as Research and
development department communicates about the sales trends, and how the sales department can

improve its functioning so that the business meets the expectations, timely deadlines and
profitability margins.
P4 Evaluate the impacts of macro environment on business operations with specific examples.
In order to evaluate the impact of the macro environment factors upon business
performance and operation by delivering specific examples, Pestle analysis is being conducted in
order to add the relevant information and examples. Pestle analysis is a framework of different
factors such as political, environmental, social, technological, legal and economic factors that
determines the overall external environment impact on the business performance. Pestle analysis
on Marks & Spencer is conducted as per:
Political factors
Political factors are such Factors that impacts the business performance due to the political
policies and framework of specific governmental and public authorities of the country. With the
introduction of BREXIT in UK, Marks & Spencer faced number of challenges in addition to the
low the value of pounds, freezed employments, restrictions for exports and imports, huge cost
incurred for acquiring raw materials as some challenges faced by Marks & Spencer in UK
(Huang-Horowitz, 2015).
Economic factors
With stable economic conditions and higher living standards in UK it makes favourable for
Marks & Spencer to grow and accomplish the profitability margin in the country. Marks &
Spencer Delivers quality products and services that matches the higher living standards and
lifestyle pattern of the people, managing the price as per the income segments of the targeted
customers and other approaches. The high purchasing power also delivers opportunities for
Marks & Spencer with high number of sales and profitability margin and business growth in the
competitive marketplace.
Social factors
With higher living standards and purchasing power, it becomes important for the association to
deliver market offerings that Matches the expectations and preferences of the people living in

UK. With higher economic and social development in UK that brings opportunity for Marks &
Spencer such as higher power and living standards of the targeted customers Which supports to
enhance sales and profitability margin of the business (Ištvanić and et.al., 2017).
Technological factors
With high technological advancement in UK where UK is one of the most technologically
advanced country in the world. That impacts the association in a positive manner, Marks &
Spencer adopts different technologies in order to bring productivity and efficiency in the
business. Adopting the latest technology helps to meet the market challenges, the association
adopts technological tools such as customer relationship management software, cloud-based
technologies, augment reality, artificial intelligence and so on. Marks and spencer also uses
technological tools and digital marketing approaches with the higher reliance over internet
platforms. Digital marketing approaches used by Marks & Spencer supports to promote the
products and services and turns as cost-effective approach to reach out to large number of
customers with limited span of time. Other technological tools help the business to analyze the
performance, manage business functioning, reaching out and managing customer relationship
and so on.
Environmental factors
With the rising environmental concerns in UK, environmental protection and safety becomes
crucial for both businesses, general public and government authority. The government of UK
Takes different initiatives in order to curb the environmental concerns and issues in the country.
Marks & Spencer orders to all the environmental safety measures and sticks green practices in
the organisation and promote the concept of sustainable development in order to reflect the
corporate social responsibility of the business towards the society and a strong brand goodwill in
the market place (Moroni, Arruda and Araujo, 2015).
Legal factors
Legal factors are the business laws and norms framed by the government of UK. Marks &
Spencer complies to all such disease laws and norms for managing the business in the most
ethical and legal manner. Some business laws complied by association involves employment
rights act, 1996, national minimum wage act one 1998 and others.

P5 Evaluate internal and external analysis of selected organizations to identify strengths and
weaknesses.
In order to highlight those grey areas and the areas where the business is doing very well,
SWOT analysis is been conducted to determine the internal and external opportunities and
challenges to the business. Swot analyses on Marks & Spencer is conducted as per:
Strengths
Organizational structure
Marks & Spencer follows a flat organizational structure, that brings productivity and efficiency
to the business. Flat organisation reduces the bureaucracy and supports the business in order to
take Quick decision making and productivity in the workplace. Flat organizational structure
followed by the association helps to reduce all the hierarchal levels rather follow a simple
structure that facilitates quick delegation of roles and responsibility and quick answer ability or
response towards the delegated task (Šoltés and Štofková, 2016).
Weakness
Increased prices
Increase prices of the goods and services turns weakness for the association as customers looks
for products and services that are affordable art range. Increased prices of products and services
offered by Marks & Spencer for the demotivates the targeted customers to purchase the offerings
delivered by the company.
Opportunities
Online presence
The association is regressively growing its online presence with the high technological
advancement and customer reliance over internet platforms. Online presence helps the
association to deliver and reach out each and every customer irrespective of the location,
improve their customer experience and build strong customer engagement.
Threat