Business and Business Environment: Unit 1 Report Analysis and Findings

This report provides an in-depth analysis of the business environment, focusing on different types of organizations, their purposes, sizes, and scopes. It examines private organizations like H&M, public entities such as the Crown Prosecution Services, and voluntary organizations exemplified by Oxfam. The report details the legal structures, stakeholders, and missions of each type, highlighting the impact of macro-environmental factors. Furthermore, it includes internal and external analyses, along with SWOT and PESTEL analyses to assess strengths, weaknesses, opportunities, and threats. The interrelation of these factors with external macro factors are also explored to offer a comprehensive understanding of business operations within diverse organizational contexts. The report concludes with a summary of findings, referencing key concepts in business and management.

Unit 1
Business And Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Different types and Purpose of organisation.....................................................................1
P2 Size and Scope of different types of organisation.............................................................3
P3 Relationship Between Organisational functions...............................................................6
P4 Positive and Negative Impact of macro environment on business operations..................8
P5 Internal and external analysis of organisation and their strengths and weaknesses........12
P6 Interrelation of strength and weaknesses with external macro factors............................14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................16

INTRODUCTION
Business environment is an aggregate of all internal and external forces that directly or
indirectly affect business operations. Still enterprises depend on these factors for their
performance and sustainability (Business environment. 2018). There are generally two kinds of
business environment such as macro and micro environment. These factors mainly includes
customers, management, suppliers, owners, government, technology, economic factors and
current market trends. In this present case study, Oxfam is taken in the sector of voluntary
organisation, Crown prosecution Services as a public company and H&M as a private
organisation. In addition to this, there size, scope and purpose are described in this report.
Furthermore, internal and strength and weaknesses of business and their interrelationship with
macro factors are included in this project. Lastly, SWOT and PESTAL have been done in this
report.
P1 Different types and Purpose of organisation
The various types of business organisations are as follows: -
Private Organisation: Private organisation is owned as run by sole traders, partnerships,
franchises and a private individual. Companies working under private sector mainly run their
business for generating profit. Private company have minimum 2 and maximum 50 employees
working in them. Hennes & Mauritz AB (H&M) is a worldwide clothing-retail business
organisation. This company is mainly known for fast fashion clothing for teenagers, men,
children and women. This company was founded in in the year 1947. in addition to the H&M,
company consist of five individual brands with separate concepts. This company operates in 62
countries with over 4,500 stores and have 132,000 people in a present time, along with this it is
the second largest global clothing retailer as compare to the parent company of Zara. This
company also has a online shopping facility in 33 countries.
Purpose: H&M is a fast-fashion retail company with having a purpose to modify their
internal structure in order to implement use of energy efficient measures, water use and
renewable energy investments. Main purpose of H&M is to source their raw materials from
recycled polyester and effectively invest for innovation.
Legal Structure: Legal Structure of private organisation includes:
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Sole proprietorship: Sole proprietorship sector include a single individual who run their
business individual and are sole responsible for company's profit and loss. Newsagents, market
traders and hairdressers are some basic examples of this type of sector.
Partnership: Partnership is an association in which two people come together to start a
business. In this, there is an agreement duly signed by partners mainly known as deed of
partnership. Doctors, accountants, dentists and veterinarians are some example of partnership.
Stakeholders: Stakeholders in private limited company include Creditors, suppliers,
owners, unions, employees and directors.
Public Organisation: Public sector mainly include those organisations that are owned
and control by government. Crown Prosecution Services is a British non-ministerial government
department. Founded in the year 1986 and headquartered in London, SW1H. CPS offer legal
advices to police and other investigative agencies
Purpose: Main purpose of Crown Prosecution Services is to systematically conduct
prosecutions in criminal cases. They mainly perform their business functions in England and
Wales. They provide effective legal advices to investigative agencies and police. These
organisations conduct their services in secondary sector and gather raw information and further
offer advices.
Legal Structure: Crown Prosecution service is an independent judicial agency which is
responsible for the presentation of criminal prosecution in the United Kingdom. It was formed in
1986, which is non-ministerial government department in England and Wales. There are civil
and family courts, criminal courts and legal profession which helps in making essential decisions
evaluate plans according to these policy. Legal structure of Crown prosecution include:
State Government: In state government there is a formative sharing of legal and political
rights between state and national authorities (Bharadwaj, 2013). In this, state government enjoy
rights of formal decision making without the prior permission of central government.
Local Government: In this form of government, there are different types of local
governance authority who mainly perform their functions in local and regional level.
Central Government: It is a supreme authority in any nation. In United Kingdom central
government have formative right to make decision for nation security, distribution of national
treasury budget and securing people form terrorism.
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Stakeholders: Stakeholders of public organisation include government employees, financial
institutions that are owned by government and shareholders.
Voluntary Organisation: Voluntary organisation run their functions to provide welfare to the
society. It is mainly a non-government and non-profit organisations which mainly engage in
proving social services to community and raise their living standards. Oxfam is a no profit
organisation founded in the year 1942 by Cecil Jackson-Cole in England. It is a connection of 20
independent charitable organisations which is consideration on the comfort of global poverty.
This company operates their business globally.
Purpose: Oxfam is a sum of 20 independent charitable organisation who perform their
functions as to reduce poverty. Oxfam provide their services in drought prone and famine prone
areas. Company mainly focus on humanitarian work, developmental work and lift society out of
poor and raise their living standards.
Legal Structure:
Trust: A trust is mainly created to manage property and money towards a defined
purpose. In this structure of voluntary organisation there is formal relationship in between donor
of money or a donor of a property a trustee and a beneficiary. A trust ensure continuity and
confidentiality.
Company limited by Guarantee: It is a separate legal identity which is constituted by
Article of Association and Memorandum of Association (Berg, 2014). It is a corporate identity
and have limited liability in which their members are protect.
Associations: It is unincorporated structure which is a community of small groups who
come together to achieve a agreed objective which is not for profit.
Stakeholders: Voluntary organisation stakeholders are consumers they serves, volunteers,
donor, foundations that permit them grant and board members.
P2 Size and Scope of different types of organisation
Public Organisation: Organisations working under public sector are mainly owned and control
by local, state or central government. Their main motive is to satisfy consumers rather than to
generate profit. Crown prosecution service is a principle public prosecution agency. They
conduct criminal prosecution activities in England and Wales. On the other hand Crown
prosecution is a micro enterprise where investment in plant and machinery does not exceed rs. 25
lack.
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Product & Services: CPS offer legal advices to instigative agencies and police
departments. They allocate raw information and then decide criminal charges on a suspect.
Size and Scope: Crown Prosecution Services manages 800,000 and more prosecution
under them and have 2,900 solicitors and 6,00 staff member in them respectively.
Vision: Main vision of Crown Prosecution Service is to become independent and offer
their advices in fair manner. Organisation respect public their serve and set their standards in
clear way.
Mission: Crown Prosecution Service mission is to behave in professional manner. CPS
strive for excellence and offer their advices in fair manner so to earn trust of their colleagues,
communities and customers. CPS ensure that they offer effective advices and suspect right
criminal.
Private Organisation: Private organisations run their business to earn profit and satisfy needs of
consumers in best possible way.
Business Structure: Private organisations are of 3 types: -
Sole proprietorship: It is a type of organisation which is run by a single person. It is also a small
enterprise where the investment in plant and machinery is more than 25 lack but not exceed
higher limit of amount.
Size and Scope: It is a form of ownership where there is a single person who enjoys the
profits as well as bear the losses. These are easy to setup and require very less investment. The
scope for growth is solely dependent upon the sole trader as they are the only decision maker.
The objectives of sole proprietorship is to operate in a manner that can help the entity in gaining
a high stake in market and earning profits at a rapid pace. Their major goal is to tap advantage of
product excellence to ensure its sustainability within marketplace.
Partnership: It is an organisation which is collectively owned by two or more parties. H&M is a
large business enterprise which servers their services worldwide. It also focuses on some
conditions like annual turnover greater than 1.5 billion euros.
Size and Scope: This is a form of ownership where the operations as well as functioning
of entity is bound by the terms specified in partnership deed. The scope for their growth and
expansion is upon the discretion of partners. The partners are jointly as well as severely liable for
the losses of firm. The objectives of partnership firm is specified in their partnership deed and
partners tend to operate in a manner that can contribute towards accomplishment of
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organisational goals and objectives. They provide such products and services that can meet the
demands of consumers in a desirable manner.
Company: It is an organisation working under private ownership and enjoy least interference
from government in their running and functioning. H&M is a multinational retail company
dealing in clothing sector. Company was founded in the year 1947 by Erling Persson and have
them headquarter in Stockholm. Company mainly deal in clothing and accessories sector and
have more than 148,000 people employed under them.
Product & Services: H&M exclusively sell fast-fashion clothing for teenagers, women,
children and men. They aimed to use renewable resources and create eco-friendly products and
services.
Size and Scope: H&M have associated with other brands and have their operations in 62
countries with more than 4500 stores around the world.
Vision: Company vision is to build a truly sustainable fashion industry which is not only
healthier for people and communities but also aid planet. Their core vision is to utilize their size
and scale to create a renewable and circular fashion industry.
Mission: H&M mission is to formulate a long-lasting change in positive manner and
improve living conditions for communities and people they serve. Company also wants to invest
their resource in brining innovation ideas in company and serve people at their best.
Business objectives: H&M main objective is to use eco-friendly raw materials and use
renewable resources to manufacture their products and services in order to provide benefit to
communities , people and planet.
Structure: H&M operate their business functions in more than 62 countries with 4500 stores.
They have employed more than 148,00 employees under them.
Voluntary Organisation: Oxfam is a non-profit charitable organisation which is named after
Oxford committee for famine relief. Organisation was founded in the year 1942. Company
engage in the activities related to fundraising and provide relief materials like, books clothing,
toys, food and ethic creating to people.
Product and Services: Oxfam offer humanitarian services in famine and drought prone
areas. They have main motive to erase poverty from all over the world and people standard of
living. Organisation sell their products and services in fair trade and offer products like food,
clothing, handicrafts and toys.
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Size and Scope: There are 20 independent charitable organisations working together with
Oxfam to erase poverty and provide welfare services in drought and famine prone areas.
Vision: Company mission is to make sure that their consumers wear their product with
pride and they stay conscious of all company actions. In addition to this, company also have
vision to provide attractive and affordable clothes to as many as people.
Mission: Oxfam core mission is to eradicate poverty all around the world and protect life
and security right of individuals. Company believes in peace and reduce inequalities related to
rich and poor.
Business objectives: Oxfam most important objective is to erase poverty globally and
empower individuals to build their self-interdependency.
Organisational structure: Oxfam have more than 1200 shops worldwide. They have
total number of 750 Oxfam GB shops within UK and several fundraising channels across the
nation. There are numerous numbers of associated volunteers working with them from many
different geographical locations.
P3 Relationship Between Organisational functions
A business unit consist of different departments functioning in them towards company
gaols and objectives. In H&M there are various department who perform their work together so
to increase company overall productivity (Werbach, and Hunter 2012). These unit have different
set of roles and responsibilities but have a common purpose that is to gain more advantages for
company (Avramenko, 2012 ). Mentioned below there are relationship of different departmental
unit of H&M and their interrelation with each other:
Human resource Department:
Human resource department in an organisation mainly engage in the process of hiring
and recruiting candidates from different geographical locations. HRM department in H&M are
directly or indirectly interconnected with other departments of the organisation. They maintain
formative form of communication in each and every department and provide them effective
labours by recruiting skilled and experienced candidates. Human resource department provide
effective training and development secessions like technical knowledge and academical skills
which aid in increasing productivity for departments like IT and Manufacturing. In H&M their
human resource department provide advices likes market oriented compensation and other
development programmes to all departments in organisation. Additionally, Finance department
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allocate them effective budget so to run their activities in formative manner. This will help
company to maximise their level of productivity and gain more competitive advantages in a
marketplace. By keeping effective coordination with all other functions and departments, HR
department strives to give their contribution towards realisation of organisational goals and
objectives.
Research and Development department:
R& D department in a business organisation mainly engage in researching a marketplace
or customers’ needs and find new and innovate ideas in order to increase quality of overall
outcomes. Research and development department in H&M perform activities like developing
new ideas and create more innovate strategic ideas which benefits production department to
produce effective and qualitative products. This will simultaneously aid sales department to
maximise their overall sales results by delivering remarkable products and services to customers.
H&M research department help finance unit with the major sources from which they can raise
funds for company. In addition to this, R&D aid marketing department and provide them
information’s of those effective areas where they can do their activities related to promotion and
branding of H&M products and services. Through this, R&D can increase their end result and
help organisation to accomplish their objectives in best possible way and meet their targets in
efficient way by gaining more competitive advantages against their competitors.
Marketing Department:
Marketing department perform activities related to finding new possible market so that an
organisation can sell their products and gain more increment in their outcomes. Marketing
department in H&M closely perform their work with finance team in relation to set total volume
of order that is required to be generated and quality and design of goods and services. While,
finance department provide them adequate budget to conduct their activities related to research
and promotion and find actual needs and demands of customers. In addition to this, marketing
department in H&M help human resource department to find them the source of effective
candidates for the organisation. Whereas, in return human resource department aid marketing
unit by providing them skilled and qualified labour force. This will simultaneously benefit
company to increase their profitability and productivity.
Sales Department:
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Sales department in an organisation primarily focus on increasing consumer base for a
company by selling their products and services directly and indirectly to customers. Sales unit in
H&M engage in maximising revenue of company and help them to gain more competitive
advantages in a marketplace. For this, marketing department provides strategies and sector to
sales unit in which they can attract customers and increase their sales base. While on the other
hand, by selling company goods and services sales unit aid finance department to increase end
results.
All these departmental units in H&M work together so to maximise overall productivity
of company and aid them to gain more advantages in market against their competitors. It is
certain that there will be a situation of conflicts that may arise in this course. So, H&M managers
need to adopt strategies and policies in order to decrease impact of these situations on company
and employee performance (Ballard, 2012). This will benefit H&M to enhance effectiveness of
their workforce and increase profitability of company simultaneously.
Interrelations between different organisation department provide various advantages to a
company. In relation with H&M these interrelations will benefit them to foster effective channel
of communication and accomplish their goals and objectives in formative way. H&M can easily
complete their set targets within proper structure of time frame and produce qualitative result.
This will benefit organisation to gain more competitive advantages in marketplace and acquire
more customer base. While on the other hand, there is serious disadvantage of these interrelation
as this can result in creating conflict situations in organisation and create negative sense of
competition among their workers. This can result in creating slow growth rate in H&M which
hamper their productivity and profit earning margin,
P4 Positive and Negative Impact of macro environment on business operations
There are major factors exists in macro environment that are uncontrollable and influence
functioning of business organisations in their decision-making process. Some of the factors
included in macro environment includes demographics factors, legal and political factor,
technological factor, economic and natural factors.
Political Factor: There are various laws and regulations which is necessary for a company to
abide in order to perform their functions in legal and ethical way. Government of United
Kingdom laid down certain political laws such as Union Directives, Subsidies, free-trade zone
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Industrial revolution and UK corporate Governance code. Which is necessary for H&M to abide
as to perform their business functions in smooth and effective way.
Positive Impact:
These laws will benefit companies working in United Kingdom to perform their
functions in ethical and legal way. H&M can run their business activities in smooth way without
facing any restrictions by government.
Negative Impact:
Changing rules and laws by government of UK in relation to Import quotas, currency
control and export financing hamper performance of H&M in many ways. It create so many
hurdles for H&M to borrow funds form international and national bank.
Economic Factor: Economic factor of United Kingdom include availability of lending rates,
prices of overseas buyers and taxation policies. All these factors directly or indirectly affect
operations of H&M. (Weiss, 2014).
Positive Impact:
Relaxations provided by government of United Kingdom benefit H&M to sell their
products and services in suitable affordable manner which will aid them to increase their overall
probability and productivity.
Negative Impact:
Economic situations like rise in in interest and tax rates impact adversely on business
functions of H&M. This will make company to loose their market stability and shares. Rise in
interest rates will impact H&M finance department to lend funds and money from different
financial institutions and utilize them for their organisational functions.
Social Factor: Social factors means cultural beliefs of society in a particular geographical
location (Ballard, 2012). It is important for H&M to analyse taste and preferences of customers
before selling their products and services. They are required to evaluate cultural beliefs of
society and ensure that their goods and services are acceptable in that reign.
Positive Impact:
Social factor can benefit a company in many ways. H&M can increase their sales
outcomes in magnificent way by following CSR activities and taking care of society beliefs and
values.
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Negative Impact:
It is necessary for H&M to follow CSR activities as if it is not abided by them then it may
result in decreasing their goodwill and reduction in demand of their product and services.
Technological Factor: Technological factor includes change in style, trend and fashion
preferences of world. As technology is dynamically changing it is essential for an organisation
to make themselves adaptable and implement effective strategies to make their employees accept
these technological changes.
Positive Impact:
H&M by adopting innovative technological measure in their organisation can maximise
their strength results. Company manufactures wide range of goods and services that includes,
clothing for men and women, cosmetics, apparel and accessories. With the help of technology
company can bring innovative modifications in their products and increase their sales.
Negative Impact:
Modifications requires huge investments of funds and trained employees. With every
change in technological aspect H&M is required to modify their internal structure as to compete
with others. This will impact them to increase their cost of input and conduct continuous research
which required a lot of time and fund.
Environmental Factor: Environmental factors mainly include efficiency and availability of raw
materials, risk of exposure and present and future compliance. All these factors can impact
organisation functioning directly or indirectly.
Positive Impact:
H&M can make necessary modifications in their product and services by using eco-
friendly raw materials (Avramenko, 2012). This will benefit company to save their cost and
strengthening their image in marketplace.
Negative Impact:
H&M is performing their business operations in many different geographical locations
which results in Change in climatic situations. This will impact company to arrange availability
of raw materials.
Legal Factor: It is necessary for an organisation to abide all legal rules and regulations in order
to conduct their business operations in ethical manner. As H&M is a multinational company and
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