Business Environment: Types, Structures, and Analysis Report

This comprehensive report delves into the intricacies of the business environment, exploring various organizational types such as public, private, and voluntary sectors, with specific examples including the NHS, McDonald's, and Oxfam. It examines the purpose, objectives, and legal structures of these organizations, as well as their size and scope. The report further analyzes the interrelationships between different organizational functions, such as marketing, production, finance, and human resources, and how they contribute to achieving overall business objectives. It also assesses the positive and negative impacts of the macro environment on business operations and conducts internal and external analyses of a particular firm, identifying strengths, weaknesses, and their connection to external factors. The report provides a detailed understanding of how businesses operate within their environment and the factors that influence their success.

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purpose of organisation and legal structure...........................................1
P2. Size and scope of a range of various type of company.........................................................3
TASK 2............................................................................................................................................4
P3. Relationship Between Different Organisational Situations and Link Between
Organisational.............................................................................................................................4
and Objectives and Structure......................................................................................................4
TASK 3............................................................................................................................................6
P4. Positive as well as negative impacts that macro environment have on business operations 6
TASK 4............................................................................................................................................7
P5. Internal and external analysis of particular firm to identify strengths and weakness...........7
P6. Strength and weaknesses interrelate with external macro factors........................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is considered as the whole factors that are related to enterprise as
well as has few impact upon business. This is the accumulation of internal and external factors
which influence firm's operative situation (What Is Business Environment? - Definition &
Factors, 2019). This involves competitors, suppliers, government, economic trends which affect
the performance and growth. The purpose of this report is to explain the various types as purpose
of organisation. Size and scope of range of different kinds of firm. The relationship among
several organisational functions and it link to objectives and structure of organisation. Macro
environment negative and positive impact upon business operations. Apart from this Internal
and external analysis of particular company to find strength and weaknesses as well as its
interrelation with external macro factors are also mentioned in this report.
TASK 1
P1 Different types and purpose of organisation and legal structure
Public sector company
Companies which are owned and control by government are refer as public sector
company. In these companies all activities and decisions are influenced by government body
(Prajogo, 2016). These company operate to serve its services to its citizens only and does not aim
at generating profits. Example of public sector company is NHS organisation. National health
Service was founded in 1948 for rendering dental, medical as well as nursing care. They aims at
rendering quality care to each individual on every day basis as well as deliver better values, care
and health. NHS is a Government funded medical as well as health care service that can be
utilised by each individual living within UK without paying full cost for the services being
delivered them. There mission is to render high quality care to each person on day to day basis.
Vision of NHS is to deliver enhanced health, care as well as values. There values comprises of
Teamwork, excellence, caring as well as teamwork. They aims at setting values with respect to
ways in which they treat each other as well as ensure that safe care is provided to their patients
with a compassion. In addition to this, they give each individual respect as well as dignity this
will help others to communicate with them in an better way. Objective of NHS is to make sure
that each child have best life as well as they can be prevented and managed from long-term
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conditions to eliminate inequalities. Along with this, their emphasis is to improvise well being
and mental health.
Purpose
Purpose of NHS organisation is to provide free comprehensive clinical services to all
citizens without any discrimination based on disability, age, religion, race etc.
Objective – Main objective of NHS is to provide best staff with experience to care their patients
and become best hospital in the world.
Types of public sector organisation Central governmental: These are political authority which is responsible for govern and
take decisions for entire nations. Central government holds control over unitary states.
 State Government: These have power to take decision for state only. State government
can develop rules and regulation for a particular state which leads to solve problem to
citizens.
Legal structural
NHS organisation is following central government legal structure which help in
providing effective and quality services free to needed person.
Private sector company
These companies are run by individual or group of people. They are responsible for
taking business decision and contribute in economy of country (Kljucnikov and Paseková, 2016).
The main objective of private sector companies is to earn more profits and growth of
organisation by satisfying needs of their customers. McDonald corporation is an example of
private sector company.
Purpose
McDonald's purpose is to achieve profits and increase in market share of company by
serving customers delicious food to satisfy their needs and wants. Purpose also includes to be
socially responsible company.
Objective – McDonald's objective include its goal to achieve market share and work with aim to
serve quality food in friendly and fun environment.
Types of private sector organisation Sole proprietorship: This is also known as sole trade as sole proprietorship is owned and
managed by one single person. In this business ownership as well as decision-making
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belongs to one person and that individual is responsible for take risks and benefits of
company. Partnership: In this type of businesses roles and responsibilities of making decision and
controlling business activities is divided between two or more people who are partners in
business.
 Large corporation and multinational: These corporation have legal and separate entity
from its owners. Large corporation and multinational organisation deal and operate in
many countries or nation to serve its products and services .
Legal structure
McDonald's is making use of private legal structure for furnishing their services
worldwide to their customers.
Voluntary sector company
Companies in this sector work with aims to provide benefits to society. Voluntary sector
companies is responsible for social activates taken by company (Hillary, 2017). These
organisation are non profit as well as non governmental organisation. Voluntary companies work
for society benefits not for earning profits. Oxfam is an example of voluntary sector company.
Purpose
Purpose of Oxfam is to build and create solutions to poverty by becoming part of global
movement of change. Oxfam wants to provide basic facilities to each and every individual who
need it and promote social welfare.
Objective – Oxfam objective is to provide equal rights to citizen by developing program which
help in creating future that is secure for individuals and free from poverty.
Types of voluntary organisation Trustee: Trustee is an individual or a person who hold power and responsible to take
decisions of company . Company based on trustee are considered as legal entity that has
trustee on their behalf who have authority of organisation
 Charity: Organisation based on charity for its functioning can be refers as charitable
organisation. These organisation are non profit organisation and primary objective of
these companies is to provide basic facilities to needy one and social welfare (Bah and
Fang, 2015).
Legal structure
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Legal structure of Oxfam is based on charity legal structure. They work to help poor and
needy ones by providing basic facilitates and education to individual person by taking charity.
P2. Size and scope of a range of various type of company.
Whole organisation have their several offerings size, scope and so on. Explanation
regarding all these are provided in respect of firm are:
Private Limited: Company which comes under private sector having the aim of profit
enhancement by attaining the client needs. They are limited to trade their share publicly and
owner area accountable for firm profit or loss (Kozubíková, Homolka and Kristalas, 2017). Vision: To become the world's best as well as fast services restaurant experiences. Burger
King can attain this by updating their menu as well as enhancing their global presence. Mission: To be the consumers most preferable place to drink and eat. Like this can be
attained by Burger King through enhancing their services as well as by making sure that
there products are of high quality and are worth for money. Size: Its have approx 34,480 restaurants into 119 countries. Total revenue of McDonald's
is about 21.03 billion U.S dollars and 375000 employees work into its food chain.
 Scope: The key activities of McDonald's involves into marketing and selling food and
beverages within several other countries.
Public Limited: These organisations are operating by respective country government from
giving efficacious services to person and rise their living standards (Eling and Schaper, 2017).
They have around 1.3 million employees who are furnishing their services for the welfare of
country (The NHS- a rewarding place to work, 2019). Such as NHS Vision: To provide good health, effective care and services to clients. Mission: To facilitate standard as well as maximised services quality to consumers for
making them healthier. Size: It is operating in all over England as well as facilitate medical services to its clients.
The number of worker who works in this firm are approx 1.5 million within UK.
 Scope: Its scope is to acquire each portion of England as well as also facilitating broad
range of services to UK individuals like eye test, dental care and many more.
Voluntary sector: These firms operates for social welfare without the purpose of profit
maximisation (Erasmus, Strydom and Rudansky-Kloppers, 2016). Such as Oxfam
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 Vision: To influence consumer decisions effecting on its life's, enjoying its rights and
assuming its accountabilities Mission: To create optimistic changes into people life's those who are living in poverty.
 Size and scope: There are about 20 independent charitable company that works together
with respective company to minimise and provide welfare services into famine prone and
drought area.
TASK 2
P3. Relationship Between Different Organisational Situations and Link Between Organisational
and Objectives and Structure
Each and every department of organisation play very crucial role in organisation. In
McDonald's there are various department with different functions and responsibilities. But an
organisation cannot work with one individual department (Kolk, 2016). For effective and
efficient working of McDonald's all department have to contribute properly so that ultimate
objective of company can be achieved. All department of company are interlinked with each
other to carry out departmental functioning and activities. Profitability of McDonald's depends
upon all functions and department function is directly or indirectly depended other departments .
Interrelation of McDonald's department with other department is mention below.
Marketing department with production
Marketing department of McDonald's is responsible for increasing selling and buying of
its products whereas production department is in charge for manufacturing products for
company. Marketing team conduct proper research for understanding needs and wants of market
and its customers as well as identify quality and quantity of products to be manufactures by
company. Production department analyse needs for customer identified by marketing department
and manufacture products according to this. Production department of McDonald's produce
products according to marketing forecast. Marketing department is responsible for selling
products manufacture by production department with aim to increase market share (Saleem,
2015).
Finance department with human resource
Finance department and human resource department of McDonald's have to work closely
with each other to maximise profitability of company. Finance department is dealing and
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responsible for handling cost and company asset and financial transaction of business . Human
resource department is contributing by finding and hiring staff for company, maintain positive
relationship between all employees and providing training to employees. McDonald's human
resource team will recruit and select candidates with required skill and ability for finance team
with motive to improve productivity of finance team. Finance department consider employees as
human capital of organisation which help in organisation functioning (Komljenovic, Loiselle
and Kumral, 2017).
Human resource with marketing
Human resource and marketing department have to coordinate with each other to achieve
goals and objective of McDonald's. As marketing department help company by increasing its
market share by satisfying customers and have competitive advantage over other company.
Whereas human resource team helps in building effective and efficient market team for
organisation. Marketing team tell qualities required in candidate and human resource team find
and select candidate with high qualification and skill set who can perform in marketing team.
Human resource department provide training to marketing and sales team which help in creating
new skills and improve performance of employees .
TASK 3
P4. Positive as well as negative impacts that macro environment has on business operations
For examining the macro environmental factors, McDonald's performs PESTLE analysis
for understanding the effect of external factors. This shows both positive and negative affect that
are mentioned below:
 Political factors: When there is change in rules and regulation as well as policies which
are developed by government this will has effect upon business operation. McDonald's is
carrying out their operations in around 100 countries. Therefore, they need to abide to
government regulations which are pertaining to health and hygiene. Government has been
making pressure on fast food industry as junk food causes certain problems associated
with high cholesterol (Cepel and Dvorsky, 2018).
 Economic factors: This considered as the factors that includes government interferences
such as tax policy, trade policy and many more. These factors involve interest rate,
exchange rates and so on. Government have faced recession previously that put the
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economy into complex situation . So, the various steps consider by the government of UK
at that time to minimise the effect . UK economy is stable that increase the purchaser
buying capacity so this effects positively on McDonald's operations positively. Huge
amount is spend on the free public service that have negative affect upon their operations.
 Social factors: These are essential while developing strategic business decisions. It
involves values, norms, culture and many more of individuals that effect the firms
operation. McDonald's have several outlets within various countries. All have their own
culture as well as they have to assure that all the cultural barriers are should be
considered through them while deciding the various outlet food menus. This effect the
respect firm operations positively as they include both veg and non veg food into their
menu. If they provide beef in Indian outlets this will have negative impact their business
operation because its is offensive for Hindu religions groups (Akhtar and Sushil, 2018).
 Technological factor: Changing technology not only enable McDonald's to develop their
business operation like minimising waste, re-ordering but also allows them to improve
huge connections with their clients. As it aids them to strengthens its brands through
facilitating various channels to order through clients such as in store self-services etc. so
it impacts their operation positively. As technology changing so it effects their operations
negatively (Lee, 2017).
 Environmental factors: These factors are related with the environment and have an
effect upon operation of the business. Government has considered various measure for
building environmental awareness that minimises the environment negative impact.
McDonald's have to concentrate upon the healthy food items so it creates public
awareness regarding health issues which impact their business operations positively. If
they do not comply environment regulation effectively this will have negative effect upon
company brand image (Gavurova and Smrcka, 2017).
 Legal factors: For operating the business appropriately, firm required to comply few
laws. As McDonald's are obeying whole legal structures that develop the image into the
minds of clients hence, they have positive effect upon company. In case legislation are
not enforced effectively, organisation required to pay fines that have a negative effect on
whole respective company operations (Khan and Quaddus, 2015).
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TASK 4
P5. Internal and external analysis of particular firm to identify strengths and weakness
In order to find out the external as well as internal factors, SWOT analysis can be
performed through McDonald's that will aids their manager to differentiate strength, weaknesses,
opportunities and threats in effective way (Hair Jr and et. Al, 2015). SWOT is a framework that
is used to evaluate company's competitive position and to develop a strategic planning process.
SWOT analysis of McDonald's is mentioned below:
STRENGTHS:
Strengths are basically the internal ability of the company that differentiate it from its
competitive brand. These are the plus points of the organisation:
 Mc Donald's have Strong brand image in the market and the customers are loyal towards
the company.
 It has the second largest fast food market share in the world .
 They has neat and clean environment and a special area for kids birthday parties.
 They has adopted Competitive Pricing Strategy for selling its products worldwide.
 More than 80% of the restaurants are owned by independent franchisees (Okeyo,
Gathungu and Peter, 2016).
WEAKNESSES:
Weaknesses are basically stop an organisation to perform to its optimum level. The
organisation becomes less productive in performance. They are the areas in which the company
have to work more and should improve to remain in competition.
 McDonald's menu is quite complex has it includes wide range of fast foods which is
usually unhealthy.
 They have been criticised for providing high fat and high calorie food.
 McDonald's provides limited range of food range for vegetarians (Prajogo, 2016).
 Less counters are available in McDonald's which result in long queues in busy hours .
OPPORTUNITIES:
It refers to the favourable condition where the company have competitive advantage as
compared to other companies.
 McDonald's enjoys market leadership due moderate pricing strategy adopted by the
company.
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 They have recently launched home delivery services in many parts of the country .
 It is trying to adopt healthy food items so as to increase its overall sales turnover.
 Overall McDonald's have varied range of menu availability (Kljucnikov and Paseková,
2016).
THREATS:
These are the factors the causes harm to the external business environment of the
organisation.
 Affected due change standard of living of people and due to change in preference.
 Change in government rules and regulations .
 McDonald's has faced huge negative media coverage due to animal cruelty issue.
SWOT of Burger King
Strengths: They are illustrated below:
 It is a popular brand name and have high loyalty. They are responsible for serving
product differentiation with larger size.
 Burger King have strong brand equity in fast food. They are serving in more than 100
countries with more than 15000 locations.
Weaknesses: With respect to Burger King these factors have been presented below:
 High calorie as well as possess lots of fat which are not good for health conscious people.
 Limited market share growth for Burger King as there exists intense competition (Hillary,
2017).
Opportunities: They represent opportunities which are present with Burger King to carry out
their operations:
 They can open new branches as well as outlets within new locations. Through
advertisement and discounts large market can be captured.
 Expansion of home delivery services can lead to increase within sales of Burger King.
Along with this they can improvise their tastes around the world (Bah and Fang, 2015).
Threat: These are the external forces which creates harm on Burger King:
 Threat from restaurants and eating joints creates a strong impact on market share of
Burger King.
 Health concerns among general people with respect to fast food .
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The SWOT Analysis have been provided for McDonald's as well as Burger King. Both of
these organisations have made their strong presence within market. By analysing their strengths
they can try to expand them and with respect to weaknesses, organisations can work on them to it
their strong point. On the other hand, they can make use of opportunities that are present with
them. Threats can be handled by turning weaknesses into strengths to have affirmative results.
McDonald's have made their presence more stronger and this can be depicted by the figure that
it has second largest fast food shares within market (Kozubíková, Homolka and Kristalas, 2017).
P6. Strength and weaknesses interrelate with external macro factors.
The interrelation strength and weakness of McDonald's with macro environmental factors
are mentioned below:
 Political factors: After Brexit, government of UK paid their maximum attention towards
the development of small and large scale organisations. Therefore the stability in political
decisions is provide huge strength for firm as this aids them to develop long term policies
as well as strategies into organisational growth. The weakness of the firm is the revised
tax rate as this effect negatively upon business operation (Erasmus, Strydom and
Rudansky-Kloppers, 2016).
 Economic factors: McDonald's provide growth opportunity to the economy by the
effective sale of their products and services. The more outlets of the McDonald's have
facilitated the more food items to clients that maximised the offerings into goods given to
consumers. There can be some weak aspects for firm that can be import as well as custom
duties. As it have negative effect on business operation as these responsibilities enhanced
so the products and services cost for consumer will also maximised. It lead towards firm's
sales and consumers base reduction (Eling and Schaper, 2017).
 Social factors: Major focus of McDonald's is to provide products and services to their
customers on the basis of their requirement and need. Therefore, firm has a research and
development team that examine the requirements of individuals at market area as to
satisfy them by providing more tasty and healthy foods. There can be some negative
aspect of firm that can create weaknesses in business operations as impact of foods on the
health of individual's. Thus, it is essential for organisation to prefer this particular point to
develop the firm safe from unforeseen losses (Kolk, 2016).
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