Business Environment Analysis: M&S and NHS, Semester 1 Report

This report delves into the business environment, examining Marks & Spencer (M&S) and the National Health Service (NHS) as contrasting examples. It begins by defining the business environment and then analyzes the type of business, purpose, and ownership of both M&S (a public limited company in the tertiary sector) and the NHS (a national not-for-profit organization in the tertiary sector). The report then explores the stakeholders influencing each organization's purpose, including customers, employees, suppliers, and owners for M&S, and employees and the government for the NHS. It also describes and contrasts the organizational structures of the two businesses, noting M&S's flat structure and the NHS's tall, hierarchical structure, and explains how these structures support their respective goals. Furthermore, the report examines the influence of economic environments, like market booms and recessions, on business activities, particularly for M&S. It also discusses the impact of political, legal, and social factors. The report provides a comprehensive overview of the internal and external factors affecting business operations, making it a valuable resource for understanding the complexities of the business environment.

The Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Describe type of business, purpose and ownership of two contrasting businesses...............1
P2 Describe the different stakeholders who influence the purpose............................................2
TASK 2............................................................................................................................................3
P3 Describe how two businesses are organised..........................................................................3
P4 Explain how their style of organisation helps them to fulfil their purposes..........................4
TASK 3............................................................................................................................................5
P5 Describe the influence of two contrasting economic environments on business activities...5
TASK 4............................................................................................................................................5
P6 Political, legal and social factors are impacting upon the business activities .......................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment means all of the internal and external factors that affect how the
company functions including employees, customers, management, supply and demand and
business regulations (Welford, 2013). It is very necessary to properly analyse and identify the
customers demand as per that should be produce products and supply services to them. This
research report will be discussing about different type of business which their has major purpose.
There will be explain some factors which can be impacting on business firm which can be
negative and positive in nature. Along with this, for effectively manage business environment so
have to be implement better management system so all employees can systemically complete
their decided task and achieve goals as well.
TASK 1
P1 Describe type of business, purpose and ownership of two contrasting businesses
M&S is an international company and is part of the tertiary sector. M&S is a public
limited company, the public part of it means that shares can be brought by the public and the this
type of organisation means that it has limited liability. Having limited liability has many
advantages as it protects a shareholder from being responsible for more than their share of
company so they wouldn’t be accountable for the liabilities resulting from the bankruptcy.
The purpose of M&S is to supply products; M&S also offers services but that isn’t their
primary way of doing business. M&S is driven by profit meaning that they make sure that their
sales cover all of their running costs and more profit. Running costs include anything that
organisation needs to spend money on in order for company to operate. When M&S was founded
the main goal was to only sell British made goods that were of a high quality.
M&S is a private company meaning that it is owned by its shareholders, shareholders do
not run business, instead they have a senior management team (Aterido, Hallward-Driemeier and
Pagés, 2011). The current chairman of company ensures that all the board meetings run
smoothly and helps to achieve a consensus in all the boards decisions.
National Health Service (NHS): The NHS is a national not-for-profit organisation and is part of
the tertiary sector. The NHS is a public company meaning that it is owned by the government, it
was set up in 1948 by the labour government. The NHS is a not-for-profit business it is run
mainly using money from taxation. The NHS is part of the tertiary sector meaning that it
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provides a service to the general population. The purpose of the NHS is to provide high quality
care for all. The NHS employs doctors, nurses and other healthcare professionals so even though
it is a not-for-profit organisation it is not comprised out of volunteers. Money from taxation is
used to pay for all the running costs – staff wages, medicines, equipment, buildings etc. The
NHS is owned by the government, the department of the government that is responsible for the
NHS is the Department of Health which is led by the Secretary of State for Health (Jeremy Hunt)
(Blanchard, Tolbert and Mencken, 2011). The NHS is part of the public sector and as it a not-for-
profit organisation they try to make the service as efficient as possible.
P2 Describe the different stakeholders who influence the purpose
Stakeholder is a person who is in an organisation and is affected by the M&S in terms of
strategy and project. Stakeholders can be internal or external at different levels e.g. Internal and
external. List of internal and external stakeholders and explanation of what they are and who
they are:
Customers: Customers want valuable and high quality products at an acceptable and average
price.
Employees: Their stake is that the company provides them good rates of reward and promotional
opportunities. They also want a very good security of employments. Also they are concerned
about their salary.
Suppliers: Suppliers want to feel valued by the business and get regular orders and also get paid
quick and on time.
Owners: Owners mostly spend a lot of time and money on a business. Therefore shareholders or
the owners like to see that their business is at a high rate of profit and increasing the profit and
also they would like to see the values of the their business is rising.
Local and National Communities: Employers of local people often have a stake in the
businesses within community (Teece, 2010). Financial activities and events significantly effect
the local environment.
Stakeholder of NHS which influences on their purpose: Health and health services play a
significant part in all our lives. As the provider of acute hospital services to local people, Trust
and its activities are naturally of interest to a wide range of individuals, groups and organisations.
All of these people are stakeholders. NHS works to ensure that stakeholders are regularly
updated about everything significant NHS can do. Stakeholder like:
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Employees: These are having huge influences because most of the services are provided by their
staff members. So their purposes are making huge influences in their acts.
Government: It makes a huge impact on them so it is essential for the organisation to make a
proper relevancy with them (Smallbone and et.al., 2010).
TASK 2
P3 Describe how two businesses are organised
Marks and Spencer:
M&S follows a flat organizational structure; this type of organizational structure has
limited levels of management between administrative level and front-line employees. This
structure is followed in organization to encourage employees in more decision making process.
This structure is followed basically to decrease bureaucracy and make employees more skilled
by authorizing them to make decisions (Moutinho, 2011). And due to less management levels
communication between upper managers and base line employees become easy which allows
rapid change and problem solution. Flat organizational structure has pyramid shape, but unlike
traditional one it's broader and flatter this is because there are fewer levels of management
between top and bottom of pyramid it also may have different departments with head and
manager leading each unit with the executive management at top of pyramid. They are having
many department like HR, accounts, sales and marketing these all having a huge value in
strategic planning which is essential for them to make a proper coordination in achieving goals.
NHS:
They are having a tall organisational structure and they are managing a proper hierarchy.
NHS has boards of directors, it is a Non profit organisation so they have boards that often
consist of influential members of health care and local communities. Boards of directors leave it
to their executives to see that their decisions are carried out and that the day-to-day operations of
the hospital are performed successfully (Hamilton and Webster, 2015). The chief executive
officer is the top boss responsible for everything that goes on in NHS. The top managers of each
department report to the core management. These people are responsible for one type of medical
or operational service. Within a department, there are the people who directly oversee patient
care. Nurse managers, directors of rehabilitation services and supervising physicians have people
under them who give hands-on patient care. NHS is composed of service-providing staff. From
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nurses and physical therapists to line cooks and laundry workers, it takes a lot of hands-on staff
to make everything happen.
P4 Explain how their style of organisation helps them to fulfil their purposes
The aims of organisations depend on type of business they are. For example, the aims of
a charity organisation will be quite different from those of a for-profit global business. A
business needs to have a clear sense of direction, which must be clearly communicated to all
stakeholders. This is the aim of the business which can then be broken down into smaller aims
and objectives (Gecevska and et.al., 2010). As M&S is a private company so they want to
maximise their profits and revenues any how so their all departments are committed to attain this
goal. The finance function plays a critical role at Marks & Spencer in cutting costs and
eliminating unnecessary expenditure. The entire value chain was examined to determine where
and how costs could be trimmed. As a result, the company was able to reduce costs, provide
better prices to the customers and improve its overall profitability. Ultimately, it is the
shareholders who stand to gain the most from the initiatives made in terms of maximization of
shareholder wealth. To attract new customers and retain existing customers at Marks & Spencer,
the marketing function critically examined the cause of declining sales. The main cause negative
customer perception of its main customer base - women aged between 35 and 55 that the clothes
sold at Marks & Spencer were unfashionable and even dowdy. Therefore, the marketing function
decided to split up the long-cherished St Michael's brand into a number of categories to cater for
different customer needs.
Consequently, the company launched three new product categories for women. The first,
the Perfect and Classic ranges were for basic purposes, for example jeans, sweaters and plain
shirts (Cordes, Richerson and Schwesinger, 2010). The second range, Autograph is for the more
fashionable woman of a larger demographic group. By segmenting its products for different
markets, the company was able to regain most of the sales it lost. Different marketing campaigns
are held for each range and this makes the company's products appear more attractive to
customers.
HRM is critical to the successful implementation of a strategy. The HRM function at
Marks & Spencer played an important role in changing employee mindset and modifying the
corporate culture to be more attuned to the changes that need to occur. As a result, employees
were more receptive to change and aware of the sacrifices they need to make.
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TASK 3
P5 Describe the influence of two contrasting economic environments on business activities
M&S is working in international market so they are having risk to changes in economic
environment, these changed economical conditions of surroundings creates a huge impact on
them so it is essential for them top make a special treatment to beware from these affects and run
their business activities smoothly. Here is different economic environment:
Market Boom: It is a period of fast economic growth this means that it is an output is high due
to being increased demand, this would mean that the unemployment is lower than it should be
(Commander and Svejnar, 2011). A boom could be very bad news for more valued stores like
M&S as the higher earners may switch to more premium markets. M&S must therefore
guarantee their customers that they have more luxury products on sale for their customers and in
order for them to stay at the top of the best for their business and their company and investors. In
the boom customers may not want value in their clothing like for example with M&S they have
good reputation customers may prefer to buy more expensive and named brands. Therefore with
the marketing teams they will need to make sure that they change their adverts to show the
luxury and the great fashion in which M&S has and also from the fact that they don’t really focus
on the actual value of their clothing.
Recession: It may be a period on time in which the economical growth may slow down, and the
level of output may actually decrease rather than increase or rise. This therefore means that with
the unemployed that it may have the chance on increasing. If this happens then it will be bad for
businesses from the fact that they may lose confidence and it also may have to experience the
reduce on investment (Chavis, Klapper and Love, 2011). This would be bad however because it
would mean that their customers may save up instead of spending their money buying products
from the company. At this time their customers have lower purchasing power so they have to
make those type of products which can be easily purchasable by them.
TASK 4
P6 Political, legal and social factors are impacting upon the business activities
PESTLE factors are creating a huge impact on the M&S and NHS which are given under
this table:
Factors M&S NHS
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Political As this is a private sector company so
they are highly influenced by
government policies like: tax and
foreign policy so it is essential for the
company to make changes in their
acts.
It is a government funded
organisation so they are mainly based
on them.
Economical Marks & Spence have closed a
number of stores due economic
downfall so to show what affect the
recession has had, they took the
decision to have two days of 20%
discounts in a week (Cavalcante,
Kesting and Ulhøi, 2011).
Economic environment can increase
the profits or losses of the NHS so
that needs to be analysed and required
changes should be implemented.
Social The organisation had considered
selling food online due to reduce
pressure of customers from their
stores.
Social environment can increase or
decrease the number of patients and
staff associated with NHS.
Technological Technology is vital in the retail
market. So company is using latest
technology in brand promotions.
Technology can help NHS to treat
patients efficiently and more
importantly, data is stored with the
NHS, for years to come.
Legal Marks and Spencer carry out re-
training & update every year, they
keep up to date with new laws or
legislations.
Legal issues are ignored then there are
possibilities of the NHS being shut
down and hence, this is one of the
most important environment.
Environmental Marks & Spencer have established
their own Green Policy to be eco
friendly.
NHS treat patients for the health
issues that they face; they also take
care of the environment so that
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unwanted diseases are avoided.
CONCLUSION
Above presented report has been concluded about business environment, it is very
significant for organisations which are working different economical conditions. M&S and NHS
are having a two different zone but both are affecting by their economical conditions.
Organisational structure help to company to manage their business activities to attain their
objectives and earn maximum profits.
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REFERENCES
Books and Journals
Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Blanchard, T. C., Tolbert, C. and Mencken, C., 2011. The health and wealth of US counties: how
the small business environment impacts alternative measures of development.
Cambridge Journal of Regions, Economy and Society.5(1). pp.149-162.
Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision. 49(8). pp.1327-1342.
Chavis, L. W., Klapper, L. F. and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Cordes, C., Richerson, P. J. and Schwesinger, G., 2010. How corporate cultures coevolve with
the business environment: The case of firm growth crises and industry evolution.
Journal of Economic Behavior & Organization. 76(3). pp.465-480.
Gecevska, V., and et.al., 2010. Product lifecycle management through innovative and
competitive business environment. Journal of Industrial Engineering and
Management.3(2). pp.323-336.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Moutinho, L. ed., 2011. Strategic management in tourism. Cabi.
Smallbone, D., and et.al., 2010. Government and entrepreneurship in transition economies: the
case of small firms in business services in Ukraine. The Service Industries Journal.
30(5). pp.655-670.
Teece, D. J., 2010. Business models, business strategy and innovation. Long range planning.
43(2). pp.172-194.
Welford, R., 2013. Hijacking environmentalism: Corporate responses to sustainable
development. Routledge.
Online
Business Environment and Skills Group, 2010.[Online] Available through:
<http://www.automotivecouncil.co.uk/business-environment-and-skills-group/>.
[Accessed on 21st July 2017].
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