Detailed Analysis: NatWest Business and Business Environment Report

This report provides a comprehensive analysis of the business environment, focusing on NatWest Bank. It begins with an introduction to business and its environment, followed by an examination of different types of organizations (public, private, and voluntary) and their purposes, size, and scope. The report then explores the impact of organizational structure, size, and scope on business objectives, as well as the complexities of different business structures and their interrelationships with organizational functions. The analysis extends to the relationships between various organizational functions and their linkages to organizational objectives. A significant portion of the report is dedicated to the impact of the macro environment (PESTLE analysis) on business operations, alongside an evaluation of micro and macro factors. Finally, the report concludes with an internal and external analysis to determine strengths and weaknesses, their interrelation with the external environment, and a SWOT analysis and its influence on decision-making processes.

BUSINESS
AND
BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisation....................................................................1
P2 Size and scope of different types of organisation.............................................................3
M1 Structure, size and scope effect on business objectives...................................................4
D1 Complexities of different type of business structures and inter relationship with
organisational function...........................................................................................................4
TASK 2............................................................................................................................................4
P3 Relationship between different organisational functions and their linkage to organisational
objectives................................................................................................................................4
M2 Advantages and disadvantages of organisational units interrelationship........................6
TASK 3............................................................................................................................................7
P4 Positive and negative impact of macro environment upon business operations...............7
M3 PESTLE model to support analysis of impact of macro factors....................................11
D2 Critical evaluation of impact of micro and macro factors on business operations.........12
TASK 4..........................................................................................................................................12
P5 Internal and external analysis to understand strength and weakness..............................12
P6 Interrelation of strength and weakness with external environment.................................13
M4 SWOT analysis and its influence on decision making...................................................14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
In the economic context activities like extraction, marketing, purchase, production, sales
and advertisement comes under business. These all activities are a part of business procedures
followed in every company. Business is performed so as to gain monetary benefits from products
that a company produces. Where as business environment is considered as the surrounding in
which a organisation is operating (Aterido, Hallward-Driemeier and Pagés, 2011). There are
certain conditions internal and external which effect the business procedures. Management,
machinery, money, human resource and availability of raw materials shapes the internal business
environment where as political, legal, technological, social, economical and ecological factors
defines the external business environment. National Westminster Bank is commonly known as
NatWest. It is one of the largest retail and commercial Bank in the UK established in the year
1968 by the merger of National provisional Bank and Westminster Bank. Till 2000 this bank was
a part of Royal Bank of Scotland Group. It has approx 960 branches serving around 8 million
peoples. It has approx 33,300 employees. This report highlights the different type, scope and size
of organisation. It also showcases relationship between different organisational functions. It also
shows the positive and negative impact of macro environment on business operations which
ultimately results in strengths and weakness of the organisation.
TASK 1
P1 Different types and purposes of organisation
There are three kinds of organisations public, private and voluntary. All these
organisation are categorised according to purposes and operations for which they operate their
business. Public sectors companies are generally government owned. They have a motive of
working for the welfare of the public. They generally share there profits with the public. Their
purpose includes providing public services to the people as well as increasing their benefit.
Private company is owned by an individual or group of people. Various forms of private service
organisation are franchises, partnership, sole trader, companies etc. Their main aim is to increase
there profit (Belás and et. al., 2015). Voluntary organisations are those which are not operating
for gaining profit but are generally working for the welfare of people, community, culture,
animal etc. These organisations most of the time are not owned by any specific person but a
group of people is generally responsible for its decision making.
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There are mainly three kinds of industry under which these organisations operate. First is
the primary sector that includes industries that uses resource for the production of its goods like
forestry, fishing, farming and mining. Secondary sector organisations are those who uses the
products that are produced by primary sector firms. They takes raw materials from primary
sector organisation and convert them into finished goods. Tertiary sector organisations are those
who provides services for the business or consumer like catering, call centres, hotels etc. These
organisations uses the product of both primary and secondary sector industries and use them as
raw materials to provide services to the customers (Blanchard, Tolbert and Mencken, 2011). All
the three types (public, private and voluntary) of organisation comes under these three sectors.
Legal structure of public sector company:
These companies are accountable to local or central government. They are obliged in law
to have annual general meeting of shareholders. Companies act sets the responsibility and power
of directors. They have legal obligations like producing annual report and accounts statement.
There are larger paperwork that needs to be done while setting up public-sector company. PLC is
used after its name.
Legal structure of private company:
They do not sell their shares to wider public. Shares can only be traded by the permission
of Board of Directors. A private firm will have Ltd. after its name.
NatWest is one the biggest bank in United kingdom that works in the area of retail and
commerce banking. It was established in the year 1968 by combining National provisional Bank
and Westminster Bank. After 2000 it is a part of Royal Bank of Scotland Group. It is a direct
subsidiary of NatWest Holdings. It is having Approx 33,300 employees that works in around 960
branches of this bank. It has approx 3,400 cash machine in all around Great Britain. It serves to
around 850,000 small business accounts and approx 7.5 million personal customers. In Ireland it
operates through Ulsters Bank subsidiary. It has online banking option and has won award for
having the best bank app in Britain. It has provided one of the best services to the people of
England as it has started the service of mobile branch for the rural areas where there are no
permanent branch of the company. Size of this organisation is very big. It funds all its operations
and has a vary wide scope of growth in the rural as well as semi urban areas (Boons and Lüdeke-
Freund, 2013). This bank can reach out of the England and can work in the market of other
European union countries in the personal banking. It also has scope in the developing markets
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such as countries of south Asian countries. Large monetary funds of this company has assist
them in making the market changes so as to adjust in the rural back grounds.
In order to understand the size and scope of public sector companies it can be illustrated
by the example of public sector bank. Bank of England Is a central bank of England and was
established in the year 1694. It is second oldest central bank in the world and 8th oldest bank in
the World. It has approx 408 million pounds of reserve with it. It helps government of Britain in
facilitating citizen with monetary operations. It is one of those banks that print notes for the
people of UK. Main purpose of this bank is to serve in public interest by helping UK government
in financial management of the country.
P2 Size and scope of different types of organisation
In order to achieve various desired goals organisational structures are designed
accordingly. This selection of structures helps organisations in achieving their various goals and
objectives. It also facilitates organisation by making the work flow effective and can be done
efficiently. Public sector organisations aims to share their revenue in the public interest and does
not intends to achieve higher profits (Cai and Yang, 2014). These company are owned by
government of UK. Private organisations aims to achieve higher profits. These organisations
stakeholders are not legally bounded to debts or assets.
Size of the organisation indicates the that what is the size of its operations and size of its
stakeholders. More the size of stake holder larger is its size. Whereas scope refers to as the areas
in which it can grow or the places in which it can expand its business. Scope of the organisation
depends on the choice and availability of resources it has. It flexibility of income also plays an
important role in deciding the scope of expansion.
NatWest is the private bank that has its operations throughout the England. This bank has
a large credit ratios which helps company in its expansion plans. Future of this company is very
bright in terms of its scope of expansion in various other countries of Europe and world.
Expansion in the South east Asian and African countries can be be highly beneficial for the cited
organisation. Even United Kingdom is a big market and lot of investors needs money for their
business operations, hence there is large scope for the company in terms of its growth in market
share. This bank has scope in insurance sector as company can expand its business in this sector
as well. Increasing instability of the economies have increased the need of having insurances.
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As compared to this Bank of England has different kind of scope (Cavusgil and et. al.,
2014). Company can come in the personal banking. Monetary funds with this company is very
high hence can use in coming to new kinds of banking. Due to its Size and years of experience
people have faith on this bank and can easily come in the personal banking sector. With its large
financial credits with it managing its profit is not a problem. After Brexit role of this bank in the
financial market of England will increase hence company has a bright future in England.
Company needs to open more number of offices especially in UK as after Brexit this bank will
need more centres for printing Pounds.
M1 Structure, size and scope effect on business objectives
Size of the organisation depends on the stake holders that are dependent on the
functioning of the company. Size determines the business objectives of the company. NatWest is
a private bank hence its structure is in such a way that it makes maximum profit. In order to
make quick decisions which is required for having edge over other competitor in the war of
increasing profits, it lies in the hands of only few people (Cuervo‐Cazurra, 2011). Their policy
making totally depends on the goals and objectives they have to achieve and do not focusses on
welfare of the citizens. Whereas public or voluntary organisations makes decision keeping
people in mind hence the responsibility of decision making lies in the hands many people.
D1 Complexities of different type of business structures and inter relationship with
organisational function.
Public sector organisations have been designed to work for people. Hence has large
number of people that are involved in the decision making process. This makes the working
procedures slow but is effective in achieving its business objectives. Whereas private
organisations is made for making profit from the product or services an organisation offers.
Generally private organisations have simple structure and are designed in such a way that
decision making process gets faster. This is reflected in the policy making of NatWest bank.
Different organisational functions like finance, human resource and their inter
relationship helps in the achievement of its objectives. It provides clear line of responsibility for
each of its stakeholders. Structures of the organisation are very rigid for public sector companies
and are very much flexible in terms of relationship within organisational functions and changes
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according to the objectives it has to achieve (Drucker, 2017). These interrelationships are defined
according to the size of the company. In big organisations like NatWest these relationships are
well defined.
TASK 2
P3 Relationship between different organisational functions and their linkage to organisational
objectives.
There are many functional unit within an organisation like sales, marketing, finance,
human resource etc. It is important for the company to give clear line of approach to each
individual so that they can understand and have their control over their roles and responsibilities.
Without having a clear understanding of their roles it is impossible for any organisation to
achieve its goals and desired objectives. There must be a relationship between every functional
unit. Starting from the finance department it can be seen that it is one of the most essential unit of
an organisation as they provide funds for different operations of an organisation. It provides
funds to different functional units within the organisation as per their requirement so as to
achieve their needs. Finance is a part of both public and private sector organisations (Javalgi,
and et. al., 2011). Sales department works with finance department so that maximum benefits can
be achieved from their business operations.
Another important department in both type of organisation is HRM department which has
a role of recruiting people as per the demand of the firm's functional units. For enhancing the
performance of any functional unit it is important for them to have skilled set of employees. This
helps in increasing their efficiency and proper utilisation of their available resources. In private
organisations the role of HRM becomes more important as they have to resolve various issues of
the employee as dissatisfaction among employees can lead to reduction in the performance of the
organisation. NatWest needs employees with good set of skills such as communication and
handling skills. Training of the use of advanced technologies in banking operations is necessary
for the company.
Production department one of the core functional unit especially of primary and
secondary sector organisations. It helps to maintain the demand and supply chain. It works with
every other department so as to produce products as per their requirements. It helps to have
competitive edge over others by fulfilling required amount of products. Production department is
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helped by sales department in order to collect feedback from the customers. In order to achieve
business objectives production department has to work at its full capacity which cannot be
achieved without its relationship with other units.
Sales and marketing department works with other departments so as to increase the profit
margin of an organisation. This department has a very severe role especially in private
organisations whose prime objective is to attain maximum profit out of their products or services
(Klapper, Lewin and Delgado, 2011). Sales department takes feedback from people that helps in
improving the style of functioning of every other departments and produce products and services
according to the market demand. If this organisational unit do not perform in a proper manner
than even the best of products cant achieve desired success.
Customer service department is one of other functional unit of an organisation that play
an important role in achieving customer satisfaction (Mahmood and Hanafi, 2013). Private banks
like NatWest is known for its 24 hour customer service that helps in increasing satisfaction level
of their customers.
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M2 Advantages and disadvantages of organisational units interrelationship.
In order to achieve company's desired objective there must be a strong interrelationship
within organisational units. This is applicable for both private and public sector organisations.
Working in a relationship helps company in achieving their objectives on time and with better
standard of product.
Advantages are as follows:
 It helps organisations in achieving their desired goals on time.
 It helps in understanding the clear line of control about there roles.
 It facilitates every functional unit in improving their performance.
Disadvantages are as follows:
 Autonomy of every functional unit is at stake.
 Due to interrelationship process of decision making gets slower.
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Source 1: Relation between business functions

TASK 3
P4 Positive and negative impact of macro environment upon business operations.
Macro environments consists of several factors such as political, social, ecological,
economical , political, legal, technology. External business environment depends on these
factors. Business is sensitive towards these factors. Any change in these environmental factor
influences the business operations of any firm (Siewiorek and et. al., 2012). Sometimes it has
same effect as internal environment has on its performance. Any strategic decisions made must
be made after considering the impact of these factors on business operations of an organisation.
Economical factor: Economy is taking shape in different part of the world. Due to globalisation
it effects the working of every organisations throughout the globe.
Positive impact of economy:
 Stronger economy assists organisation both public and private sector in generating their
revenue.
 Investors needs loans in the unstable economies for their business projects which can be
Provided by the NatWest bank.
 When there is strong economy repo rates are lower that helps in providing loans to people
at lower rates.
Negative impact of economy
 Weaker economy is unable to provide monetary assistance to both public and private
sector companies.
 Where there is instability in the economy then loans waivers are unable to return there
interests which discourages the functions of banks (Sørensen, 2012). For example
bankruptcy of Greece has lead companies to face great losses.
Political factor: Government policies effect working of firms. Especially public sector units who
are under direct control of organisations. But even the private organisations are influenced by
political decisions.
Positive impact
 Lowering of interest rates increases the performance of banks as more number of people
will be able to take loans.
 Reducing taxes helps company in operating their function and increasing their profit
margin.
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Negative impact
 Increased taxation reduces the revenue of the company.
 Any harsh political decisions may hamper the performance of organisations especially in
the public sector.
 Political clashes between two territories pose problems for the business operations
especially for the multi national companies are effected more than any other companies.
Social: This factor may not directly influence the performance of the company (Ullah and Lai,
2011). Changing cultures of the society impacts the business operations especially those which
are operating in a single country.
Positive impact
 People are moving towards formal sectors which has boosted the performance of many
industries that are registered by the government.
Negative impact
 Hybridisation of cultures throughout the world has reduced the performance of
companies that are operating in single region.
Technological: Business communities are moving towards more use of technology which has
increased the performance of the companies. It has changed the way of doing business.
Positive impact
 With the use of technology companies are able to reach to larger set of people from
endorsing their products.
 Production has increased due to use of technology.
 Standards of products and services has increased.
Negative impact
 Due to excessive use of technology data and future documented decisions are one stake
as they can get stolen easily.
 Technology is changing at faster rates hence continues investment in required which
leads to revenue loses to the company.
Legal: As the rights of stakeholders needs to be taken care of by the companies hence this factor
influences the operations of the organisation (Bageac, Furrer and Reynaud, 2011). Banks like
NatWest have to properly check the legal laws as they are operating in the field of finance
industry.
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Positive impact
 It safeguards rights and business interests of every stakeholders.
 It helps to have proper set of rules on which company's functions gets performed.
Negative impact:
 It increases the complexity of operations.
 It reduces the speed of decision making as legal issues has to be taken care of.
Environmental : Many organisations especially in the primary and tertiary sector has been
impacted by this factor. Government and societies are forcing companies to make their
operations Eco-friendly.
Positive impact
 It helps company is innovating new ideas of doing business such as promoting use of
renewable resources.
Negative impact
 It has impacted the revenue generation of many companies as they cannot put extra
pressure on the resources of the region.
M3 PESTLE model to support analysis of impact of macro factors.
This model is designed to understand the impact of external environment on the business
operations of the company. PESTLE analysis is as follows:
 Political: Policies are made by Government which shape the structure and operations of
different organisations. Both public and private sector organisations are influenced by
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