Unit 1 Report: Business Environment Analysis of French Connection Plc

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This report provides a detailed analysis of the business environment of French Connection Plc, a UK-based fashion retailer. It explores various aspects including the types and purposes of organizations, legal structures, and the influence of macro and micro environmental factors. The report examines the organizational structure of French Connection, its objectives, and the impact of globalization. It includes PESTLE and SWOT analyses to assess the company's strengths, weaknesses, opportunities, and threats, as well as the external factors affecting its operations. The report also provides background information on John Lewis Partnership, HM Revenue and Customs, and Action for Children, comparing their structures, objectives, and services. The report aims to understand the interconnectedness between organizational functions and the external environment, offering insights into the challenges and opportunities faced by French Connection within the clothing industry.
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UNIT 1 BUSINESS &
BUSINESS ENVIRONMENT
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LIST OF FIGURES
Figure 1: Organizational Structure of French Connection plc.........................................................8
Figure 2: Internal and external analysis to identify strengths and weaknesses of French
Connection plc...............................................................................................................................11
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INTRODUCTION
Business is the organizational or individual activity or economic system of exchanging
goods and services with an intention to generate profit in terms of money. Business environment
is the atmosphere or surrounding of a business that consists of factors, forces and entities
influencing organization’s processes and performance (Carroll and Shabana, 2010). Report on
business environment is prepared to understand the internal and external environmental factors
that influences the operations of an organization. For the case study, research on macro and
micro factors affecting business environment of French Connection plc a UK based public
company engaged in clothing industry is undertaken. The report also studies the organizational
functions of French Connection and its interrelatedness with its objectives and structures and
positive and negative impacts of macro environment on business operations. PESTLE and
SWOT analysis will be done to analyze the micro and macro environmental factors affecting
French Connection and interrelation of strengths and weaknesses of business with external
factors.
TASK 1
P1. Different types and purposes of organizations and legal structures
Business organization is a group of people organized for generating profit in a collective
manner and major purpose of every business to motive of profit but, it varies according to the
type and function of organizations. Different types of organizations are; public, private and
voluntary sectors and these are formed according to various legislations and regulations (Klapper
and Love, 2010).
Overview
Business environment is the collection of political, social, legal and economic factors that
are beyond control of French Connection and impacts its business, functions and structure in a
direct manner. It includes various internal and external factors and forces like employees,
objectives, vision, mission, ethics and culture which are under its control and government,
stakeholders etc are some influences which cannot be controlled by organization.
Background of the company
French Connection is a UK based global retailer and wholesaler of fashion clothing,
accessories and homeware founded in 1972 and is a brand of parent company French Connection
Group Plc which is a public limited company listed on the London Stock Exchange. It distributes
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its clothing and accessories through its own stores globally and has around 2,260 (2014)
employees and revenue of £189.4million (2014). (French Connection Group plc - Company
Profile, Information, Business Description, History, Background Information on French
Connection Group plc, 2018.)
Types and purposes of organizations
Private
Private sector organizations are operated and held by private individuals, groups and
firms with an intention of making profit by rendering products and services to customer’s and is
a part of the national economic system which is owned, managed and controlled by forming new
enterprise or taking over a public entity. These include sole proprietorships, SME’s, partnership
firms etc that have a higher contribution to country’s economic wealth generation and
employee’s workers and employees for undertaking its activities and processes (Klapper, Lewin
and Delgado, 2011). John Lewis partnership (JLP) is an employee owned partnership firm in
retail industry of UK which operates John Lewis and Partners department store, Waitrose and
partner’s supermarket, financial and banking services and is owned by a trust. Its employees
accounts to 88,900 (2016) and works with the motive of making profits by rendering value
products and services like clothing, watches, jewelry etc
Public
Public or state sector organizations are managed and controlled by national, state or local
government which consists of various public services and enterprises and are part of the
country’s economic system which operates with the motive of rendering services to public than
profit making objective. Public sector bodies are formed under several statutory norms and
legislations and employs general public and individuals as permanent staffs and conducts
operations to render services to public. Her majesty’s Revenue and Customs (HM Revenue and
Customs) is a non-ministerial department of the UK government which is responsible for
collecting taxes, payments of state support and administering other regulatory regimes like
national minimum wages. It employs 56,000 employees (FTE, 2010) and is revenue department
type of organization formed in 2005 April 18 (Commander and Svejnar, 2011).
Voluntary Sector
Voluntary or community sector organizations are administrations that are operated with
the purpose of benefiting and enrichment of society with little or less intervention of
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government. These are independent organizations known as civil society, tertiary or not for profit
organization for uplifting and addressing issues and problems of community and public rather
making profits. These organizations are registered and formed by complying several rules and
regulations formed by the directors and committee and usually operates as a trust. Action for
children is a UK’s charity organization committed to help vulnerable and neglected young
people and their families in the country (Savrul, Incekara and Sener, 2014). It was founded in
1869 and employs 7000 people and includes 4000 volunteers and is called as NCH Action for
children.
Legal structure of French Connection Plc
French Connection plc is a public listed company operated and managed by board of
directors on behalf of its shareholders and investors that is registered and formed by making the
articles of association that describes the purpose, membership and capital. The collegial body is
mandated by all shareholders of the organization and acts in corporate interest that is performed
by the board of directors.
Analyzing how structure, size and scope of different organizations link to business objectives
and products and services offered by French Connection plc
Structure, size and scope of business enterprises are connected with its organizational
structure and processes and also affects its functions and operations. Employees of an
organization, their knowledge, skills and capabilities helps a firm in attaining goals and
objectives. Major purposes of every firm is to generate huge profits by conducting business
activities and operations. French Connection offers clothing and other fashion products to
customers by delivering quality and uniquely designed goods focused on rendering innovative
items globally. It offers clothing, sunglasses, watches, cosmetics, perfumes etc.
Growth of international business environment
Globalization and liberalization of international trade and practices with advance
technologies are paving way for global trade that is helping organizations conduct business
beyond their nation to generate higher customer base, expand operations and create profit and
wealth (Boons and Lüdeke-Freund, 2013). Due to these emergences businesses and
organizations are experiencing a wide scope of change in their operations, functions, product
line, organizational structure etc, to benefit them in generating and attaining objectives and goals.
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P2. Size and scope of different types of organizations
John Lewis partnership (JLP)
Background details of John Lewis partnership (JLP)
John Lewis Partnership is a private sector partnership retail organization founded in 1929
and is operated in Oxford Street, London. The firm operates John Lewis and partners, Waitrose
and partner’s supermarkets, banking and financial services and retail products and services and is
owned by a trust on behalf of all employees (Belás and et.al., 2015).
Products and services offered
It offers various products and services like clothing, jewelry, watches, cosmetics,
furniture, housewares, photography, financial services and audio visual computing.
Size and scope of organization
John Lewis Partnership is a private partnership organization headquartered in UK which
operates with 88,900 (2016) employees and generated a revenue of £1billion (2015) and has a
net income of £409million (2012-13). The firm has a manufacturing operations in Herbert
Parkinson in Darwen that produces John Lewis own brand fabrics and curtains as well as
furnishing products. It operates by rendering direct services through their bran’s departmental
store and also actively performs in online platform.
Vision
Successful way of doing business by putting happiness of partners at the Centre of
everything and serve customers with flair and fairness”
Mission
“Happiness of all members through rendering satisfying employment in a successful
business with success measured on our ability to sustain and enhance position as a retailer and
employee ownership”
Business Objectives
Strategy, aims and objectives of John Lewis Partnership (JLP) are;
Increase advantage of partners
Realize potential of market
Attain efficient growth
These aims are designed to render bolder, clearer and confident partnership approach to
conduct business in a better manner and deliver goals and targets as attaining growth and
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respond effectively to new demands and utilize coownership model (Chesbrough, 2010). The
major aim of this organization is to conduct ethical principles and commitment of conducting
business in a fair and sustainable manner.
Organizational structure
John Lewis Partnership are governed by a written constitution that renders a framework
establishing principles of partnership and the way of operations. The partnership governance
system was created by the founder John Spedan Lewis which is set in firm’s constitution and the
structure renders freedom to management to be entrepreneurial and competitive in business
doing to attain a long term success (Dahan and et.al., 2010). The rights and responsibilities of
partners, owners are granted through active involvement in the decision making and business of
John Lewis Partnership.
Stakeholder’s information
The firm publishes financial annual and interim reports for the benefit of their
shareholders, partners and shares information with all interested potential parties. The firm
renders importance to their partners to make them satisfied and happy which is the major aim of
organization which has created the organization reach to high level of successful operation in
UK.
HM Revenue and Customs
Background details of HM Revenue and Customs
Her Majesty’s Revenue and Customs is a non-ministerial government department
responsible for collecting taxes and is the part of preceding agency Inland Revenue HM customs
and Excise and was formed in 2005. The commissioners for revenue and customs act 2005
combined these two into a single government department and the act establishes revenue and
customs prosecutions office and provided inspections of HMRC by HM inspectors of
Constabulary to ensure fulfilness with law.
Products and services offered
HM Revenue and Customs are interested in physical management of goods than services
which includes specific tangible commodities, manufactured items like fabrics, clothing,
agricultural products, tools and machinery (Belás and et.al., 2014). It also renders services like
advertising, business management or administration, R&D, Training provisions and service with
no community code.
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Size and scope of organization
HM Revenue and Customs administers and collects direct taxes, income and corporation
tax like capital gains, inheritance and indirect taxes and contributes to national Insurance of UK
and comprises of 56,000 employees and operates in London in the revenue department.
Vision
“Improve the extent to which individuals and businesses pay tax due and receive entitled
credits and payments”
“Improve customer’s experiences of HMRC and develop business environment of UK”
Mission
“Collect compile, assure quality and publish trade statistics on physical goods entering
and leaving UK for trade purposes”
“Ensure compliances between UK and European Union legislation regarding quality
and timeliness of trade statistics”
“Ensure trade statistics collection and publishing according to UK National Statistics”
Business Objectives
HMRC works closely with treasury to design effective tax and customs policies and
support governments aims using tax reliefs to support economic growth. Also facilitate trade
through customs processes and enforcing national minimum wage (Ullah and Lai, 2011).
Organizational structure
The senior management and executive team of HMRC consisting of secretary, ministry
and treasury are responsible for all decision making and managing of activities and processes in
the organization. It is supported with supporting groups and department is organized and led by a
director general.
Stakeholder’s information
HMRC issues trade statistics and reports for their valuable customers and stakeholders to
get information on their revenues and operation costs. It considers its customers as valuable
assets to improve their experiences and business of UK.
Background details of Action for children
Action for children is a charity organization in UK founded in 1869 and is a registered
aid association helping children and young people in areas of disability, adoption and neglect
(Carroll and Shabana, 2010).
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Products and services offered
Action for children focuses on improving children and young people’s welfare by
rendering services and care.
Size and scope of organization
Action for children works over 650 projects and services based on UK and works over
300,000 children and young people and their families which works with 7000 employees and
4000 volunteers.
Vision
“To meet the needs of children and young people through work and speaking out and we seek to
break cycle of deprivation”
Mission
“To make sure every child and young person has love, support and opportunity required
to reach potential”
Business Objectives
Support family of neglected children
Deliver services to disabled and children in care
Support young people and render education
Organizational structure
Action for children being a registered charity organization is managed and operated by its
board of directors and statutory committee (Reinhardt and Stavins, 2010). The chief executive
officer and board of trustees are responsible for its practices and activities and decision making
within the organization.
Stakeholder’s information
Action for children publishes annual reports and testimonials to benefit their stakeholders
get to know about their services in which they might be interested in to join.
TASK 2
P3. Relationship between different organizational functions and interrelation with organizational
objectives and structure
Interrelationship between organizational functions and impact on French Connection plc’s
organizational structure
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French Connection plc’s organizational structure are dependent on it business functions
as it develops the structure and objectives to serve customers (Kolk and Van Tulder, 2010). For
the same they create objectives to raise productivity and effective organizational structure to
deliver customers with unique products to make impact on business. Organizational functions
vary in various ways and is necessary to interrelate with all departments of the organization.
Management: French Connection plc’s activities and processes need to be effectively
executed to impact overall performances of organization and decision making which is done by
operative team to improve production and profitability (Klapper and Love, 2010).
Finance: French Connection plc’s financial department controls and manages the cash
inflows and outflows, budgets, operational costs etc., of activities in organization which is
required to understand, allocate and sanction fund or capital needed for effective budget planning
and forecasting. All department of French Connection is associated with this functional unit.
Human resource: Administering French Connection’s activities and employees Human
resource management is necessary that will delegate authorities to subordinates and assign duties
and responsible towards better performance to benefit organization with increased productivity
and profitability.
Advantages:
Interrelation of employees and departments of French connection helps in maintaining
cooperative and coordinative work environment to attain productivity and profitability
Effectiveness of business and profits will be increased due to high performance work of staff and
association among each other which will render unity and harmony (Klapper, Lewin and
Delgado, 2011)
Enhances better improved communication that will ease business operations and
performances.
Disadvantages:
Understanding of workings and responsibilities within departments and operations of
functional units can be manipulated by wrong and misled employees
Increased competition among departments may rise conflicts and issues.
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Figure 1: Organizational Structure of French Connection plc
TASK 3
P4. Positive and negative impacts of macro environment on business operations
PESTLE MODEL to analyze macro environment of French Connection plc
Political
UK government is reduced pension barriers
for above 55 years’ age which could be
targeted by French Connection plc to
capitalize on this wealth. Rise in refugees to
UK can be focused by French Connection to
absorb diversity within advertising to render
awareness of current issues in London
(Commander and Svejnar, 2011).
Economic
GDP growth rate have increased after the
recession and UK’s decision to leave EU
which could benefit French Connection to
render a premium lie to capitalize increased
wealth in economy. Reduced unemployment
will help business to increase sales as
spending power of youth are rising.
Social
Increasing market of menswear and apparel
trend in UK is an advantage to French
Connection to increase production and
improve collections and add more products to
Technological
High use of internet and ecommerce are used
by consumers to browse and buy products
online than buying from physical store which
could be a challenge to French Connection
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Board of
Directors
Nomination
Committee
Remuneratio n
Committee
Audit
Committee
Risk Committee
Global Health
Committee
Global ethics
Committee
Chief Executive
Officer/
President
Senior
Leaqdership
Team
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