Business and the Business Environment Report: Organizational Analysis

This report provides a detailed analysis of the business environment, focusing on different types of organizations, including private, public, and voluntary sectors, with a specific focus on Mark & Spencer (M&S). The report explores the size and scope of these organizations, examining their revenue, employee numbers, and global presence. It then delves into the relationships between various organizational functions, such as marketing, human resources, finance, and customer service, highlighting their collaborative roles in achieving organizational objectives. The report further describes the positive and negative impacts of the macro environment using PESTLE analysis, considering political, economic, social, technological, legal, and environmental factors. Finally, it conducts internal and external analyses of organizations, employing SWOT analysis to identify strengths, weaknesses, opportunities, and threats, and explaining the relationship between internal factors and external macro factors. The report concludes by summarizing the key findings and implications of the analysis.

Business and the Business Environment

Business and the Business Environment
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Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1. Different types of organisation..............................................................................................1
P2. Size and scope of different types of organisation..................................................................4
LO 2.................................................................................................................................................5
P3. Relationship between different organisational function........................................................5
LO 3.................................................................................................................................................6
P4 Describing some positive and negative impact of macro environment..................................6
LO 4.................................................................................................................................................8
P5. Internal and external analysis of organisation.......................................................................8
P6. Relation of strength and weakness with external macro factors.........................................10
CONCLUSION..............................................................................................................................13
References......................................................................................................................................15
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INTRODUCTION
In order to sustain successfully in business environment it become essential for business to have
various resources such as finance. The company needs human resource, and need to produce the
product as per the public demand and social forms. There are many factors which affects the
business environment(Bohari,., Hin and Fuad, 2017). The all factors altogether is known as
business environment. In order to understand the concept more clearly the study has taken mark
and Spencer as a company. The study will cover various types of organisation in the market. It
will also highlight relationship between different department within the organisation. The
negative as well as positive impact of various macro environment has also been discussed in the
study. In order to do so PESTEL analysis has been performed. The relation of internal strength
and weakness of company with its external macro factors has also been explained using SWOT
analysis.
LO 1
P1. Different types of organisation
Private sector company : The private sector company can be defined as a company which is
fully owned by a individual and a particular organisation which is not part of government or state
bureaucracy. The legal structure of a company varies it depend upon on which location the
company is operating. The maximum number of members in private organisation are 200 and
minimum number of members are 50(Blockeel and et.al., 2016). Private sector company usually
raise funds through direct investment by various investors or through venture capital. They can
also raise funds from loan and borrowing. Some examples of private sector company are Ikea,
Morrison and Mark & Spencer. It can be better understand by taking an example of a UK based
company Mark & Spencer.
Mark and Spencer : M & S is a multinational retailer which is located in London. The company
provides high quality clothing, food products and home products. The company became the first
British retailer who have earn pre tax profit of over euro 1 billion.
Purpose of Mark and Spencer : the purpose of Mark and Spencer is to serve a quality products
to its customers. The company many targets the people belonging to middle to lower upper class.
The company also provides bank services.

Public sector company : In public limited company the shares of a company are open to public.
The minimum number of member in such type of company seven and there is no limit for
maximum number. A stock of such company can be acquired by anyone and the holders are
limited to only the lose they have on the shares. Some of the examples of public sector company
are NHS, Google LLC, F5 etc.
NHS
National health service is a public limited company which is located in England. It is largest
company worldwide providing health care system. The company provide primary care,
Ophthalmology care, dentistry and in patient care. The organisation provide health care services
free of cost services include dental care, long term care services, eye test to legal residents of
UK.
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Purpose of NHS : The main purpose of NHS is to provide good health care services to all people
regardless of wealth. Aim of NHS is to meet the needs of patient and provide free services to
patients(Prajogo, 2016).
Voluntary organisation : It is a group of people who voluntary enter into an agreement in order
to form a organisation. The voluntary organisation aims at providing benefit to society. The
profit which is earned by organisation is reinvested in organisation itself but this does not happen
with private and public sector organisation. In public and private sector organisation the profit is
distribute among the shareholders(Hillary, 2017). Example of types of organisation which comes
under voluntary organisation are social welfare organisation, community group, charity,
foundation etc.
Oxfam
Oxfam is a voluntary organisation which work for poverty and injustice related issues. It is a non
profit organisation. the organisation believe that poverty can only be reduced by a human effort
and political support. The four major areas on which Oxfam focuses are economic justice, rights
in crisis, essential services and gender justice.
Purpose of Oxfam :
The aim of organisation is to provide the rights of livelihood, right of heard, right of identity,
basic needs, safety and security.
Types of private sector organisation are :
Sole trader ship : It is the most common form of business organisation. In such type of
organisation one person provides finance for performing different functions of organisation and
has full control on the company. The main advantage of such type of organisation are owners of
the company get all profit , the owner can choose pattern of work and time, can build close
relationship with the staff members(Bhandari and Bhandari, 2017).
Partnership : It can be defined as an agreement between two or more people in order to run
business. The deed of partnership is been signed by the partners which includes the rights of
voting, management function of each partner and criteria for distribution of profit. The advantage
of such type of partnership is that a shared decision is taken by the partners, each partner invest
additional capital and such type of agreement has greater privacy and few legal formalities as
compared to corporate organisation. The disadvantage of this is that profit has to be shared
between the partners and the partners has limited liability.
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Limited companies : This are generally small companies. Shares are transferred privately and
all the shareholders must be agreed on the transfer. Such type of company are generally owned
by a members of family or close friends. Advantage of such type of business is that shareholders
of a company has limited liability and the business will be continued even if the owner die. The
main disadvantage of such type of company is that firms are generally not allowed to sell its
shares to public.
Some other types of organisation are profit organisation and non profit organisation.
Not for profit organisation : In such type of organisation no person owns share and the income
which has been earned is reinvested in the organisation only. Such type of organisation work for
the welfare of a society. The types of such organisation are charitable organisation, churches,
independent research institute, promotion of social welfare, hospitals etc(Non profit
organisation, 2019).
Cooperatives: this type of organisation perform common business in some countries. The
business such as agriculture and retailing. All the members of organisation can contribute in the
working of organisation and sharing of roles and responsibilities. In such type of organisation
profit is shared equally among all the members of organisation.
Objectives of public sector organisation : The main objective of public sector organisation is the
development of socio economic infrastructure.
Objectives of private sector organisation : The objective of private organisation is to survive in
the market, grow the business and earn profit out of it.
P2. Size and scope of different types of organisation
On the basis of size organisation can be divided into three categories :
Mark and Spencer : As per of year 2019, the company has its stores in different geographical
regions. The company has about 1043 stores which is located in UK and about 444 stores which
is located all around the world. The company has about 79 thousand people who are working for
the company. And out of which about seventy one are female. Since year 2010 the company has
experienced increase in its revenue by almost 9.44 billion. Most of the revenue of company
comes from its food segment. The company also has its online platform which has also
experienced revenue of about 370 million pounds(Kapoor and Kaur, 2017).
NHS : United Kingdom spends about 7.4 percent of the GDP in NHS. The expenditure on
healthcare has generally been increased due to more spending on public healthcare then on
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private health care. It is the UK’s largest public employer. The company has about 110 thousand
doctors, 317.7 thousand nursing staff and 351 thousand support staff which is totally up to
approximately 1.3 million staff.
Oxfam : The organisation is made up of about 19 organisation. The organisation is working with
various partners and local communities and is operating in about ninety countries. On an average
the company tries to spend about 70 percent of one euro in the betterment of organisation.
As per the statistics of Oxfam the company gets the total fund of about 1042 euro and
expand 1079 euro. The company gets about 42.6 % of its fund from institutional fund raising,
38.6 % from public fundraising, 16.8 % from trade revenue, 1.2 % from other sources and 0.8 %
from interest and investment.
LO 2
P3. Relationship between different organisational function
There are various department within the organisation which work collaboratively in order to
achieve success. The various function of organisation are human resource, research and
development, sales and marketing, production and operations, finance and accounts,
administration and information technology and lastly customer service. The various department o
work collaboratively with one another(Švagždienė and Perkumienė, 2017). All the department
plays an important role in order in success of organisation. Marketing function is most important
function of Mark and Spencer as it helps the company to understand the need of customers and
satisfy them. The marketing helps Mark and Spencer to create new products for their customers.
The human resource department of Mark and Spencer is responsible for recruiting the right
people for the organisation. The human resource department recruit such employees for
organisation which helps company to achieve objective efficiently. Finance department works
almost with every department for instance marketing department in order to conduct promotional
activity for a company or to promote product through various platform such as social media,
print media etc needs a budget in order to accomplish their activities the finance department is
responsible for setting budget for such type of activities. Similarly the finance department also
has to set budget for HR department recruitment and selection purpose, for bringing new
technology or software in the organisation, for conducting market research etc(Gunawong,
Thongpapanl and Ferreira, 2019). Research and development department of Mark and Spencer
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work with marketing department which help in analysing the target customer, trends etc., and
then accordingly the marketing department design marketing strategies and product for the target
customers.
Similarly customer service department takes regular feedback from customers about the product
and services offered by Mark and Spencer which help in better understanding of customer needs.
And help marketing department to accordingly make the product. The information technology
department also helps marketing department by preparing content for the social media platform.
Thus it can be seen that different department of Mark and Spencer helps the company to
achieve organisation objectives.
LO 3
P4 Describing some positive and negative impact of macro environment
PESTLE analysis is used to determine the external macro environment factor which is
the strategic management tool that helps to determine some external factor that affect the
business environment. These are as mention below:
Political Factor: This factor generally deals with the political system of the country and
M&S also deal with this situation such that it create both positive and negative impact like, Positive impact: Government of UK suddenly raise the tax rate and this fluctuates the
product's price. But the company start offering the products at low rate and adopt cost
leadership strategy that helps to create positive impact upon M&S external environment
(Nandonde, 2019).
 Negative impact: Due to comparatively high cost structure, company losses its share
market and also losses its financial stability in market. Moreover, due to fluctuation in the
political stability of the country also creates negative impact upon M&S.
Economical factor: It deals with the currency fluctuation, inflation and deflation rate of
the country. This factor also creates impact upon company such as: Positive impact: Due to inflation rate in UK, the company also develop the strategy that
helps to deal with the economic factor such that it provide products as low rates which
helps to attract wide range of customers and this lead to raise company's financial
performance.
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 Negative impact: Fluctuation in the currency rate of country creates negative impact
upon the M&S such it increases the price of the offered services and this lead to creates
negative impact upon the business. Apart from this, failing in oil prices leads to affect the
performance in negative way (Islam, 2017).
Social Factor: it deals with the belief and values of the customers as well as society, this
also affect the business in both ways such that, Positive impact: by providing the innovative products to the customers and offering
online services will help the firm to cope with social factors and this also creates positive
impact upon customers.
 Negative impact: Customer shift towards another brand when they find the store who
provides low cost products and this creates negative impact upon business financial
performance. Such that at that time, the company has to provide innovative and attractive
products which attract wide range of customers.
Technological Factor: It deals with the new and advance technologies which generally
creates good impact upon business performance, such that, Positive impact: By offering online services to their customer will creates positive impact
upon company's financial performance and using advance technique such as automatic
billing and use of social media creates positive impact upon the business performance.
Because generally customers are now more focused and prefer mobile commerce which
creates positive impact upon M&S performance (Reuer, 2019).
 Negative impact: Using advance technology may also create negative impact such that it
sometimes breaches the security and may leak some confidential data as well. Therefore,
company has to make sure that it comply with the Data protection act and did not share
the personal information with any third party.
Legal Factor: This factor deals with the laws and regulations which every company must
follow and it also affects the external environment of the company such that Positive impact: M&S should comply with law such as Employment Act, discrimination
law, Health and safety law so that it creates positive impact upon the business and helps
to run smoothly as well. Apart from this, quoted firm also allow the omni channel
experience so that customers also use an option of home delivery.
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 Negative impact: On the other side, if the firm did not comply with the laws, then it did
not provide positive environment to the employees and as a result, it affects the brand
image in negative way. Moreover, company should provide equal and minimum pay to
their employees otherwise it will create negative impression.
Environmental factor: It deals with the protection of environment from using any other
harmful resources, such that Positive impact: The company follow plan A which provide the best ethical green
practice and it also requires some stricter standards. Thus, it creates negative impact upon
the business as well an environment. Further, the company also follow sustainability act
that also help to protect the environment.
 Negative impact: if the fir did not have waste management system and proper recyclable
system then it will also affect the environment in negative way and also leads to create
negative impact upon business brand image.
LO 4
P5. Internal and external analysis of organisation
SWOT analysis
Strength
Clear brand image : The company targets
premium segment. The company has a good
bran image in market as it provides stylish,
sophisticated and modern clothing which
satisfy the needs of customers. Which results in
clear brand image
Diversity : Their are about 80,000 employees
who are working under a company. The
employees are of different countries, religion
and gender. Mark and Spencer provides equal
opportunities to every employee and no
support is given to discrimination performed
within the work environment(Coyle, 2018).
Weakness
Inability to penetrate successfully : The
company is operating in Europe, united
kingdom and united states. The company has
also opened its stores in Asia and middle east
but fails to perform in this markets.
Customer satisfaction : The company is not
successful in meeting the satisfaction level of
employees. Though the company is
continuously trying to work on this.
Supply chain scalability : The company has a
weak supply chain management. The company
is trying to fill this gap by providing its
products through online stores.
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Wide variety of products : the company
provides a wide variety of products to its
customers
Large number of stores and outlets : The
company has about 900 stores all over the
work and 600 stores within the UK. As the
company has wide number of stores it helps the
company to create its presence in market as
well as the large number of outlets make
business wider and also results in increase in
sales.
Popular designer brands : The company ahs
wide range of designer brands for both men’s
as well as women wear. Brands of men’s wear
are Big& tall, Collezione, North coast,
autograph etc. And in women’s clothing Indigo
collection, Limited collection, Per Una,
Autograph, classic, portfolio etc.
Bad publicity as non trendy stores : The clothes
which company is providing is out of date and
non trendy. The customers have thinking that
the products offered by Mark and Spencer is
only for the aged people are not for youngsters
and teenagers(Demircioglu and Audretsch,
2017).
Manual working increase coast : The company
does not make use of new technique as a result
a high cost and time is involved in it. The
company is not making use of technology for
manual work which results in reduction in
work efficiency.
Opportunities
As fashion is evolving therefore their is a huge
opportunity for a company. In Asia there is a
huge demand of ethnic and traditional wear so
the company can also use this opportunity by
starting to provide clothing under this category.
Threat
Competition : There are large number of
competitors in a market. The increase in
competition is creating a threat for a company.
Some of the competitors are Uniqlo, Tommy
Hilfiger, Zara, United colons of Benetton and
Gap, river island, Oxygen, H&M, New look
etc.
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P6. Relation of strength and weakness with external macro factors
Strength and weakness of business organisation are directly or indirectly related to various macro
and micro environment factors. The organisation usually compare their strength and weakness
with the external environment. The factors on which the company compares strength and
weakness are economic, social and cultural factors , technological factors, environmental factors,
environmental factors. Any change in environmental factors can create a negative as well as
positive impact on the decision-making of a company.
Interrelationship between micro and macro factors and organisation strength and weakness are :
Economic factors : There are some kind of elements which affect the economic environment of
a company. The economic factors include inflation rate, exchange rate, interest rate etc. The
economic factors may affect the decision-making of Mark & Spencer. As the company is
financially strong and also operate its business in different areas. Therefore if any change occurs
in exchange rate, inflation rate and interest rate of a country in which the company is operating it
will create a negative impact on the financial condition of the company.
An affect of economic environment can be understand as, recently due to the impact of
Brexit the UK is facing a economic slowdown which is directly or indirectly affecting the
business of Mark and Spencer and various other organisation. Thus it can be seen that how the
financial strength of a company can be affected due to economic factors(Maier, Meyer and
Steinbereithner, 2016).
Social and cultural factors : The social factors include different types of group, religious,
belief, habits, custom, ethnicity etc. If we talk about the weakness of company one of its major
weakness is that company is weak in promoting its product as many customers have the
conception that the products provided by the company only belongs to aged people and it doses
not provides clothing for teenagers and youngsters. As a result of this the company is not able to
create a relation with the other age group.
It can be seen from the above discussion that how the weakness of company and social
factors are interrelated.
Environmental factors : Among all the factors of external environment it is one of the most
important factor which affect the business. The environmental factors are waste management,
ecological matter, carbon management, infrastructure, fume emission etc.
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In order to overcome the negative effect of production process or any other activity on
environment the company is trying to take many steps such as recycling, good waste
management etc., so that minimum impact is created on the environment due to company.
Technological factors : As the technology is changing day by day it is creating a negative as
well as positive effect on the business. Mark and Spencer is not making use of latest technology
for inventory management which is one of the weakness of a company. As a result of this the
company is not able to move with the rapid changing business environment.
The company should use the advance technology in order to solve this problem.
This all factors affect the decision-making process of company. The reason behind this is that
company have to take decision by considering all these factors. For example company have to
indulge such activities in its working which does not harm the environment, secondly the
company has to produce such product which is acceptable by the customers or should promote
their product in such a way which does not harm the religious, gender, belief of any group of
society.
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CONCLUSION
Business environment is experiencing a continuous change in it. There are various
different types of organisation in business environment. The purpose of each and every
organisation varies from each other. The private sector organisation aims at generating profit
while if we talk of public sector the aim of such type of organisation is to provide services to
public and voluntary organisation aims at providing better life to the people of society without
earning for their own. The voluntary organisation work for welfare of the society. And how the
different department of organisation helps in achieving overall objective of organisation. There
are various macro and micro factors which affects the business in both positive as well as
negative wary. Macro factors such as political, economic, social, legal etc affects the working of
business.
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