Business Environment Report: Macro Factors and Organizational Analysis

This report provides a comprehensive analysis of the business environment, focusing on public, private, and voluntary organizations. It begins by defining the business environment and its impact on various business functions. The report then explores the characteristics, legal structures, purposes, ...Read More

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Several types and purposes of organisations like public, private and voluntary sectors and
legal structure as well..................................................................................................................1
P2 Scope and size of a range of different types of organisation.................................................3
TASK 2............................................................................................................................................5
P3 Relationship between different organisational functions and how they link to
organisational structure and objectives.......................................................................................5
TASK 3............................................................................................................................................7
P4 Positive and negative impacts the macro environment has upon business operations with
examples......................................................................................................................................7
TASK 4 ...........................................................................................................................................9
P5 Internal and external analysis of specific organisations to analyse strength and weakness.. 9
P6 How strength and weaknesses are interrelate with external macro factors..........................10
CONCLUSION..............................................................................................................................12
REFERENCE.................................................................................................................................13

INTRODUCTION
Business environment refers to the different types of internal and external factors which
generally comes under the clients, employees,suppliers, supply and demand, owners, innovative
technologies, market trends, changes in economies and so on. These assorted factors directly
affects entire functions and several management activities of an organisation along with it focus
that how firms are working by focusing on environment business situations (Hilton and Platt,
2013). Therefore, business and the business environment is very helpful approach in order to
identify different opportunities in business in order to increase entire performance, profitability
of business, growth etc. This assignment is based is based on public (Crown Prosecution
services), private (Marks and Spencer) and volunteer (Oxfam) organisations in order to known
various size, scope and structure of firms. Along with this, interrelationship of various functions
together with positively and negative influence impact on business operations. At last, internal
strength and weakness of particular business and its interrelationships with external macro factor
will get discussed.
LO 1
Several types and purposes of organisations like public, private and voluntary sectors and legal
structure as well.
Within competitive world there are are different types of firms and business entities that
plays significant role at marketplace and gives better working opportunities to economy. With
the help of this they can achieve its targeted goals and objectives in a proper manner. There are
different types of organisation those are going to be discussed below:
Private organisation:
These firms and organisation considered as the corporation, person, partnership or agency
which are not controlled and managed by a public and make for a profit as well. In order to better
understanding of this concept there is Marks and Spencer has been selected as a private firm
which is a British multinational retailer and headquartered in London, UK. It was formed in the
year of 1884 by Michael Marks and Thomas Spencer (Bharadwaj and et. al., 2013). This brand
has their own unique brand identity at marketplace which is working with large number of
people to achieve organisational goals and objectives. On the other side as they do not have
government pressure so that they can easily take their own decision and able to run entire
1

business activities effectively. For example: Apple is one of the most famous and leading brand
which deals with mobile phones, Mac book, personal computer and so. Along with prices of
product from this firm is very expensive. Therefore, the main aim of this firm is to make huge
profits through giving best services and always target high class people at marketplace. So that
private firm generally made for profit.
Legal structure: On the basis of this, Marks and Spencer always followed powerful legal
structure by which they can shapes the way to achieve desired goals respectively. Along with
employees are able to apply different policies and strategies on those necessaries terms by which
they can make organisation effective and productive.
Cooperatives: It is refers to the autonomous firm of person in which they able to meet
their common social, economical and aim to controlled their different types of functions and
values.
Purpose: The main purpose of Marks and Spencer is to provide general stores at market
place by which middle to upper class people can buy anything. Along with they want to have
home décor, clothing and food items in the stores.
Stakeholders: Within the Marks and Spencer stakeholders are employees, management
and customers as well by which firm can easily increase its wealth and able to gain huge profit at
marketplace (Berg and Kilambi, Siebel Systems Inc, 2014).
Public Organisation:
As compare to the organisations public sectors are usually operated and owned by
government bodies in order to provide better services to the citizens. On the other side this type
of organisation do not seek to develop profit, they only helps to give them satisfaction. For
example Crown Prosecution services, refers to the principle public agency for conducting
criminal prosecution within the Wales and England. At current period of time, this firm is having
6,000 around people who works together to give better services to all over employees. For
example: NHS it is refers national health services which is known as public firm as it helps
people to improve their health and gives them different types of safety and healthy tools in order
to achieve targeted goals.
Legal structure: By having appropriate legal structure they generally follows police and
evidence in order to take right decision to achieve better ways for communicate with people in a
proper way.
2

Sole Trader: It is considered as a self-employed person who has their own business and
doesn't have any legal identity along separate to their owner and work for society.
Partnership: It is a kind of business where two or more people work together and
responsible to manage overall functions and operations within firm.
Purpose: The main aim of this organisation is to reduce crime from the nation which
help police and share lots of new ideas by which they can provide better policies and few
knowledge about particular topics in order to attain accurate information effectively to achieve
goals (Ballard and et. al., 2012).
Stakeholders: Within the Crown Prosecution services it comes under the different types
people which is generally associated with financial institutions, government agencies that affect
people to take effective decisions towards betterment of future.
Voluntary Organisation:
It refers to the particular group who mainly enters into an agreement mainly as volunteers
to form a organisation in order to accomplish a purpose. Trade unions, learned societies,
Professionals associations and environmental groups as well. Herein, Oxfam has been selected as
an volunteer organisation, it consist different types of alliances in which 20 independent
charitable trust always works together to overcome poverty from the nation. It is formed in the
year of 1942 through Cecil Jackson-Cole into the England. Therefore, this firm is not related
profit but it seeks humans profit by reducing crime from the nation. For example: NGO's are the
best way who are able to give better services to people through fulfilling their needs and wants
without thinking any kind of profits.
Legal Structure: Oxfam follows hierarchical structure in order to create trust, beliefs
and norms in the people mind to make communities crime free. Some of the aspects under this
point covered below:
An Unincorporated association: It is large number group of people who come together
in order to achieve targeted goals and objectives(Schaltegger, Lüdeke-Freund and Hansen,
2012).
Legal needs: It consist different laws or legislations for example checklist, charity, legal
advice which is helpful for firm to manage overall activities effectively.
3

A Trust: It is much essential for people to make trust towards this respective firm, with
the help of this they can develop better ways by investing more funds to make services for
people.
Partnership: With the help of legal structure Oxfam is able to have large number of
people in their group so that they can work in partnership to make people happy.
Purpose: To offer better alternatives and solutions for different types of issues which is
generally faced by people into the society. So they probably wants to develop unique solutions to
reduce poverty properly.
Stakeholders: It can be founder, volunteers, employees and so on. So that Oxfam take
help from all of these sorts of people and make good decisions towards better ways.
Scope and size of a range of different types of organisation.
Scope, size, aim, mission and objectives are most appropriate helpful approaches for
firms to make unique goals to achieve desired aim. To make unique image of brands firms are
required to following these assorted aspects to gain successful growth (Janita and Miranda,
2013). There are several organisations, those are explained in beneath:
Public Organization:
This sorts of firm usually governed and managed by various government sources like
central, state as well as governmental agencies. There are some points in reference with Crown
Prosecution services, mentioned below:
Background: CPS also considered as the principle of entire public agency to conduct
criminal prosecution and registered in England and Wales. It is opened in the year of 1986 that
have 6,000 people into the business place. Along with it involves so many rules and policies to
make better environment.
Products and services: This firm deals with various aspects which is used to helps
people at every level.
Vision: Main vision of this firm is to formulates best organisation worldwide.
Mission: To provide better and proper safety tools for humans so that they can enjoy
their life.
Size: They have large workforce so that they can easily attract numerous people together.
Objectives: Is to offer numerous protective tools to reduce various issues globally.
4

Structure: Hierarchical structure is followed by this firm to increase people confidence
towards work and make effective decisions.
Scope: It is a broad concept that offers securities to people (Werbach and Hunter, 2012).
As per the different types of size and scope of this public organisation this can be said
that it comes under the large organisation which is always able to reduce crime from the nation.
Private Organization:
This type of firm always want to earn huge profit with high sales and revenue within the
marketplace through satisfying all over customers needs and wants. In context with Marks and
Spencer, there are some basic aspect which is followed by them, they are following as:
Background: Marks and Spencer considered as a major retailer of household items,
foods, clothes along with financial services as well. As it is international brand and provide its
product and services globally so that they have good brand image.
Mission: It reflects on overall business of an organisation so the mission are to make
inspirational quality that is accessible to others.
Vision: Main vision is to work towards achieving goals in order to gain successful
growth in a proper manner.
Objectives: In order to develop lots of improvements within the sales by which they can
get operational objectives to growing ahead.
Products: Goods and services of this organisation includes food items, clothes,
household items and so on.
Size: This firm operates its overall functional activities worldwide, so that size of this
organisation is very wide (Vitale, 2011).
Structure: Marks and Spencer always used flat organisational structure in which they
have limited levels of management as well as administrative level by which they can encourage
employees towards making effective decision process.
Scope: By having lots of product and services in every market globally so that they have
large scope to achieve its organisational goals.
This type of firm mainly works for profit so that it comes under the micro factor in which
they have minimum 10 employees and less than more in order to achieve targeted goals in a
perfect way.
5

Voluntary Organisations:
In context with Oxfam, it is a confederation of 19 independent charitable agencies or trust
which is helpful to remove poverty across the globe. It is established in 1942 through Oxfam
international. This is because it is considered as a non profit firm.
Vision: Main vision is to overcome poverty globally.
Mission: To develop better strategies and variants to make each and every people happy
in a right manner.
Size: With the help of large number of people firm has good scope.
Objectives: Main objective of this firm is to offer multiple services to improve living
standard of people.
Structure: In order to bring more improvements into their services they generally used
organizational structure.
Therefore, this can be said that if all of the above given firms follows all these key
elements properly then they are needed to have effective workforce in order to run their
businesses functions or operations in a proper way (Weiss, 2014). In addition to this it would
help firms to achieve desired goals and objectives in an effective manner.
LO 2
Relationship between different organisational functions and how they link to organisational
structure and objectives.
Interrelationship between several organisational functions always shows the firms value
and identity at marketplace. With the help of various marketing departments firms can easily
make better decisions and able to gain competitive advantages effectively. Therefore, there are
some different departments which are interrelated with other functional units in context with
Marks and Spencer, those are giving below:
Marketing and HR: Human resource department plays very important role within the
organisation which help firm to recruit, select and hire knowledgeable and skilled employees so
that they can perform well and able to achieve goals towards organisation. Whereas, marketing
department provide job vacancies to HR in order to select right people who can fulfil firm's
requirement and needs on time (Prins and Cybercrime, 2011). In context with Marks and
6

Spencer, HR department and marketing all are interrelated with each other and able to gain better
identity by selecting high skilled employees who always make firms productive.
Marketing and Finance: Financial department has its own place within firm, with the
help of this firms can get appropriate and effective budget statement to achieve its appropriate
operational cost to further manage and controlled marketing activities. In reference with Marks
and Spencer, financial department generally provide funds to marketing department by which
they can make better ways to gain competitive advantages by applying new policies and
strategies. So the overall interrelationship between different functional units makes firm
attractive.
Therefore, interrelation between different functional units is most necessary for each and
every business firm in order to gain huge profits and productivity in an appropriate manner. For
example: Marks and Spencer has good interrelations between so many functional units by which
they can develop various strategies and sources to achieve targeted goals. Along with it helps
them to make clear techniques to take future decision. Apart from this if respective firm is not
able to have interconnection in functional units so that they can not properly communicate their
desired to people as well as not able to achieve goals.
Organisational Structure:
Illustration:1 Organisational structure
Source: Organisational structure 2018
7

From the mentioned organisational structure there are so many marketing functions in
firm those are explained below:
Human resource: This is one of the best function within firm which help them to recruit
and hire knowledgeable candidate who can fulfil firm's requirement on time.
Finance: With the help of this function company can take sufficient fund in order to run
their business activities in a perfect way.
Production: Through this function manager of firm needs effective process to maker
their production process best therefore it is necessary for firm to achieve desired goals in a
perfect manner.
All of these functions are related with marketing department of respective firm because
without taking permission from marketing department they can not do their work and able to
produce their services within marketplace. Therefore, it is essential for them to achieve desired
goals in a perfect way.
Bureaucratic Structures-
This is a formalised structure and it is also known as the combination of set of rules and
roles which is based on few specifications such as what, when, how. Therefore, it comes under
the normative structure that is not based on decision making process. Along with it consist
Scientific management theory which determines different types of workflows. Therefore, the
main objective of this method is to modify economic efficiency through increasing lower
productivity.
SBUs :
It is generally considered as a computer bus system which is mainly used in the different
types of computers through microsystems. It can also be used by firms in order to make their
system updated so that they can achieve their desired goals properly.
8

LO 3
Positive and negative impacts the macro environment has upon business operations with
examples.
Business environment is the combination of different types of internal and external
factors which consist several kinds of factors like client, customers, technologies and so on.
Within an organisation there are various Macro factors which directly affects on the business
performance so it is very much crucial to evaluate positive and negative aspect of respective
factor to gain potential outcomes.
Political factors:
Each and every country has their own business rules and regulations which is strictly
given by the government of UK and them they expect from all type of business they should
follow them as well. In reference with Marks and Spencer, as it is known and famous brand so
that there is not much issues from this factor but for safe side they should consider all those rules
towards betterment of future.
 Positive: In context of M&S different types of laws and rules given by government will
definitely impact hem in a positive way as they have been already following every
governmental rules and policies.
 Negative aspect: AS they majorly operates in UK marketplace in which various kinds of
trade regulations operated that directly affect on their business performance in adverse
manner.
Economical factors:
Respective factors in which consist of the growth rate of economy, GDP and interest rate
and many more attributes which directly affects the business performance. In context of M&S it
is very crucial to evaluate the positive and negative side of respective factors. Along with this if
respective firm is able to put affordable price on their products then they are able to attain their
desired goals across the globe.
 Positive: Exchange rate is one of the most crucial factor that one of most crucial source
of income for an organisation in order to gain higher level of profitability in marketplace.
 Negative: Due to high rate of inflation in marketplace that impacts on the purchasing
power of consumers in negative way that directly affect on organisational profitability.
Social factors:
9

In social factors consist of the taste and preferences of consumers that directly affect on
the business works and activities in proper manner. As it is based on several cultural and trend
of people within the world so that respective firm needed to follow present culture and produce
goods and services as per the customer's preferences to reduce negative impact of this factor.
 Positive: The positive aspect of respective factor that when an organisation comply as per
consumer taste and preferences then it create loyalty of consumers towards them.
 Negative: To access the taste and preferences that are very much frequent in nature
required some sort of research that takes too much time and cost.
Legal Factors:
In legal factors consist of the rules and regulations within the organisation that directly
influence on organisational works in both positive and negative way.
 Positive: When an organisation follow all kinds of regulations that create a positive work
culture within the organisation that enhance productivity (Wheelen and et. al., 2017).
 Negative: In context of M&S which operates in various nations so comply with kinds of
regulations affect on their performance adversely.
Technological factors:
In technological factors consist of the usage of advance kinds of tools and techniques that
affect business performance.
 Positive: Usage of advance tools and techniques enhances consumers experiences as they
are interested in purchasing organisational products.
 Negative: On other side adaptation of advance tools and techniques occurs too much cost
and time that are not possible for organisation every time.
Environmental factors:
In environmental factors consist of usage of eco friendly products and services in order to
gain sustainability and profitability in marketplace.
 Positive: Environmental factors helps to organisation build products that are highly
preferable by them in order to gain potential outcomes in M&S.
 Negative: On other hand it takes too much cost and time to build products by protecting
environment.
10

TASK 4
Internal and external analysis of specific organisations to analyse strength and weakness.
SWOT analysis covers strength, weakness, opportunities and threats which is a
comprising factor that influence internal or external analysis of Marks and Spencer which is
going to be discussed below:
SWOT
Strength Weakness
 Marks and Spencer strongly provide
latest trends including clothing, food
items and so on.
 This brand has high effective corporate
social responsibility by which they can
influence employees positively towards
work.
 It has appropriate e-commerce
infrastructure
 Sometime they are not able to give
better performance towards financial
aspects so that it create negativity in
customer's mind within the local
countries.
 Major problem is there are frequent
products that recalls leads as a loss into
the customer's mind, so that it decrease
value of firm at marketplace.
Opportunities Threats
 M&S has good image within the
marketplace, for better future they have
opportunities to expand its business in
domestic markets.
 As it has global presence so that they
also have online presence by which
they can increase their position in
marketplace.
 On the other side, they can easily
simplify their operating model to
achieve its goals and objectives.
 In the current scenario there are
different competitors of this firm like
ZARA, H&M, Forever 21 and so on.
All these factors negatively influence
firm.
 Along with this there is competition
between food sector so it is also
reducing value of this firm at
marketplace.
 Lastly, changing trends in the clothes
industry overcome brand image at
marketplace.
11

How strength and weaknesses are interrelate with external macro factors.
According to Marks and Spencer, decision making process is an effective aspect within
the firm which can get influenced by micro and macro factors that impact on business positively
or negatively both. Therefore, there is SWOT and PESTLE analysis are interrelated within the
macro environmental which is going to be discussed below:
Political: During the changes in government policies along with taxation policies Marks
and Spencer faced few issues so that they are not applicable to apply new strategies at that time.
But after observing all these things they formulates new strategies on its business and able to
follow all these government rules and legislations in order to provide better goods and services to
their customers at marketplace (Avramenko, 2012).
Economical: During the currency impact of Brexit M&S faced some problems like
financial crises and so on. By reducing these assorted factors respective firm is able to increase
its business to gain competitive advantages in a proper manner. Along with this they are able to
provide better quality of goods and services to customers.
Social: Within the competitive scenario trends are changing everyday towards food,
clothes and households as well. In reference with Marks and Spencer, they have chain of large
number of goods and services that develop its positive image in front of their customers. But
sometime prices or cost has been cut down internally which negatively influence on company's
brand image.
Technological: As per the current scenario there are different types of tools and
technologies which is adopted by so many firms and companies in order to give better services to
customers properly. It helps firm to increase their entire profits and productivity in an
appropriate manner. In context with Marks and Spencer, this can be said that sometimes firm
faces few risk to adopt different technologies so that it creates negativity of firm at marketplace.
By reducing few risk they can adopt new technologies that develop good strength of this firm.
Therefore, interrelation of those SWOT and PESTLE factors directly influence people positively.
But as per the external factors they get influence negatively and not able to gain profits.
12

Poter's 5 Forces Model:
It is a model that determine and analyse five types of competitive forces, those are going
to be discussed below in reference with Marks and Spencer, that are:
Competition in the firm: In context with M&S, this can be said that within competitive
scenario there are so many competitors of this firm so that they should always focus on their
manufacturing process to overcome this affect from firm.
New entrants into the firm: It can be influence firm in a negative way which consist
cost and competition in the firm. So that herein, Marks and Spencer should use sorts of
techniques by which they can exist in the market in a proper way without any issue.
Power of suppliers: It is low in M&S as they have large number of suppliers so that they
can easily buy raw material from anywhere.
Power of buyers: It can be also low as it depends on M&S that how many buyers are
there and than they can achieve their targeted goals.
Threat of substitutes: It is related with goods and services that can be used by firm
along with their competitors. Herein, Marks and Spencer should use unique strategies and tools
to make attractive goods and services along with satisfying consumer's needs and wants.
13

CONCLUSION
From the above representative report it can be said that, business and the business
environment plays important role which refers to the combination of different aspects like
internal and external factors such as customers, clients, employees and so on. With the help of
this firms can focus on those factors by which they can get influenced in both positive and
negative manner. There is SWOT and PESTLE analysis has been specified by which firms can
manage their entire business functions accordingly. Apart from this, all those aspects are
necessary for firms to take effective decisions towards the achievement of organisational goals.
14

REFERENCE
Book and Journal
Avramenko, A., 2012. Enhancing students' employability through business
simulation. Education+ Training. 54(5). Pp,355-367.
Ballard, C. and et. al., 2012. Dimensional Modeling: In a Business Intelligence Environment.
IBM Redbooks.
Berg, E. and Kilambi, K., Siebel Systems Inc, 2014. Method and apparatus to facilitate
development of a customer-specific business process model. U.S. Patent 8,639,542.
Bharadwaj, A. and et. al., 2013. Digital business strategy: toward a next generation of insights.
Hilton, R. W. and Platt, D. E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Janita, M. S. and Miranda, F. J., 2013. The antecedents of client loyalty in business-to-business
(B2B) electronic marketplaces. Industrial Marketing Management. 42(5). Pp,814-823.
Prins, J. R. and Cybercrime, B. U., 2011. Diginotar certificate authority breach’operation black
tulip’. Fox-IT, November.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E. G., 2012. Business cases for sustainability:
the role of business model innovation for corporate sustainability. International Journal
of Innovation and Sustainable Development. 6(2). Pp,95-119.
Vitale, R. P., 2011. Business to business marketing. Pearson Education India.
Weiss, J. W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
Werbach, K. and Hunter, D., 2012. For the win: How game thinking can revolutionize your
business. Wharton Digital Press.
Wheelen, T. L. and et. al., 2017. Strategic management and business policy. pearson.
15