Business and the Business Environment Report - JP Morgan Analysis

This report provides a comprehensive analysis of the business environment, focusing on organizational structures, functions, and their interrelationships, using J.P. Morgan Finance and Investment as a case study. It explores the different types of organizations—public, private, and voluntary sectors—and their characteristics, including their sizes and scopes. The report delves into the link between organizational functions such as marketing, human resources, finance, and production, and their alignment with company objectives. Furthermore, it examines the impact of the macro environment on business operations through PESTLE analysis, identifying both positive and negative influences. The report also includes an internal and external analysis of J.P. Morgan, using SWOT analysis to assess its strengths, weaknesses, opportunities, and threats, and how these factors relate to the macro environment. The conclusion summarizes the key findings and insights from the analysis, offering a holistic view of the business and its environment.

Business and the Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types of organisations.............................................................................................1
P2 Size and scope of different types of organisations.................................................................3
TASK 2............................................................................................................................................4
P3 Relationship between different organisational functions and their link with companies
objective and structure................................................................................................................4
TASK 3............................................................................................................................................6
P4 Positive and negative impacts the macro environment has upon business operations..........6
TASK 4............................................................................................................................................8
P5 Conduct internal and external analysis of JP morgans..........................................................8
P6 How strength and weaknesses of the company related with macro environmental factors.10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Business is concerned with the economic system in which goods and services are
interchanged for motive of earning profit. In relation to this, business environment is consist of
several internal and external elements which effects the organisational functions. Factors which
influences business environment are suppliers, competitors, technology, legal laws , market,
economic trend etc. It is the surrounding of business which influences the business operations
and its productivity level (Chavis, Klapper, and Love 2011). This given report is based on J.P
Morgan Finance and Investment which is financial institution controlled by government. It
offers commercial and financial services to public. In this report types of organisation are
elaborated to understand nature, purpose, scope, size and legal structure of public, private and
voluntary sectors. In addition to this, PESTLE analysis is done to identify external macro
environment with their positive and negative impact on the business operations. Further to
understand internal and external environment SWOT analysis is conducted by the manager of
company to understand its strength, weaknesses, opportunities and threats which helps the
business creating future objectives and goals.
TASK 1
P1 Different types of organisations
Business environments is the sum up of various internal and external factors which
affects the business and its operational activities. It is the responsibility of the business manager
to analyse the internal business as well as external market to identify the opportunities available
for the business (Chow and et. al., 2012). This also help employees to know about internal
weakness and instructs them to improve their existing products and services according to the
requirement of the customers. Environment of the business differs on the basis of their size and
type. Organisation are divided into three different sectors public, private and voluntary sector.
Private sectors: In this sector, companies are controlled by the individual person with
the purpose of earn profits.. Here, J.P Morgan Finance and Investment is financial institution
founded by J.P Morgan in 1871. This offers several financial services like bank loan, investment
banking, asset management, commercial banking etc. in united kingdom.
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Purpose of the company: Major purpose of private sector company is to run business for
earning profit in order to improve the overall performance of the company at markeplace. Some
other essential purpose of J.P Morgan Finance and Investment are described below:
 Organisation under this sector runs to generate employment in their country. This bank
has provided job opportunity to thousands of people and contributed in GDP growth.
 Another purpose of this company is to control maximum financial decision in the
banking sector of the country by owning majority of banks.
Legal structure- It is the legal format of the company under which various business formulates
its policies. Different legal structure of private sector companies are as follows:
 Sole trader- In this, business is operated by single person without sharing its
responsibility with anyone else. Business owner alone have to arrange all the financial
funds for the business and take decision. This legal structure involves unlimited liability.
 Partnership- Partnership is termed as the legal structure in which business is owned by
more than person. All the business activities are controlled by the respective partners and
also share profit and losses according to their ratio.
 Private limited company- These are the small companies which are owned by its
shareholders. Responsibility and liability of each shareholders depends on their
investment amount. In this, organisation is run by the board of directors which are chosen
by the shareholders.
Public sector: In this, organisation is completely working for the profit motive. All the
business activities and its operations are operated by its owner. Here, DCMS is department of the
UK in which they provide services and guidance to manage culture, media and sports activities.
Along with, organization also give suggestion to some aspects of the media (Commander, and
Svejnar, 2011). Private sector organisations are contributing majority ratio in the employment
generation to the country.
Purpose of the company- Private sector companies are profit oriented. Their main purpose is to
utilise available resources in effective manner to generate maximum profit and provide
opportunities to develop the economic growth of the nation. Apart from this several other
purpose of this company are evaluated as below:
 To provide quality to products and services to its customers in order to provide services
with the purpose of improving economic condition.
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 The main purpose of this organization is to protect as well as promote the culture of the
country.
 It also work for ensuring the social responsibility to increase welfare within the country.
Legal structure: This involves various terms of the government which impacts business
activities and these are evaluated as below: Central government- This involves maximum administrative division that supports the
country in running their business operations. Government of UK have made several rules
and regulation which are required to followed by companies (Cuervo‐Cazurra, 2011). State government- In this, various small units are operated by government. In relation to
this, it controls all education sectors to improve the development level of the country.
 Local government- This involves maximum public administrative department which
emphasize on controlling and improving economic growth of the company that enhances
economic growth of the country.
Voluntary sector: This sector is also termed as the community sector. Companies comes
under this sector are non profit motive and non-governmental. Example of voluntary sector
companies are charities, NGOs, (Churches, Temples, Mosques)
Purpose of the company: Companies under voluntary sector are formulated for the social
cause and welfare of society. These organisations works for non profit motive. Profit generated
from these companies are again invested in the same firm to expand the business and provide
more services to society.
P2 Size and scope of different types of organisations
Business environment of the company depends upon its size and structure. However,
business is operated for profit as well as development motive. Its necessary to evaluate the
internal and external factors to identify business opportunity. Organisation can use these
opportunities to develop their products and services and also expand size of business. Size of the
companies are divided into various parts like micro, medium, large and small. It can be identified
by analysing market share, number of employees, yearly turnover, shareholder and legal status of
the organisations (Deasy and et. al., 2016). In relation to this report, size and scope of every
sector are described as below:
J.P Morgan finance and Investment
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Size- J.P Morgan finance and investment company is financial institution. It was
originated in 1871 by J.P Morgan. It is large in size as it controls three largest banking institution
Morgan Stanley, Deutsch Bank and JP Morgan chase.
Scope- J.P Morgan finance and investment offers several services in the form investment
banking, commercial banking and other financial services and products to public.
DCMS:
Size- DCMS is considered as the public sector company which provides guidance to
society with the aim of improving their social values (Drucker, 2017). Mainly, it promote the
culture and artistic to business and communities to grow their innovation. This will contribute in
improving the economic condition of the country.
Scope- DCMS is operate their business in public sector as they tries to develop economic
by promoting social welfare. In addition of this, around 650 workers for DCMS. As it also
include sponsorship Design council for providing the assistance to society.
The Save the Children Fund
Size- This company is considered under voluntary sector as it emphasize on promoting
children's right worldwide. It was established in 1919 in United Kingdom and also helps the
children across the world. It is associated with global network of NGO which is supported by the
local partners across 120 countries in the world.
Scope- Major objective of this company is to improve the life of the children by
providing them basic necessity goods, proper education, healthcare support and also helps the
business people who are the victim of wars, natural hazard etc.
TASK 2
P3 Relationship between different organisational functions and their link with companies
objective and structure
Every business is consist of several organisational function which helps the company in
achieving its goals and objective. Major organisational functions of every business are
marketing, human resource, research and development, finance and production. In relation to J.P
Morgan Finance and Investment, this company is large in size and involves all organisational
function to perform well in order to achieve business objective and preset goal (Hamilton and
Webster, 2015). However, this company comes under public sector and works for development
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of the country as well as society. It is responsibility of the manager of this company to monitor
the performance of each department to identify the scope of opportunities and changes.
Organisational functions are required to be performed well and in effective manner to achieve
organisational goals and objective. All the functions are interrelated to each other and also
influences work of every department. These functions are described with their interrelation as
below:
Marketing: This department works as the mediator between customers and organisation.
Marketing is considered as the way of spreading awareness of the product and services among
customers. It also helps the organisation about the requirement of the customers and improves
the product to increase their sales. In context to J.P Morgan Finance and Investment, its
marketing department is awaring people about their financial products with their benefits (Hair
Jr, and et. al., 2015). This enhances the recognition of products and services and also improves
their profit ratio. Marketing function of this company is related to the production function as it
guide them to improve the products and services according to the need of customer’s.
Human resource: This department of the company recruits and select candidate as per
the job profile. Major responsibility of HR manager of J.P Morgan Finance and Investment is to
place right candidate on right position. Functioning of this department is related to marketing
function, as marketing manager promotes the company and gives advertisement in the market
place which attracts pool of applicants to join this financial institution. This helps HR manager to
hire well educated employee which performs business operation in effective manner to achieve
organisational goals and objective.
Finance: Every business is required to use financial funds on proper place which results
in effective utility of it. This department is related to every department as each function in
organisation requires proper and timely funding to perform their work in effective manner
(Hillary, R. ed., 2017). Finance department provides funding to marketing team for their
advertisement and other promotional activities which helps J.P Morgan Finance and Investment
to achieve its business goals and objective.
Production: Function of this department is related to the process of physical input and
output. In relation to the J.P Morgan Finance and Investment, major function of its production
department is to run the companies services like fixed deposit, debit cards and other products and
services in smooth manner. This department is directly related to human resource as they
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provides skilled employees in production department which helps ion achieving preset goal of
company.
Organisational structure: Every organisation is arranged in different types of structure which
reflects that how organisation will perform their business activities and operate various function.
Various organisational structure are evaluated as below:
Functional structure: In this, company is divided into small department according to
their speciality like finance, IT, marketing, research and development and human resource etc.
J.P Morgan Finance and Investment can follow this organisational structure to manage their
operational activities in effective and organised manner (Hilton, and Platt, 2013). All the
department under this structure have their separate business manager which leads their team and
guide them to achieve their departmental goal which is related to the common goal.
Flat structure: This organisational structure refers to self managed organisation which
does not have separate levels of management. In this structure, manager supervises their
employee in large number. J.P Morgan Finance and Investment can opt this structure as it
involve less number of manager and avoids conflicts in the company.
From the above mentioned organisational structure J.P Morgan Finance and Investment
is following flat structure as it involves less number of manager which saves the operational cost
of the company. This structure also improves the satisfaction level of the company by getting
orders and instruction from the common manager it avoid discrimination in the company. Flat
structure helps this financial institution in accomplishing their business operation in effective
manner.
TASK 3
P4 Positive and negative impacts the macro environment has upon business operations
Political Factor: This is a factor in which regulatory bodies make different kinds of rules
and regulations that are related to various fields and it includes taxes and other related policies
which can helps company in operating their business in a better manner. Thus, while making
these policies government consider all the factors which can create some kinds of problems
(Klapper, Lewin and Delgado, 2011).
Positive: In terms of J.P Morgan Finance and Investment, which is an investment bank
and provides customers with different kinds of financial services to their clients. The biggest
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strengths of this company is that as organisation is big so they constitutes a capital ratio of
around 15.7% which is huge. Therefore, they comes under amongst one of the dynamic Money
Centre Bank across the globe. They provides with legal framework related to contract
enforcement which is considers as the biggest strengths.
Negative: With the change in government policies on a frequent basis and is creating
problem in implementing different strategies in a better manner. Company had to make
modification in their rules and regulations related to finance and other activities (Prajogo, 2016).
Taxations and alteration in incentive policies by regulatory bodies and making policies on a
frequent basis can act as a weakness for J.P Morgan Finance and Investment.
Economical Factor: Under this, factors like inflation rates, saving rates, and different
elements are considered which can have direct or indirect impact on financial companies. In
terms of J.P Morgan Finance and Investment, they can use different economic indicators like
Money Centre Bank industry growth in order to make or forecast their future business
operations.
Positive: Countries in which company is operating its business are financially strong and
exchange rates are stable. Company is having skilled workforce which is assisting firms in
attracting a large number of customers towards their organisation.
Negative: Not having appropriate knowledge of economy in clients can reduce
company's sales and productivity. Therefore increase in unemployment rate, inflation rate and
interest rates can have adverse affect on business operations.
Social Factor: Culture that are being followed in society can have an impact on
organisation and the way they are performing their task. As company is big so there is a
possibility that people from different culture are working. Thus, it is crucial that a healthy
environment is provided to employees where they can work with mutual understanding.
Positive: As the given company i.e. J.P Morgan Finance and Investment, is situated in
developed countries so educated people will think of investing their money sin financial process
which will gradually increase their sales and profitability.
Negative: Attitudes different culture and class structure can be considered as a drawback
for J.P Morgan Finance and Investment, as it can create the feeling of alienation amongst peoples
who are working in this organisation (Savrul, Incekara and Sener, 2014).
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Technological Factor: With the change in course of time, technology has made life of
people easier and in terms of companies it has made the entire process less cost and time
consuming.
Positive: In terms of technology, J.P Morgan Finance and Investment, can now attract a
large number of people as documentation process has cut down and now employees can explain
cost structure in a better manner using latest tools and technologies.
Negative: Hard in understanding complicated technologies can hamper the entire
procedure and with the increase in rate of technological diffusion can slow down the process.
Legal factors: It is related to the law and legal framework which a company must
evaluate before performing entering into new market. Some of the legal factors that JP Morgan
must consider while entering into new market are Discrimination law, Anti trust law, healthy and
safety law, data protection law etc.
Positive: JP Morgan chase legislative activities and analyse trends and public policies to
provide briefs of their decisions in order to avoid legal issues in their practices.
Negative: If company fail in implementing all the legal laws and regulations within their
business activities than they reduce their productivity level and also responsible for pay penalty.
Environmental factors: This factor generally includes norms and certain environmental
standards which affect s the profitability as well as goodwill of an organisation. Environmental
factors generally includes regulations related to environmental pollutions, waste management
etc.
Positive: If company uses instruments that are eco friendly and which emit less carbon,
then it help company in attracting large number of customers and in avoiding legal compliances.
Negative: If these standards are not followed by company than it may affect the goodwill
of the JP Morgan.
TASK 4
P5 Conduct internal and external analysis of JP morgans
Internal and external analysis is done by business associations in order to obtain
information about organisational cultural and recognise current market trends. The analysis can
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be done through identifying strength, weaknesses, opportunities and threats of company thus to
make imperative business decisions. Below is given SWOT analysis of JP Morgan -
STRENGTH WEAKNESSES
One of the prior strength of JP Morgan is its a
leading player in global financial services. The
firm operates in 60 countries and serves to
numerous customers, government clients,
businesses and institutes. Although the
organisation leads in investment banking,
financial and commercial services (Siewiorek,
and et. al., 2012).
JP Morgan has strong capital position and
liquidity. In period of 2008-13, firm's deposit
were increased and loans decreased; hence
deposit to loan ratio of JPMC raised by 174%.
The financial institute has a diversified and
balanced revenue stream as it deals in 5 diverse
business segments which incorporate in
investment banking, asset management,
corporate entity, community banking, and
commercial banking.
JP Morgan has a successful record in
developing new products and product
innovation.
The organisation is dedicated with its target
audiences and manage strong relationship with
them; it enables to attain high customer
satisfaction level and manage effective brand
equity over market.
The non-interest and operational expenses of
companies are raising year on year. Although
in 2013, non-interest expense of JPMC was
formed about 72% of total revenues. In
addition, profitability ratio and net contribution
of the company is lower below the average.
Higher dependency upon North America
market, i.e. more than 65% revenues generated
from there. Over dependence upon single
market makes JP more vulnerable while
economic downturns or business slowdown in
such markets.
JP Morgans is susceptible in market
fluctuations and its vulnerability in these
markets makes the organisation unstable in
certain circumstances.
The firm is not being able to handle market
challenges which are presented due to entries
of new competitors. It also has lost small share
in niche markets. In order to cope with this, JP
Morgan should build internal feedback
mechanism directly from sales team.
OPPORTUNITIES THREATS
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In UK, low inflation rates bring more
steadiness within markets; it increases low rate
credits to customers.
British government's green drive opens
opportunity of procurement products under
state and federal government contracts.
New taxation policy has a wide impact on
working styles and will be helpful for financial
institutes by raising their profitability.
Market development leads dilution of
competitive advantage and enable
organisations to drive up their technology and
gain obtain high market share.
The asset management industry is growing
leaps and bounds globally and is set to reach
$102 trillion by 2020 with a CAGR of about 6
percent. JPMC is well equipped to be benefited
by the growth in asset management industry.
Financial institutes over the world are
constantly challenged through changes in rules
and regulations. For example – raising
compliance cost for organisations affect
operating margins.
Any economic downturn or financial crisis
highly influenced JP Morgan as due to lack of
finance people will not deposit or invest.
Every country has their own liability law and
JP Morgan may be influenced with liability
claims by changes in credit policies (Zott,
Amit and Massa, 2011).
Changes in buying behaviour of customers as
now the prefer online channels for any
purchasing thus it could be a threat for existing
physical infrastructure which driven supply
chain model.
P6 How strength and weaknesses of the company related with macro environmental factors
In this competitive era, analysis of macro environment is become necessary for business
associations which supports them to grab better opportunities. There are numerous factors
involved in macro environment and may affect strength and weakness of the company. Brief
description of this statement is given under beneath -
Political factors – There are several political factors, i.e. trade policies, taxation laws and
regulations, tariff rates etc. all these can affect a business organisation and its activities in direct
and indirect manner.
 Strength – JP Morgan operates over the world as it needs to follow laws and regulations
of each and every country to survive successfully here for long run.
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 Weakness – Due to globalisation, most of firms has changed their import and export
policies thus to follow all of them in appropriate manner is not possible for JP Morgan
(Deasy and et. al., 2016.).
Economic factors – These components comprises with inflation rates, interest rates,
bank rates, level of education, poverty, unemployment and so on.
 Strength – In UK, most of the people are educated and they tend towards savings and
investments; which is beneficial for financial institutes in respect of raising their capital.
 Weakness – Economic recession in 2008 has raised poverty and unemployment within
nation; at this time assets management industry had faced more losses which could affect
their profits and sales revenues.
Social factors – It involves changes in consumer buying behaviour, values, morale,
beliefs etc. of people within a country.
 Strength – As business associations are tend towards conducting market research thus to
analyse customers' needs and wants in the best possible manner. It helps JP Morgan to
obtain high competitive edge over the world
 Weakness – Due to changes in market trends at fast pace, companies are not capable to
adopt them as soon as possible; it takes certain time. Through this, firms may loss better
opportunities and chances of success.
Technological factors- This factor involves advance technology that influences the
business of the company in the country.
 Strength- Its easier for J.P Morgan as it this company opts advance technology to connect
to its customer and it also enhances marketing and promotional activities of the company.
This improves number of customers which improves the increases the profitability.
 Weakness- Advance technology creates security issues in the customers mind impact
negatively on business growth. It may decrease the usage of online services offered by
bank and reduce the profit of the company.
CONCLUSION
As per the above analysis, it get concluded that business environment highly affect
working activities and practices of an organisation. It is essential for companies to identify
factors available in business environment so as to make imperative business decisions. Along
with this, the report has stated types of business organisations and their size & scope, i.e. public,
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private and voluntary. Furthermore, an effective organisational structure supports it to attain
goals and objectives. Positive and negative impact of PESTLE analysis is also defined thus to
identify market opportunities and gain high market share. Whereas as SWOT analysis is used as
internal and external analysis of the firm.
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REFERENCES
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Online
Business Environment. 2017[Online]. Available
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