Business Environment Report: Micro and Macro Factors Impact Analysis

This report provides an in-depth analysis of the business environment, focusing on different types and purposes of organizations, including public, private, and voluntary sectors, along with their legal structures. It examines the size and scope of various organizations, such as the Bank of England, Arcadia, and UNICEF. The report also explores the relationships between different organizational functions, such as HR, finance, marketing, and R&D, and how they contribute to organizational objectives and structure. Furthermore, it identifies the positive and negative impacts of macro-environmental factors, using PESTLE analysis to assess the influence of political, economic, social, technological, legal, and environmental factors on business operations, with specific examples related to UNICEF and Arcadia. The report highlights how these factors affect decision-making and overall organizational growth.

Unit 1 - Business and The
Business Environment
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INTRODUCTION
Business and business environment refers to the boundary in which a business operator. in
recent times this environment has become complex and difficult to understand. it is because of
changing several factors which affect on organization growth and expansion. Therefore it is
necessary to analyze micro and micro factors so that accordingly strategies developed. Moreover
the size and scope of business differs from one another. Also there are various functions
performed in company (Camilleri, 2020).
In this report it will be described about different types and purpose of organization along
with their size and scope. also it will be explained about relationship between different
organization function and their structure. besides that micro and macro factors will be analyzed
and how it impact on decision-making. also it will be discussed about how strength and
weakness interrelate with micro factors.
LO 1
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures.
There are various types of businesses which operate. David in nature and size according to
the goals and objectives. also their legal structure where is from one another. it is as follows
Bank of England. it is a public organization that is controlled and operated by government
Arcadia is a private organization that is operate by group of people or an individual
UNICEF it is a voluntary organization that is formed by trust.
Basis Public Bank of England Private Arcadia Voluntary UNICEF
Purpose The purpose of public
organization is to so
people of nation by
providing them products
and services (Muminov,
and Rakhimova, 2020).
It is non profit making
organisation
a private company
purpose is to earn
profits my providing
products two people. . It
is profit making
organization
it is formed for the
social welfare and well
being of society. . It is
non profit making
organisation
Legal structure the legal structure is it is formed by group ofthe legal structure is
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formed by government.
The structure include
Governor, court of
directors, and committee.
people who own the
company. The company
structure is LTD
made of 36 member of
executive board of
government
representatives.
Products and
services
Bank of England
provides variety of
services related to
finance
it only provides
clothing, shoes related
products and services
(Mushtaq, and Khan,
2020).
The services provided
are education health care
to fulfill the needs of
society.
Stakeholders The stakeholders are
government, public,
employees.
Here, stakeholders are
employees, BOD,
customers, etc.
In this stakeholders are
government, NGO, UN,
etc.
Background Bank of England was
established in 1694 and
operate in UK. It become
public organization in
1998.
It was founded in 2002
by as arcadia group plc
It headquarter in
London .
It was formed in 1976 by
United nations and is It
headquarter in New
York.
So, it is identified that various business objectives and structure vary on basis of its size
and nature. They also provide variety of products and services. Moreover, the purpose of
company depends on their mission and vision. In public limited structure can not be changed
automatically. But in private structure can be changed by BOD. There is no interference of
government in it (Mustapha, and et.al., 2020).
P2 Explain the size and scope of a range of different types of organisations.
A business size and scope also varies from one another. this is because it depends on its
structure and type. similarly the size and scope of three organizations are defined as
Basis Public Private Voluntary
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Size It operates in UK only. Arcadia majorly
operates in UK and is
having 2500 stores. it
only operates in limited
countries outside UK.
UNICEF operates at
global level in many
countries for welfare of
society.
Scope It operates at national
level.
It majorly operates at
national level.
(Newman, and et.al.,
2020)
It operates at
international level in
163 countries.
Products and services Bank of England
provides financial
services.
it only provides
clothing related products
and services.
The services provided
are education health care
to fulfill the needs of
society.
Number of
employees
There are total 4485
employees working in it
It includes 13000 staff
working in it
It has 26492 employees.
Thus, it can be stated that scope and size are interrelated to each other. A business working at
large level will have high scope as compared to low ones. However, it is necessary to determine
scope by comparing size. There are many things which is taken into consideration as well
(Onyshchenko, Maslii, and Ivaniuk, 2020).
LO 2
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure
There are various types of departments and functions in Arcadia which operate. they are
interrelated to each other. in this way overall goals and objectives are achieved. The company
structure is flat as there are few middle management in it. In that decisions are taken by CEO and
Director. The functional areas are as follows
HR this Department performs function of managing human resource. the functions are
recruitment hiring performance management training and development etc. so they analyze the
needs of operations marketing finance functions and accordingly hire people. In Arcadia they
hire right people for right job.
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Finance it is an important function in organization as it includes managing finance related
functions like preparing reports recording transactions, managing assets, etc it is related to HR
operations are indeed, as they allocate funds to them for fulfilling their needs (Oyewobi, and
et.al., 2020). In Arcadia resources are allocated to perform achieve goals.
Marketing in these function promotion and advertising of products and services and other
marketing activities are done. it is related to production HR finance functions etc to perform
various operations. They provide data and information to all these functions. In Arcadia
promotion of product is done to earn profits.
research and development the main function is to conduct market research to find out needs of
people doing market analysis gathering data and info etc. they interact with production and
provide them data about needs and market trends. in Arcadia data is gathered by R&D from
market to develop new product.
Sales in this function selling of product is done. also they maintain relationship with customers
through CRM. It is interrelated with marketing as they provide relevant data and information
about market to them. in Arcadia selling is done to achieve sales target.
Supply chain it is responsible for buying of raw materials and selling of final products to market.
it is interrelated with production as data is provided to them regarding how much raw material is
to be buy and how much unit is to be delivered in market (Vrbka, 2020).
Advantages of interrelation
1. Better communication leads to better performance of organization.
2. Interrelation of department improves the planning and goal setting process.
3. Increase the cooperation level.
4. Improves the organisational environment.
Disadvantages of Interrelation
1. It is time consuming process.
2. The complexity of organisation increases.
3. The communication gap increases
LO 3
P4 Identify the positive and negative impacts the macro environment has upon business
For every business organization it is necessary to analyze the factors that can impact on its
operations. this is because there are many external factors which exist within the business
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environment. In which the business operate. Any change in those factors highly impact on
organization growth. therefore it is essential to determine those factors so that accordingly
strategies can be developed to minimize its impact. for that past analysis is a tool which can be
used. it provides a framework to analyze the external factors an ineffective way. As UNICEF
operate at global level so they can use this tool. It is as below (Yuwen, , 2020)
Political- in this there are those factors related to political stability, change in government trade
laws, etc. any change in this factor will highly impact on business operation. As UNICEF
operate in many countries so any change in law of that will affect on UNICEF operations in
negative way.
Economic- they are the factors such as GDP currency rate inflation etc. any change in this factor
affect on business growth. As UNICEF operate at global level, so the COVID 19 has resulted in
declining economic growth at global level. Also, GDP of all nations has decreased to a great
extent. Thus it will highly affect on UNICEF operation in negative way as they will not get
appropriate funds.
Social - the factors are related to change in taste and preference needs etc of people. due to
COVID-19 now people have become more health conscious and are considering organic
products. This has changed their needs and wants. It will affect in positive way on UNICEF
growth as they will have to deal with situation in proper way. Thus, they can provide health care
services to poor people free of cost (Camilleri, 2020).
Technological- it is related to advancement in technology. This factor highly affect on business
operations. Due to lock down many people are using technology. Hence, UNICEF operations is
affected as they are not able to provide services to society. It is because the business model work
in physical way rather than online.
Legal these are the factors related to employment law health and safety law minimum wage act
etc which needs to be followed by company in nation in which they operate. Due to covid 19
there is change in health and safety law as government has issued new norms and guidelines.
Hence UNICEF operations will be affected in negative way as they will have to focus on
providing health and safety to their people. so they will have to formulate new guidelines for it.
Environmental in this there are those factors related to environment laws, CSR practices, etc.
any change in these laws highly impact on company operations. As UNICEF operates at global
level so they have to follow different environmental laws, CSR practices. The business is already
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contributing in all these. so it will impact on their operations and positive way (Muminov, and
Rakhimova, 2020).
Arcadia pestle analysis
Political in this there are those factors related to political stability, change in government trade
loss, etc. any change in this factor will highly impact on business operation. As Arcadia generate
who is revenue from UK, so Brexit will highly impacting negatively on its growth. this is
because they will have to develop new laws to trade with other countries.
Economic they are the factors such as GDP currency rate inflation etc. any change in this factor
affect on business growth. Arcadia operate at global level so the COVID-19 has resulted in
declining economic growth at global level. also GDP of UK has decreased to a great extent.
Hence, it will highly affect on arcadia operation in negative way (Mushtaq, and Khan, 2020).
Social the factors are related to change in taste and preference needs etc of people. due to
COVID-19 now people have become more health conscious and is considering organic products.
this has changed their needs. It will affect on Arcadia growth as company will have to develop
organic products to fulfill people needs.
Technological it is related to advancement in technology. This factor highly affect on business
operations. UK is highly developed country. Due to lock down many people have preferred to
shop online. And Arcadia majorly operates through online. therefore it will affect on their
business growth positively (Mustapha, and et.al., 2020).
Legal these are the factors related to employment law health and safety law minimum wage act
etc which needs to be adhered company in nation in which they operate. covid 19 has changed
health and safety law as government has issued new norms and guidelines. Hence Arcadia
operations will be affected in negative way as they will have to focus on providing health and
safety to employees.
Environmental- in this there are those factors related to CSR practices, etc. any change in these
laws highly impact on company operations. Arcadia have not initiated any effective CSR
practices so, it will affect on their growth.
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LO 4
P5 Conduct internal and external analysis in order to identify strengths and weaknesses
Apart from micro factors it is necessary to identify micro factors as well. For this SWOT
analysis is done. This enables in finding out strange weakness along with opportunity and threat.
Similarly, UNICEF SWOT analysis is explained below:
Strength
UNICEF is having a strong comparative advantage than UN as they got success in children
immunization at global level (Newman, and et.al., 2020)..
They are having strong partnership with government as it provides efficiency in supply, finance
and other programs.
It cooperates with NGOs to increase the coverage and cost effectiveness of programme delivery
and to improve the effectiveness of efforts at social mobilization
Rise in community participation has led to developing diversified staff.
Weakness
There is limited capacity in HRD building, community programs, etc.
The administrative cost ratio is very high.
UNICEF only aim at sharing of knowledge and provision of skills rather than social
participation.
Opportunities
The can focus on quality of program outputs.
UNICEF need to promote innovative social programs (Onyshchenko, Maslii, and Ivaniuk,
2020).
Threats
Due to covid 19 many nations may not be able to provide funds to UNICEF. So its operations
may be affected in negative way due to lack of resources.
Arcadia group SWOT analysis
Strength
ARCADIA is having a strong brand name due to which they are able to attract large number of
people.
The customer service provided by ARCADIA is of high quality new witch they are having a
loyal customer base (Oyewobi, and et.al., 2020 ).
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they offer variety of size of clothing to all people. it means all size clothes are available.
Weakness
They are not having smaller size for children of 8- 12.
Opportunities
The company can grab market share by launching their own website and online shopping app.
They can integrate with third party suppliers in order to reach two more customers.
ARCADIA can expand in emerging markets such as India, Indonesia Turkey where there are
vast growth opportunities.
Threats
There can be rise in competition due to new entrants and retail industry and clothing segment
The increase in Primark market share is also a threat to ARCADIA (Vrbka, 2020) .
ARCADIA growth may be affected due to COVID-19 and decline in economic growth of global
economy (Muminov, and Rakhimova, 2020).
P6 Explain how strengths and weaknesses interrelate with external macro factors.
It has been analyzed that organization operate within a boundary. There are some internal
external factors which impact on their growth. besides that strength and weakness is interrelated
with macro factors. This is because any change in macro factors affect on these both. Similarly in
UNICEF as well the analysis is done below
Due to covid 19 the political stability of nations will change. this will result in forming of new
laws. but as UNICEF is part of UN so its strength will not be affected. they will continue to get
engage in social and community programs at international level (Mushtaq, and Khan, 2020).
Besides that due to COVID-19 there is decrease in economic growth of all nations. Thus,
UNICEF may not be able to provide and contribute in social and welfare program for children.
Therefore, changing economic factor will impact on UNICEF strength in negative way. It will
also affect on decision making as well.
Moreover it is evaluated that there is changing needs of people due to cover 19. now they
are preferring not to engage in social program. So as UNICEF cooperate with NGO and trust so
it will enable in helping poor people to fight with disease. Hence, it will attract more NGO to
cooperate with UNICEF to provide health care services to people. It will affect on decision
making in positive way as quick decision will be taken.
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However it is found that due to lock down many people prefer to stay home. So due to
change in technological factor UNICEF can focus on online business model. they can share
knowledge and skills through it. This will be useful for many poor countries in fighting
pandemic. Therefore, quick decision will be taken in it (Mustapha, and et.al., 2020).
CONCLUSION
It can be summarized that there are three types of organization that is public private and
voluntary. it's size an structure as well as purpose the first from one another. so, it is identified
that various business objectives and structure vary on basis of its size and nature. They also
provide variety of products and services. Moreover, the purpose of company depends on their
mission and vision. Along with that, there are various functions which is performed such as
marketing HR, R&D, sales finance etc and they are interrelated to one another. Moreover the
macro factors are political social economic etc whereas the micro factors are strength weakness
opportunity and threat. Bank of England is a public organization whereas Arcadia is private.
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REFERENCES
Books and journals
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