Business and the Business Environment: A Comprehensive Report

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BUSINESS AND THE
BUSINESS ENVIRONMENT
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Contents
Introduction......................................................................................................................................3
L01...................................................................................................................................................3
P1.................................................................................................................................................3
Explain the different types and purposes of organisations......................................................3
P2.................................................................................................................................................6
Explanation of size and scope of a range of different type of organisation............................6
M1................................................................................................................................................7
Analyse of how the structure, size and scope of different organisations link to the business
objectives and product and services offered by the organisation............................................7
LO2..................................................................................................................................................9
P3.................................................................................................................................................9
Explanation of the relationship between different organisational functions and how they link
to organisational objectives and structure................................................................................9
M2..............................................................................................................................................11
Analyse of advantages and disadvantages of interrelationships between organisational
functions and the impact that can have on organisational structure......................................11
L03.................................................................................................................................................12
P4...............................................................................................................................................12
Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples..........................................................................12
LO4................................................................................................................................................15
P5...............................................................................................................................................15
Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses......................................................................................................................15
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P6...........................................................................................................................................17
Explain how strengths and weaknesses interrelate with external macro factors...................17
M4..............................................................................................................................................18
Apply appropriately swot/tows analysis and justify how they influence decision-making...18
Conclusion.....................................................................................................................................20
References......................................................................................................................................21
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Introduction
The business includes a process of selling product and services to the customer in the market in
order to satisfy their needs with the aim of making profit. There are different types of business
organisation and their scope and the product or services are provided by them is also different
(Jeston, 2014). This report will include a discussion on various type of business organisation
their sizes and scope.
The Arcadia group is one of the British retailer organisation owned by Philip green this
organisation includes a number of retailers Topshop, Topman and Evans the company is having
various branches in different countries and operating their business at very large scale.
This report is going to describe the various business functions and their link with the
organisational objectives and structure using the example of Arcadia group business. Further,
this report will describe the impact of macro environment on the business environment and
internal strength and weakness of the business along with this their interrelationship with
external macro factors also get discussed in that report using the example of above-mentioned
organisation.
L01
P1
Explain the different types and purposes of organisations
Business Organisation
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The business organisation includes a group of people comes together to achieve mutual benefits
and operates a business activity to offer some product and services in the market with the aim of
profit-making and gaining market share.
Types of business organisations
There are different types of the business organisation who provides their offerings to the
customers in order to gain some profit in the market and owned as well controlled by the public
or private ownership (o'Shaughnessy, 2013). The ultimate aim of business organisation is to
serve the market with their product and services and these organisations can be profitable or non-
profitable depends upon their structure and ownership.
Public Organisations
These organisations owned and run by the government and completely controlled by the rules
and regulations of the government. Funding for these organisations raised by the government
taxes, fees or financial help other levels of the government. The public organisations also make a
partnership with the private sector to create a public-private partnership agreement (Haufler,
2013). Public sector organisations are operated by three levels government national, regional and
local. The main purpose of these organisations is to serve their citizens and focus on providing
public welfare facilities. Examples of public organisations are public transport and public
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utilities. The stakeholders of these businesses are a community, government, suppliers, banks,
shareholders etc.
Example – British council is public cooperation was founded in 1934 and incorporated by royal
charter in the year 1940. It is the UK's international organisation which provides education
opportunities and promotes cultural relations (British, 2019)
Private organisations
Private organisations are held by private ownership of an individual, cooperation or a group of
partners. The aim of these organisations is to earn profit and grow the business at a large scale
through gaining market share (Mazzucato, 2015). There might be little or no involvement of the
government in the private sectors. The private sector is responsible for providing higher
employment opportunity. Private organisations are created by forming a new enterprise or a
company in the market. The private sector is giving a big contribution to the economy of the
world. Some examples of private organisations are a partnership, sole proprietorship, trade
unions, small and medium businesses etc. the stakeholders of these businesses are community,
individuals, suppliers, government etc.
Example – John Lewis is a partnership organisation of UK. This organisation is operating John
Lewis and other partner departmental stores. The company is also operating its financial&
banking services, and other retail related activities.
Voluntary Organisations
These are mostly non-profit organisations and works for public welfare and benefits. These
organisations are voluntary in nature owned and operated by a group of people who comes
together to solve a social problem and offers those products and services which helps in
providing benefits to the society as a whole (Osborne, 2013). Some examples of voluntary
organisations like charity, trusts, old-age home etc. the ultimate aim of these organisations is to
improve the living standard of the people in the society. They focus on the betterment of the
world rather than profit making (Santos, et.al, 2015). The stakeholders of these businesses are a
community, social groups etc
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Example – Oxfam is a group of non-profit organisations of the UK founded in 1942 which
focuses on reducing poverty in the society by operating its 20 independent charitable
organisation and also maintaining the wellbeing of the community (Oxfam, 2019)
P2
Explanation of size and scope of a range of different type of organisation
There are many differences can be seen in the organisations according to their size, scope, and
structure. The size of an organisation refers to its infrastructure, no of employees and numbers of
activities are performed in the organisation. The scope of an organisation relates to its access in
different areas. The structure of an organisation defines its organisational chain, working process
and ethics followed by an organisation. There is various kind of element presented in the
organisation which would help in determining the size and scope of the organisation. The size of
a private organisation can be understood through its number of employee working, the number of
product line sold by them and their scope can be determined through their access in the market if
a private organisation is serving a wide range of customer in the different market then its scope
will be wide. The size and scope of a voluntary organisation can be determined through a
number of people are involving in it and the number of markets served by the organisation. The
public sector is serving a wide range of market that is the reason its scope is high and the public
organisations are operated usually at a large scale with a maximum number of employees. There
are some type of businesses classified according to their size and scope in the market which will
get discussed as follows
Small business
The size of small businesses includes 1 to 50 employees and is operating at a small scale. These
businesses are owned by an individual or a group of individual with the aim of profit making
(Blackburn, et.al, 2013). Small businesses are growing very fast and serving a community by
offering their products and services in the market. Small businesses are privately owned (Gupta,
et.al, 2013).
Medium business
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The size of a medium business includes 50 to 250 employees and operated at a small or medium
scale. These are the private organisations that aim at profit-making and provide their product and
services in the market. The scope of these organisations is wide because they have wide access to
the market (Blackburn, et.al, 2013).
Large business
These businesses include more than 250 employees and operate their business activity at a large
scale. These organisations can be publicly or privately owned and generate more revenue for the
organisation. They provide higher employment opportunity and give their big contribution to the
development of the economy. The large organisations have a strong market position and focus on
gaining higher market share.
M1
Analyse of how the structure, size and scope of different organisations link to the
business objectives and product and services offered by the organisation
The size and scope of the organisation can be defined by its number of employees and number of
market share and their profit-making capability. The size of an organisation helps in bringing
new products and services in the market that result in increased revenue for the organisation. The
wider scope of an organisation will help in achieving organisational objectives and goals more
effectively. The product and services offered by an organisation help to serve a large market and
that increased its scope in the market (Fort, et.al, 2013). The large size organisation develops
more new products and services in comparison with small and medium size organisation. The
small and medium business serves a specific geographical and provides benefits with its product
and services. the small and medium businesses are capable enough to achieve their business
goals with the efforts of their organisational structure. Further, large businesses are also serving
their products and services at a large level for achievement of their business goals.
The legal structure of an organisation can be as follows:
Sole trader
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In this type of business, the business is run and operated by an individual himself to make some
profit. The business follows a legal structure of the government to operate business activities
example- small grocery store
Partnership
When two or more than two people comes together to own a firm with the aim of profit making
is called partnership. They follow a partnership act of the government to sign a partnership deed
with each other. John and Lewis is a partnership based firm in the UK.
Private LTD
When a business uses Pvt ltd word at the end of its name is termed as a private company. That is
owned privately with the use of legal procedure and policy of the government. Pvt company aims
at a profit-making example – Firstsource Pvt LTD
Public LTD
When a business uses public LTD word at the end of its name is termed as a public company that
is owned and operated by the authorised government following a legal structure. The public
company aims at maintaining the welfare of the public example British council
Thus, all the businesses are operated into a legal structure according to their size and business
objectives. It can also be said that the business structure and its size closely relates to its
objectives
Growth of the international business environment
The international business is growing very fast in this world. Many small, medium and large
businesses are expanding their business at a large level. The global environment facilitates
business to create more innovation in the business and provides an opportunity to serve the
global audience with their offerings. Many international organisations like world trade
organisation promoting international business and managing all the international business related
activity. Hence due to a rapid expansion of public, private and voluntary organisation the
international business is growing very fast and helping in the achievement of business goals
(Brannen, et.al, 2017).
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LO2
P3
Explanation of the relationship between different organisational functions and how
they link to organisational objectives and structure
The organisational structure of an organisation includes various departments. Coordination
between all the organisational functions of these departments is necessary to achieve success in
the market (Huczynski, et.al, 2013). All kind of business organisation wants to achieve a good
reputation in the market and this can be possible through a well-maintained structure of the
organisation. There are many different departments in the organisation like human resource,
finance, marketing and research & development. These all the departments work together to
achieve organisational goals by following a well-defined structure of the business (Zheng, et.al,
2010).
The Arcadia group company follows a well-defined structure in their organisation in which
various departments are linked with each other to achieve overall objectives of the organisation.
The different departments and their functions are described as follows:
Finance department
This department is the most important department of any organisation because it facilitates
funding for the other business activities through determining a specific budget. This department
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links with all the other functional units to follow the budget and limitation of the budget to be
used in operations of the business. All the financial transaction of the Arcadia group is done by
their finance department (Arcadia group, 2019).
Human resource department
That is one of the most important departments of any organisation which helps in bringing new
talent in the company and focuses on employee management in the organisation. The HR
department of the Arcadia group is responsible to perform all the human resource related activity
in the business. Efficient management of people at work helps in generating more profit for the
company (Arcadia group, 2019)
Marketing department
The marketing department of any organisation coordinates with all other departments to achieve
marketing related objectives. The marketing department of the Arcadia group is responsible for
promoting and selling of the products by applying effective marketing strategy. This department
helps in generating more revenue for the company. The marketing department of the Arcadia
group communicates with the HR department to hire a marketing team and also communicates
with the finance department to determine the budget for operating marketing functions.
Operations department
This is also an important department of an organisation which focuses on all the day to day
operations and activity of the business. They focus on efficient management of raw material and
give attention to the adequate supply of the products in the market. The production department of
Arcadia group manages the inventory, supply and other operations of the business.
Digital department
The Arcadia Company is serving 110 countries through its 40 websites and having a separate
team in the digital department which operates the business on a digital platform. The team is
setting out digital strategies to expand their business and providing the best online shopping
experience to its customers (Arcadia group, 2019)
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M2
Analyse of advantages and disadvantages of interrelationships between
organisational functions and the impact that can have on organisational structure
Advantages of the interrelationship between
Speed of operation
The coordination and communication between all the department of the Arcadia group helps in
increasing the quality and performance of the employees in the organisation which also increases
overall organisational performance (Teece, 2010)
Achievement of a common goal
The interrelationship between all the departments of Arcadia Group Company promotes the
achievement of common business goals. All the business unit works together to achieve the
objectives of the business. The management of the organisation is responsible for making
understanding and coordination between these departments
Better collaboration and cooperation among employees
The interrelationship between organisational units of the Arcadia group facilitates better
cooperation and coordination among the employees which helps in to increase in employee’s
engagement and their productivity in work.
The gain of market shares
The proper communication and coordination between departments of the Arcadia group help in
to increase its market share. The company will be more powerful and will gain a higher market
share with effective functional units.
Disadvantages of interrelationships between organizational functions
Lack of coordination
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