Business and the Business Environment: A Comprehensive Report

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Business and the Business Environment
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Table of Contents
Introduction...................................................................................................................... 3
LO1 (P1, P2).................................................................................................................... 4
LO2 (P3)...........................................................................................................................8
LO3 (P4).........................................................................................................................14
LO4 (P5, P6).................................................................................................................. 18
Conclusion..................................................................................................................... 21
Reference list................................................................................................................. 22
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Introduction
Business environment is one of the vital considerations in a business context.
Spontaneously the market competition level is increasing that has violated the business
environment. Business ventures must analyse and understand the business
environment of the chosen business location before conducting any sort of business
activity. It includes both internal as well as external factors that impact over different
aspects of business ventures.
Across the UK premises, “Marks & Spencer” is a popular and well-established retail
brands. Michael Marks and Thomas Spencer established the company in 1884 with
burning desire of providing customers best quality products at reasonable price rates.
The company has expanded their existing business in more than 1420 locations. Last
year the company generated £10832.2million revenue in business (marksandspencer,
2019).
This paper will shed light on various types of companies along with their size and scope.
There are several factions in organizations. This paper will outline interrelationship
between different types of functions and their relation with organisational structure.
Apart from this, impact of the macro environment over the business venture will be
evaluated in this paper. Lastly, strengths and weaknesses of the organization and their
relation with external macro factors will be explained as well for better consideration of
the project.
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LO1 (P1, P2)
Explain the different types, size and scope of organisations.
P1 Explain different types and purposes of organisations; public, private and
voluntary sectors and legal structures.
Business industry has become the backbone of global economy. In current market
scenario, there are several types of business organizations such as public, private and
voluntary. All the business organizations have their different purposes and legal
structures for sustaining in this competitive market place.
Private organizations
Private organizations are the most common types of business organizations in modern
market. Private organizations are aimed at generating higher amounts of profits in
business for further business growth and development. Across the UK premises, more
than 95.7% business ventures are listed in private sectors. These business
organizations are different from public and volunteer organizations. These business
organizations are aimed at meeting needs of customers and generating more revenues
(Rahman et al., 2016). These organizations compete with each other for market
sustainability. “Marks & Spencer” is one of the best examples of private organizations.
Apart from this, majority of SMEs and other all originations are listed in private
organizations. “Marks & Spencer” deals with multiple products such as food, grocery,
fashion, home products and others. The company has been providing great quality of
products to customers since 1884 so that the company has well-stashed brand image
and a wide customer base. The key stakeholders of the company are Jupiter income
fund, Invesco UK, Temple Bar and others those have the responsibility of taking all
operational decisions and holding significant shares. the company follows PLC legal
structure for better business performance.
Public organizations
Public companies have controller and administers such as central, federal and state
government. Government bodies mainly undertake these types of organizations.
However, government bodies fund these organizations and taxes pay by common
people (Kuipers et al., 2014). This type of business ventures are aimed at wellbeing of
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common people. Additionally, they work with private organizations as well for providing
better services to national citizens. Across the UK premises, NHS or National Health
Service is one of the best examples of public organizations that is undertaken by
government bodies and health department. They work for providing different services in
terms health and well-being. NHS has several stakeholders Including Academy for
Healthcare science (AHCS), Academic Health Science Networks, North West
Healthcare Science Network and others.
NHS has a clear mission of serving the common people and improving their health
condition. The key aim of the health organization is making collaborative relationship
with patients and Clinicians. Their main purpose is bringing better health in the society.
Voluntary organizations
Voluntary organizations are completely different and they do not conduct operations for
generating higher amounts of profits. Instead of that, voluntary organizations work for
work betterment of the society and bringing positive changes in the firm. Trusts,
government bodies and directors control the organizations. Additionally, group of people
or volunteers can start voluntary and they have to report to local government about the
financial returns and revenues (Butler and Wilson, 2015). Care International is one of
the popular voluntary organizations across the UK premises that work for betterment of
the society. It is large in size and non-governmental voluntary organization that has the
purpose of eliminating global poverty. However, these ventures provide support and
assistance in terms of societal development and humanitarian relief.
The vision of the specified voluntary organization is making the lives of people safe and
secure as well as dignified through eliminating poverty. Saving people from the crisis of
humanitarian aspects is one of the major objectives of this organization. They support
women and work for betterment of societal condition. The organization mainly follows
the legal structure of on-profit organization (NPO). Major stakeholders are trustees and
board members are vital stakeholders of the organization.
P2 Explain the size and scope of a range of different types of organisations.
Different business organizations have diverse scope, capacity and resource availability
that decided their market position, growth and progress in business. In the below
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section, scope, size, goals, business objectives and other vital aspects of all types of
business organizations have been added in detail manner.
“Marks & Spencer” is one of the oldest and largest retail organizations across the UK
premises that large size and over 82,000-trained employees for performing multiple
business activities and operations. As per the reports, there are several opportunities
available to company for accelerating their sales revenue. The company has its
presence in more than 1420 different business locations so that the organization has
the opportunity of grabbing attention of customers of those areas to accelerate the sales
performance (marksandspencer, 2019). Huge sales of the company have raised the
price rates of product simultaneously balancing the profitability of the organization. The
company has the business objective of becoming best retail company in terms of quality
and price rates. In present business scenario, retail industry has great demand so that
the company is aligning their scope and capability with the business objective for
achieving best possible outcomes. The company has several investors and effective
stakeholders for providing adequate support and assistance to “Marks & Spencer”
during critical business situations. Overall, the set up and business performance of
“Marks & Spencer” is such impressive in current business context.
While it comes to the public organization named, NHS, the company has huge
workforce unit and large size for providing numerous numbers of patients’ free services.
It has more than 140,000 numbers of effective staffs those are directly or indirectly
linked with health care services (nhs.uk, 2019). However, being a public organization,
the company does not show interest in marketing or promotional activities. However, the
organization has well-established market reputation and high growth opportunities in
present and upcoming days as well. The organization mainly funded an operated by
donations and tax amounts so that they are financially stable. The organizational
structure of NHS is excellent and effective for growth. They are not aimed at generating
profits so their growth scope is much higher than other private organizations.
Apart from this, voluntary organization is another important consideration in modern
business context. Care International is a voluntary organization that provides free
services to more 94 different countries. Many of the big projects are handled by these
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ventures; however, they do not work to generate profits (Care-international.org, 2019).
Their key aim is to bring positive changes in the community and extending the life
leading style of people. Hence, the organization has high growth scope and
opportunities for development of the organizational structure as they provide free
services for betterment of the community. More than 50,000 employees worldwide
serve patients and needy people to enhance their quality of living. Additionally, the size
of the organization is often larger enough compared to other NGOs and voluntary
organizations. These non-governmental organizations are not required to pay taxes to
government and follow strict business laws. The local people will need support, care
and development services all the while so that the scope of development for the
specified non-governmental voluntary organization will never decrease.
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LO2 (P3)
Demonstrate the interrelationship of the various functions within an organisation
and how they link to organisational structure.
P3 Explain the relationship between different organisational functions and how
they link to organisational objectives and structure.
Due to high market competition, most of the modern companies including “Marks &
Spencer” follow different organisational structure according to their needs in order to
manage all business functions in an effective manner. There are mainly four types of
organizational structures are followed by modern ventures that are described in below
portion:
Functional top down
It is considered as a traditional business structure that shows C-Suite at the top,
followed through other higher managerial authorities, middle managers and others.
However, the entire business structure is divided into traditional functional departments
such as HR department, IT department, operational department, finance department
and others.
Figure 1: Functional top-down structure
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(Source: Winnubst, 2017)
Flat organisational chart
In flat organizational structure, there are few or no levels of management between
executives and all other staffs. Mostly, this kind of organizational structure is followed by
small size business organizations for maintaining their growth rate and organizational
profitability. However, large size firms can also adopt it. This type of structure influences
self management as well as better decision-making capability for the entire workforce
unit.
Figure 2: Flat organizational structure
(Source: Yinan et al., 2014)
Divisional structure
This type of organizational structure reflects an organization structured along a
particular geography or product line. For instance, in a car-manufacturing firm the
divisions may represent electric cars, SUVs and sedans. Every division that has this
own functional structure such as operation department, IT department and others.
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Figure 3: Divisional structure
(Source: Lee et al., 2015)
Matrix organizational structure
It is one of the most common type of organizational structure and mostly used by large
size multinational organizations. As per the consideration of researchers, it is the
combination of both functional and divisional organizational structures. “Marks &
Spencer” follows this matrix organizational structure in their firm. In the company,
employees are divided into different teams by diverse projects lead by a project
manager. The entire process is reported to the functional manager. It allows better
allocation and management of resources where they are needed. It can assist to
facilitate better, more open communication as well as adopt a dynamic, prefabricated
and flexible working environment for better organizational performance and success.
“Marks & Spencer” has multiple business objectives so that the company has aligned
their objectives with their organizational structure. Hence, the teams and project
manager can better understand the organizational objectives and can perform in better
manner towards accomplishment of the set business milestones.
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Figure 4: Matrix organizational structure
(Source: Theocharis et al., 2016)
Different functional units in “Marks & Spencer”
In every organization, there are various functional units or departments that different
functionality in the company. Successful companies like “Marks & Spencer” have
different functional units such as marketing department, finance department, operational
department, HR department and others to manage their wide range of business
activities in a précis manner. As per the consideration of modern market researchers,
deep interrelation between different organizational departments of “Marks & Spencer”
is the key of business success.
Finance department
One of the most vital parts of business is undertaking business operations and
managing activities under the financial capabilities of the organization. Functions
operated by finance department are simply crucial for business ventures (Hillier et
al.,2014). The finance department of “Marks & Spencer” has the responsibility of
handling all financial activities and assisting the company in generating higher amounts
of revenue. However, in ventures, especially in retail industry, detail analysis of financial
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documents is such important. The finance department of the specified company
allocates capital to different departments for conducting their business activities. This
department makes budgetary plan and investment plan for better financial performance
of the organization. It is also associated with other responsibilities such as cost benefit
analysis, budget estimation of all operations. Apart from this, finance department is
linked with providing equal profits to stakeholders.
Marketing department
Marketing department of “Marks & Spencer” has the responsibility of conducting wide
range promotional activities and informing them about the upcoming product. Marketing
department influences the purchasing behaviour of the customers and it results in
higher sales revenue (Feng et al.,2015).
Manufacturing department
Manufacturing or production department is one of the most vial functional departments
in an organization that is associated with multiple important roles such as analysing
needs, planning, organising, negotiating regarding budget as well as scheduling with
clients and many more.
R&D team
In “Marks & Spencer”, there is also a research and development team for conducting
different types of research activities. R&D team conducts research in market for proper
assessment of customer needs and demands. It plays the vital role during product
modification or new product manufacturing process.
However, all these organizational functional departments are interrelated with each
other. The interrelationship between these functional units is as follows:
Marketing department and IT department
Marketing and IT departments are closely interlinked with each other. IT department
assists to marketing department to conduct all the online promotional activities. IT
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