Macro-Environmental Impacts on Business Operations

Desklib provides solved assignments and past papers to help students succeed.

Business and Business Environment

Table of Contents
Introduction......................................................................................................................................3
LO1 and LO2...................................................................................................................................4
Task 1...........................................................................................................................................4
Task 2...........................................................................................................................................7
LO3 and LO4.................................................................................................................................11
Task 3.........................................................................................................................................11
Task 4.........................................................................................................................................15
Conclusion.....................................................................................................................................18
Reference list.................................................................................................................................19

Introduction
Business organisation is a systematic structure of a business plan and its execution effectively to
meet the organisations goal. There’s a wrong belief that business is marketing the products. The
term business is a wider concept, which includes various departments performing various
responsibilities for the growth of the organisation. This report will discuss about different kinds
of business organisations. The size and scope of different type of organisation will be explored in
the report. This study discusses about the different organisational functions and their goals and
objectives. The chosen organisation will be analysed based on PESTLE. At the end, a swot
analysis on the chosen organisation is interrelated with the external macro factors.
Sainsbury's is the second largest super market in UK. It has 15.3 percent share in the
supermarket sector. John James Sainsbury founded the organisation in 1869. The head quarter of
Sainsbury is situated in Holborn, London, UK. According to 2018, the revenue collected is
£28.456 billion. Presently there are 186,900 employees working in the organisation
(sainsburys.co.uk, 2019).

LO1 and LO2
Task 1
P1 Explain the different types and purposes of public private and voluntary sectors and
legal sectors.
Public sector organisation
The organisation is under the supervision of the government. The government funds the
organisation. The purpose of the public sector organisation is to operate effectively in the
country for its development. There are three different forms of public sector organisations,
Government Company, statutory corporations and Departmental undertakings. QinetiQ is a UK
based public sector organisation (qinetiq.com, 2019). It is a British defence Multinational
technology company. The legal structure is public limited company. The advantage of legal
structure of the company indicates that it is a limited liability company where the shares are sold
freely to the public. The disadvantage of the public limited company is that if public have more
access of these shares then they can have control over the organisation.
Private sector organisation
The private sector organisation is an owned and controlled by private individuals or a group of
people. The purpose of the organisation is to enjoy benefits personally by providing high quality
goods and services to the economy. For the development of the economy the private organisation
makes money. Sainsbury's is a private sector organisation which a well-known retail industry in
UK (sainsburys.co.uk, 2019). The company aims at providing goods and services to the
customers to earn profit. The legal structure is public limited company. This indicates that the
shares are traded freely with the public.
Voluntary organisation
It is a not a profitable organisation or the charitable organisation is known as voluntary
organisation. The main purpose of the company is to create social impact in the economy. They
are helping the people in need. There are various voluntary sectors focusing on various factors to
benefit the people living in the society. The Royal Mencap Society is a voluntary organisation in

UK (mencap.org.uk 2019). The organisation aims at helping the disable people and their
families. The organisation follows a charitable legal structure, which means they work to serve
the society with no profit motive. The advantage of this type of legal structure is that the owners
are safe from any personal liability. The disadvantage is that there are limited fund and as it is a
non-profit organisation, thus raising the fund is a big challenge for the organisation.
Micro organisation
Micro organisation is small companies, which has fewer employees. The purpose of the
economy is to earn profit completely for individuals benefit. The company is run either by an
individual or by a small group. The company does not have high net income. It operates in a
small place. Boss Brewing is a micro organisation in UK (bossbrewing.co.uk, 2019). The main
purpose of starting this organisation was to eliminate the hierarchy that women cannot operate a
brewing organisation. The legal structure is partnership. The partners share the profits with the
partners. The advantage of partnership is that the responsibility is shared equally between both
the partners. The disadvantage of partnership is that
SME’S
Small medium sized enterprises are organisation, which has less than 250 employees. They are
important for social and economic reasons. The SMEs are small firms, and scope of the business
organisation is to help other business organisation to solve their problem. Brightstar financial is
located in the United kingdom’s (brightstarhub.co.uk, 2019). The legal structure of this
organisation is private limited company.To make the life easier for the brokers this organisation
aids the brokers. The private individuals own the shares.
Large sector organisation
Large business organization gains a huge amount of profit. The organisation has many workers
working towards achieving profit for the organisation. ASDA is awell known retail
organisation(asda.com 2019).There are verities of products produced by the product.Financial
services are also provided by the company. The legal structure ASDA is subsidiary which means
it can be a public or a private limited company. The shares are sold and supervised by the the
main organisation (asda.com 2019).

P2 Explain the size and scope of a range of different types of organisation.
Public sector organisation
QinetiQ is an UK based public sector organisation. The company was founded in 2001. It is an
aerospace defence research and development industry. It is the world 52nd largest defence
contractor. The scope of the organisation is to serve the British defence sector with aerospace
research and development, which will help the British defence to serve the economy effectively.
Its headquarters is located in Farnborough, Hampshire. The revenue collected by the company is
£833.0 million in 2018.
Private sector organisation
Sainsbury's is the second largest supermarket in UK. It is a retailing industry. John James
Sainsbury founded the organisation in 1869. It serves in United Kingdom which high quality
product and services. It has 1418 shops in 2017 according to 2017. The head quarter of
Sainsbury is situated in Holborn, London, UK. The scope of the company is to expand its
business to provide quality goods for maximum customer satisfaction to earn profit. According
to 2018 the revenue collected by the company £28.456 billion. There are 186,900 employees
working in Sainsbury according to 2018.
Voluntary organisation
Royal Mencap Society is the charity UK based organisation, which helps the people in UK who
are disabled. The company was formed in 1946. Headquarter of Sainsbury is situated in London.
The chief executive of this organisation is Jan Tregelles. The scope of the organisation is to fight
for the rights of the people who are economically backward. As it is a charitable organisation, it
helps the people who are disabling and economically backward by advising them and solving
their issues related to anything (mencap.org.uk, 2019).
Micro organisation
Boss Brewing is small organisation in UK. It has won several awards for best brewing. The
company is located in south Wales. The scope of the company was started to prove that that

woman are efficient enough to run a brewing organisation. It is a small organisation, which have
fewer employees. The founder of the organisation is Sarah John (bossbrewing.co.uk, 2019).
SME’S
Brightstar financial is a SME located in United Kingdom.(brightstarhub.co.uk, 2019). The
scope of the company is to help brokers with their work. The company has received various
national awards. It is a leading company which has earned billions. It is an authorised financial
entity.
Large sector organisation
ASDA is a large organisation in the British supermarket. The headquarters is located in Leeds,
Yorkshire. In 1949, this organisation was founded. This organisation was founded by Peter and
Fred Asquith. The scope of the organisation is to provide quality goods and services in the
market to earn a profit. It was the second-largest supermarket chain in the in the retail sector. The
organisation spreads over 633 countries. The 2016 reports states that the revenue collected by the
company is £1,666 million. The products produced by this organisation are groceries and
financial services. There are 165000 workers working in this organisation according to 2018
(asda.com 2019).
Task 2
P3 Explain the relationship between different organisational functions and how they link to
organisational objective and structure
There are three types of organisational structure
Functional organisational structure
It is the most important organisational structure. It helps the organisation to function smoothly.
The people are grouped based on various talents and skills. There are various departments under
this organisational structure like the marketing department, human resource department,
customer executive department, logistic department and others. The candidates are grouped
according to their qualifications. They have to perform their task effectively. All the candidates
who have same talents are grouped together. This indicates that the productivity of the

organisation increases which is an advantage for the organisation as the roles and responsibility
of the organisation remains same (Carvalho et al., 2015). The disadvantage is that employees
might find the work monotonous after a period. As the functional organisational structure is
rigid thus any innovations or changes is difficult. This type of organisational structure suits
large-scale organisations.
Figure 1: Functional Organisational structure
(Source: Slack et al., 2015)
Matrix organisational structure
The structure increases the efficiency, market adaption and readiness. This organisational
structure works for small business firms, start-ups, micro organisation and others. The structure
in this organisation is moving vertically downwards. The skills of the employees are better
analysed. This makes the work of the higher authorities easy to analyse the efficient workers in
the organisation. The efficient works are then allowed to deliver the products. In matrix
organisational structure, there is more than one boss (Grubenmann, 2017). The advantage of the

matrix organisational structure is that there is effective and efficient use of human capital. In
matrix organisational structure, the employees are trained effectively to become leaders in the
functional organisations. The disadvantage of the matrix organisational structure is that there
are more than one boss in the organisation which can create conflict while executing the project.
Figure 2: Matrix organisational structure
(Source: Doz, 2016)
Sainsbury's is a well-known supermarket, which follows the functional organisational structure.
The organisational structure is divided into the various departments.
 Finance department
 Marketing department
 HRM department
 Logistic department
 Customer service department

All the above-mentioned departments are interlinked. The Finance department is the important
for the all the organisation. It controls all the expenditures of the organisation. The organisation
expenditure, investments and other financial activities in the organisation is controlled by the
organisation. All other other departments are depended on the finance department related to the
funds. The Marketing department has various functions like promoting, setting prices,
distribution and others. The marketing department needs fund for promoting the products. The
marketing department makes a budget plan for the marketing department so that the department
can execute the plans effectively. The Human resource department is also depended on the
finance department (Ruiz-Velasco and Zaugg, 2017).The finance department plans a budget for
recruitment procedure. In order to recruit a candidate the requirement must be advertised. The
advertisement requires fund, which is planned by the finance department.
The logistic department is responsible for strong the products and distributing it effectively. The
finance department plans the transportation cost. Other departments are depended on the
marketing department. The marketing department helps the HRM department to advertise the
requirements of the organisation. The HR manger analyses the requirements and then makes a
list of the requirement. The marketing department does a proper market research by advertising
the job requirements. The marketing department is also depended on the human resource
department. The requirements of the other department is analysed by the HRM department. The
HRM department recruits efficient employees for all the other departments so the organisation
can work smoothly. All the departments as if the marketing department, the logistic department,
Finance department others requires efficient employees for effective functioning (Channon and
Jalland, 2016).
The HRM department fulfils the requirements by recruiting as well as training them for their job
role. The training and development is necessary for the organisation to increase the effectiveness
of the employees. The logistic department aids the marketing department with the distribution
and safety of products. The customer service department responsible to handle the clients and
solves the query of the clients. The customer service department does various functions.
Attractive packaging is done by the customer service department.. Attractive packaging will
attract more customers. All the departments work together increase the production and sales of

the organisation. The healthy relation between all the departments is essential for the smooth
working environment in the organisation.

LO3 and LO4
Task 3
P4 Identify the positive and negative impacts the macro environment has upon business
operations supported by various examples
Elements Impact
Political The most concerning political issue is the
Brexit. According to 2018 reports, The British
national income has reduced by between 0.6%
and 1.3%. This will affect the UKs economy
immensely. The prices of the products will rise
which will affect the citizen of UK. Brexit will
also affect all the industries in UK. UK is one
of the fastest growing economies. In 2016, the
growth reduced due to Brexit referendum.
Compared to 2017 the GDP reduced in 2018.
The GDP in 2017 was 1.7 and is reduced to 1.4
in 2018. Due to this Brexit referendum, the
retail industry will be affected. The prices of
the products will rise. This will negatively
affect the organisations growth. The production
and sales will decrease, as the customers will
not buy the products at such high rates (Martin
et al., 2018).
Economical Economical factors include inflation rate,
economic growth, unemployment rates and
others. According to 2016, the unemployment
rates were 4.9, which have reduced to 4.1 in
2018 (Stiglitz et al., 2017). This will have a
positive impact on UK’s economy. The