Impact of Macro-environment on Business Operations

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Business & Business Environment
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Table of Contents
Introduction......................................................................................................................................3
LO1..................................................................................................................................................4
P1.................................................................................................................................................4
P2.................................................................................................................................................6
M1................................................................................................................................................7
LO2..................................................................................................................................................8
P3.................................................................................................................................................8
M2................................................................................................................................................9
D1 (LO1&2)..............................................................................................................................10
LO3................................................................................................................................................11
P4...............................................................................................................................................11
M3..............................................................................................................................................12
LO4................................................................................................................................................13
P5...............................................................................................................................................13
P6...............................................................................................................................................14
M4..............................................................................................................................................15
D2 (LO3&LO4).........................................................................................................................16
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
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Introduction
This report discussed different types of organizations with their purposes. Organizations have
different size, structure, and scope on which it depends. Different size, structure and the scope of
the organization are linked with the objective of the business and also with the products and the
services which are offered by the companies. A critical analysis is also provided of the different
types of company’s complexities ion their business structures and the organizational functions
interrelationships. After these relationships of the functions of the organizations are also
discussed by linking them with the objective and the structure of the organization and its
advantages and disadvantages will also be discussed. The macro-environment has a positive and
negative impact on the operations of the business which is supported by the PESTLE model.
Both the macro and micro factors affect the objective and decision making in the organization. in
the last part of this report, a SWOT analysis will be provided which has an impact on the
decision making of the business.
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LO1
P1
Types of organization
1. Public Organization – Public organization is that organization that is owned and run by the
government. The government can be national, state, provincial and local. Their main goal is to
look at the interest of the public. All the steps taken by the public organizations will be taken
according to the policy of the government. There also include the agencies which are funded by
the public, enterprises and the other organizations that deliver the public programs, services, and
goods (Bryson, 2018).
Purpose of public organization:
 Developing the economy – They are developed to increase the economic rate. They help
create a good industrial base and the speedy growth in the industries in the country.
 Self-reliance – These types of enterprises are set up to promote the self-reliance in the
national economy.
 Backward areas development: Many enterprises are developed in backward areas to make
a balance in the development of the country (Kuipers, et. at., 2014).
2. Private Organization – These organizations are run by private individuals and companies.
The main aim of setting up of these organizations is to earn profits. These organizations are not
owned by the government. Private organizations can be partnership firm, corporation, agency or
any person (Gorman, 2019).
Purpose:
 Profit maximization – The main aim of operating these types of firms is to increase more
and more profits.
 Reporting transparency – The transparency in the annual reports and financial reporting
will be limited to the key stakeholders of an organization.
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 Choosing appropriate organizational structure – They are based on the different
organizational structures and different benefits will be drawn from the different
structures.
3. Voluntary Sector – These sectors are those types of organizations that have the main aim is to
serve the benefit and enrich of society. There is no profit motive in these types of organizations
(Bryson, 2018).
Purpose:
 To make the individuals in learning the fundamental of the groups and the political
actions.
 To serve the society without earning a profit (Osborne, 2013).
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P2
Munchester Dishqo Tastewright
Size The number of
employees under this
food business which
is a small type
enterprise is 10
workers. The monthly
revenue of this
business is 20,000 and
their operating income
is 950 (Kraja, and
Osmani, 2013).
There are 100 workers
in this food enterprise
which is a medium-
sized company. Their
monthly revenue is 20
lakhs and their
operating income is
90,000.
This food enterprise is
large type
organization that has
1000 workers with
them. The monthly
revenue of this largely
based organization is
5 million and their
operating expenses
are 100 million.
Scope The scope of this
small food
organization will be to
the extent of the city
only in which the food
stall located. The
whole of the profit is
earned only from
those city customers
(Liedholm, and Mead,
2013).
The scope of the
medium-sized
organization of a food
restaurant will be in
the whole country in
which the restaurant is
situated. The profit is
earned from the
customers of the
whole country.
Tastewright is a big
giant enterprise that
has its business in the
national as well as
international. Their
customers will
become from their
country as well as
from the foreign
country (Kuipers, et.
at., 2014).
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M1
The structure, size, and scope of the organization are linked with the objective of the business
and also with the products and the services. The good structure of the organization has a great
impact on achieving the goal of the organization, in the small size organization where the
number of employees is less there is no proper organizational structure and the employees in
these type of organizations do not know about their roles and their subordinates and this will
become a hindrance for them in achieving the target. In the medium-size organizations where
there are few large numbers of employees than there are some chances in achieving their targets
and goals while in the big size organization there is a proper organizational structure and
everyone is familiar with their roles and responsibilities and in these types of organizations the
objective of the business is achieved in an efficient manner (Kuipers, et. at., 2014).
The objective of the company is set according to the scope of the company. when the scope of
the business is national than its objectives will be also based on that and when the scope is at an
international level than the objective will be also big and difficult to achieve and is this situation
the objective will be set accordingly (Liedholm, and Mead, 2013).
Based on the products and services the size and the structure and the scope of the business will
be set (Kraja, and Osmani, 2013).
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LO2
P3
Relationship between the functions of the organization and their link with the objective and the
structure of the organization
1. Design & production: Deigning of the product is an important function of the organization.
Designing has a great impact on the selling of the product because customers purchase the
product based on its designing. Production is a vital function of the organization because the
products produced through the process of production will be selling in the market to their
customers.
According to the objective of the organization the products will be designed and produced and
the structure helps in defining the superiors and their subordinates and this helps the workers in
defining who has the role of designing and production (Liedholm, and Mead, 2013).
2. Finance: Based on the objective of the organization the finance that will be required in
achieving that objective will be prepared and set. Finance plays an important part in achieving
the objective for the organization because without finance no activities can be performed.
3. Human Resource: Human resource is those persons in the organization who make available
the resources for the organization. The resources are very important for the production process in
every organization. They hire persons who are required in the organization. According to the
objective of the business HR of the company will identify the resources that are required in
achieving that objective (Kuipers, et. at., 2014).
4. Sales & marketing: The organizational objective will decide the market that is aimed to sell
their product and based on this the sales and marketing function will be achieved to accomplish
the goal of the organization set (Kraja, and Osmani, 2013).
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M2
Advantages:
 The team of the organization includes the persons who have the ability and the skills to
set the effective business objective.
 When the people of the organization work together their thoughts are shared and this
helps in making good decisions in the organization.
 With the experienced workers in the organizational structure, the decision of the
organization has been taken a timely set (Kraja, and Osmani, 2013).
Disadvantages:
 Because of the function of the organization, the employees from the diffident department
know the job of the other people in the organization and this information can be utilized
in the organization which is not good.
 The competition between the functional branches in the organization will increase
(Liedholm, and Mead, 2013).
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D1 (LO1&2)
There are many different types of business structures through which the organizations are formed
in many different types. Different structures perform different types of functions. Micro
enterprises have the size, scope, objectives, and staff of very simple nature and because of this
reason, micro-business is the simple business in comparison to other businesses. But in micro-
business, there is no proper organizational structure and due to this reason the roles and
responsibilities are not clear and it acts as a hindrance in achieving the objective of the business.
But the functions in microstructure will be performed in collective and they can be easily
performed set (Kraja, and Osmani, 2013).
Macro business is big as the size is big the complexities are more there. As there is a large
number of employees so the organizational structure is clearly defined there every employee in
the organization know their job and also know their superiors and subordinates. But there will be
complexity in the cooperation between the employees as many employees are there so the
conflicts between them are on high (Liedholm, and Mead, 2013).
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LO3
P4
The positive and negative impact of the Macro-environment on the business operations of the
Tastewright:
Tastewright is a restaurant at the macro level. The macro-environment has both the positive as
well as a negative impact on the organizations. There are many factors of the macro-environment
that put an impact on the Tastewright in both positive and negative sense (Mano, et. al., 2012).
Many forces of the macro-environment impacted both positively and negatively in the operations
of the business. The technological factor reflects the business on both the manner. Positively the
technological advancement helps the business in improving their operation and the operations
will become simple, smooth and will run fast and their negative impact is the cost in
implementing the new technology is very high which include making a huge investment in the
business (Liedholm, and Mead, 2013).
Social factors help the organization in making its employees happier and the employees will
work more productively and the target of the organization will be achieved timely and ineffective
manner. But in implementing these changes more time has to devote to the decision making
process set (Kraja, and Osmani, 2013).
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M3
PESTLE Model to support analysis of the macro-environment within the Tastewright:
1. Political factors: There is political stability in the Tastewright which helps in the
functioning of any organization. Political factors consist of some rules and regulations
which affect the functioning of any organization. When the rules and regulations are in
favor of the organization then the working of the organization will not affect and its
functions go very smoothly (Mano, et. al., 2012).
2. Economic factors: These factors are related to the rate of interest, inflation rate, GDP,
stability in income, etc. The functioning of an organization is depending on it. In
Tastewright the economic factors are in the favor of the organization. This means the rate
of interest is low, good stability in the economy, the inflation rate is low, etc.
3. Social factors: This factor is related to the community where the business operates.
Tastewright is facing social factors that are good for the company (Liedholm, and Mead,
2013).
4. Technical factors: This factor is based on the change in technology. Change in
technology brings innovations in working in the company.
5. Legal factors: These factors are related to the laws of the nation related to the business.
These include employment regulations, legislations for the environment which is a
challenge Tastewright (Ho, 2014).
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