Business Environment: Analysis and Evaluation Report

This report examines the business environment by analyzing two contrasting businesses: ASDA and Ladybirds. It explores the types of businesses, their purposes, and ownership structures, including sole traders, partnerships, and public limited companies (PLCs). The report delves into stakeholder influence, comparing how stakeholders impact the operations of ASDA and Ladybirds. It further investigates organizational structures, such as hierarchical and functional structures, and how these structures help businesses fulfill their purposes. The analysis extends to the influence of economic environments, like growth and recession, on business activities, with a focus on factors such as employment, inflation, and interest rates. The report also covers political, legal, and social factors impacting business operations, providing a comprehensive overview of the business environment and its various facets.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P 1 Type of business, purpose and ownership of two contrasting businesses........................1
P2 Stakeholders who influence the purpose of two contrasting business..............................2
TASK 2............................................................................................................................................3
P 3 How two businesses are organised...................................................................................3
P 4 Style of organisation helps them to fulfil their purposes.................................................4
TASK 3............................................................................................................................................5
P 5 Influence of two contrasting economic environments on business activities.................5
TASK 4............................................................................................................................................5
P 6 Political, legal and social factors are impacting upon the business activities.................5
CONCLUSION................................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
Business environment is the sum total of all factors external to the business firm and
that greatly influence their functioning. It covers factors and forces like customers, competitors,
suppliers, government, and the social, cultural, political, technological and legal conditions
(Ashkenas, Ulrich and Kerr, 2015). A business can be a for-profit entity or a non-profit
organization that operates to fulfil a charitable mission. Stakeholders have increased influence on
company business activities in the early 21st century as community citizenship and social
responsibility have been consistently integrated into business management. Customers,
employees, communities and business partners are among key stakeholder groups that carry
weight in company decisions and activities.
TASK 1
P 1 Type of business, purpose and ownership of two contrasting businesses
Sole Trader:A sole trader is a business that is owned and operated by one person -
although they may employ workers. Individuals who provide a specialist service like plumbers,
hairdressers or photographers are often sole traders. Because a sole trader is set up by one
person, in the eye of the law a person and his business are the same, so if the business get into
debt or sued the person must pay for it put of his own pocket this is called unlimited liability.
There are some advantages and some disadvantages to being a sole trader, the advantage points
are: It is easy to set up as there is no legal paper work that people need to do (Aterido, Hallward
and Pagés, 2011). Some of the bad points are: If you run your own business you have no one to
share the responsibility of the business with. If you run your own business then you often work
very long hours and can find it hard to get holidays and time off if you are ill.
Partnership:A partnership is a business owned by two or more people, the typical types
of partnerships are builders, dentists, doctors and solicitors. Partnerships work well when two
people work in the type of business but in a different trade like a brick layer and a joiner or a
plumber and electrician. When two people do go into a partnership there are some advantages
that follow an example of this that there is someone to help with the responsibilities of the
business and can help with the decision making taking some of the pressure off of just one
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person. Another good point of partnership is that if one person is sick the other one can try to
cover the other person.
European/national company : Asda is one of the biggest supermarket chains in Europe
they are based in Leeds with over 500 hundred store and thousands of customers alone in the UK
they have a wide range of products that they sell to their customers form bread and butter to
televisions and DVD’s (Černá, 2014). Because they have so many stores they sell their products
to a number of different communities, they sell to and cater for all of their customers’ needs and
help them find whatever they need or are looking for.
Franchise-It’s a type of business that sells the rights of another business to operate the
franchise; this also means that the owner of the franchise might want to let others run the
business in other parts of the country.
Worldwide company: Apple is a worldwide company selling their products to millions
of people they are based in California and sell their products all over the world, they sell a
number of products all electronically based but millions of people want the products.
P2 Stakeholders who influence the purpose of two contrasting business
Companies -ASDA and Ladybirds
ASDA- Asda is a nationwide tertiary PLC company, because the company is PLC (public
limited company) its shares are sold to the public freely, people that buy shares into the company
are called share holders such as customers, employees, owners, suppliers, trade unions these
people are entitled to a percentage of Asda’s annual turnover (Chittithaworn, Islamand Yusuf,
2011). Nationally the minimum spend for a share is £50,000, that means that the one share must
cost £50,000, also any company that is a public limited company it must say it in its name for
example ASDA PLC.
Lady birds-Ladybirds is a one nursery tertiary LTD company, because the company is LTD
(limited company) it means that it is more private than a public limited company since shares are
not normally sold to the public as these company are usually small locally companies that wound
not gain much profit from selling shares, the up side to being a private limited company is that if
the company does fail then they only owe the money that they put into the business to start it up,
any existing debts or bills are forgotten about.
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Comparison of Asda and Ladybirds-The purpose of Asda is different to Ladybirds,
Asda sell a wide range of products to thousands of customers while Ladybirds sell a service to a
handful of customers. Ladybirds aim to exceed all standards in care and education for young
children. Asda and Ladybirds are both different types of businesses Ladybirds are a private
limited tertiary business with only one store that offers a service instead of a business, whereas
Asda is a public limited tertiary business with hundreds of stores that sell hundreds products to
thousands of customers, Ladybirds is a limited business this means that the company is protected
from any liability.
TASK 2
P 3 How two businesses are organised
Business structures-The matrix structure is usually found in organisations that can
deal with the special one off type of projects, also these companies can also work on several
projects all at the same time (Craig and Campbell, 2012). Although while all of these projects are
ongoing, they have and expert team seeing it through making sure it goes well. A product
structure is the way an organisation represents the parts of a product and the way they fit
together and interact, also the organized levels in the detail based on the type of structure.
The functional structure is more of an organisational structure where the employees are
all grouped hierarchically and then these are managed through the clear lines of authority and
then only report to the only person in charge. The geographical structure is the way an
organisation put things into a geographical units which are regional, national, and international,
this means that they will need to report to one central headquarter, by doing this is administers to
the core functions such as the planning and marketing.
The organisational structure of ASDA has is a hierarchical style and this means, that
there will be fewer people at the top of the company managing the people below. Plus this also
will allow the managing directors, at the top of this chart to make the big decisions about which
way the business should take next. Ladybirds consists of one layer below the manager this
means that the manager as a span control of four, this means that information can be passed
through to everyone quite easily
The functional areas-The functional areas of Ladybirds include that he manager will
manage the payrolls, invoices, P&L also balance sheets and the businesses performance, the
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manager will also report how well the business is doing to the rest if the employees (Huang,
Shen and Sun, 2011). The functional areas of ASDA include that the finance department will
manage the payrolls, invoices, P&L also balance sheets and the businesses performance, the
finance department will also report how well the business is doing to the rest of the company
departments. This will happen each day if there is any major area of concern, plus there will also
be a monthly late lunch meeting for everyone in the ASDA house this then will be videoed and
sent out to all of the stores.
P 4 Style of organisation helps them to fulfil their purposes
ASDA is a public limited company it is formally known as a PLC, they have a lot of
stores across the UK, plus they sell a wide range of products, and this variety from food, toys,
electronics, drinks, clothes, toiletries. The organisational structure ASDA has is a hierarchical
style and this means, that there will be fewer people at the top of the company managing the
people below (Kirton and Trebilcock, 2017). Plus this also will allow the managing directors, at
the top of this chart to make the big decisions about which way the business should take next.
These decisions are important and should be made by the top executives with the right
experience and intelligence in this type of experience.
The sales director is responsible for making sure that all the right products are bought
for the store, although he doesn’t have change to check every individual one he knows they must
ensure that the right people are buying these products. Also there are different types of buying
teams that will need to focus on their area and then leave the other teams to look after their
products. This structure of company helps the finance department fulfil their purpose by making
sure the payrolls, invoices, P&L also balance sheets and the businesses performance, is up to
date regularly and on time.
The finance department will manage the payrolls, invoices, P&L also balance sheets
and the businesses performance, the finance department will also report how well the business is
doing to the rest of the company departments. This will happen each day if there is any major
area of concern, plus there will also be a monthly late lunch meeting for everyone in the ASDA
house this then will be videoed and sent out to all of the stores.
` IT department can fulfil their purpose by keeping focus and working and
communicating well with the other departments (Klapper, Lewin and Delgado, 2011). Also the
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IT department will also work with all the other departments, because this department are always
looking for new ways of doing things to help the business progress and move forward.
TASK 3
P 5 Influence of two contrasting economic environments on business activities
The economic environment is the totality of economic factors, such as employment,
income,inflation, interest rates, productivity, and wealth, that influence the buying behaviour of
consumers and institutions. Sainsbury’s in the UK operated during the recession and the boom
period. The UK is in the growth economic environment and this means the country was before in
the recession economic environment and now it is growing. This does not mean they are a rich
country compared to China.
Economic environment includes stability which is when business people can make
predictions for the short and the medium term about likely demands for their products in the near
future. Sainsbury’s would be affected if there are changes in the economic environment and
these are growth, recession and ripple effect. Growth is when more products are being produced
and consumed. This also means the incomes are rising (Klapper and Parker, 2011). So in
Sainsbury’s, if customers buy more goods and services, the production department would make
more products than the usual so that they can sell more products. Recession is when there is a
decline in the GDP and this also means there is an increase in the unemployment rate. Recession
will take place if customers of Sainsbury's tend to save more money than to spend it on goods
and service.
TASK 4
P 6 Political, legal and social factors are impacting upon the business activities
Political stability is usually defined as the state of peace that is normal experienced in a
country from the activities from the government and also the government in this situation will
make decisions and keeping the best interests in mind for people. The government have their
own initiatives for companies like ASDA and these are the healthy eating and fit for life, these
are the type of campaigns that the supermarkets will try to support to then try get more funding
or advertising for the company from the government, this is by the prime minister if he
mentions how good ASDA has been supporting the certain campaigns.
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The legal impacts are that ASDA must follow the law, and an example of this is the trade
description act, this is where the product most be described accurately otherwise it can cause an
issue and an example of this the big issue with meat earlier this year, so it is extremely important
that you describe the product well and accurately if not then the trading standards will have no
other choice but to get involved (Thomas, 2010). The social impacts that ASDA may face are
the difficulty to recruit the right people for the job in the stores or the offices depending on where
they will be based, also most of the workers that are in the stores are an unskilled workers on the
minimum wage given.
CONCLUSION
From the above report it can be concluded that Business environment plays a vital role in
tasks and activities of the company. Some major factors are included in the environment which
are social, economical, environmental ,legal and technological factors. Shareholders are also key
part of the business organisation to accomplish their goals and objectives.
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REFERENCES
Books and journals
Ashkenas, R., Ulrich, D. and Kerr, S., 2015. The boundaryless organization: Breaking the chains
of organizational structure. John Wiley & Sons.
Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Černá, M., 2014. Aspects of Information Management in Context with IS Selection by SME.
Procedia Engineering. 69. pp.745-750.
Chittithaworn, C., Islam, M.A. and Yusuf, D.H.M., 2011. Factors affecting business success of
small & medium enterprises (SMEs) in Thailand. Asian Social Science. 7(5). p.180.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Huang, J.J., Shen, Y. and Sun, Q., 2011. Nonnegotiable shares, controlling shareholders, and
dividend payments in China. Journal of corporate Finance. 17(1). pp.122-133.
Kirton, J.J. and Trebilcock, M.J., 2017. Hard choices, soft law: Voluntary standards in global
trade, environment and social governance. Routledge.
Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp.
108-123). Palgrave Macmillan UK.
Klapper, L.F. and Parker, S.C., 2011. Gender and the business environment for new firm
creation. The World Bank Research Observer. 26(2). pp.237-257.
Thomas, J., 2010. Attitudes and expectations of shareholders: The case of the multi-generation
family business. Journal of Management & Organization. 15(3). pp.346-362.
Trkman, P., 2010. The critical success factors of business process management. International
journal of information management. 30(2). pp.125-134.
ONLINE
Neil Kokemuller,2017.How Do Stakeholders Influence Business Activities? [Online]. Available
through: <http://smallbusiness.chron.com/stakeholders-influence-business-activities-
18754.html>. [Accessed on 5th June 2017]
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