Business and Business Environment Report: Marks & Spencer - Analysis

This report provides a detailed analysis of the business and business environment, using Marks & Spencer as a case study. It begins by defining business and its environment, emphasizing the impact of external factors on business growth. The report then classifies different types of organizations, including private, public, and voluntary organizations, and examines their legal structures. It further explores the size and scope of organizations like Marks & Spencer, the National Health Service, and the British Heart Foundation, highlighting their missions, visions, and objectives. The core of the report focuses on the relationship between different organizational functions, such as HR, marketing, finance, and R&D, and their links to organizational structure, specifically the flat structure adopted by Marks & Spencer. The report also analyzes the positive and negative impacts of the macro environment on business operations and conducts an internal and external analysis of Marks & Spencer, including its strengths, weaknesses, and their interrelation with external macro factors. The conclusion summarizes the key findings and insights from the analysis.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Types of organisation and their legal structure.....................................................................1
P2. Size and scope of different types of organisation.................................................................4
TASK 2............................................................................................................................................5
P3 Relationship between different organisational function and their link with organisational
structure.......................................................................................................................................5
TASK 3............................................................................................................................................8
P4 Positive and negative impact of Macro environment on Business operations.......................8
TASK 4..........................................................................................................................................11
P5 Internal and external analysis of Mark & Spencer...............................................................11
P6 Strength and weakness interrelated with external macro factors ........................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business includes commercial activities performed to achieve profits. The activities are
performed by group of people in accordance to business environment. Business environment
means internal and external elements such as customer, employees, government,. Suppliers, etc.
Due to change in external factors business growth gets affected (Apăvăloaie, 2014). So manager
has to analyse external components and accordingly actions has to be taken. In business
environment, there are varieties of competitor, so manager has to analyse their policies and
accordingly changes has to be made. In this report there is discussion about Marks and Spencer
which is one of the best retail sector established in 1884. This has headquarter in City of
Westminster, London. In this report there is discussion about various types, size and scope of
organisation, functions of various department and their interrelation. This report also tells about
positive and negative impact of macro factors of business and lastly this tells about internal
strength and weakness and its interrelation with external macro environment.
TASK 1
P1. Types of organisation and their legal structure
Organisation refers to the group or individuals who are associated for accomplishment of
common goal or objective. Each enterprise is different in term of their structure, size, scope and
the way in which they operate business (Beckmann, Hielscher and Pies, 2014). Following are the
sectors to which different organisation belongs:- Primary sector:- The primary sector involve activities related to the extraction and
arrangement of raw material such as coal, wood, iron etc. which are required to produce
final product. Secondary sector:- This sector includes transformation of raw material into finished
goods, secondary sector therefore includes activities like manufacturing, processing and
construction industries.
 Tertiary sector:- Tertiary sector includes activities like production and exchange. The
production activities include provision of services and its consumption whereas,
exchange involve transportation, trade and communication facilities.
Types of organisations:-
Following are the type of organisation with their legal structure:
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Private organisation:- Business which is owned and operated by one or group of
individual and is not under the control of government is known as private organisation. Private
enterprises can issue stocks but are not eligible for trading in public stock exchange. Mark &
Spencer is taken as an example for private enterprise, which is an supermarket retail chain stores
situated in UK (Bernstein, 2015). M&S generally belongs to Tertiary sector.
Purpose:- Main purpose of private organisations is to generate maximum profit and to expand
their business.
Advantage:- Liabilities of shareholders are limited and members are not liable for the debts of
enterprise.
Disadvantage:- Private limited companies can not issue their prospectus to general public.
Legal Structure:- Sole proprietorship:- Sole trade or proprietorship refers to a business which is owned &
operated by single individual and that individual is personally liable for all its revenue
and debts. Partnership:- It refers to an agreement between two or more individuals to operate
business for the achievement of common goal. Partners pool money as well as resources
and also shares profit and losses.
 Limited company:- limited company refers to the business in which partners have limited
liabilities either limited by shares or by guarantee.
Public organisation:- These businesses are generally owned and operated by the
government and are present for providing services to their citizens. Public sector enterprises
doesn't seeks to operate profit, they only work for the welfare of the society (Bocken, Rana and
Short, 2015). National Health Services (NHS) is a public sector enterprise, headquartered in UK
which provides public health care services and performs tertiary activities.
Purpose:- Purpose of public sector enterprise is to service citizens and contribute toward
economical wealth of country.
Advantage:- Public enterprises are autonomous hence, enjoys flexibility and independence in
their operations.
Disadvantage:- When public enterprises incurred losses then that loss is bear by either
government or result in higher taxation.
Legal Structure:-
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 Central government:- Central government refers to the political authority which is
responsible for governing the unitary state of nation (Botha, Kourie and Snyman, 2014).
It formulates legislative rules for local as well as state government. State government:- It is a political authority which are subdivision of government into
federal form and also shares political power with the national government.
 Local Government:- Local government refers to public administration and only have a
control over specific geographical area.
Voluntary organisation:- Voluntary organisations is group of people who came up
together to form an association which work for the welfare of society. These enterprises are
independent, flexible and non-profit in nature, hence income earned is again invested in business
and used to achieve organisational goal (Dawson and et. al., 2015). British Heart foundation is a
voluntary organisation present in UK, which provide fund for cardiovascular research. It
provides services related to the tertiary activities.
Purpose:- Primary purpose of voluntary enterprise is to create social impact through their
business operations rather than generating revenue.
Advantage:- These organisation doesn't have to pay income taxes, capital gains tax.
Disadvantage:- Members of voluntary organisations are not allowed to use financial benefit for
their personal use.
Legal Structure:- Unincorporated association:- This association refers to an organisation which works for
the welfare of community and doesn't recognised as a legal entity. Incorporated organisation:- Incorporated organisation is consider as an separate legal
entity from its directors, as they are regarded as the agent of company and are not liable
for firm's debt.
 Charitable company:- These organisations are managed by charity commission and are
formed to achieve charitable aim. These companies are limited by guarantee and not by
share.
P2. Size and scope of different types of organisation
There are different types of organisations that operates in business environment, which
are different in term of their size, scope and objective behind their activities (De Massis and
Kotlar, 2014). Their differences can be better understood by following points:
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Mark & Spencer:- M&S is a multinational retailer and is headquartered in London.
Company is specialised in selling home products and clothing’s. Mission & vision:- Its mission is to deliver high quality products in the area of cloth,
home & food as well as providing good value of money to their customers. Their vision
is to become a standard against which competitors are measured. Size & scope:- M&S is UK's leading retailer having more than 450 store in 30 countries
with nearly 70,000 employees worldwide. It deals in product like clothing,
 Objective:- Their main objective is to increase sales and market share by delivering
innovative and quality products using differentiation strategy.
National Health Services:- NHS is a comprehensive public health service, which is
operated under government administration. It provides range of health care services separated by
three groups such as general practitioners & dental services, local health authority services and
hospital & specialist services. Mission & vision:- Their vision is to achieve excellence in health care by providing
quality performance and service delivery. NHS mission is to deliver standard health care
services which are accessible, affordable, sustainable and equitable. Size & scope:- NHS is world's fifth largest organisation with 1.7 million workers
throughout Wales, England, Scotland and Northern Ireland. The largest part of company
is in England which serve around 54.3 million peoples.
 Objective:- Main aim of NHS is to achieve the highest possible level of good health and
well being by providing universal access to good quality health care services.
British Heart Foundation:- BHF is a charity organisation and is major funder in
cardiovascular research, care and education (Dima, Grabara and Modrak, 2014). It also work
with other organisation in order to reduce premature death and disabilities from cardiovascular
disease. Mission & vision:- Its vision is to develop a world which people do not have premature
death due to circulatory & heart diseases and its mission is to win fight against the
cardiovascular disease. Size & scope:- BHS has employees around 1001 to 5000 throughout United Kingdom.
 Objective:- Main objective of BHS is to perform research to find the cause of heart
disease for improving the methods of prevention, diagnosis and treatment.
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TASK 2
P3 Relationship between different organisational function and their link with organisational
structure
An organisation is consists of various department which are different in term of their
operations but all unit work towards the achievement of common organisational goal i.e. to
achieve higher customer satisfaction and maximum revenue at minimum cost (Falkner, 2017).
But in order to achieve this there must be a proper coordination between organisational
departments so that they can perform operations much effectively and efficiently. Following
points explains the various types of department in Mark & Spencer and their interrelations: Human Resource Department:- Main function of human resource section is to manage
the valuable resources of an organisation. It perform several operations such as
recruitment, selection, training & development, induction, compensation etc. It is very
essential for HR unit of M&S to communicate with other department in order to solve
the issues of their employee for retaining them and to appoint employees as per the
requirement of these departments. Marketing Department:- Marketing unit is responsible for performing several operations
related to the promoting goods and services of Mark & Spencer within the market place.
It is very essential for marketing department to communicate with finance department
for financing their operations (Fan, Lau and Zhao, 2015). Marketing section must also
communicate with HR department in order to get the skilled and competent persons
which can influence and retain customers for longer period of time. Finance department:- Finance section is also very essential unit of an organisation as it
is responsible for managing the finance of the company. It perform several operations
such as preparation of budget, cash flow statements, balance sheet which help M&S in
determining their profit during the year or the ways to reduce the operational cost. So it
is very necessary for financial unit to coordinate with other departments so that can
provide fund whenever required by units and can reduce the operational cost to
maximize revenue.
 Research and development department:- Major function of R&D department is to
perform a market research in order to determine the trend, customer's demand &
preference in order to remain competitive and to attract larger number of customers
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(Forsgren and Johanson, 2014). It very essential for R&D unit to communicate with
marketing department for collecting the past year data and to provide them information
relate to change that must be achieve in order to improve promotional efforts.
Types of organisational structure:- An organisational structure refers to a system that
defines the activities to be performed and by whom, which contribute toward the achievement of
organisational goal. Each organisations are different in term of their operations as well as
objectives and hence they follow different organisational structure which can be better
understood by following points:
 Flat organisational structure:- Mark & Spencer follows Flat structure which refers an
organisational structure that eliminates the functions of middle level management, so that
top management can directly communicate with their salespersons, shop floor employees
and customers. Flat organisational structure is very beneficial for company as they can
directly communicate with their employees and can take decisions much more quickly
(Foss and Saebi, 2017). It help Mark & Spencer in identifying the taste and preference of
their customer and make it easier for them to response to changing demand of their
clients much more quickly, which in turn will support in maintaining long term relations.
(Source: Organisational structure, 2018)
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Illustration 1: Organisational structure

Above image shows the flat organisational structure used by Mark & Spencer which
assist company in simplifying the managerial process and in taking quick decisions.
 Hierarchical organisational structure:- National Health Service uses Hierarchical
organisational structure for performing their operations in a systematic way. Hierarchical
structure consists of various layers of management and chain of command in which
senior management takes all the decisions and information flow from top to bottom.
NHS organisation consists of three tier of management where top tier takes
political decisions and formulate plans as well as policies for future actions. Middle tier
implement these strategies and manages the performance of their staff members. Lower
tier includes the staff members who provide services to patient.
(Source: Organisational structure of NHS, 2018)
Above given image shows the organisational structure used by NHS i.e., hierarchical
structure which assists company in performing its operation in a systematic way.
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Illustration 2: Organisational structure of NHS

TASK 3
P4 Positive and negative impact of Macro environment on Business operations
Macro environment means elements which affects business operations in indirect manner
but Marks and Spencer manager has to change their working style. There are possibilities of
making business operations effective and efficient. There are possibilities tat association has to
alter their policies, so they can satisfy their customers (PESTLE Analysis, 2018). As Marks and
Spencer has good image in market, so it is essential to work in accordance to external business
environment. As changes are taking place in business environment, so to compete with external
factors managers of Marks and Spencer has to alter working style. In macro environment legal,
political, environmental, etc. factors are included. Macro environment has positive or negative
impact on business enterprise. Positive and negative impact of macro environment on business
operations are asunder-
Basis Meaning Positive impact Negative impact
Political Political factors
includes role of
governmental parties
which affects business
operations. Marks and
Spencer deals in
various parts of
country, so they have
to frame policies
accordingly.
Marks and Spencer
can trade freely
because of proper
making policies
according to
government norms, so
this helps to perform
operations smoothly.
There is difference in
tax rates of various
countries, so this is
expensive for Marks
and Spencer. As there
is difference in
policies of
government. So this
alterations in policies
affects business
policies.
Economical Economic factor
means elements
related to finance such
as funds, inflation,
wages, etc. Marks and
Spencer deals in
As Marks and
Spencer has good
image in market, so it
is easy for managers to
raise funds and
accordingly actions
As per change in tax
rate, inflation, etc.
sales of Marks and
Spencer gets affected
(García-Peñalvo and
et. al., 2014). There
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various countries, so
this factor differs in
different parts of
country.
can be taken. It helps
to select best source of
funds which are
available when
needed.
are possibilities in
reduction in sales
because of negative
impact on purchasing
power of customers.
Social Social factors means
elements of society
where business
operates. Marks and
Spencer operates in
various parts of
company so there is
difference in demand
of customers because
of change in trends.
This factors helps
Marks and Spencer to
give products which
are related to
customer's demand
(Hamilton and
Webster, 2015). As
these days CSR
concept is much more
in trends which helps
Marks and Spencer to
make good image in
industry.
As per changer in
demand of customers,
manager has to later
their business policies
which is costly
approach for Marks
and Spencer.
Technological Technological changes
means latest
technology up-
gradation by managers
of Marks and
Spencer. As there are
many changes in tools
to perform business
operations, so this is
considered under
technological changes.
With the help of
technological changes
business operations
can be performed such
as quick delivery
system, fast check- in
and check- out
machines, etc. There
are possibilities of less
defects and customers
gets approved goods.
To apply latest
technology, there is
requirement of
research, which is time
and cost consuming
method. There is
requirement of training
which affects business
operations and
sometimes employees
of Marks and Spencer
are not ready to work
9

under new technology.
Legal Legal factors includes
government norms and
regulations which are
essential to be
followed by Marks
and Spencer
(Khanagha, Volberda
and Oshri, 2014).
There are some laws
related to employees,
infrastructure of office
premises, etc.
When managers of
Marks and Spencer are
performing business
operations in
authorised way, then
this makes good image
in society and there is
less governmental
interference.
As per legal norms
policies of Marks and
Spencer has to be
altered. There is
requirement of
expertise person for
which fees has to be
paid. As Marks and
Spencer operates in
many countries, so
sometimes it is
confusing for
managers.
Environmental Environmental factors
means external
environment of
business. This includes
climatic changes
which affects business
operations.
To protect
environment Marks
and Spencer change its
process of working
which helps in making
good image. They
frame policies to
reduce wastage by
15%.
Due to excessive rain
transportation facilities
gets halt and there is
decrement in sales of
Marks and Spencer.
TASK 4
P5 Internal and external analysis of Mark & Spencer
There are number of factors present in business environment which may affect the
functioning of an organisation, so it is very essential for them to analyse them in order to perform
their operations much effectively. SWOT is a tool used for internal and external analysis which
stands for Strength, Weakness, Threat, Opportunity (SWOT analysis of Marks & Spencer, 2018).
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By using this analytical tool company can identify their weaknesses to overcome them for
enhancing their performance and determine strength which can be used to achieve competitive
edge. It help Mark & Spencer in determining various threats in external environment that need
attention and opportunity which can be exploit by company in order to achieve higher growth.
Following tables shows the SWOT analysis of M&S:-
Strength Weakness
 Mark & Spencer has higher brand
recognition as it provide high quality
product which in turn will help them in
retaining customers (Maula and
Murray, 2017).
 It provides variety of products under
one roof which help customers to select
product as per their choice and also
save their time.
 M&S is the largest supermarket chain
which contains 900 stores among them
600 stores in UK and around 300 are
present in 40 countries with more than
80,000 employees around the world.
 Customers have some wrong
assumptions that M&S offers clothes
for old aged people, not for teenagers
and this in turn reduces the sales of
company.
 M&S uses old technique as they
perform their operations manually
which increases the time and cost of
their work.
 As Mark & Spencer is a popular brand,
some people are misusing the name by
imitating the product and selling it on
the company's name. It is a major
drawback as these practices are
affecting the goodwill of company.
Opportunity Threat
 Mark & Spencer should also provide
their products & services online which
help in attracting larger number of
customers.
 Company can expand their business in
countries which have developed
economy.
 M&S can also enhance their global
 Increasing number of competition is a
major threat for M&S as other retail
stores garbing their market share by
attracting customers toward their
discounted prices (Van der Wagen and
White, 2018). Major competitors of
Mark & Spencer are ALDI, Tommy
Hilfiger, ASDA, TESCO etc.
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presence by using alliances or offering
innovative solutions. This help
company in improving their operations
or can also enhance their goodwill and
market value.
 With the increasing use of internet,
online shopping is becoming more
popular among customer (Ward,
2016). This proves to be a major
drawback for M&S as it still not uses e-
commerce platform for offering their
services.
P6 Strength and weakness interrelated with external macro factors
Strengths and weakness of various external factors help the organization to identify their
strong and weak points. Hence firm can take corrective steps to improve the methods and
procedure so that company can perform all activities in effective form. Strengths and weakness
of Marks and Spencer are described below:
 Political factors: Govt. creates rules and regulations for the company such as health and
safety, risk assessment etc. This is done to protect the employees from any accident or
injury. Strengths and weakness are described below:
Strength: If company follows the rules then, safety and protection is provided to all
employees. This helps workers to perform in effective manner. Hence firm can earn
more profits and can increase the market share.
Weakness: If firm do not follow the rules, then organization cannot survive in the market
and at same time employees are also not satisfied with the job (Wetherly, 2014). Thus
firm cannot run successfully.
 Economic factors: If there is recession in the market, then company can create different
rules and can take different steps so that they can easily deal with the economic factors.
Strengths and weakness are described below:
Strength: Firm can easily take different steps if there is recession and hence it can close
the stores or can take another decision. Hence company can take effective decisions and
can earn huge revenues.
Weakness: If company do not take steps in proper time, then company cannot survive in
the market. Hence it cannot earn revenues and expand the business.
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 Social factors: There are changing needs of all people and hence company can take
decision to fulfil the social needs. It is crucial so that company can perform. Hence
strengths and weakness are described below:
Strength: Company fulfil the need and requirements of all people and hence it can earn
huge revenues. This helps the organization to enhance the market share.
Weakness: If firm do not evaluate the market and do not fulfil the needs of all users, then
it cannot run successfully and cannot earn revenues.
 Technological: Technology is an important factor and hence company has to adopt the
external factors so that firm can easily survive in market and this is also important for
organization to attract more users. It is crucial so that firm can earn more revenues.
Strengths and weakness are described below:
Strength: If company adopts the online tools and techniques then it can reach to many
people in minimum time. This helps the organization to earn more revenues and it can
easily expand the business.
Weakness: If company do not adopt the latest tools and methods then, company cannot
perform the activities and functions in efficient manner. Hence firm cannot survive in the
market.
 Environmental factors: It is crucial for the company to follow the environmental factors
so that firm can survive in the market. Hence it can earn huge revenues and can enhance
the market share (Wong and Young, 2014). Strengths and weakness are described below:
Strength: If company follow the rules then firm can survive in the market. Organization
has created a green policy in which there is announcement of 100 five year plan to create
carbon neutral. Ethical trading, sustainable trading and healthy promoting business. This
help the company to generate more revenues and increase the market share. Hence they
can easily expand the business.
Weakness: If firm do not follow the environmental rules, then company cannot survive in
market. This results in decreasing of revenues and firm cannot run successfully in
market. Hence company cannot survive in the market.
 Legal factors: Company has to follow the legal factors so that they can easily survive in
the market. Strengths and weakness are described below:
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Strength: Company provides training to employees so that they can update with latest
laws and rules. Hence it can survive in market.
Weakness: If firm do not follow the legal rules then company cannot survive in the
market. This results in reducing the profits of company.
CONCLUSION
From the above discussion it is clear that there are any factors of business environment
gets affected business. This is responsibility of manager to take care and frame policies
according to market. There are various types of organisation having difference in size and scope.
As there is difference in scope, size of organisation, so there is difference in their working style
too. Private, public, voluntary organisations are mentioned in this report. This report en-lights
relationship between various organisational departments. Business gets affected because of
macro environment having negative and positive impact. While running business, manager has to
analyse internal and external factors and corrective measures to avoid negative results. PESTLE
analysis is one of the best technique which helps to know about external factors. As there are
many internal components which affects business operations, so SWOT analysis helps to make
policies according to internal factors.
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