Business and Business Environment: Macro Environmental Report

This report provides a comprehensive analysis of the business and its environment, covering various organizational types, including public, private, and voluntary sectors, along with their legal structures, sizes, and scopes. It examines the relationships between different organizational functions, such as production and human resources, and how they contribute to organizational objectives and structure. The report also delves into the positive and negative impacts of the macro environment on business operations, supported by specific examples, and conducts internal and external analyses to identify strengths and weaknesses of specific organizations. Furthermore, it explores how these strengths and weaknesses interrelate with external macro factors, offering a detailed overview of the business landscape and its complexities.

Business and Business
Environment

Contents
INTRODUCTION.....................................................................................................................................3
PART 1...................................................................................................................................................3
P1 Explain different types and purposes of organisations; public, private and voluntary sectors and
legal structures..................................................................................................................................3
P2 Explain the size and scope of a range of different types of organisations....................................6
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure............................................................................................8
PART 2.................................................................................................................................................11
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples....................................................................................11
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses...............................................................................................................................13
P6 Explain how strengths and weaknesses interrelate with external macro factors.......................14
CONCLUSION.......................................................................................................................................15

INTRODUCTION
The business is considered to be an activity with the help of which the business aims
to earn profits. The businesses are classified into different types on the basis of the motive of
operating(Talamini, 2013). For this they have to analyse the business environment
irrespective of the nature of business as they have direct influence of internal and external
factors of the business. This enables them to identify various opportunities and threats that
the businesses can grab and reduce the impact through their strengths of the organisation. In
this report different types of organisation are taken into consideration with their structure,
size, scope, purpose etc. In addition to this their structure are also discuss that facilitate to
understand different functions which are performed by the organisation. Along with the
internal and external analysis is also undertaken for the company so that they can accomplish
their business objectives by minimising the impact of various micro and macro factors.
PART 1
P1 Explain different types and purposes of organisations; public, private and voluntary
sectors and legal structures
Success of an organisation depends on the competences and experience by target
market (Janita and Miranda, 2013). There are different type of organisations which are
classified on the basis of their purpose, nature and objectives. Majorly the type of
organisations is Public, Private and voluntary that established to render quality services their
service users. An analysis and detailed description of these organisations are determined
below:
Private sector organisation
Private sector organisation plays a most important part in a country’s economy
system. These kind of organisations are run by companies and individuals with a clear
intention of making desired profit. A perfect example of private sector organisation is Marks
and Spencer which is British multinational retailer that selling clothing, food products and
home product to its direct customers. This organisation was founded by Michael Marks and
Thomas Spencer in the year of 1884.
Different type of private sector organisation

Joint venture: Joint venture is known as a business agreement between two or more
parties that agree to pool their resources for a specific purpose or to accomplish a task.
Sole Proprietorship: This is one of the simplest business form in which an individual
can operate a business who is not a legal entity. In sole proprietorship the person who own a
business is personally responsible for all its debts. For example, Ma baker which is award
winning sole trade business in UK.
Partnership: This is a formal business form between two or more parties who agreed
to manage and operate a business as well as to share its profit mutually.
Features: One major feature of private sector organisation is its management which is
by individual or 2group of individuals without any involvement of government.
Goal: Goal of Marks and Spencer is to make an inspirational quality accessible
organisation for others. It incorporates quality based products and services for the customers.
Purpose of Private sector organisation: One major purpose of private sector
organisation is to earn profit and become a leading organisation in the target market. As the
purpose of M&S is to serve a quality of products and services to its customers in order to gain
desired profit and business sustainability.
Objectives: Objective of Marks and Spencer is to set a standard and benchmark for
other on the basis of organisation quality products and services. It contains core values as
quality, service, innovation and trust.
Legal feature: M&S follows the legal structure of a public limited company and it is
listed on the London Stock Exchange. It is a limited liability company whose shares may be
sold and traded to the public.
Public sector organisation
Public sector organisations are known as those firms which are owned by government
in order to provide goods and services for the benefit of communities (Laudon and Traver,
2016). For example, NHS is a public sector organisation of UK which provides healthcare
services to all the citizen on the basis of their healthcare need rather than analysing their
ability to pay for it.
Different type of Public sector organisation

Public or statutory corporation: This type of organisations are taken into existence
by special act of Parliament. Main objective of these type of organisations is to ensure public
welfare.
Departmental undertaking: This is one of the oldest form of public sector
organisation which is organized, controlled and financed by other government organisation.
Features: Public sector organisations are work under the government's direct control
and some of them are even formed under the Statutes and Companies Act. Public enterprises
are therefore in nature semi-autonomous or autonomous.
Goal: To stand for improving well-being and health of people by providing them
quality of services and experience.
Purpose of Public sector organisation: Major purpose of NHS is to render highest
standard of excellence and professional services to patients as well as services users. Their
purpose contains high quality care which is safe, focused and effective in context of patient.
Objectives: Objective of NHS is to deliver a better care, better health as well as better
values to its service users (Shenkar, Luo and Chi, 2014). Their all the targets incorporates
future aim that what they are trying to deliver or why.
Legal feature: NHS basically follows the rules and regulation as a public corporation
which is funded by parliament of UK.
Voluntary sector organisation
Voluntary sector organisations are those that receive funding from the state, groups
and individuals to act for public benefit rather than shareholder benefits (Prins and
Cybercrime, 2011). Their main objectives is to create a social impact without concentrating
upon profit. For example, Oxfam which is a charitable organisation which was founded in the
year of 1942 which focusing on the alleviation of global poverty.
Different type of Voluntary sector organisation
Charitable Trust: This type of organisations are basically establish to accomplish a
substantial social benefit for the public. It is also known as unchangeable trust which
established for charitable purpose.

An Unincorporated Association: It is group of two or more individuals which is joined
by mutual consent for a lawful purpose to organized a profitable aim or not. This corporation
has no legal rights and a separate entity.
Features: Amain feature of voluntary sector organization is that it is an association
which is formed and controlled by its own members without external interference, whether its
employees are paid or unpaid.
Goal: The Goal of Oxfam is to create a world without poverty and injustice. A world
in which individual can influences decisions that has an impact over their lives (Vitale, 2011).
Purpose of Voluntary sector organisation: Purpose of Voluntary sector
organisation is to comprise by giving fundamental rights and freedom to needy people and
communities.One major purpose of Oxfam is to create a permanent solution to the poverty as
well as injustice. Further, taking a part of global movement of change in order to create a
future that is secure and just free from poverty.
Objectives: Objective of Oxfam is to create a permanent solution for the injustice of
poverty. For this, is to create a global movement in order to make changes for a secured
future.
Legal feature: Oxfam falls under the legal structure of Unincorporated Association.
This was basically established with an agreement among group of people to provide a
solution of poverty.
P2 Explain the size and scope of a range of different types of organisations
For each and every organisation, it is required to set an objective that could be a short
and long term goals that they are seeks to accomplish (Schaltegger, Lüdeke-Freund and
Hansen, 2012). Mission, vision and values play an important part in setting organisation’s
policies and resource setting strategies. Size and scope of different organisations are
determined below as:
Size of an organisation
Organizational size is defined as the number of employee who are working at any
given location of firm.It will include the entire business entity whether it is in a regional area
or a de-centralized company division.

Micro Organisation: These type of organisation refers to a small company which
employing a limited number of individuals. Micro organisations typically operates with less
than 10 employees and it is raised funds and capitals from a bank or other entity in advanced.
Small size organisation: Under the UK’ companies act 2006, a small organisation is
described as one that has no more than 50 employees. Its annual turnover does not have
above £6.5million (Finding a Standard Definition for Small Businesses, 2019).
Medium size organisation: A medium size organisation is define as those enterprise
those having fewer than 250 employees as well as must have under £12.9 million turnover.
Large size organisation: Large scale enterprise are those that have more than 250
employees in geographical location of firm as well as have great number of business
operations on daily basis. In this type of organisation has more complex management
hierarchy than medium and small scale business.
Suggestion:
Micro:Ma Baker is an award winning micro bakery in the UK.This organisation is
run by Liz Wilson who is a teacher, passionate home cook and baker. She run this business
by her own creativity and ideas.
Medium:Oxfam isvoluntary sector organisation that has a massive reach that works
to resolve issue of poverty with the help of limited voluntaries. This organisation reached to
different regions by spending a specific amount on their welfare and quality work.
Large: NHS provides hospital and community healthcare services to customers by
employed around 106, 430 doctors, 285, 893 nurses and so many equipment, technical staff
and professional management authorities.
Scope of the organisation:
Private: Ma Bakers is well micro firm in UK in which, Liz Wilson which is owner of
the firm provides its own services. With the help of delicious bakery products firm can reach
in the different locations of by transforming its structure at vast level.
Public:In order to expand quality service experience, NHS is looking to expand its
business in the maximum areas of Scotland, Wales and Northern Ireland in which they
existing working with a minimum staff.

Voluntary: Oxfam works in more than 90 countries with several communities,
thousands of partners and so on in order to help people to rebuild their livelihood by making
permanent changes.
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
In an organisation, working activity of functional departments are based on its business
structure. This is basically helps to set a network of relationship which divide work into
different units and departments.
 Production function: M&S is well known organisation in worldwide because firm
provide quality product and services to its customer on the basis of their requirement
and need. In this process production division provide its contribution by
manufacturing quality services to satisfy requirements of services users. In this
process, research and development department of M&S provide their contribution to
production division by analysing demand of market and customer on the basis of new
trends. On the other hand, human resource department also provide their contribution
by hiring skilled and capable employee who can produce quality products for firm.
 Human resource function: In an organisation, Human resource and marketing both
department play a most important role. Human resource department work for staffing,
training, workplace culture development and employee retention to provide a
productive workforce. On the other hand, marketing division works to promote
business product and services and develop opportunity of product sale by analysing
market requirement. In M&S, both these divisions work together as HR department
hire skilled marketing employees for organisation who enhance market sustainability
opportunity by analysing customer requirement and need.
 Marketing function: In M&S, role of marketing department is to analyse market
trends and requirement of customer in order to develop desired products. In this
regard, Finance division provide own support to them for effectively conducting
market research to enhance growth opportunity for firm.
 Accounts and Finance function: M&S is a multinational leading retailer
organisation that provide quality products and services in different countries. Thus,
for them it is required to manage their funds as cash inflow and outflow. In this
process, finance division play a most important role in order to manage all the
financial activities effectively (Craig and Campbell, 2012). In this regard, HR division

provide its own contribution by hiring skilled and capable knowledge according to
organisation’s requirement and need. Both these divisions’ works together in order to
attain organisations goals effectively.
 Research and development function:R and D department's main role is to assist a
firm or organization to maintain its competitiveness. This means keeping an eye on
market patterns that are emerging, and the working activities of competition. This
division is works to evaluating a clear understanding of current condition within given
industry. In order to conducting these activities, Finance division provide its own
contribution by allotting desired fund for market research.
Matrix divisional: The organization is grouped into a matrix structure on the basis of
products as well as functional activities. In this process, the product lines are administered
horizontally and roles are administered vertically. This implies that for each product and
feature for example, marketing, production, distribution, and finance has different internal
divisions.
Functional structure: This is a specific type of organizational structure in which the
departments of firm are divided into smaller units based on different functional areas such as
information technology, accounting, or marketing.The functional relationships between
anydivisionsare grouped in a specific organizational framework based on a specialization or
specific field.
Organisational Structure:
Working structure of different functional departments are based on organisational
structure that could be:
 Functional structure in which people do similar task who grouped on the basis of
their speciality.
 Matrix structure in which individuals group into different functional division after
that further are separate into divisional projects (Vitale, 2011).
 Flat structure which attempt a traditional top-down management structure.
Organisational structure of M&S
M&S follows flat organisational structure and their working activities of functional
departments are based on decision making process under this structure.

Figure 1Marks and Spencer Group, 2020
Main objective of implementing this organisational structure is to encourage
employees to involve in decision making process of firm. This structure assist in reducing
bureaucracy as well as to make employees enthusiastic by making their involvement in
organisational activities. With the help of this, M&S enhance overall productivity of firm that
helps in maximising growth opportunities.
PART 2
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples
For the business it is important to identify various macro factors and its impacts so
that they can minimise the adverse impact of such factors and can avail the opportunities
present in the business environment. Pestle analysis is a concept of marketing that facilitate to

understand the impact of various environment factors that are present in the business market
and has direct influence over them. It includes analysis of various factors such as P for
Political, E for Economic, S for Social, T for Technological, L for Legal and E for
Environmental.
Figure 2: What is a PESTEL Analysis? 2015
For analysing the positive and negative impact of the macro factors PESTLE analysis
is undertaken which is given below:
Political Factors: The political factors has direct influence on the M&S as they are
operating in different countries due to which they have to comply with various requirements
imposed on them by the government. The free trade agreement and policies of the UK
government with other nations has positive impact on M&S as will this their requirement of
various implications reduces.
Positive impact: This has positive impact on the company. But the BREXIT has adverse
impact on the company as due to this the free trade agreement will not be available to them.
Negative impact: Also their cost of production will increase which will have negative impact
on the profitability of the company(Zahari and Romli, 2019).
Economic Factors: The businesses have to make adjustment in their policies as per
the prevailing economic condition. Various economic factors that they have to take into
consideration include inflation rate, interest rates, employment rate etc.

Positive impact: M&S has been operating on large scale with large stores in the current
market but the trend in UK reflects that the shifting is taking place towards smaller retail
stores. Due to this the mark-up price has lowered down which enables them to be a premium
brand thus making it affordable to all which has positive impact on increasing their sales.
Negative impact: The diminishing purchasing power of the people of UK forcing them to
shift to the local small retailer rather than premium brand and this has direct and negative
impact on the profitability of the organisation (Sarsby, 2016).
Socio-cultural Factors: The social factors have greater impact on the company as
they consider the taste and preference of the customer so that they can make their goods as
their needs and wants.
Positive impact: With the increasing demand of the ready meal sector the company has
significant market share as they successful in tapping this market segment by effectively
determining the need and serving them the meals as per their requirement.
Negative impact: As they have been operating for long due to which they have brand
recognition but they have not introduced any innovation and launched creative products for
the customers due to which they are considered to be non trendy by their customers.
Technological factors: The technological factors reflect the trends in the technology
that the businesses have to adopt so that they can ensure satisfied customers.
Positive impact: M&S has adopted self checking counters in their retail stores which has
facilitated the customers in improving their shopping experience as with this their time of
standing in queue for the billing process reduces. Also with the emerging online shopping
trends is also accepted by the company due to which they offer all their products through
online medium and this has favourable impact on the M&S.
Negative impact: This frequent technological development affects the cost structure of the
company.
Legal factors: The Company has to comply with various legal implications on them
so that they can ensure ethical business practices and better image among the customers.
Positive impact: They comply with all the legal aspects which ensure that they have ethical
code of conduct within their organisation and this has positive impact on the company (Hilton
and Platt, 2018).