Business Environment Report: Sainsbury's Organizational Structure

This report comprehensively examines the business environment of Sainsbury, a prominent UK supermarket chain. It begins by defining the business environment and exploring different organizational types, purposes, and legal structures, with a focus on private companies like Sainsbury. The report then delves into the size and scope of various organizations, using Sainsbury, the Child Support Agency, and Oxfam as examples. It analyzes the relationships between different organizational functions within Sainsbury, such as finance, marketing, human resources, and production, and how these functions contribute to achieving organizational objectives. Furthermore, the report assesses the positive and negative impacts of the macro environment on business operations, followed by an internal and external analysis of Sainsbury to identify its strengths, weaknesses, and their interrelation with external macro factors. The analysis covers aspects like market analysis, competitive landscape, and the overall strategic positioning of the company within the industry. The report concludes with key findings and recommendations, offering a detailed understanding of Sainsbury's operations within its business environment.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 The different type and purpose of organisation and their legal structure. ............................1
P2 The size and scope of different type of organisations. ..........................................................2
TASK 2 ...........................................................................................................................................4
P3 The relationship between different organisational function and its link to objective and
structure.......................................................................................................................................4
TASK 3 ...........................................................................................................................................5
P4 The positive and negative impact of macro environment upon business operations.............5
TASK 4............................................................................................................................................7
P5 Internal and external analysis of organisation to identify strength and weakness.................7
P6 Strength and weaknesses inter relate with external macro factors........................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is the combination of internal and external environment of the
organisation. These factors can directly or indirectly affect the working of each and every firm
which is operating its business in the market. Some of the factors which affect the business
include- suppliers, customers, competitors, government, etc. It is essential for every organisation
to make plans after analysing each and every aspect of the business environment is the proper
manner(Hamilton and Webster, 2018). As by doing this better plans can be formed for
overcoming the challenges. Organisations are of various types this includes- public, private and
sole proprietorship. The private organisation chosen for this report is Sainsbury which is the
biggest supermarket chain of UK. The major topics covered in this report are size and scope of
different organisations, relationship between organisational function and the positive and
negative impact of macro environment.
TASK 1
P1 The different type and purpose of organisation and their legal structure.
Business environment is related with the various factors which directly or indirectly help
in achieving the long and short term goals. These factors generally includes various challenges
and risk because business environment is uncertain in nature. This means rapid changes take
place in internal and external environment of the organisation. It becomes essential for the
business organisations to make plans for achieving the targeted goals. The various type of
organisations along with their purpose and legal structure is mentioned below-
Private company
These are the organisation in which work is managed by the private members and
individuals. Such organisations generally have separate legal entity form its shareholders.
Sainsbury is the topmost private organisation of UK which deals in groceries. The purpose of the
organisation is to increase the profit in the best possible manner. This is done by providing better
services to the customers(Klapper and Love, 2010).
Purpose- Sainsbury aims at providing better services to the customers for increasing their
satisfaction level. Organisation also aims at maintaining balance in the environment, so that
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chances of negative impact on its business can be reduced. It also focuses on increasing the
profitability and sale in the effective manner.
Legal structure- The organisation is owned and governed by shareholders and directors.
Major decisions for the effective functioning of Sainsbury are taken by its Board of Directors
and shareholders. The top management of the organisation in these company's generally take
vital decisions for its well functioning. These type of organisations also have separate legal
entity from its owners.
Sole trader: In this type of organisation the activities and strategies are managed by the
single individual. These type of organisation generally does not require large investment as its
operations are carried out at low level. But sole trader generally face various kinds of problems
in raising adequate fund for the achievement of their goals and objectives.
Partnership- These type of organisation are generally established by two or more than
individuals. In this type of organisation the profit and loss are equally shared by each and every
individual. These type of organisation is very much different from sole proprietorship. As in this
more than two individuals are involved.
Public company
These are those organisations whose securities can be sold to anyone as and when
required. The work and activities of these organisation are managed by the rules and regulations
imposed by the government. The major motive of these organisation is to enchance and improve
living standard of the individual in society. This is done by providing various kinds of benefits
for their overall development. Child Support Agency is the public organisation which aims at
managing and supporting the children of UK. This is done by providing financial support and
guidance to the children.
Public and private sector organisation as very much different from another. As the goal of private
sector is to increase the sale and profitability in the best possible manner. While public sector
organisation work for increasing the living standard of the individuals.
Purpose- The organisation was formed with the purpose and motive of supporting the
children of separated or divorced parents. Child Agency Support aims at building proper
relationship with the children, so that their problems can be solved in the proper manner.
Legal structure- The plans and strategies for its functioning are made by the local
government. These are generally made to maintain and improve the economic conditions of the
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organisations and society. Various laws are also made to provide maximisation satisfaction to
the needy children(Palo and Tähtinen, 2011).
Voluntary organisation
These organisations are formed with the motive of providing maximum satisfaction to the
society. Oxfam is the Voluntary organisation which works with the motive of reducing and
decreasing the chances of poverty. Oxfam does not aims at earning profit but works for
improving the condition of society.
Purpose- Oxfam is the charitable trust which was formed with the motive of increasing
living standard of the society by reducing and eliminating poverty. This is usually done by
providing appropriate services to the citizens of UK.
Legal structure- The organisation work as the rules and regulations of the society. There
are various trustee and donors of Oxfam which help the organisation in improving the conditions
of society(Azma and Mostafapour, 2012).
P2 The size and scope of different type of organisations.
Business organisations are of different forms and types such as private, public, etc. Such
organisations have different size and scope and also have different set of objectives. The plans
are made as per different target. The organisational structure of private organisation is very much
different from the structure of public sector organisation. The various scope and size of different
organisations are discussed below-
Sainsbury
Organisation is one of the top supermarket chain retailer of UK which was established in
1869. Its headquarter is located in London. The major objective of this organisation is to provide
better services to the customers, so that their needs and demands are fulfilled in the systematic
manner. With the help of this organisation also manages to increase its sale because appropriate
services are offered to the customers within limited period of time. The major products and
services of Sainsbury include Argos, Sainsbury bank and Habitat energy. Sainsbury also aims at
using hierarchical organisational structure for completing the complex task in the efficient
manner. With the help of this structure every function is managed properly.
Size and scope- Organisation has approx 1415 shops which are located in almost 50
countries around the world(Hockerts, 2015). The revenue of Sainsbury is up to £28.456 billion.
The scope of the organisation is very large because Sainsbury operates on different division. The
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help of this organisation is continuously aiming at growing and expanding its business in the
effective manner.
Child support Agency
The organisation work with the motive of providing financial support to the children.
Child support agency was established in 1993 and its headquarter is situated in Britain. The
major mission of the organisation is to make best use of the available resources to provide
maximum satisfaction to children and their families. This is done by using some of the cost
effective programmes. Objective of Child support Agency is to make plans for promoting
appropriate parenting for taking care of the children. Financial and non financial services are
offered to the children if their parents are divorced or separated. Organisation also guides and
encourages the parents to support their child mentally. Functional organisation structure is
followed in Child Support Agency. This is because with the help of this structure skills and
knowledge of the individuals are used in the systematic manner. By using this structure
organisation directly aims at reducing errors and mistake(Cowan-Sahadath, 2010).
Size and scope- There are approx 240000 employees which are working with Child
Agency Support. The organisation is currently operating in 20 countries and has revenue of
£30.486 billion. Its scope is very wide because various kinds of support services are offered to
the children. With the help of this basic services are also provided to the parents and their
children. With the help of this organisation is able to maintain and encourage healthy and
friendly relationship.
Oxfam
It is the non profit organisation which works with the motive of reducing poverty form
the society. Oxfam was established in 1942 and its headquarter is located in England. Oxfam is
able to provide its services across the globe. Mission of the organisation is to reduce the chances
of poverty from the society and make plans for treating each individual equally. This means
organisation aims at removing injustice from the society and educate the people about their
rights and responsibilities to manage their life. Major services which are provided by Oxfam
include- clothing, shelter and food to the needy ones. Flatter organisational structure is followed
in Oxfam. This means its work is managed by president and director, employees ideas are also
taken into consideration. By using this structure Oxfam is able to provide maximum satisfaction
to the customers(López Salazar, Contreras Soto and Espinosa Mosqueda, 2012).
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Size and scope- The organisation operates approximately in 90 countries and its revenue
is up to £1,040.7 million. The scope of the organisation is very wide because most of the people
are living in poverty. Oxfam works for bringing major change in the society by making plans to
fight against poverty.
TASK 2
P3 The relationship between different organisational function and its link to objective and
structure.
Every organisation has different set of objectives and different plans are made to achieve
them in the proper manner. Every department of the organisation plays a vital role in achiveing
targeted goals in the effective manner. This is because work of every department is
interconnected with each other. Sainsbury has different departments which plans the
management of the organisation in sale and profitability. The relationship of different
departments of Sainsbury are discussed below-
Finance and marketing department- These are the two main departments of Sainsbury
which leads to growth and profitability(Cadle, Paul and Turner, 2014). The work of finance
department is to make plans for increase in sale and profit. While on the other hand work of
marketing department is to attract more and more customer's. The work of these two departments
are interrelated with each other. This is because if finance department of Sainsbury is not able to
provide adequate fund to marketing department than sales target might not be achieved. With
the help of adequate funds marketing department of Sainsbury will also be able to make changes
in the promotional activities.
Human resource and marketing- Both the departments are also inter-related with each
other. It is the duty of Human resource department to hire skilled and talented employees for the
marketing department. This is because skilled employees will be able to give new ideas for
attracting more customer's. HR department will also guide the marketing department to make
best use of available resource.
Production and marketing- The role of production department is to manufacture goods
as per the demand of customer's. While the role of marketing department of Sainsbury is to
promote the final product to customer's. This is done by using latest techniques of advertising
and promotion. With the help of marketing department plans can also be made to manufacture
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the product in the right manner and quantity. If the management of Sainsbury is able to make
adequate plans for managing the work of these two departments than goals will be easily
attained(Chokheli, 2014).
If proper plans are made to manage the work of every department than wastage of the resources
might not be done by the organisation. Sainsbury will also be able to sustain in the market
because its profitability will be directly increased. The organisation structure of Sainsbury
include chief executive ,chairman and various other managers of each department. With the help
of proper organisation structure Sainsbury aims at accomplishing objectives in the systematic
manner.
TASK 3
P4 The positive and negative impact of macro environment upon business operations.
Macro environment is related with external factors which directly affect the decisions of
the organisations. So it becomes essential for Sainsbury to analyse the impact of macro
environment. This can be done by using PESTEL analysis which is discussed below-
Political factor- It include policies and practices which are imposed by the government on a
particular industry. Activities and functions Sainsbury is affected by Brexit and due to this
chances of inflation was increased. After the entry of Brexit organisation had to pay high duty on
import and export of goods.
Positive- There are stable conditions in the market of UK and due to this the chances of
corruption was reduced. Sainsbury was able to conduct its business activities in the legal and
systematic manner.
Negative- Due to Brexit organisation was forced to pay high duty on food products and
because of this profit margin started decreasing.
Economical- It is related with employment and interest rate of the economy. Due to Brexit
chances of turnover in the organisation was increased. This is because of the decrease in price of
pounds with context to dollars(Yuan, 2013).
Positive- One of the positive impact of this situation was price of the products started
decreasing. This directly resulted in affecting the buying pattern of potential customer's.
Negative- The economic conditions of the organisation was affected because value of
pounds was decreased.
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Social – After the entry of Brexit taste and need of the customer's changed. As they started
demanding healthy food products. This positively and negatively affect the business of
Sainsbury(PESTEL Analysis of Sainsbury, 2019).
Positive- With the change in need and preferences of the customer's the sale of the
organisation directly increased and customer's also started becoming loyal towards the product of
Sainsbury.
Negative- Adverse impact was emphasised on the sale of organic food and due to this
working of supermarket was also affected(Heuer Jr, Heuer and Pherson, 2010).
Technological – Brexit also affected this factor as major changes were required to improve the
current condition. With the change in technology organisation introduced option of online food
shopping for its customer's.
Positive- New and innovative ideas leads to saving the time and energy of valuable
customer's of Sainsbury.
Negative- Online food option was a challenging task for the individuals who were not
familiar with the online function.
Environmental – It is related with making plans for maintaining healthy environment. To
improve this situation Sainsbury introduced latest technology which was related with smart
fridges. With the help of this customer's can easily keep a watch on their items in fridge. This
helped them in reducing the chances of buying inappropriate items.
Positive- The chances of wastage of food products was redcued.
Negative- Different people have different choice of buying food so due to this conflicts
was increased,
Legal- After the introduction of Brexit there was increase in the sugar tax. Due to Sainsbury had
to introduce sugar free products(Niranjanamurthy, Nithya, and Jagannatha, 2018).
Positive- It helped in maintaining health of diabetic customer's.
Negative- The marketing strategies and plans of the organisation was affected negatively.
TASK 4
P5 Internal and external analysis of organisation to identify strength and weakness.
Internal and external environment of the organisation can analysied with the help of
SWOT analysis. As this analysis will be helpful in making different plans and strategies for
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competing in market. After knowing the strength and weakness management of Sainsbury will
be able make necessary changes in its working structure. The strength and weakness of
Sainsbury is discussed below-
Strength. Weaknesses.
 The organisation has skilled employees.
Management of the organisation makes
plans to improve the skills by providing
them training programmes on the
regular basis.
 Sainsbury aims at using innovative
promotional strategies to attract large
number of customer's.
 It is the biggest supermarket chain in
UK which is one of the biggest strength
of Sainsbury.
 The expansion strategy has helped the
organisation in expanding its business
in various parts of the world.
 The competition level in this type of
industry is very high and due to this
chances of shift in customer's from one
brand to another is also very high.
 The organisation is unable to forecaste
demand of the market. Due to this
management of the organisation is not
able to take best use of opportunities.
 Management of the organisation will be
required to invest properly for
introducing latest techniques in the
process of production.
Opportunity Threat
 The organisation can plan strategies for
entering in a particular market by joint
venturing with other organisation. As
with the help of this organisation will
be able to enter in new market.
 Organisation can plan to expand its
business by offering its product at the
online platform.
 Sainsbury can also plan to introduce
their business in some growing
 The competition level for the
organisation is very high. Some of its
major competitors are Tesco, Asda,
Aldi,etc.
 There are many organisation which
offering their products at low prices.
Due to this chances of shift in
customer's from one brand to another is
increased.
 The need and demand of customer's in
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countries like Africa, Asia, etc. this type of industry is uncertain so
organisation needs to implement better
techniques for increasing the
satisfaction level.
P6 Strength and weaknesses inter relate with external macro factors.
The factors of external environment along with their strength and weakness is discussed
below-
Political factor- The government of UK is stable and due to this the laws imposed on the
organisation will be for a longer period of time. This factor has its own strength and weakness.
One of the biggest Strength for the organisation is its sale and profitability can be directly
increased. By making use of the promotional strategies in the proper manner(McGee, Wilson
and Thomas, 2010). While on the other hand negative impact is unethical practices can reduce
the productivity of the organisation.
Economical factor- The economic situation of the organisation was improved because
various opportunities were available for the growth and development. The potentiality of the
organisation was increased as new innovative products were introduced which was the strength
for Sainsbury. The competition level was increased as competitors were making plans to increase
their sale which is the weakness.
Social factor- The need and preferences of the customer's was changed as they started
preferring healthy food products. The sale of the organisation was increased because organic
products were preferred by the customer's which is the strength. Rapid change in the preferences
affected the business of Sainsbury which is the weakness.
Technological factor- Various new strategies were launched by the organisation which
include online selling. Due to this brand image of the organisation was increased which proved
as the strength for the organisation. While the weakness was competition level was increased.
Environmental factor- New and eco friendly products were launched by the
organisation to save the environment(Bird, 2011). Due to this sale and profitability of Sainsbury
was increased as positive value was created in the mind of customer's and organisation was also
able to make best use of the available resource. But sale of the organisation was affected in the
negative manner.
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Legal factor- The organisation was able to follow the rules and regulations in the proper
manner. Goals and objectives can also be easily achieved by reducing negative impact of new
entrants. Any change in polices of the government directly resulted in affecting the work and
activities of Sainsbury in the negative manner(Helfat and Winter, 2011).
The strength and weakness of the organisation are inter-related with the macro factors. Any
change in this factor can lead to mismanagement in the activities and operations. If the
management of organisation is successful in analysing its strength and weakness in the best
possible manner than effective and better plans can be made for the future course of action. After
analysing the strength organisation will be able to achieve competitive advantage in the best
possible manner. As with the help of this each and every activity can be completed in effective
manner.
CONCLUSION
From the above given report it has been concluded that business environment can directly
impact of the productivity of the company if proper plans and strategies are not used. The
working of the business can be affected internally or externally. To overcome this challenges
and risk in the environment analysis of the market conditions can be done. As by doing this
purpose of various type of organisations can be easily attained. Firm can also make use of
PESTEL analysis for evaluating the macro environment. After knowing the strength and
weakness organisation will also be able to compete with the competitors.
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