Report on Business Environment Analysis and Organizational Structures

This report provides a comprehensive analysis of business environments and organizational structures, examining public, private, and voluntary organizations. It delves into the characteristics of each type, using examples like NHS, McDonald's, and Save the Children to illustrate their structures and objectives. The report explores the interrelation between organizational functions, such as operations, marketing, and finance, and how these relationships contribute to achieving business goals. Furthermore, it applies frameworks like PESTLE and SWOT analysis to evaluate the external and internal factors influencing businesses, with case studies on McDonald's and H&M. The report also discusses the impact of organizational structures on business performance and decision-making, offering insights into how these elements shape strategic choices and operational effectiveness. The report aims to provide a thorough understanding of how businesses operate within their environments and how they can leverage various strategies to achieve their objectives.

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
ACTIVITY 1....................................................................................................................................3
P1 Types of Organization and Their Purpose..............................................................................3
M1 Organisational Details..........................................................................................................4
P2 Types of Organization............................................................................................................6
P3 Structure of Organisation and Relationship between the Different organization function....7
M2 Advantages and Disadvantages of the interrelation..............................................................8
ACTIVITY 2....................................................................................................................................9
P4 analysis of different factors on McDonald.............................................................................9
M3 Applying PESTLE..............................................................................................................10
P5 SWOT Analysis of H & M...................................................................................................11
P6 Interrelation of SWOT and PESTLE to Decision making of organization..........................13
M4 Apply SWOT......................................................................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business is an activity which is performed to make money by providing goods and
services to the customer. Business environment is the study of all the external and internal factors
and their influence on the business of the organization (Hillary, 2017). This report presents the
different internal and external factors that affects the business of H&M. NHS is a public health
organization and providing health services in European countries . It is currently working in 62
countries with more than 4500 stores. McDonald is a private restaurant chain and selling the fast
food to its customers. Save the children is a voluntary organization working to protect the rights
of children. This study presents the overview of the types of the organizations in detail. The
relation between the different organizational functions is explained and how these inter relation
helps the organization to meet their business goals and objectives, and how they are related to the
structure of the organization. This study also explains the impact of interrelation between
organizational functions. Effect of internal and external factors on the business of an organization
is explained in the report.
ACTIVITY 1
P1 Types of Organization and Their Purpose
There are three types of organization.
1. Public
2. Private
3. voluntary
Public Organization
A public sector company is owned by the government and the operations of the company
are conducted or facilitate by the government. Main intention of the company is to serve the
citizens of country. The objectives of public company are to provide the high quality services to
the citizen not to earn profit. For example, NHS is a public health organization which was found
in 1948 and it follows the hierarchy organizational structure. The founding objective of the
organisation is to provide free health services to the people at the time of delivery. This
organization's legal structure is public limited company (Bocken, Rana and Short, 2015).
Private Organization
Private Sector Company is owned by individual or company. The objective of these
companies is to earn profit and maximize it. Private companies are free from the government

interference. These type of companies earns the profit by selling its goods and services to the
customer. McDonald is an example for private organization. It was established in year 1940 and
now it is serving at more than 36899 local store world-wide. McDonald is a one of the largest
fast food restaurant chain and providing range of fast food and services to the customer. The total
profit earn by the organisation is by selling the clothing and accessories and McDonald is a Sole
proprietorship company and it follows the matrix organizational structure (McDonald and
Wilson, 2016).
Voluntary Organization
These organizations are found by group of individual who are willing to serve for a good
purpose. For the voluntary organisation it is not compulsory to take the membership for each
volunteer. There are two types of voluntary organization, one is charitable and other one is trusts.
The charitable organisations spent the budget which is received by the charity. The trusts are the
voluntary bodies which spent their own resources and the resources received by the charity for
the voluntary work (Booth, 2018). Save the children is a voluntary organisation which was
founded in year 1919. The purpose of the Save the children is to ensure the security and peace
for every children in world. It was found to protect the health and life of all children. Legal
structure of Save the children is trust which is a non-profitable organization and follows the
hierarchy structure.
M1 Organisational Details
NHS McDonald Save the children
Background It was found in 1948
after the world war
second. And fifth largest
employer. It is providing
health services to the
countries of Europe.
McDonald was
established in year 1940
as a restaurant in USA.
It is a non
governmental
organization and
wstablished in year
1919 in london.
Product and services It is providing the health
related services in the
European countries.
McDonald is a fast food
chain provides burger,
French fries, and other
fast food products.
It is a NGO and
working for the rights
of the childerns.

Size of the
organization
It is working in the
whole European
continent in around 33
countries.
McDonald work in 120
countries and have
36,899 stores
It is working in 120
countries including
USA and other around
the world.
Scope of the
organization
NHS is providing the
health services in Europe
and wants to operate in
other continent.
Currently working in 120
country and looking for
more restaurant around
the world.
Working for the rights
of children and have
scope to serve more
children in other
countries.
Mission of the
organisation
The mission statement of
the NHS is to improve
the health care of the
older people. Improve
the mental health and
well-being by
partnership working.
Serve the customer in the
best way they can. And
provide wide rang of fast
food to satisfy the
customer and attract
them.
Mission is to make the
children aware of their
rights and promote
their rights.
Vision of the
organisation
Vision of the NHS is to
provide the free health
services to the people at
instant And provide
more focused healthcare.
Provide the self
appreciation by providing
the high quality food and
superior service in clean
at a great value.
Improve the lives of
the children worldwide
and promote the
people to save the
children rights.
Business Objective The business objective of
the NHS is to provide
the best quality of
healthcare to the citizen
of country it is serving
for.
To attract the customers
and serve more customers
to increase revenue.
It is NGO. so, its
objective is the free
service which is
provided to save the
rights of children.
Legal Structure The legal structure of the
company is public
limited company.
McDonald is private
liability company. It is
own by an individual
person. And it follows the
It is non government
organisation and have
legal structure of
charitable trust.

Sole proprietorship.
Stakeholders of
organisation
The stakeholders of the
NHS are the managing
body, Doctors, nurses
and the patients who are
receiving the services.
Stakeholders of the
company are employees,
customer and raw
material supplier.
The stake holders are
volunteers and chilren
who are served.
Public- NHS is working in whole Europe and providing healthcare. The legal and organisational
structure helps the management to achieve the goals by giving more authority to the
management. By this the implementation of the plans and strategy improves.
Private- The organizational and legal structure provide more powers to the administration and
CEO of company. Which allow them to take strict decision for better result and goal completion.
Voluntary- This type of organizational structure and legal structure helps the Red cross to work
individual in respected country and help to complete the goals related to human rights and
respect to every human being (Invernizzi, 2016).
P2 Types of Organization
There are mainly four type of organisations according to size and number of employees.
Micro enterprise
It is a very small size of organisation which is having only few employees around 5-10.
This type of the organisations are conducted by small groups
Small Enterprises
These are the privately owned organisations which works under partnership, sole proprietorship
and have few employees nearly 20-30. The per year turnover of the organisation is not more than
a regular size organisation.
Medium Enterprise
This type of organisations are bigger than the small enterprises and having the employees
around 100 to 999. The mos of the organisation in the world are medium sized organisation.
Large Enterprise

These type of the organization are larger than the medium enterprise and number of
employees are more than 1000 and this type of organization follows complex hierarchy structure.
Organisational Structure of the Public, Private and Voluntary
Organisational Structure of the Public Organisation
Mostly the public company follows the vertical hierarchy structure. In this type of the
organization have multiple levels of management. In the top of the hierarchy the director or the
chairperson who is the main controlling body. The ground level employees are managed by the
managers and supervisors. The second level the staff is handled by the senior level managers.
That's how the public sector company works (Denhardt, and Denhardt, 2015). H & M is
following this type of structure and this structure helps the employee to work more disciplined
way which leads organization to achieve the goals of the organization. The director handles the
manager level staff and the management department controls the activities of the nurses and
doctors. In this type of structure, communication gap occurs because of less contact between the
employees and the owner and this may lead to misunderstanding in goal completion (DENIS,
Ferlie and Van Gestel, 2015).
Organisational Structure of The Private Organisation
The McDonald is a private sector organisation which is working in the matrix
organisational structure. In this type of the structure employee have dual reporting relationship
and they report to both functional and production manager. This matrix structure provides the
better operational and management conditions for the company production. This leads to the
better implementation of the policies of the company and Better implementation leads to larger
profit (McDonald, 2017).
Organisational Structure of Voluntary Organization
Save the children is following the divisional structure as organisation. In this type of
structure headquarter of the organisation handles the other divisional centre. Save the children is
working all around the world and having office in each country for more suitable operation to
serve to children who needs help. It is a voluntary organization so it doesn't need multiple levels
of management (Yadav, 2017).
P3 Structure of Organisation and Relationship between the Different organization function
The McDonald follows the vertical matrix structure. The employees are connected to the
management department and further the management is connected to the CEO of the company.

Interrelation between Operation and Marketing
The operation and marketing are interrelated by their individual work objective of
producing and selling the product. The operation department manage the production of the goods
and arrange the raw material for the production. The marketing department provides the
information of the product demand to the operation department to produce accordingly. The
operation department provides the product specification to the marketing and make sure the
availability of the product as per the demand. Both department are parallel to each other in the
organisational structure. This better interrelation between department leads to the better sales of
the McDonald product to achieve the better sales goals of the company.
Interrelation between Operation and Finance
Finance department of McDonald provides the fund to the operation department to
arrange the raw material for the continuous production. The operation department efficiently buy
the raw material at effectively low price to save the funds. The operation department provides the
information to the finance department for their convenience to arrange the funds. The
information sharing in the department is little time consuming due to organisational structures.
This interrelation completes the selling goals of the organisation.
Interrelation between HRM and Operation
The operation department provide the specific information to HRM about their
requirements for man power or specific training. The HRM conducts the recruitment process and
conducts the training as per the requirement of operation department related to man power
recruitment and training. As per the organisational structure the HRM manage the all
departments and their goals. By this interrelation of the HRM and operation the organization
goals are completed more effectively and efficiently to perform better to produce fast.
M2 Advantages and Disadvantages of the interrelation
This interrelation is the basic need for the organisational working. By this interrelation of
the organization the whole operations are managed. This interrelation of the have some
advantage and disadvantage which are as follows.
Advantages of interrelation
1. Better communication leads to better performance of organization.
2. Interrelation of department improves the planning and goal setting process.
3. Increase the cooperation level.

4. Improves the organisational environment.
Disadvantages of Interrelation
1. It is time consuming process.
2. The complexity of organisation increases.
3. The communication gap increases.
ACTIVITY 2
P4 analysis of different factors on McDonald
Analysis is a framework that is used to analyse and monitor all the environmental factors
that might impact the organizational performance (Alava and et.al., 2018). Here, Analysis of H &
M has been done where all the external environmental factors affecting its business will be
addressed.
 Laws and Government Laws: Government guidelines for sustainability in many nations
are both threat and opportunity for them. For example: external political factors put a
pressure on H & M to make sustainable products. However, this same external factors
creates an opportunity for them to bring improvement in their products (Aithal, 2017).
Also, due to regulatory reasons H & M is continuously collaborating with different
franchising partners in order to operate their brand in Kuwait, Egypt, Israel, Morocco,
Thailand and various other. This has been a basic general expansion strategy of H & M.
 Customer Income Factors: Rapid growth rate of developing countries also gives them
an opportunity to grow by expanding their market. However, Slowdown in Chinese
Economy is one of the major factor that can disturb the overall revenue of H&M in
China. It can also disturb the overall business strategy of H&M in China. Despite of all
the non-positive effects of Brexit which has disturbed the currencies all across the
Europe, H&M sales role up by seven percent as compared to all the other brands.
 Social Factors: This is due to the engaged lifestyle of people in urban cities which
increases the number of customers for H&M which is an opportunity for them to grow.
However, the increasing change in cultural diversity is both a threat and an opportunity
for them. For example, external factors such as socio-culture create diverse set of
preferences for customers according to the market. The inability of H&M to adopt such
changes can be a threat for them and can reduce their overall profit (Kaur and France,
2018). Simultaneously this can be an opportunity for them to increase flexibility in their

design of the product according to the preferences of the consumers in different parts or
markets of the world. Demand for transparency in business is growing continuously as
customers invest their disposable money in buying their products. H&M is continuously
trying to adhere this demand and trying to bring changes in their business.
 Technology Factors: Increasing use of mobile devices is both a threat and an opportunity
for the company. If the company fails to bring changes to their flexibility in operating
through mobiles, then it can be a threat for them otherwise it can be a great opportunity
for them. Due to this H&M is continuously trying to develop their mobile application
where customers will be able to purchases their products, collect rewards points and use
their while shopping through mobile applications. The main aim behind is to gain an
opportunity of rising interest of corporate environmental programs and increasing focus
on sustainability practises which gives the company to improve their sustainable business
strategies. However, change in climatic conditions is a threat for H&M which can
threaten the business of the company as the stability and availability of raw materials for
production influences the overall supply chain of the company (Alava and Mu, 2018).
 Law Factors: Implementation of rising minimum wages in many nations is also
becoming a threat for them as it influences the overall business strategies and cost of the
company.
M3 Applying PESTLE
From the above PESTLE analysis it could be noted that company will be able to identify
its macro environmental factors which affect its operation and management as well. It is very
much essential for firm that they are identifying all factors indicating the impact of environment
within organisation. Like for example H&M will be affected by the changes in political parties as
then the policies related to trade will also are modified. With the change on economy of UK
these changes will impact the rate of return of H&M as well.
Political Factors
In this factor all the political or governmental
factors and policies that affect H&M economy
and business are discussed. These
governmental interventions determine the path
and growth rate of the company. There are
various factors that affect the business of H&M
both positively and negatively. They have an
Economic Factors
In this effect of economic trends and conditions
on external factors of H&M will be discussed
here as change in economic conditions directly
or indirectly impacts the overall performance of
the business. Stable but slow growth rate of all
the developed countries is one of the major
opportunity of H&M in order to increase and

opportunity of increasing or expanding their
business is by improving their international
trade due to which they can increase them
global supply chain.
grow the stability of their business especially
from US and European market.
Social Factors
In this all the social trends and conditions that
might support or hinder the performance of
H&M will be discussed. These conditions
affect the remote environment in which the
company operates. Rising disposable income
has always been an opportunity for H&M to
grow as many customers prefer to shop
whenever required or whenever they want.
Technological Factors
In this impact related to technology that affects
the macro environment of the company will be
discussed. One of the major opportunity for
H&M is to increase their research and
development activities and invest to improve
their business effectiveness and efficiency. By
using advance technology company can
increase their automation of business which will
increase their business.
Legal Factors
In this all the legal aspects that affect the
business of H&M will be discussed. These
factors affect the business of an organization in
various aspects both positively and negatively.
One of the major threat for H & m is increasing
number of sustainability regulations at
workplace, this imposed regulations limits the
company and enforces them to focus on their
products according to the sustainability
regulations imposed by the government.
Ecological Factors
In this all the environmental and ecological
factor that affects the business of company will
be discussed. H&M can improve their
sustainability and environmental programs in
order to gain an opportunity for improving their
brand and its business.
P5 SWOT Analysis of H & M
SWOT analysis is a framework that is used to evaluate a companies' strength and
weakness in order to develop strategic planning Soon (Moro Visconti, 2016). Here, SWOT
Analysis of Company will be done.
Strengths:
 H&M has successfully increased their range of products in clothing section and various
other items which is liked and loved by their consumers.

 With this strong range of product offering company has successfully grown their overall
revenue and income throughout the recession.
 Their operations and business functions has successfully grown worldwide which means
that company is not exposed or dependent on just one economy or currency.
 More than 40% of stores in United States are of H&M and related brands in this business
which increases their sales and revenue (Ng, 2018).
 It is one of the most famous and strongest brand around the world which is known by
most of the people.
 Quality in their products is one of their strongest point that attracts customers.
 They have spread their businesses around the world due to which their total earnings and
sales increases their overall revenue.
 Due to their brand equity and recognition they have gained a competitive advantage and
stabled their cash flow with generous consistency in their profitability.
 Innovation in business and their products is also increasing their market.
 They are expanding globally and can expand even more as today they have only ten
percent of customers of the total world populations.
 Accepting social changes by bringing innovation in products is increasing their
opportunity to grow and gain a new position.
 One of the main strength of H&M is their strong digital presence and they operate their
stores in more than 40 countries.
 H&M has more than six brands which are continuously becoming popular especially on
the UK streets. This has given then slight competitive advantage among their
competitors.
Weakness:
 It will become continuously harder for H&M to find prime location to set their business
in whichever location they want in any country. The market of US and Europe are set
with their business, so they need to expand their business globally facing all the
international potential cultural challenges all around the world.
 As dividend hike annually is likely to continue, the dividend growth rate will probably
slowly and continuously level off.