Business Environment Analysis: Sainsbury and Organizational Structures

This report provides a comprehensive analysis of the business environment, exploring the different types, sizes, and scopes of organizations, including public, private, and voluntary sectors. It uses Sainsbury as a case study to demonstrate these concepts, delving into its organizational structure, mission, and vision. The report examines the interrelationship between various functions within an organization, their connection to the organizational structure, and the positive and negative influences of the macro environment on business operations. Furthermore, it performs internal and external analyses of organizations, highlighting the relationship between strengths and weaknesses with external macro factors. The report concludes with an overview of the key findings and insights gained from the analysis.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1 ..........................................................................................................................................3
P1. Different type, size and scope of organisations................................................................3
P2. Size and scope of organisations.......................................................................................6
TASK2PESTLE Analysis. 2019......................................................................................................9
P3. Relationship between different functions of an organisation...........................................9
TASK3 .........................................................................................................................................10
P4. Positive and negative impact that macro environment has on business operations. .....10
TASK5...........................................................................................................................................12
P5. Internal and external analysis of organisations..............................................................12
P6. Interrelation of strengths and weaknesses with external macro factors.........................14
CONCLUSION..............................................................................................................................15
REFRENCES.................................................................................................................................16

INTRODUCTION
Business environment is an aggregation of intrinsic and extrinsic components of business
world. It includes customers, shareholders, competitors, employees, etc. Totality of these factors
influences the organisations environment and situations. It helps in identifying business
opportunities, tapping useful resources, supports in planning, maximises the overall performance,
growth and profitability of the business. Organisation undertaken in this report is Sainsbury
which is a private company founded in 1869 in UK; which is a retail industry and deals in
hypermarket, supermarket, etc. This report will explain different types, size and scope of the
organisation. It will demonstrate the inter relationship between various functions within an
organisation and their link with organisational structure. It will also illustrate the positive and
negative influences of macro environment on business. And later part of the report will
demonstrate the internal strength and weakness of business and their relationship with external
macro factors.
TASK1
P1. Different type, size and scope of organisations.
Business environment is the most important characteristic of any business. Every
organisation operates in a distinctive environment because it cannot endure in change of
integrity. Also business environment is dynamic and complex as there are broad assortment of
forces, events and conditions that established business environment arising from various sources.
It consist of internal and external factors where internal factors exist internally like value system,
mission, vision, etc. and external factors like suppliers, customers, political, economic, etc. In
this business world there are various types of organisations like public, private and voluntary
(Andersson, Forsgren and Holm, 2015). These are discussed below :
PUBLIC ORGANISATION
The public sector organisations are those which are controlled and operated by the
government of the country. They consist of those companies which exist to provide services to
their citizens. These organisations are funded through various methods like taxes, fees, financial
transfers from other level of government.
Purposes of public organisations

 Employment generation : The main purpose of public organisation is to generate the
employment opportunities in the country (Botha, Kourie and Snyman, 2014). This will
be useful in eradicating the poverty and minimising the rate of unemployment while
contributing in increasing per capita income.
 Minimising the concentration of wealth and economy : These organisations ensures
that it is necessary to reduce concentration of wealth and power in private hands. For this
purpose, it prevents the growth of monopolies and big businesses have been declared
objectives of the government throughout the plan.
For instance, Environmental Agency is a public organisation of UK which was founded
in 1995 and its purpose is to protect the environment. It works in areas like flood warning, river
levels, fisheries and rod licensing, boating, waterways, etc.
Legal structure
The legal structure followed by public organisations vary from local, state and national
services and they are discussed below :
 Local government : These are concerned with the operations and functioning of small
proportion of society and regularize its operations in a city or a region. It oversees the
local issues like fir department, city police forces, etc.
 State government : This is related to the operations and functioning of a company within
a state. It oversees areas within the boundaries of national government. For instance, state
police.
 National government : It oversees and creates policies that affects the entire nation. This
is concerned with maintaining institutions which is beneficial for the entire country like
national park, military, etc.
Private organisation
These organisations are concerned with any person, partnership or corporation which is
not a public body. It is a part of economy, which is run and operated by private individuals or
groups with the aim of earning profits. They are funded through savings, loans, borrowings,
mutual funds, etc.
Purpose of private organisation

 Profit maximisation : Every private organisation aims to work for the successful
implementation of its operations to earn maximum profits.
 Desired outcome : The another major purpose of private organisations is to reach to the
desired level of results which is simply the satisfaction of customers.
For instance, Sainsbury is a private organisation which was founded in 1869 in UK,
which is a retail industry and deals in hypermarket, supermarket, etc.
Legal structure
 Sole trader : It is a one person business and small amount of finance is required to set up
and it is the simplest way of carrying out business. They are liable to keep all the profits
with themselves and they are also personally accountable for all the debts which makes
the business risky.
 Partnership : It is an association of 2 or more persons but not more than 20, forming a
company together with aim of sharing profits and losses in an agreed proportion. In this
each partner is responsible for the debts of the partnership deeds.
 Limited partnership : It is made by a mixture of limited partners and ordinary partners.
They are jointly liable for any debts owned by the partnership and equally accountable
for paying off the whole debt.
 Limited liability partnership : In this type of private organisation, a partner's liability is
limited to the amount of money invested in the business. It is also limited to any personal
guarantee for raising funds.
Voluntary organisation
It is an organisation which is a group of individuals who come together for the benefit of
social welfare (Cairncross, 2014). These organisations are flexible, independent, democratic,
secular which provides selfless community service on voluntary and non profit basis.
Purpose of voluntary organisations
 Its purpose is to strength the voluntary and community sector, build bridges with other
sectors and influences local and national policies.
 This also aims to support local voluntary actions by local people working in partnership
with other support organisations like private and public companies.

For instance, Cancer Research is a UK based voluntary organisation which was founded
in 2002 which the purpose of serving people with cancer research and providing health policies.
Their aim was to minimise the number of deaths from cancer.
Legal structure
 Associations : This a most common form of voluntary organisations and it exist where a
group of people band together to carry out an agreed object. This is governed by
constitution, legal document which governs the association (Chang, 2016).
 Trust : It consists of charitable trust which is governed by trust deed which contains the
objects of trust, names of the trustees and provides for the administration for the trust.
 Company limited by guarantee : It is the type of incorporate body used by groups in the
voluntary and community sector. This is constituted by memorandum and article of
association.
Micro , small and medium enterprises
Basis Micro Small Medium
Annual turnover Greater than or equal
to 2 million euro
Greater than or equal
to 10 million euro but
less than 50 million
euro.
More than or equal to
50 million euro.
Annual work unit Greater than 10 More than 50 More than 250
P2. Size and scope of organisations.
Above discussed three types of organisations namely, public, private and voluntary secotr
have different sets of aims, objectives, purpose, size, scope and legal structures (Charter, 2017).
Apart from this, various types of sectors will also be included namely, primary, secondary and
tertiary. These sectors are discussed below :
 Primary sector : This sector is also known as extraction sector as it involves extracting
raw materials. They can be renewable or non renewable resources and primarily
concerned with agriculture activities, fishing, mining, etc.

 Secondary sector : This is the manufacturing sector where raw materials are combined
with other materials and manufactured to produce a good or services.
 Tertiary sector : In this sector, intangible aspects of services are provided to the
consumers like retail of the manufactured goods, insurance, banking, etc.
Public organisation
Following is the aim, objective, scope, size, legal structure of Environmental Agency
discussed below :
 Size : It operates in entire UK while dealing with various issues related to climate change,
quality of air, water, land, fishing, navigation, mining, etc.
 Scope : It cover almost every part of England by covering about 13 million hectare of
land, 22000 miles of rivers and 3100 miles of coastline seawards (Cohen and Kietzmann,
2014).
 Mission : : Its purpose is to protect and enhance the environment and promotes the
objective of attainment of sustainable development. In this, protection is relatable to
threats and dangers such as flood and pollution.
 Vision : Their vision is to create a rich, healthy and diverse environments for present and
future generations.
 Stakeholders : Being the public sector organisation, its stakeholders are the government
and other regulatory agencies.
 Business objectives : These organisations work for the benefit of the country. Their
primary aim is to maximise the development in the country by providing employment
opportunities, education, etc. It protects and prevents the organisation from harmful
substances of environment.
 Legal structure : It has eight directors and each of them report to chief executives. In
this, there are two types of policy and process directors in which one deals with flood and
coastal risk management and the other with environment and business (Cotter and
Fritzsche, 2014). The other one is the evidence director, fourth one is the director of
operation delivery unit and rest other directors are central shared service groups for
finance, legal services, etc.
 Sector : This organisation deals in protecting the environment in all the three sectors
namely primary, secondary and tertiary.

Private organisation
Organisation undertaken under private sector is Sainsbury :
 Size : This has a huge number of operations and it operates in various countries covering
every part throughout the world by employing more than 186,000 people in their
company.
 Scope : It has a wider scope because of its operations and expansions.
 Mission : Their mission is to be the customers superior choice in food, delivering
products of outstanding quality and great services at competitive cost.
 Vision : They want to be the most trustworthy retailers where people will love to work
and shop.
 Stakeholder : It has a board of director and their fellow members are accountable for
setting long term strategy. They work in their best to delivery efficient services to the
customers, shareholders, etc. They also have chief executive who are accountable for
looking after everyday operations is going according to the planned strategies (Dima,
Grabara and Modrak, 2014).
 Business objectives : They wants to maximise their profitability and sales by putting
customers as the most important and offers best stores, services to so that customers are
delighted with the shopping and experiences.
 Legal structure : It has a hierarchical organisation structure because of various levels
operating in it. Each level is responsible for reporting to the next high level.
 Sector : It operates under all the three sectors.
Voluntary organisation
In this report, Cancer research organisation is taken for explaining voluntary
organisations :
 Size : It is huge in size as it operates globally and is worlds largest independent charity
devoted to cancer research. This conducts research into prevention, diagnosis and
treatment.
 Scope : They have a wider scope because of the latest equipments used by them in giving
efficient treatment to the people.
 Mission : Their mission is to prevent control, and cure cancer with the help of their
innovative research.

 Vision : They wants to bring forward a day when all cancer will be cured.
 Stakeholder : Trustees of the organisation are the major stakeholders.
 Business objectives : They aim to minimise the number of expiry from cancer. And
another motive is to raise awareness about the cancer among people through campaigns.
 Legal structure : It is governed by council of trustees and they sets the charity strategic
direction, monitors the delivery of the charities objectives and upholds its values.
 Sector : This operates in tertiary sector only as they provides the services of health.
TASK2
P3. Relationship between different functions of an organisation.
In an organisation, there are many departments and each departments performs some or
the other set of functions (Erasmus, Strydom and Rudansky-Kloppers, 2016). So in Sainsbury,
being one of the largest retail industry in UK, it exercises various functions which are linked to
the objectives of the company and they are discussed below :
 Financial management : It is concerned with preparation, organising, directing and
controlling the financial activities such as procurance and utilisation of funds. In
sainsubury, this involves acquiring and utilising funds which are crucial for efficient
operations. It is interlinked with other functions of management to fulfil the objectives.
They are also responsible for setting budgets for the various activities of the company
like marketing, recruitment budget, etc. Production department is also linked with finance
so as to maintain day to day operations of the business while producing goods and
services, supplying raw materials etc.
 Human resources management : This department is responsible for hiring people in the
company. In sainsbury, it deals with concerns like terms of hiring, compensation,
performance, safety, wellness,etc. It is a pre defined approach of managing people and
resources in a company. It has been demonstrated that a strong relationship between
HRM and finance function will lead the company to greater heights. Finance department
will set the budget for all the activities required under the HRM for fulfilling the business
objectives (Glova, Sabol and Vajda, 2014). This specially focuses on the effective
training and development programs. HRM function is also linked with marketing because
for conducting recruitment in the company, HR need various marketing tools to capture

large pool of candidates so that best person can be selected which will help in meeting
business objectives and goals effectively and efficiently.
 Marketing department : As sainsbury is a retail industry, therefore it needs effective
marketing tools and techniques in its every day functioning. It is a strategic function
which underpins most activities of the business and it is an essential component of
corporate strategy. The marketing department of sainsbury will closely work with
production department to ensure that satisfactory research and development is planned to
satisfy the present and future needs of the customers and also products can be
manufactured as per the specifications led down by the customers (Hair and et. al.,
2015). It will work with finance department to assure that funds are available for
promotions, research and distribution activities.
 Information technology : This function is very important in present business context.
Every organisation work under some or the other systems in the offices and factories. It
includes hardware, software, internet, etc. It is essential for appropriately meet the
business objectives and also makes work simplifier. This department will closely work
with finance department to maintain the accounting system effectively and useful in
developing annual reports of the sainsbury by analysing profits and loses of the
company. It will work with marketing department , for advertising various software are
used which includes images, animation, videos, editing, etc. and all this needs software
and internet applications which will help in making it appealing to customers.

TASK3
P4. Positive and negative impact that macro environment has on business operations.
Ever organisation is affected by the macro environment which influences the business
operation in positive and negative way. So, it becomes necessary to evaluate the external
environment by analysing their positive and negative impact on Sainsbury's's. For this purpose,
PESTLE analysis will be done which is a model or tool used by marketers to analyse and
monitor the macro environmental factors (Hamilton and Webster, 2018). Following are the
PESTLE analysis of Sainsbury's which will explain the impact of Brexit on various factors :
Political factors : It is related to the adversity and opportunity brought in by the
government and political institutions on the working of a business. It includes government
policies, trading policies, funding, corruption, bureaucracy, taxation, etc. Brexit has a huge
impact on political operations and funtioning and they are discussed below :
Source : Organisational chart. 2018

 Positive impact : The uncertainty around a potential outcome has led the organisation to
mitigate and offset the above risks by reviewing its supply chain and by actively looking
into alternative sources of supply within the UK but also outside the EU to source food
and drink deliveries to its stores.
 Negative impact : Its supply chain’s large reliance on EU nationals working in the British
agri- food sector and which are particularly vulnerable to the prospect of future changes
to immigration policy for EU migrants
Economic Factor: It relates to the economic polices, structures and the degree at which
these factors impacts upon the business (Hillary, 2017). It includes local economy, inflation,
deflation, exchange rates, etc. This will affect the demand, cost, price and profitability of the
Sainsbury's's.
 Positive Impact: Good import policies across Europe also lead to flexible import of goods
in higher quantity across border which saves the time and eradicates the delay in the
arrival of products.
 Negative Impact: Due to higher domestic inflation, and the weaker rate of Sterling than
Euros, placed a negative impact on the working of Sainsbury's's. Further the reason for
weaker sterling was the new import duties and tariffs due to which the prices went up and
also decreases the demand of products of the company. (PESTLE Analysis, 2019).
Social Factors: It is concerned with the cultural aspects, attitudes, beliefs of people which
will affect the demand for companies products. It includes demographics, media, work ethics,
advertising, consumer role model, etc.
 Positive impact : The hiring of skilled British staff by the company will led to
improvement in the quality of material supplied by the suppliers of the company.
 Negative impact : The dependence of UK farmers on the low skilled workers also creates
a negative impact on the working of Sainsbury's as the quality of material is not provided
to it which leads to decrease in the quality of the products. (Khan and Quaddus, 2016).
Technological factors : These are those factors which impacts upon the working of a
business due to some technological advancements which can affect positively or negatively to
the company. It includes emerging technologies, research, information and communication,
payments, etc. Brexit has impacted this factors in following ways :