Analysis of Business Environment, Structure and Operations

This report provides a detailed analysis of the business environment, focusing on various organizational types, legal structures, and their purposes. It examines the characteristics of sole trader, partnership, private limited, and public organizations, using examples like Merrill Lynch and the NHS. The report delves into the relationship between different organizational functions and how they contribute to achieving company goals. Furthermore, it explores the positive and negative impacts of the microenvironment on business operations and support. A significant portion of the report is dedicated to a SWOT analysis of a specific organization, identifying its strengths and weaknesses in relation to external macro factors. The study covers various aspects of business operations, including financial services, healthcare, and charitable organizations, providing a comprehensive overview of the business landscape.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Types and purpose of organisation and legal structure with the scope and size.........................1
TASK 2............................................................................................................................................4
Relation between different organisation function ......................................................................4
TASK 3............................................................................................................................................6
Positive and negative impact of micro environment on business operation and support...........6
TASK 4............................................................................................................................................8
Internal and external analysis of specific organisation to identify the strength and weakness...8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................11

INTRODUCTION
Business Environment is the combination of internal and external component such as
management, customer needs, supply and demand, employees, client, owners, social trends,
economic changes etc. These factors affect the working of the organization directly or indirectly.
Business environment helps in analysing business opportunities, contribute in planning, finding
needful resources, improves the performance, growth and development and profitability of the
organization (Evans and et.al, 2017). Analysing business environment helps an organization in
knowing the possible opportunities in the surrounding that a company can grab to grow further
and threats that can affect the business. So after analysing the possibilities the company can work
on them and convert them into positive outcomes. Merrill Lynch is a US based investing wealth
management company under the control of Bank of America. The company was founded in 1914
and is headquartered in New York City and hold the entire 34 stories building. Merrill Lynch is
listed on New York Stock Exchange (Bank of America Merrill Lynch, 2019). The study focuses
on various types and purposes of organization along with the size and scope of the business.
Further it includes organization function and how they connect to the goals and structure of
company. Pros and cons of macro environment (pestle analysis)on business operations. SWOT
analysis of the company is done and how the strength ans weakness are related to the external
macro factors.
TASK 1
Types and purpose of organisation and legal structure with the scope and size
Introduction
Organization is known as the body consisting of multiple people, like a group and work
for a particular purpose. Organisation made to achieve the goal, in this each and every person
have their assigned work and it will be done by the responsibilities and authority which is given
for the work. Public, private, voluntary all kind of organisations have different purpose and legal
structure. All these work in different sector: primary, secondary or tertiary (Hair Jr and et.al ,
2015).
Sole trader
This is the type of organisation which is run by single owner. Individual start a business
to get reasonable amount of profit. Solo trader organisation is known as the organisation which is
run by the single person. This type of organization works to make profit and it has only a single
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owner which mean the owner take whole profit. In this type of organisation, they have only one
or two employees
Advantage of being sole trader is that ownership remain in the hand of owner only, there
is no need to share ownership with any third person. But it also has disadvantage as owner
become legally liable for all debts that means if firm fails to generate profit then owner will have
to repay all liabilities from own savings (Kljucnikov and et.al, 2016).
Soletrader shoes is the great example of sole trader it exists in secondary sector.
Partnership companies
This is the type of firm which is run by two or more partners. Both partners are
responsible for liability of company. partnership organisation is known as the two or more
individuals share their management for the work and run the organisation also they divide the
profit. The main purpose of the of partisanship organisation is work with the any individuals and
divide the responsibility of the organisation. Profit is shared between these partners and they get
profit as per their invested amount. Advantage of partnership company is that risk is managed by
both partners hence it doesn’t create any burden on individual. Disadvantage of partnership
company is that it increases chances of conflicts between both partners.
John Lewis partnership is the partnership firm, it exists in secondary sector (Lee and et.al,
2015).
Limited companies
Private limited organisation are known as the organisation which run by the particular
person or the team. Legal Structure: The company is listed on US Stock Exchange. Advantage
of this firm is that their liability is limited. But disadvantage of private companies is that they
have to arrange capital by own as they don’t get support from government in term of finance.
The main motive of the private organisation to make profit with giving the good service to the
people. Purpose: It is financial service and believe on the providing the best service. The
purpose of the company is to invest in the client's business or help the client to start a new
business(Erasmus and et.al, 2016).
For example we take Merrill lynch investment which is a well known private sector organisation.
Merrill lynch investment: it is a US based investment company and its headquarter in
the new york city USA. Merrill lynch provide financial service all over the World and in this
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company 15.100 employs correctly working. The firm mange the over 2.2 trillion $ in client
assets (Evans and et.al, 2017).
Public Organisation:
Public organisation run by the government. This type of organisation work for the
providing the service for the citizen. This type organisations main motive is to give the service to
the people and primary motive to make profit. We take the example of the NHS which is the
public sector organisation (Beatty and et.al, 2018). Legal Structure: It is directed by the UK
Government by Department of Health and Social care which took care of political responsibility
(Belás and et.al , 2015). Resource allocation was hand over to NHS England. The Clinical
Commissioning Groups(CCG) undertake services including hospital and community based
healthcare. NHS trust provide services in some areas like NHS acute trust control treatment
centres and specialist care in 1600 NHS hospitals. Size and scope: It is a large scale organization
(Kljucnikov and et.al, 2016). It covers consulting firms, clinics, health insurance organization,
hospitals, healthcare associations, mental health organizations, public health department(Besley,
2015). Mission - Company is committed to work together as a CCG and to provide the best
possible care within the given resources. The company attempt to make sure that views of the
patients are heard and that their time through the company's local health system is smooth
through working in a team. Vision - The company's see itself developing as a team including
patients and clinicians that come together to deliver quality health services, that matches with the
money value and fulfils the needs(Bocken, Rana and Short, 2015). Objectives - The company
makes sure that every baby has the best beginning of life, prevent conditions to expand the
length and quality of life and minimize health inequalities, improve the mental health and well
being of patient, and deliver best with available resources (Teece, 2018).
Public companies can sell their shares into London stock exchange. Decisions are taken
by government. Advantage of public company is that they do not have to worry about funds as
they get fund from government. Disadvantage of public companies is that they have to
undhttps://www.google.com/search?
q=divisional+structure&oq=divisonal+&aqs=chrome.2.69i57j0l5.4800j0j7&sourceid=chrome&i
e=UTF-8er gone through huge legal process (Lee and et.al, 2015).
For example, National health services (NHS) is working as public company. It is publicly
funded national health care system based in UK. It was constructed on 5th July 1948. NHS is the
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largest single-payer healthcare system across the world. The primary source of fund for NHS is
government funding. It provides healthcare facility to their legal residents with most facilities
non chargeable at the time of use and also try to give the best service to people. They also aware
about the health.
Purpose: NHS provides facility to each and every person without discriminating irrespective of
gender, sex, race, age, disability. It believes in respecting the human rights. It believes in social
duties like promoting equality by the services that they give and they pay equal attention to that
section of society where development in healthcare is not matching with rest of the citizens.
Public companies like NHS exist in tertiary sector. As it provides services to consumers for their
welfare (Evans and et.al, 2017).
Government and charity
OXFAM: It is named after Oxford committee for Famine Relief and was founded in 1942. It
is coalition of 20 charitable organization that focuses on removing global poverty. Purpose: The
organization focuses on working to make an end to poverty. They believe that poverty is not an
unavoidable fact and should be removed by handling its root causes. Legal Structure: It is
governed by 3 Boards of Directors. The company's director found charity, follow laws and make
rules, policies and decisions by majority votes (Kljucnikov and et.al, 2016). Size and scope – It
is a large scale organization. It covers campaigns , labour rights and fund raisers. Mission –
Company's mission is to generate solutions to the problem of poverty. Company wants to bring
change globally, encouraging people to have a future that is secure and poverty free. Company
work for removing poverty locally as well as globally. Vision – Company's wants a world that is
free from poverty. They want equal and fair treatment for all the citizens so they can enjoy their
rights and can change those factors that affect their living. Objective – They believe that
necessary actions with political will can change the world. People have the right to live their life
freely and securely, have an identity and to access basic social services. Company has 4 main
criteria to focus that is economic justice, essential services, rights in crisis and gender justice. It
exits in tertiary sector and serve consumers well.
Conclusion
Public, private and voluntary companies have different purpose and legal structure. They
have to ensure following all legal regulation to run business successfully (Hair Jr and et.al ,
2015).
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TASK 2
Relation between different organisation function
Introduction
Organisational structure can be defined as way of allocating task and managing
coordination in business units between various level of employees. It describes hierarchy in
business that ensures that operations can be managed properly.
There are different types of structure that different organization accept in the ways of
proper formation of the business and having the healthy relationship between the employee and
different department to achieve the gaols and objectives. There are mainly 3 type of structure are
thee-
Horizontal structure- mainly refers as the flat structure in the one having the democracy to
rule the day. Employee will have the experience of more autonomy at their workplace which
allows them to have more creativity and innovation into the work (Corcoran. and Gillanders ,
2015). There is loose communication and structure feeling for the understanding of the various
concept.
Vertical structure – it is the hireaical level of organizational structure in which the
managers have all the control regarding the development of goals and objective of organization.
A business owner is typically at the top of a vertical chain of command.
Matrix structure- it is the combination of the two or more types of the organizational
structure (Tregear, 2015) . There are mainly the two leaders authorize having the proper work
management in decision-making and other aspects.
Merrill Lynch structure
Merrill Lynch company's client capital group company use vertical structures. In this
structure management of the company divided into the parts and all parts will report to the single
head of the company.
John Lewis partnership structure
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Firm follows flat organization structure. In this structure company maintains limited
hierarchy and there is clear and direct communication between managerial persons and lower
level workers.
Analyses of both structure
Tall or vertical structures has several management layers. This type of structure gives
benefit to Merrill Lynch in promoting many people at managerial positions. Hence, people work
hard to get promotion opportunities in business unit. As close monitoring of higher authorities is
here hence employees make fewer mistakes which gives positive results in term of high
productivity to the Merrill Lynch (Tregear, 2015). But employees get no rights hence sometimes
this type of structuring demotivate them.
Flat or horizontal structure of John Lewis firm helps in enhancing moral of employees
and people perform their duties within more attention. It reduces staff turnover problem in the
organization and minimizes conflicts as well hence productivity of the firm get increased. But
sometimes people become more casual as there is no close monitoring hence they waste their
time in useless conversations. Apart from this involvement of people in decision-making process
waste time of management to make proper timely decisions.
Organizational chart and interrelationship of these structure
Figure 1 Vertical structure of Merrill lynch
(Source: Vertical structure, 2016)
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Figure 2: Horizontal structure of John Lewis
(Source: Horizontal structure, 2017)
Merrill lynch follow the tall structures for the organization which help them to
understand or make the relation with the both kind of factors, internal and the external factors . It
helps the company (Source: Horizontal structure, 2017) to make the relation between the
manager and top-level management. This is the most flexible structure and most of the financial
company use this structure. Merrill lynch use this structure for the crate a network between the
employees and the client. Which help them to maintain the relation with client(Kljucnikov and
et.al, 2016).
It helps the organization to optimize the performance of each and every department.
Capital group use this structure for the organization. It helps them to divide the department and
freely work with the individual. Company divide the department into marking department,
development department , financial department and support department, and then they all
department works freely and gives the report to the manager of the organisation. It helps the
company to understand the overall performance of the company and as well as the individual
performance of the department (Evans and et.al, 2017).
Marketing Department with Human resource management:
Marketing department of Merrill lynch connect with the human resource department and
ensure that how many people they need in the department and also they ensure that which skill
are needed in the new employee. That helps the human resource department to recruit the right
person for the post. Marketing department of the Merrill lynch make sure that they provide the
proper information to the employee which help to understand the work (Tregear, 2015). HR
department take this all information, and then they apply this thing at the time of the recruitment
and give the best candidate to the marketing department. This relationship between the marketing
department and the HR department help the organization to achieve the goals in the less time.
Company follows tall structure in which managers control over entire departments hence
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information gets past easily without any major changes. Managers make immediate decision to
improve HR function if there is any loop fall hence this structure helps in making this
relationship better and getting positive results as well. Whereas John Lewis follows flat structure
in which employees make direct communication with each other, it develops trust of users and
help the business in creating healthy culture where both department can exchange their
information without barrier this results high productivity of organisation.
Marketing Department with research and development department:
Marketing Department of the organisation connect with the research and development
which help them to understand the requirement off the client. Research and development
department analysis the market and find the requirement of the client which help the marketing
department to promote the main thing which his basically need of the client(Beatty And et.al,
2018). Marketing department of the Merrill lynch communicate with the Research and
development which help them to understand the need of the client and also they research of the
market that help the marketing department to promote the main and need thing of the client. This
help the organisation to grow and understand the need of the client which help them to take
action in the right way with the less loss of the money (Lee and et.al, 2015). Merrill has tall
structure where managers make all the decisions when marketing managers inform to R&D
department’s head about the development needs then managers works on it and ensure that
employees manage their work accordingly. This helps in achieving business goal whereas John
Lewis has flat structure where firm marketing employees discuss their problems with R&D
department’s staff members. They both share their information and find innovative ideas to fulfil
needs of workers. It makes them feel good and help in raising productivity of both departments.
Marketing Department with financial department:
It is necessary for finance department and marketing department to work very closely
together because the finance department have the complete detailed information about the
organisation and all the operation running in the organisation is within the financial budget. The
finance department of Merrill lynch instruct all the department of the company to work in the
budget provide to the respected department (Corcoran. and Gillanders , 2015) . The marketing
department of Merrill lynch major focus is to enhancing to promote the scheme of the company,
increasing the market share and the revenue generation of the company whereas the financing
department of company focus is on cash flow of the company and covering the cost as early as
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possible. Merrill has tall structure where company promotes people on higher position, this type
of structuring helps both these department in getting most talented staff and smooth functioning
of work. By this way people work hard to get that promotion that makes work of both these
division smooth and effective. Whereas John Lewis has flat structure where smooth
communication is here, managers behave friendly with all staff members this type of structuring
supports in making people positive and they always work hard to meet organisational goal.
Human resource department with research and development department:
Human resource department and research and development work together of the
organisation to improve the employee work and efficiently. Research and development
department analysis the market and also the company which help the HR department to
understand the need of the company and then they apply these things in the new recruitment and
also help the HR department to plan the training and development programs. Tall structuring of
Merrill company makes the environment where HR department and Research and development
department of Merrill lynch work together for the development of the company. Reach depart
analysis the market and find the basic things which they needed to apply in the organization for
the growth and also what kind of change they need (Tregear, 2015) . After this analysis they give
the report to the HR department and then thy apply the change and also provide the training
about these things for the employees. This relation with the department help the organisation to
grow fast and apply the right thing on the right place. On other hand John Lewis has flat
structuring, managers treat employees well and give freedom to them to work better. This type of
structuring is helpful in raising moral of employees and making them positive towards brand.
This helps in reducing staff turnover issue and retaining talent in business for longer duration
which is very important for smooth functioning of both departments.
TASK 3
Positive and negative impact of micro environment on business operation and support.
PESTLE ANALYSIS : Pestle analysis is a marketing tools use by the marketer to identify the
positive and negative impacts of Marco business (the extra factors) on the organisation. There
are six steps in Pestle analysis, which are as follows
Political factor :
Political factor is the fist factor of pestle analysis. This is about the interference of the
government is the economy. Political factor include all trade policies, taxation, government
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policies stability of government and many more. Political factor impact on business unit, if
enterprise plans to enter into new market to want to make new plan then it has to ensure political
stability and condition otherwise it will not be able to sustain in market for longer duration.
 Positive impact : The stability in the government of united kingdom is very high
moreover UK has the most sable government in the world, So the Merrill Lynch
Investment doest have the need to change their organisational structure because of change
in government Moreover the company have good relation with most of the countries, it
allows foreign companies to do business in their country(Besley, 2015). If there is stable
government then company will not have to make changes in its operations which will run
operations smoothly.
 Negative impact : The uses to have their main office in United Kingdom for whole
Europe as UK was also the part of European union, after Brexit the Merrill Lynch had to
open new office in many countries. In the condition of instable government company
faces problems, new government makes new norms which create difficulty to manage
operations accordingly
Economical factor
Economical factor as those factor which define the economical growth, inflation,
exchange rate, income scale of the customers and many more. If economic condition of nation is
not good then entity faces problems to sustain in market for longer duration.
 Positive impact: United kingdom economy is well established and growing day by day,
which means the income of consumers are higher than other countries it ultimately
increases the sales of the Merrill Lynch (Hair Jr and et.al , 2015). If there is high GDP
then consumers will have adequate income sources that will help business in generating
more sales and gaining more profit.
 Negative impact: The firm is facing many conflicts with large and medium size business
who uses to operate the business in European union countries. All these problems arise
due to Brexit. If unemployment rate is high then firm may face issue in generating sales.
Even if interest rate is high then firm will not be able to spend much amount in expansion
which will reduce profit of company (Tregear, 2015).
Socio-cultural factors:
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