Business and Business Environment: Helifax Bank Analysis Report

This report provides a comprehensive analysis of the business environment, exploring various organizational types such as sole traders, partnerships, and limited companies, along with their size and scope. It examines the interrelationship of organizational functions like HR, sales, marketing, and finance, and their impact on the overall structure. The report delves into the positive and negative impacts of macro-environmental factors, utilizing PESTLE analysis to assess political, economic, social, technological, legal, and environmental influences on organizations. Furthermore, it includes a SWOT analysis of Helifax Bank, linking internal strengths and weaknesses with external macro factors. The report concludes with a summary of findings and references.

BUSINESS AND BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Different Types of Organization and their size and scope:.........................................................4
TASK 2............................................................................................................................................6
Interrelationship of the various functions of an organization:....................................................6
TASK 3............................................................................................................................................8
Positive and Negative impact of Macro Environmental Factors:...............................................8
TASK 4..........................................................................................................................................11
Internal Strength and weakness of Helifax Banks linked with external macro factors:...........11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

Illustration Index
Illustration 1: Various Functions in an Organization.......................................................................7
Illustration 2: PESTLE analysis.....................................................................................................11

INTRODUCTION
Business environment is the combination of the entire internal and external factors which
can influence an organization's business. It is the most important aspect and helps in the
awareness of the ongoing current changes in market. The factors which are included in the
business environment can be explained as company's competitors, consumer groups, government
and its laws, customers, technologies, current trends, market conditions, suppliers, etc. It helps to
identify threats as well as opportunities for any organization.
In the present report, it will focus on different types of business organization such as sole
traders, partnerships, private, public, etc, and their size, structure and scope. It will also explain
different internal and external factors which influence the organization and their interrelationship
with the macro environmental factors. PESTLE and SWOT Analysis of Helifax Bank and the
positive and negative impacts of macro environment on organization are also covered in this
report.
TASK 1
Different Types of Organization and their size and scope:
An 'organization' is a group of individuals working together in order to achieve certain
goals and objectives. There are various types of organization whose purpose is to meet different
needs and wants of the society in which they work. There are many organizations which works
for only profit while there are some organizations which serves to promote a social cause or to
uplift the well being of society. Based on these characteristics, there are different types of
organization present in the market, such as profit and not for profit and non-government
organizations (NGOs).
 For Profit Organization : Any organization or business which is set on the basis of
generating only profit from is considered as profit organization. These organizations are
generally owned by individuals or group of entities and which usually operates in private
sector and known as businesses. These are not run by any state or government bodies but
still they have to follow the legal and financial framework which has been set by the state
government in order to work properly. In this, the profit or revenue which is generated by
the organization is reinvested into the business to maintain its consistency and
sustenance. The remaining amount is being distributed among all business investors or
shareholders, who are working with organization. These can operate in multiple sectors,

for example, food, technology, fashion, manufacturing, retail, etc. (Armstrong, G. and et-
al. 2015.).
 Non Profit Organization : These organizations work for the improvement and well
being of society in which they operate or work. Their sole purpose is to serve people for
their better welfare. These organizations do make profits for their business but with the
purpose of working for public benefits. In this type of organization, it includes social
enterprises and charities. The revenue generated from the business is not distributed
among all the members of the organization rather it is used for some public welfare.
These usually generate funding through various ways such as, from donations,
sponsorship's and other similar investments from different organization. They work in the
field of educational sectors, religious, and scientific.
 Non-Government Organization : These are commonly known as NGO's. These are
nonprofit organization which runs independently from state government. They get their
funding from the state government to work. There are many types of NGOs which work
for different fields, for example, education sector, environment, for any business, etc.
NGOs also reliant on the external funding which come through donations, grants, etc.
(Botha, A., Kourie, D. and Snyman, R. 2014).
 Micro, Small and Medium-sized Enterprises (SMEs) : usinesses or enterprises are of
different sizes, such as, micro, small, medium or large. These are based on their number
of employees working, number of owners and their market shares, etc. For micro-sized
enterprise, the employee count should be less than 10 employees, in small-sized it should
be less than 50 employees and for medium-sized enterprise, the number of employees
should be less than 250.
There are so many legal structures which a business can have. The most common forms of
business can be explained as, sole traders, partnerships and private limited companies, which is
explained below,
 Sole Trader : A sole trader is a process which is a legal setup where the business is
operated by a single individual. No other person is involved in it. In this type of business,
the profit generated is solely of that person and all debts owed by the business is also the
business owner’s personal liability. Sole trader can employ workers for its organization

but ultimately the final responsibility is of owner's only. These types of businesses are
easy to set up as it requires only small amount of investment.
 Partnerships : In partnership business, it is operated by two or more parties which work
together for same business. In this, they specify the responsibilities of each partner, and
manages how profit will be distributed amongst them, investment obligations of each
partner and sharing of losses. All these factors are equally distributed between the parties.
 Limited Companies: Companies which have their own legal status in the market and
have a separate legal entity is known as Limited Companies. They are protected by
limited liability. There are basically two types of Limited Company, for example, Private
Limited Company and Public Limited Company.
1. Private Limited companies are owned by small private entities which have limited
liabilities of shares. As it is a small private company so its stakeholders are also in small
number. There are many SMEs which operate in private limited companies because they
allow them to raise their fund from shares which can be beneficial for them. For example,
Sainsbury is a private sector retail business which is working in order to maximize its
profitability in business.(Bryman, A. and Bell, E. 2015).
2. Public Limited Company, are those who can sell and trade their sales in the stock
exchange freely. In United Kingdom, these companies cannot trade their shares without a
trading certificate from the company house. For example, National Health Service is a
highly recognised public sector enterprise working in the United Kingdom.
TASK 2
Interrelationship of the various functions of an organization:
Functions which are applied by an organization to increase their products and services for
their customers are known as its Organizational Functions. It includes functions like operations,
sales and marketing, human resource department, information technology, administration
service, finance and accounts department, etc. All these functions works together in order to
fulfill their objectives.
 Human Resource or HR Department : The main functioning of Human Resource
Department is to recruit new staff members. They make sure that they are recruiting the
most appropriate candidate who is well qualified and can understand the given work or

task. After recruiting, giving them proper training for their developmental skills is also
ensured by HR only.
 Sales and Marketing Department : This department ensures that marketing and
promotion of their new products and services is done properly in order to aware people
about them. Before executing any new plan or strategy in the market, proper research has
to be done by the marketing department to minimize all the negative outcomes.
 Finance and account Department : These department helps to maintain and evaluate
the financial statement of the organization and has all the records of company's
investments and the revenue they are earning from the business. These statements can be
recorded manual or electrical. These financial statements are used by them to calculate
the overall profit and loss of the organization. This department also decides the budget of
every task which is happening (Crane, A. and Matten, D. 2016).
 Administration Department : Operating all the administrative tasks in the organization
is done by this department, which includes dealing with all the inquiries and complaints
received from their customers. Any operational area which has some issues and needs to
be resolved is done by them.
 Technological Department : All technical related issues are operated by this department.
This generally includes information technology which is used by an organization.
Il
lustration 1: Various Functions in an Organization
Source : Discovering the “Right” Organization Structure.
2014

All these factors are responsible for proper functioning of an organization as they are
linked with its functions as well. With the help of all these factors, it becomes easy for them to
work effectively and increase their rate of productivity. The organizational structure is the
relationship between those functions operating in the company. For example, if sales department
is not working properly that it will definitely affect the structure of the organization and can lead
to affect the brand name in the market.
There are basically three main type of organizational structure, functional structure,
divisional structure and combination of these two called matrix structure.
 Functional Structure : These structures are used to set each portion of the organization,
and is grouped according to its function. Different department are assign to the respective
members for example there are department of marketing, finance, production, sales, etc.
 Divisional Structure : This types of structure is used in larger companies which operate
in a wide geographical area or have separate smaller organizations in the market. There
are different functions which can affect the working of the organization like the
marketing department. If the promotional activities is done properly then it would be
difficult for them to establish in new place.
 Matrix Structure : This is the combination of both these structure, i.e. functional and
divisional structures. This is generally used in large multinational companies. It gives
benefit of both the functions to exist in one organization (Cull, R., Navajas, S., Nishida, I.
and Zeiler, R. 2015).
TASK 3
Positive and Negative impact of Macro Environmental Factors:
Macro Environmental factors are the external factors which affect the organizations
decision making process and also affects its performances and its strategies. These factors are
calculated by a process known as PESTLE analysis. In this analysis, various factors are included,
such as, political, economic, social, technological, legal and environmental factors that affect the
overall functioning of the organization. Helifax Bank has both positive and negative impact of
the macro environmental factors and we can demonstrate it by using PESTLE analysis (Trevino,
L.K. and Nelson, K.A. 2016).
 Political Factors : These are the which can affect the functioning of the bank. These are
the rules and regulation which is formulated by the government and have to follow by the

bank in order to work appropriately. These Political decision can impact on many vital
areas for the banking industries for example, new 8% government surcharge applied
profits on UK banks in 2016.
 Economic factor : These are the factors which is affected by the economic change
happening in the country, which includes interest rates, taxation changes, economic
growth, inflation and the exchange rates. These has a great impact on the banking
industries. Factors which can affects the Helifax bank are for example, high inflation rate
can result into higher wage demands from the employees and raise cost.
 Social Factor : These are those factors which are affected by the social behavior of the
people which can include, changes in people’s lifestyles, fashion, labor composition,
social mobility and other demographic trends which is currently happening in United
Kingdom. For example, one demographic change which can affects Helifax Bank in UK
market is the ageing of British population (Deasy, S. and et-al 2017).
 Technological Factors : In banking sector, technology plays an important role. As most
of the work in banks are done in computers using various techniques. To meet all the
technical needs required for them, Helifax Bank has invested in fraud prevention system,
cyber risk, IT security and the appropriate management of data.
 Legal Factors : Legal factor are those which is related to legal environment in which
Helifax Banks are operating. In the past few years, there were many significant legal
changes in UK which has affects the behavior of Helifax bank.
 Environmental factor : With the use of technology particularly with mobile banking
apps the use of paper has been reduced a lot. Additionally, the need to drive directly to a
branch to handle affairs is minimized as well. Most of the work can be done online by the
customers by using bank's online application for example, they can apply for credit cards,
buy cheques, and their queries have been answered online or by phone. This helps to
reduce individual environmental footprints.
With the analysis of all these factors, Helifax bank can evaluate there positive and negative
impacts of macro environmental factors and can make policies according to it which can be
beneficial for them and to their customers as well (Drucker, P.F. 2017.).

TASK 4
Internal Strength and weakness of Helifax Banks linked with external macro factors:
Internal and external analysis of the organization is done to identify its strength and
weakness. There are various factors which affects the functions of the Helifax Bank. These
internal factors can be calculated by a method known as SWOT analysis.
 SWOT Analysis : This method basically calculates the strength, weakness, opportunities
and threats of the organization. It can help the Helifax bank to uncover all the
opportunities that the bank has well-placed in the market. And by understanding the
weaknesses of the bank, it becomes easy for them to eliminate all the threats which can
arise in between their work.
 Strength : It provides the savings and the housing mortgages and became the largest
provider of UK. This bank is supported by the strong company which is the Lloyd
banking group. Lloyd group is very large and taken over the Helifax bank at that time, it
Illustration 2: PESTLE analysis
Source : PESTLE Analysis with Mind Map Tools. 2017

was in the very bad state. It is the big entity which provides various services like
insurance, share dealing, loans, credit cards etc. There are various kinds of services which
the bank provides that are needed by the people like current account, reward current
account and ultimate current account. There are various payment services through which
any one person can send abroad. Through online banking system, it provides convenience
to the working style. It makes our work easier. There are various types of individual
savings account for children (Ferrell, O.C. and Fraedrich, J. 2015).
 Weakness : There were some negative opinions from viewers because of the campaigns
on advertisements. There was some huge crisis in 2008 and had a very slowdown credit.
The policies are not sound at that time that's why the crisis are made. Customers got
irritated due to the overdraft charges are made on latest note.
 Opportunities : The credit card schemes and cash backs are newly started due to the
growth programs. By wealth management schemes Helifax bank has focus on the aged
people for the bank's growth. They acquired the smaller banks and the insurance firms for
the bank's growth.
 Threats : Banking business has very bad impact due to the recession period. Recession
period affect the whole industry. In this period to reduce the cost banks and the other
organization reduces the employees. There are many customers who are not paying the
banking business has very bad impact due to the recession period. Recession period affect
the whole industry. In this period to reduce the cost banks and the other organization
reduces the employees. There are many customers who are not paying the loan timely
and due to this bank has to face the losses. There is cut throat competition in the UK
financial sector. A timely and due to this bank has to face the losses. There is cut throat
competition in the UK financial sector (Goleman, D. 2017).
Interrelationship between SWOT and PESTLE analysis :
In the swot analysis the organisation concentrate on the internal as well as the external
things happening in the organisation. From swot the organisation get to know the strengths,
weakness, opportunities and threats and after that only the business strategies are made.
Strengths focuses on the what company has or why company is strong enough to fight from
competitors. It tells the potentials of the company. Weakness tells about where the company is
lacking behind or the company's deficits. It tells where we have to improve. Opportunities tell us

from where the organisation can gain. The future possibilities from which company can gain the
huge profits. By making what changes in the product or services the company can gain future
profits. Threats tells about the things that can endanger in the future (Hillary, R. ed. 2017).
PESTLE tells about the external factors only. It covers the overall topic like what are the
political, economical, social, technological, legal and environmental factors. It covers the topic in
the comprehensive way. According to Helifax bank, PESTLE analysis as well as SWOT both are
equally important because one covers the external factors and other on e covers the external as
well internal factors. One focuses on the strengths, weakness, opportunities, threats and other one
covers the overall topic.
By conducting these internal (SWOT analysis) and external (PESTLE analysis) analysis
of the bank, it can easily identify their strengths and weakness by studying these factors and by
implementing all these related measures to overcome the issues coming in the bank. By keeping
in minds their customers needs and interests, analysis of the factor should be done accordingly
(Kolk, A. 2016).
CONCLUSION
From the above report, it concluded the detailed explanation of the business environment
and the different types of organization working in the market for example, public, private and
volunteer sectors and legal sectors as well. Different types of function in an organization and
their relationship with the structure of the organizations also studied in this report. PESTLE and
SWOT analysis of Helifax Bank is studied in order to evaluate the positive and negative impact
of macro environmental factors and calculated the strength and weakness of the bank. This report
also helps to understand the interrelationship between both the analysis, i.e. PESTLE which
helps in external factors and SWOT which helps in internal factor analysis.