Business Environment Analysis Report: JP Morgan Bank, UK

This report provides a detailed analysis of the business environment, focusing on JP Morgan as a case study. It begins by defining the business environment and its impact on organizations, then differentiates between various types of organizations, including public, private, and voluntary sectors, with examples like the Bank of England, JP Morgan, and Oxfam. The report then examines the scope and objectives of these organizations. Furthermore, it explores the relationship between organizational functions such as human resources, finance, operations, marketing, and R&D and their link to organizational structure and objectives. The report also covers the identification of positive and negative impacts of the macro environment through PESTEL analysis and internal and external analyses using SWOT analysis, interrelating external macro factors with strengths and weaknesses to formulate strategies. The report concludes with a summary of the key findings and references cited.

Business And The Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisations.......................................................................1
P2 Different types and scope of organisations............................................................................4
TASK 2............................................................................................................................................5
P3 Relationship between organisational functions and link with structure and objectives........5
TASK 3............................................................................................................................................8
P4 Identify positive and negative impacts of macro environment upon operations...................8
TASK 4............................................................................................................................................9
P5 Internal and external analysis of JP Morgan..........................................................................9
P6 Interrelate external macro factors with strengths and weaknesses......................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment includes internal and external factors which directly and indirectly
influence organisation and its operations. It is essential that management design system and
implement appropriate technologies and equipments to execute business activities effectively to
achieve business goals and objectives. Companies provide variety of products and services to
satisfy and fulfil demands and requirements of people. This help executive to establish and
maintain position and reputation in market in respect to rival firms (Business Environment.
2017). Present report is based on JP Morgan which is multinational firm which provide financial
and banking services to people. It is largest and leading firm established in UK and other
countries. This assignment defines different types and purpose of organisation which have
variance size, structure and scope. There are various functions which are present in firm and
have interconnection with other department. Management of JP Morgan conduct PESTEL and
SWOT analysis which help them to have complete information about internal and external
environment. This help them to make changes in system and formulate strategies to make system
function effectively.
TASK 1
P1 Different types and purposes of organisations
In present fast development, business environment of company is upgrading at fast rate.
This help firms to have large opportunities to implement innovative and creative ideas and gain
good amount of profit from business. Public, private and voluntary are different kinds of firms
which conduct activities for enhancing conditions of country. For this, companies increases
employment opportunities, deliver products and services in market for development of society
and generate adequate revenue to sustain its position in market. These are different types of
organisation which are described below (Bryman and Bell, 2015):
Public organisation: This industry includes enterprise which are controlled and regulated
by local or central government to strengthen and enhance economy of nation. These organisation
are funded by authorities to increase job opportunities to give facility to people to generate
income for maintaining their living standards. Bank of England is public bank of UK which is
main authority regulating country's operations by issue of currency and other financial services
to other financial institutions and public.
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Purpose: Bank of England aim is to raise funds, provide money to other banks and keep
gold reserve as custody to maintain and sustain economic conditions of UK. Along this, bank is
lender of last resort and regulator of nation for which monetary policies are framed by
authorities.
Legal structure:
Local government: This tactic includes organisation which need to function in according to
policies which are formulated by state authorities. It is necessary that adequate products and
services are provided to people to fulfil their demands and needs.
State government: It is another segment which comprises firms and business operations that are
conducted by authorities for development and enhance conditions of state (Buckley and Casson,
2010) .
Central government: This structure defines organisation which are run by authorities to govern
the unitary state of country. For this, government formulate rules and regulations which state and
local authorities require to follow for betterment of nation.
Benefits: Public organisation conduct business for betterment of society by providing
them appropriate facilities that is education, health care, electricity, transportation services such
as road, rail and other things to public.
Disadvantage: Government require to have skilled staff to provide appropriate services
to people. For this, tax is only source of income for authorities which determine quality of
services that are provided and operations conducted by them.
Private organisation: This sector comprises firms which are started, managed and owned
by either individual or group of people or shareholders which invest money in business to
conduct operations and gain good amount of revenue. For this, companies deliver products and
services in market to satisfy demands and requirements of people and sustain its position in
market. Primary, secondary and tertiary are three forms in which private firms conduct business
to provide products and services to satisfy demands and needs of people (Commander and
Svejnar, 2011).
Primary sector includes agriculture business which is to provide raw material to other
firms and people. Besides this, secondary industry comprises firm which manufactures and
produces products for fulfilling demands and demands of customers. Third segment is tertiary
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which includes banking, advertising, warehousing, transport and other firms which provide
services to people.
JP Morgan is private bank which is conducting business in financial and banking sector.
It is firms which provides investment banking, asset management, brokerage, wealth
management, treasury and securities services to public.
Purpose: JP Morgan goal is to become leading financial firm by providing quality and
appropriate variety of financial services globally.
Legal structure:
Sole proprietorship: This is one form of structure in which includes firms which is
owned and controlled by individual for utilising funds and generate profit from business. In this,
entrepreneur is the person which have sole decision making power and is liable for debts and
losses (Cuervo‐Cazurra, 2011).
Benefits: In sole proprietorship, entrepreneur is single person which have decision-
making power, so fast and appropriate judgements and selection of things are possible.
Disadvantage: Individual have shortage of funds which affect on quality of business
operations and firm position and reputation in market.
Partnership: It is another structure which comprises companies which are controlled and
managed by two or more people. For this, individuals sign agreement and bind themselves in
formal deed which specifies responsibilities and duties require to be performed by them. Along
this, company have sufficient amount of capital to organise business activities and generate profit
for sustaining its position in market.
Benefits: Partnership firm is started and managed by more than two people which help
companies to have good amount of capital and resources to conduct business effectively. Along
this, firm have possibility and chance to expand business and have branches in different nation.
This help businessperson to have large market reach and customer base to enhance sales volume
and profitability (Gebauer, Paiola and Edvardsson, 2010).
Disadvantage: Companies have number of shareholders and members which have
different opinions and experience which affect on decision activities of firm. This lead to
conflicts and time lag in judgement-making for firm.
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Limited company: This tactic includes firms in which shareholders have limited liability
in respect to their investment amount and regulations of authorities. Limited by share or liability
are two types in which members have power whichever is chosen by company.
Benefits: Companies which follow this structure are beneficial for members to have
limited functioning in business which protect them from risks.
Disadvantage: Executive of limited company find it difficult to raise funds, as owner
have less control in respect to sole trader and partnership (Hamilton and Webster, 2015).
Voluntary sector: This industry includes organisation which conduct business for
development and welfare of society. It is essential that in market there are firms which execute
activities for providing products and services to people and without aim of profit. OXFAM is an
independent and charitable firm which conduct operations for reducing poverty and enhancing
conditions of nation.
Purpose: Oxfam aim is to increase job opportunities to provide chance to people to
generate adequate income for securing and maintaining their living standards. Along this,
company enhance solutions for making country free from poverty.
Legal structure:
Trust: This is oldest form of structure which voluntary firm uses to provide appropriate
services and products for betterment of society. For this, government provide property to person
for conducting activities and deliver facilities to needy people (Halbert and Ingulli, 2011).
P2 Different types and scope of organisations
Public, private and voluntary are different forms of organisation which are present in
market to provide products and services to people to satisfy their demands and requirements.
Along this, these firms conduct business operations to generate profit and sustain its position and
reputation in market. These are sector which have different availability of resources which
determine size, objective and scope which vary for each organisation. Bank of England, JP
Morgan and Oxfam are various scale of firms which have different amount of capital that affect
on area of operations and market share. These companies have different objective and size which
is described below:
Bank of England: This is public organisation which is central bank of United Kingdom.
Company formulate monetary policies and regulate functioning of country by keeping reserve of
commercial banks (Hilton and Platt, 2013).
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Scope: Bank of England is central bank of UK whose objective is to maintain and
formulate policies for regulating and managing conditions of country. bank provides financial
services and other facilities that is brokerage, asset management and many other to people.
JP Morgan: It is private company which has headquarter in United Kingdom and is
conducting business worldwide. Bank provide financial and banking services to people to
provide them facility of saving and loan to public (Kang, Lee and Kim, 2010).
Scope: JP Morgan require to become popular and leading bank in the world. For this, top
personnel are making efforts and arranging funds for increasing outlets and expanding business
to have large market reach and customer base to enhance profitability.
Oxfam: This is voluntary firm which is charitable trust that enhance employment
opportunities to provide facility to people to generate adequate income for maintaining their
livelihood. This help authorities in development and enhancement of conditions of country.
Scope: Oxfam is MNC which is conducting business to fight for poverty by conducting
business and increasing job chances. This help people to have sufficient employment
opportunities to gain money for regulating and maintaining living standards.
TASK 2
P3 Relationship between organisational functions and link with structure and objectives
Each and every organisation have different department which are formulated by
management to execute business operations and achieve business goals and targets. Human
resource, finance, operation/ production, marketing, sales, R&D are various department which
are present in companies to conduct activities and attain objectives. These are different unit
which have relation with each other and help management of JP Morgan to deliver adequate
products and services in market to sustain firm's position and image in market. These are
different organisation functions which are described beneath (Kian Chong, Shafaghi and Leing
Tan, 2011):
Human resource department: This unit plays essential role in company which is to
conduct HRM practices and have adequate manpower in firm to execute business operations and
achieve objectives. Recruitment, staffing, performance appraisal, compensation, training and
development are various activities which help HR of JP Morgan to have skilled and competent
people to provide quality services to customers. It is necessary that bank have adequate
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workforce to provide financial services to people to sustain its position and reputation in market
in respect to rival firms. Along this, management construct and maintain relations with
employees to have motivated and dedicated staff to perform tasks effectively.
Finance department: This is another segment which comprises important part in firm
which is to prepare budget and have information about requirements of capital to conduct
business activities effectively. It is essential that each sector gets adequate money to organise and
implement appropriate technologies and equipments in system to conduct operations properly. JP
Morgan bank require to provide appropriate financial and banking services to people (Bovee,
2010) .
Operation/ production department: It is another unit in which employees responsibility
is to provide products and services to people. Besides this, this department also have duty to
conduct manufacturing activities to produce items and deliver services to people to satisfy their
needs and requirements. It is necessary that resources are utilised efficiently for efficiently
execution of operations. JP Morgan provide financial and banking services to people, for which
management require to execute operations and provide appropriate facilities about saving and
loan to customers. In this marketing team helps manager to acknowledge demands of people and
make operation members provide services and facilities accordingly.
Marketing department: It is organisation function which is to promote and advertise
information about products and services. Marketing is process which helps management to
establish appropriate position and image in market and in mind of people. For this, market
research is technique used by superior to have complete information about requirements and
demand of public. Along this, competitor's offerings are also acknowledged by firm to design
items and services accordingly (Bryman and Bell, 2015). JP Morgan is bank whose marketing
unit uses promotional techniques that is online advertisement, electronic and print media to
promote and inform people about financial services and rate for each scheme and facilities. This
help bank to attract clients by creating good market position and brand value. Along this,
marketing also helps sales people and operation members to have adequate customer base to
enhance sales volume and profitability.
Sales department: This unit responsibility is to build and maintain customers by
interacting with them and providing them information about products and services. People
require to get support and guidance from company people about variety of items, its features and
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attributes. It is necessary that management have members to influence and make customer's mind
to purchase products from them. JP Morgan bank provides financial and banking services to
public. For this, financial products that is account, loan and other services are given to each
member as target which require to be completed within defined time. In this, marketing team
plays important role which is to inform people about financial services which gives support to
salespeople to easily grab attention of customers and make their mind (Buckley and Casson,
2010).
Research and development department: This unit responsibility is to implement
innovative and creative business ideas for betterment of company. It is essential that
management make changes and alterations in products and services in according to needs and
requirements of people. Along this, superior of JP Morgan even require to implement advance
and latest technologies in system to provide quality and appropriate financial services to clients.
Organisation structure: Top personnel formulate organisation structure which define a
systematic order which superior and members require to follow. Different department that is HR,
finance, production/ operation, marketing, sales, R&D are given proper order to utilise resources
efficiently and execute operations to attain business objectives. These are different organisation
structure which are stated beneath (Commander and Svejnar, 2011):
Divisional organisation structure: This is efficient structure which is used by
organisation to manage and have outlets in different nation to have good market reach and
customer base. It is essential that management utilises resources that is funds, material and
manpower efficiently to conduct business operations effectively.
Functional organisation structure: This is essential and commonly used structure which
define that HR, finance, production/ operation, marketing, sales, R&D are various department
which are designed by management. In this employees are provided and distributed into unit to
make them perform tasks in group. Along this, members are given duties and responsibilities in
according to their skills and knowledge to make them perform tasks effectively and deliver
quality services to people (Cuervo‐Cazurra, 2011).
In JP Morgan, management uses divisional and functional organisation structure to
organise and conduct business activities to achieve objectives and sustain its position in market.
Divisional structure helps bank to operate branches in different nation to have large market reach
and customer base. Besides this, functional structure which define that HR, operation, finance,
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marketing, sales and R&D department are given duties and tasks to provide financial services to
people. This help bank to have sufficient manpower and funds to provide appropriate services to
clients to sustain them for longer period.
TASK 3
P4 Identify positive and negative impacts of macro environment upon operations
Macro environment include factors which are present outside firm and indirectly affect
on business operations. It is essential that management have complete and appropriate
knowledge about market conditions to make changes in system and conduct business activities
effectively. For this, PESTEL is appropriate technique which is used by manager of JP Morgan
to have information about external components that are government, economy, public,
technological, environment in functioning of bank. It is necessary that positive and negative
points of each factor are acknowledged by administration to design system and execute
operations in efficient manner (Gebauer, Paiola and Edvardsson, 2010).
Political factor: This tactic define that state of country determine policies and rules that
are framed by government to regulate and coordinate functioning of organisation. For this,
authorities have even made compulsory for companies to register firm and take licensing to make
system function legally. JP Morgan is leading bank which provide financial and banking services
to people. It is necessary for bank to conduct operations and provide services in according to
government rules and policies.
Positive impact: J.P Morgan offers various financial services to its customers which are
attract more number of customer's as it provides opportunities for growth. This organisation
provides its services in UK which is already stable country and does not not changes its policies
frequently (Hamilton and Webster, 2015).
Negative impact: Changes in taxation policies within the UK may impact this
organisation in negative manner.
Economic factor: This factor includes recession, saving rates, interest rate, economic growth
pattern of the country. In context to J.P Morgan, economical factors affect will affect the growth
of this financial institution.
Positive impact: J.P Morgan majorly provides its services in financial strong countries whose
exchange rates are stable.
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Negative impact: Recession in UK will affect its sales of financial products in negative manner.
Social factor: Changes in culture of trading country have its own influence over the
business. Along with this social factors also affects the working pattern of organisation.
Positive impact: Educated people of developed country are aware of financial benefits
which increases usage of financial services.
Negative impact: Culture of UK believes in living their life with high lifestyle. It reduces
the usage of financial products of J.P morgan (Halbert and Ingulli, 2011).
Technological factor: According to the changing scenario, technology is developing every day
and makes the work of employees easier and less time consuming. Advance technology have
both positive and negative impact on the growth of J.P Morgan.
Positive impact: This company can introduce automated machines in its financial
institution which will save the time of customer's as well as employees.
Negative impact: Adoption of technology is expensive for this company as it will affect
the budget in negative manner.
Legal factor: Legal factors involves discrimination law, safety law, consumer protection law
and employment law of the country. These factors affects the growth of J.P Morgan.
Positive impact: J.P Morgan follows all the employment which helps the management in
building positive relation with its employees and increase the work efficiency of employees.
Negative impact: Changes in consumer protection laws has increased difficulty for J.P
Morgan in order to follow them.
Environmental factor: These factors includes rules and regulation of environmental pollution
and waste management. It involves various environmental standards that may affect the
profitability of the J.P Morgan (Hilton and Platt, 2013).
Positive impact: J.P Morgan should use solar panel in its stores for using natural
resources. This will not harm the environment.
Negative impact: If J.P Morgan will not follow environmental policies its brand name
will be effected.
TASK 4
P5 Internal and external analysis of JP Morgan
SWOT analysis of J.P. Morgan
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J.P Morgan is a leading financial institution that operated its business globally. They are
mainly dealing in 5 different business segments like corporate and investment banking,
commercial banking and corporate entity, consumer and community banking and asset
management. In order to know internal strength and weaknesses company has conducted SWOT
analysis which is explained below for better understanding:
Strengths:
 As company operates its business in around 60 countries which is making this institution
one of the leading global financial services provider. They are giving facilities to
government clients, different customers, businessmen and other institutions (Kang, Lee
and Kim, 2010).
 As compared to other companies J.P Morgan has strong liquidity and capital ratio is great
and making position better at market area. According to study it has been evaluated that
during the period of 2008-2013, their loan ratio has increased to 174%. In term of diverse revenue system, company has 5 different shared segments that are
investment banking, asset management, commercial banking and cooperate entity and
consumer and community banking.
Weaknesses:
 Although company is very big but there are some weaknesses that can hamper business
operations and drop in sales and profitability can be seen. In context with J. P. Morgan,
management is very weak in terms of managing company's non-interest expenses and in
the year 2013, it has raised to around 72% of total net revenues (Kian Chong, Shafaghi
and Leing Tan, 2011).
 Other factor which is creating problem for the organisation is over dependence on certain
market area. For example: over 65% of market dependence can be seen in North America
which is slowing down business at market area. Fluctuation in markets is also consider as one of the major issue for J.P. Morgan because
implementing policies is not being done in a better manner.
Opportunities:
 As in this current market scenario, business are growing in rapid speed and company are
getting various services and resources through which they can grab opportunities. J.P.
Morgan has set their targets of reaching to $102 trillion by 2020 which is about 6 percent.
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