Business Environment Report: Impact of Macro Environment on Business

This report provides an analysis of the business environment, examining the different types, sizes, and scopes of organizations, with a particular focus on Hilton Hotel. It explores the interrelationship of various functions within an organization and how they link to business objectives and structure. The report investigates the positive and negative impacts of the macro environment on business operations, and includes both an internal and external analysis of Hilton Hotel. Strengths and weaknesses are examined in relation to external macro factors. The report also covers public, private, and voluntary sectors as well as legal structures and provides a comprehensive overview of the key aspects of business operations and the external factors that influence them.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P 1 Covered in PPT................................................................................................................1
P 2 Covered in PPT................................................................................................................1
TASK 2............................................................................................................................................1
P 3 Relationship between organisational functions and objectives and structure..................1
TASK 3............................................................................................................................................4
P 4 Positive and negative impacts of macro environment on business operations................4
TASK 4............................................................................................................................................5
P 5 Internal and external analysis of Hilton Hotel.................................................................5
P 6 Strengths and weaknesses interrelate with external macro factors .................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Atmosphere of business organisation plays a vital role to achieve goals and objectives of
profit maximisation as well as revenue generating. Each firm varies from another on basis of
size, type and scope which decides their share in market. There are different types of enterprises
like public, private and voluntary sectors and legal structure. Scope of form is interrelated to
business target as it helps in accomplishing them (Frue, 2017). Functions of company are also
connected with firm structure for Hilton hotel which is a well known and leading organisation in
service industry of United Kingdom. It has advantages and disadvantages which can affect
ultimate outcome. Being a big brand, it has to manage a sound and healthy environment at
workplace for employees so that they can put their maximum efforts to get customer satisfaction.
As they are main asset of company, every single factor outside from firm like political,
social, technological, economical, environmental and legal which have a huge impact on
functioning and decision making of mentioned company. In following report external as well as
internal analysis to identify strength, weakness, opportunities and threats as SWOT in long term.
These internal aspects are interrelated to macro environment, so they must be considered in
detail. Business operations are influenced by them in a positive and negative way. If company is
strong enough to compete in service market, it will survive even get affected by government
policies in long term. So different kind of elements will be explained in report that can be game
changer in achieving short term and long term target.
TASK 1
P 1 Covered in PPT
P 2 Covered in PPT
TASK 2
P 3 Relationship between organisational functions and objectives and structure
Every business firm has its own specific aspects which are executed to accomplish
objective and goals in future. For example, Hilton Hotel has a formal structure which is
connected to its functions (Klapper, Lewin and Delgado, 2011). They also have a huge impact on
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businesses environment and consequently employees and customers. An organisation chart is
here to show different function of Hilton Hotel:
Source: Organizing human resources. 2017.
Followings are some major functions of company.
 Research and development-Mentioned firm conducts time tom time survey to estimate
demand of market and employees requirements so that it can provide the same. Being a
leading brand in service industry of United Kingdom, Hilton Hotel tries to offer a
customised service to its consumer to satisfy them and retain them in future. On other
hand, for worker happiness, it provides them different types of facilities and healthy
atmosphere to help in increasing their productivity in long term. This team is working to
develop more benefits for their customers which can help to them to provide better
comfort to their customers. It is related with the marketing and human resource
management department, according to the informations of the marketing team it works to
develop more better working things by implementing on their employees.
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Illustration 1: Organisation Chart of Hilton Hotel.

 Sales-This a ultimate target function of company through services to customers. As it
captures a lion share of industry, it tries to uplift its quality so that maximum customers
buy It (Iskanius, Page and Anbuudayasankar, 2010). To achieve this goal, the mentioned
firm adopts an efficient and effective marketing strategy to provide healthy environment
and increase sales.
 Production- For a well maintained business structure , there has to be a managed
production which is a major function of Hilton hotel of United Kingdom. On other hand,
it must recruit skilled workers who can uplift quality of service as well as quantity to get
maximum customer satisfaction in future. It may lead to profit and revenue generating at
most.
 Human resource management-This is also an crucial function of every business
organisation especially in service sector of United Kingdom. If they are not effective and
skilled in service delivery to consumer then it may harm image as well hinder growth of
company. So it is interrelated to structure of firm. For example, recruitment and selection
process in service sector play a vital role in organisational structure and its objectives
(Ishengoma and Kappel, 2011). If there is no effective process, it may weaken
performance of firm and no satisfactory service will be delivered to consumers. All of
the staff members which working in different teams like service, dining and others are
related with the HRM which provide a support to better work them in their field.
 Finance-Without any funding or investment, no business organisation can survive in
future. It is interrelated every single element of company like stakeholder, production,
service ans structure. For example, Hilton Hotel is a big brand in service industry so it
gains a lot of monitory support to operate activities with smoothness. It has a he turnover
in service sector in comparison to other firms, so there is no shortage of financial support
to operate with ease. On other hand, enough finance leads to more satisfaction among
employees and their morel is increased. Thus there are many different functioned of
company which affect firm structure in long term. It is related with the marketing
department according to the information for market demands it will make provision for
the future to manage their demands and capabilities accordingly.
To keep these two elements positive, firm has to make efforts to create a healthy and
energetic atmosphere at workplace. Particular company has its unique features of functions
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which are different in various structure (Siewiorek, Saarinen and Lehtinen, 2012). For example,
sole proprietorship and partnership are main structure of companies in United Kingdom. If these
functions are not considered by higher officials then it may decrease profit margin and customer
satisfaction in future.
TASK 3
P 4 Positive and negative impacts of macro environment on business operations
Marco environment is market situation outside of firm in which various different factors
are described as political, economical, social, technological, environmental and legal (Hazlina,
Ramayah and Kummerow, 2010). If company needs to keep a smooth functioning in its service
delivery to customers then it must consider these all important elements. They can have positive
as well as negative impact on business operation as followings.
 Political factor-This is one of most crucial aspect which influences company code of
conduct and consequently its operations. For example, being a well known brand in
service industry, Hilton Hotel get affected by change in policies and procedures by
government authorities. Sometime there is changes in business rules which increase profit
margin or liberty in company. On other hand, restriction in few operations can make it
difficult for firm in future.
 Social factor-As service industry is depend on people which are related to it. For
example, employees, customers, and social culture, value affect business operation.
Hilton hotel must provide its service according to culture of people in which it operates
its business otherwise there will be no welcome and can decrease goodwill of firm
(Hamilton and Webster, 2015). If company delivers a particular service which is against
belief of society then it will not benefit at all.
 Economical factor-This is an important part of macro environment which plays like a
game changer for business organisation like Hilton Hotel. Positive situation of market
will uplift growth of company, on other hand, slowdown can lead to loss occurrence in
future. For example, recession decrease sales in industry which may affect business in an
negative way. But inflation can attract more money in market and consequently increase
amount of revenue of firm.
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 Technological factor-A company can get affected by changes in technology as there are
continuous new inventions which helps in delivering services in more effective and
efficient way. It may lead to customer satisfaction and profit in long term. For example,
accommodation and different luxurious services can be upgraded with technical support
and enterprise will take competitive advantage in comparison to others. On other hand, if
company is not able to keep updated then it can decrease goodwill in sight of customers.
 Environmental factor-As environment is a foundation of every business organisation, it
is a major factor of macro and must be considered by firm (Halbert and Ingulli, 2011).
For example, Hilton Hotel uses many different natural resources for delivering its
services to customers. Although there is enough water , crude oil and land for operating
its business smoothly but over all amount is very less for world. So if there is any
shortage of them , it can stop processing further and make it difficult to compete in
market.
 Legal factor-This aspect is also a major part of macro environment which plays a vital
role in operations and activities of firm in an negative as well as positive way. If there is
any changes in rules and regulation related to working condition, enterprise also has to
obey and modify its code of conduct (Granger and Schroeder, 2013). For example, there
can be no discrimination with worker or customers at workplace on basis of skin colour,
language, religion and gender. On other hand, these rules helps in creating a positive and
healthy atmosphere in firm to get maximum satisfaction in people who are related to
company. Thus these various factors of macro environment have their own different
impact on operations and decision making of organisation in long term.
TASK 4
P 5 Internal and external analysis of Hilton Hotel
As it is a big brand in service industry of United Kingdom, it has a huge power in term of
goodwill and established image. Internal environment includes four major aspects like strength,
weakness, opportunities and threats of company which helps in understanding exact position of it
in service sector (Fernando, 2011). On other hand, external analysis of mentioned firm includes
PESTEL that contains several factors like political, social, economical, technological,
environmental and legal. SWOT analysis can be described as below.
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Strength of firm-As being a leading firm Hilton hotel is on very strong place in service sector.
It has a huge turnover which makes it more powerful in comparison to other enterprises. Being a
well known brand, it provides highly quality services and product to its customers which leads to
maximum satisfaction and goodwill in market. Another strength of mentioned company is that it
has worldwide operations wand covers a huge number of clients from different countries. Due to
multi nationality, it has divided profit and risk in business (Siewiorek, Saarinen and Lehtinen,
2012). Risk of currency values is also less due to different value in specific nation. It is run by
experiences management which makes it competitive. It has a broad portfolio in which it offers a
wide range to customer in comparison to other competitor firms. It has great relation with travel
advisor which helps in increasing number of customers in long term.
Weakness of Hilton Hotel-It has limited market share in service industry of all over the world.
As it is a multinational brand in hotels, host country has huge impact on its business. For
example, if there is any changes occurred in government policies, operation so of firm are
drastically affected in long term that can stop further growth. Sometimes it got high level debts
which put it to risk for future to run (Craig and Campbell, 2012). Although there is a wide range
of product ans services with variety but still it has less part of real market. There is lack of
flexibility due to large size of company. Over dependence of operation on country environment
as society attitude and legal rules which can foster or hinder progress of hotel in future. So it may
fluctuate target accomplishment of profit maximisation and revenue generating.
Opportunities of Hilton Hotel-As there are many sectors in which Hilton hotel can grow due to
great reputation in sight of customers all over world,chances to dominate international market are
also high. It adopts various innovative methods to provide best customers services to get
maximum satisfaction and retention in long term (Yu and Ramanathan, 2012). Another
opportunity of the firm is that it utilizes latest technology in services so that its employees can
easily give their full efforts to achieve organisational goals. So digitalisation will help in
capturing a lion share in service industry in future. It has reduced its sales force which is also a
potential aspect for future. Global hospitality sector is one of most growing sector all over world.
Threats of Hilton Hotel-One of major potential damage can be occurred due to many new
entries in service industry in current time (Commander and Svejnar, 2011). For example,
increased number of competitor can decrease demand of particular product or services of Hilton
due to equal quality. Global economic downturn can lead to weak business in future. If any
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country faces political instability then company will also suffer from loss in term of number of
customers and quality of services. Today, terrorism is major threat to all kind, so it stop
development of every kind of industry including service sector. So economic and political
turbulence may weaken growth of hotel in future. Rising rate of airfare may also affect business
of service industry as it make all facilities more costlier for customers. Thus there are many
aspects which are considered as strength, weakness, opportunities as well as threats to mentioned
firm in long term.
P 6 Strengths and weaknesses interrelate with external macro factors
Being a leading brand in service industry, Hilton Hotel has its own strength and weakness
which is connected with external factors like political,social, legal, technological,economical and
environmental (Chow, Erving and Ying, 2012). Higher officials of firm take decision for
business benefit which are based on internal as well as external factors. Positive ans negative
aspects and their relation with these macro environment elements can be described as below.
One of major factor which must be considered while making decision about operations is
political stability. If there is continue changes in government rules and regulations to run a firm
then company will also have to modify its policies which may lead distraction from long term
target. Strength of form is related to it as stable political situation can help it to focus on main
objectives. On other hand, the mentioned enterprise gains benefit for it by making strategies to
grow. Another external factor is market condition which is related to company strength and
weakness. For example, Hilton Hotel gain competitive advantage in recession through slow
downing its rates and on same time, value of money is increased.
Another external or macro environment factor which should be considered to relate with
strength and weakness of firm is competitors (Chavis, Klapper and Love, 2011). For example, if
competitors offers low rate then it also has to decrease its services cost to compete in industry in
future. Strength of mentioned company is that it it offers best quality with reasonable rates to
customers which makes it strong and have goodwill in sight of them. Another factor in macro
category is environment which can affect strong and weak side of firm. For example, Hilton
Hotel tries to make sure that there is no harm to environment by its operations. It minimizes use
of natural resources. On other hand, company executes its corporate social responsibility through
helping poor class of society.
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Another macro factor is technology which affect strength of firm as changes in
technological environment make the hotel use of latest equipment in delivering services and gain
competitive advantage in long term. Government intervention can also weaken operations of
company. For example, if authorities of host country always controls all activities, operations
and decisions then there will be difficulty to run business smoothly (Botha, Kourie and Snyman,
2014). Weakness of firm is that it gets negatively affected by continue changes in elements in
nation in which it operates. Legal factor also plays a crucial role as every business organisation
like Hilton has to obey all requirement of rules and regulations to create sound atmosphere at
workplace. So that its employees and customers will be satisfied and worker productivity would
be increased in future.
Economic factors may increase cost of product and services of mentioned firm and
consequently profit in future. For example, if there is hike in over all market then raw material
will also be expensive and it may lead to high rate for delivering services to consumers. If there
is any further law is applied on all business organisations of hotel industry by United Kingdom
government then it will affect existing performance in a positive as well as negative way
(Björklund, 2011). Thus there are many elements of macro environment which are interrelated to
strength of firm and its weakness too.
CONCLUSION
From above report it can be concluded that business environment plays crucial part in operating
form activities and tasks to achieve organisational objectives of profit maximisation and revenue
generating. It is different from small to big company as they have their own specific functions
and structure. Employees are influenced by atmosphere, procedures and policies which are
followed by company. Government rules at national level and legal component also can hinder
or foster growth of firm. Being a leading firm in service sector, Hilton hotel must consider
environmental and social factors so that it can make a good image in sight of customers in long
term. Along with these above elements, recession or inflation in market and changes in
technology are also a main impactors on process of organisation. So it should create a healthy
environment at workplace so that customers and workers can be satisfied and retained in future.
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REFERENCES
Books and Journals
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