Impact of Macro Environmental Factors on Business Structure

This report examines the influence of macro environmental factors on business organizations, focusing on the impact on organizational structure and functions. It explores different types of organizations, including public, private, and voluntary sectors, and their respective sizes and scopes. The report delves into the relationships between various organizational functions like human resources, marketing, finance, IT, production, and R&D, and how they contribute to achieving organizational objectives. A significant portion of the report involves a PESTLE analysis of John Lewis Partnership, assessing the positive and negative impacts of political, economic, social, technological, legal, and environmental factors on the company. Additionally, the report conducts an internal and external analysis of the organization to identify strengths and weaknesses and explains how these aspects interrelate with external macro factors. The analysis provides a comprehensive understanding of how businesses adapt to and are shaped by the broader external environment.

Macro Environmental
Influence

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
P1 Different kinds of organisations with purposes such as public, private and voluntary
organisation.................................................................................................................................3
P2 Size and scope of different kinds of business organisations..................................................5
TASK 2............................................................................................................................................6
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.......................................................................................6
TASK 3............................................................................................................................................7
P4 Positive and negative impacts of macro environmental factors that affects the organisations
structure.......................................................................................................................................7
TASK 4..........................................................................................................................................10
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses..........................................................................................................10
P6 Explain how strengths and weaknesses interrelate with external macro factors.................10
CONCLUSION .............................................................................................................................10
REFRENCES.................................................................................................................................11
Books and Journal.....................................................................................................................11

INTRODUCTION
Business environment is in a dynamic nature, because there are many factors that
influence the organisation (Bae and et. al., 2018). Factors that influence the organisation
structure and operations can be external and internal. External are not controllable whereas
internal factors can be control with the proper analysis of internal environment of organisation.
This report covers the types of business organisations that have different kind of size and scope
that depends on nature of their business. There are three kinds of organisation that run in the
marketplace such as private sector companies, public sector companies and voluntary
organisations. All these organisation gives the great contribution in the economic growth. All
firms having many different kinds of factors that can be analyse with the help of PESTLE and
SWOT. These tools helps to understand the behaviour of external and internal environment. In
this context, John Lewis Partnership is undertaken for the analysis of external and internal
environment. John Lewis Partnership is the UK based firm that dealing in clothing, cosmetics,
jewellary and many more products that has headquartered in Westminster, London. This report
covers the basic meaning of type of organisation and how their size and scope affects the
organisational goals and objectives.
MAIN BODY
TASK 1
P1 Different kinds of organisations with purposes such as public, private and voluntary
organisation.
There are mainly three kinds of organisation existing in the marketplace that have own
purposes. It is very essential for the internees that they should know the different kinds of
organisation that have own purposes. It is well explained in the following points:
Public sector organisation:
These type of organisations are managed and controlled by the governments of countries.
Government has the full control on public sector organisations and having full interference in the
decisions of organisations (Bila, 2020). They are mostly depend on the government decisions
and actions. In this respect, BBC is undertaken for the public sector organisation that has vast
broadcasting activities.

Purpose- The main objective of public sector organisations is to provide services at
enough profits that helps to run their business easily.
Legal structures- Public sector organisations lays three main bodies that are deciding the
legal structure of organisations (Crandall and et. al., 2017). The three main bodies are mentioned
below:
 Central Government: Public sector organisation are managed and controlled by the
central government such as Department for International Development, Environment
Agency, etc. These types of organisations are directly controlled by the central
government and they decide their legal structure.
 State Government: Those organisations that are doing functions related to the state then it
can be controlled and managed by the state government. Local Government: It include the legal structure of mainly municipal corporations that
involved the functions for local areas. It can be managed by local government.
Private sector organisations:
These type of organisations not depends on the decision of government, they have
separate legal entity that have own control. Private sector organisations has no interference of
governments so that they take their own decisions according to the business. In this context, John
Lewis partnership is undertaken in the respect of private sector organisations. It is the large
organisations that have supermarkets and many more products and services providing to the
customers.
Purpose- The main purpose of private sector organisations is to earn maximum profits.
Legal Structure- Their legal structure depends on the nature of business that are
mentioned below:
 Sole Proprietorship: It is the type of organisations that having a single owner and having
unlimited liability (Drumm and et. al., 2020).
 Partnership: It is the type of organisations that run business by two or more members and
sharing profits or losses according to the profit sharing ratio. They have limited liability
according to their invested capitals. Companies- Those organisations that are incorporated under the act of Companies Act,
2013. It can be public or private limited.
Voluntary organisations:

It is the type of organisation that doing charities and donations for the welfare of society.
National Council for Voluntary Organisations (NCVO) is undertaken in the respect of voluntary
organisation (Fredericq and et. al., 2019).
Purpose- The main purpose of voluntary sector organisation is to do social welfare rather
than making profits.
Legal structure- It can be mainly categorised in the following points:
 Unincorporated Association: In this type of organisation, they have common goal for
society welfare not making profits.
 Trust- They are the organisations that doing mostly donations so that they can help to
needed people.
From the above discussion it is analysed that every kind of organisations have separate
purposes and legal structure. It is very necessary for understanding the kinds and their legal
structure for internees.
P2 Size and scope of different kinds of business organisations.
Every type of organisations has different size and scope that helps to attain their
organisational goals and objectives (Galvin, 2020). Size and scope is very essential for achieving
the organisational goals and objectives because all of them have different functions according to
their size. It can be understand with the help of following description:
Public sector organisations: BBC is the worlds' largest broadcaster in terms of
employees. BBC has a very large size because they have many members that are working for
their organisations.
 Size- BBC has a very large size in term of business operations and their team members.
The number of employees that are working in the organisation approximately 35400 that
include both part time and full time members (Gao and et. al., 2018).
 Scope- BBC has a very vast and wider scope because it doesn't limit to the news
channels, they are providing many type other services such as BBC radios, TV channels
and online services.
Private sector organisations: John Lewis Partnership is the large supermarket that
provides products and services like clothing, jewellery and other financial services.

 Size- John Lewis Partnership has a very large size in terms of employees. Approximately
85000 employees are working in the organisation that is a huge number which effects the
organisation structure (Gryspeerdt and et. al., 2019).
 Scope- Their scope is very large because it gives many kinds of items to the customer for
satisfying their needs and wants. Their wider scope helps to achieve the organisational
objectives easily.
Voluntary organisations: This type of organisations has narrow scope. National Council
for Voluntary Organisations (NCVO) is undertaken for the this context.
 Size- Their size is narrow as compared to other organisations because they have
membership of approximate 14000 peoples that are willing to do charity.
 Scope- The scope is narrow because it is not easy for peoples that they do charities based
business (Hazen, Mollenkopf and Wang, 2017).
It is analysed from the above discussion that size and scope of business decides the
organisational goals that directly impacts on the organisational structure.
TASK 2
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
Organisations has many functions that performed by the employees and members of the
business. Functions that include recruiting, manufacturing and financing are all interlinked with
each other. These functions are generally integrated with each other that helps to achieve the
organisational objectives and goals (Hörisch, Kollat and Brieger, 2017). John Lewis partnership
is the large organisation that performs many functions which are mentioned below:
Human resource and marketing: Marketing is the field that requires skilful members of
the organisation that perform marketing job in best way i.e. they are able to identify and analyse
the market trend. Proper analysis of marketing trend helps to analyse the demands and desire of
customers that directly achieve the target goals and objectives. Human resource is the activity
that perform by the people and for the people. It recruit and select the right candidate that is most
suitable for the marketing job. Companies have separate department of HR but it is not necessary
that all companies have HR department, it just depend on the size of organisation. John Lewis
Partnership is a very large organisation that requires a large number of members to work in the

marketing department. They need very skilful and talented people that analyse the market trend
and consumers' taste and preferences.
Finance and Information & Technology: Information & technology is the important
concept in new digital marketplace. Because the upcoming world will be going on the digital
market trend that means every organisation use information & technology to ease the working
conditions in the organisations. John Lewis Partnership is the organisation that provides online
service that means they already use IT (Jiménez and et. al., 2017). It is very necessary for
organisation that they should innovate their products and services through the introduction of
new technologies. But it can be only done with the help of finance because money is the only
source to purchase some new technologies that makes their organisation unique.
Production and Research & Development: R&D is one of the important activity that
need by the companies to identify the new modification that can be available in their products.
John Lewis Partnership is the supermarket retail company that require a deep knowledge of taste
and preferences of customers so that they make their products and services to satisfy the
consumers' wants and desires. R&D helps to make the decision of regarding production in the
organisation. R&D gives the information of raw material that means what amount of inventory
needed for continuing their functions.
From the above discussion, it is analysed that all above mentioned functions are
necessary for achieving the organisational goals and objectives. It is also analysed that all
activities and functions are interrelated that helps to attain their organisation' goals and
objectives. It is very necessary for the organisation that they perform all functions nicely so that
it will not create any conflicts and doesn't stop any business operation functions.
TASK 3
P4 Positive and negative impacts of macro environmental factors that affects the organisations
structure.
Macro environmental factors are the external factors that should be know by the
organisations because each and every organisation has face unknown happenings during their life
(Little, Lee and Nair, 2019). To run the business successfully it is necessary for the organisation
that they have to analyse the dynamic nature of environment, so that they cope up with upcoming

situations. It can be better understand with the help of PESTLE analysis of two organisations that
are mentioned below:
PESTLE analysis of John Lewis Partnership
Political factor- It is the factor that include the stability of country's political conditions.
UK has now in peaceful conditions in term of political stability. John Lewis Partnership is the
private sector company that can be influence with the UK's political situations.
 Positive Impact: UK government taking decisions that they reduce the corporation tax
from 30% to 28% which means that John Lewis Partnership gain more profit (Mariak and
Kurpińska, 2018).
 Negative Impact: For example, if the UK has not in stable position then they have not
clear informations and guidance regarding of taxes and policies then it will face negative
impact.
Economical factor- It includes the financial stability in terms of economic growth of
particular country. John Lewis Partnership is the large company that gives the great contribution
in UK's GDP.
 Positive Impact: John Lewis is large organisation that generate higher profits which
helps to cope up with recession of UK.
 Negative Impact: UK facing recession in their economic conditions that becomes the
adverse situation for John Lewis Partnership because they are now down their prices.
Social factor- The factors that include the customs, religions and culture that affects the
organisation structure.
 Positive Impact: John Lewis Partnership should introduce new products for capturing the
opportunities that created through the shifting of consumers' goods.
 Negative Impact: It can be negative when the company doesn't take steps for
opportunities (Masama, 2018).
Technological factor- It includes new innovative technologies that are emerging due to
the up gradation in technologies. John Lewis Partnership is serving services online.
 Positive Impact: To introduce new techniques in their organisation give a positive effect
as it attracts the customers.

 Negative Impact: John Lewis Partnership is not so much on internet shopping so it will
create problems in terms of sales.
Legal factor- All activities that perform by John Lewis Partnership should be legal that
means they did not face any lawsuits (Nuapia and et. al., 2020).
 Positive Impact: The company has followed all rule and regulations such as employment
law, consumer right acts, etc.
 Negative Impact: When company are not adhere the important rules and regulations then
they have to face repercussions.
Environmental Factor- It basically related to CSR policy that means the company should
do activities that are in favour of society.
 Positive Impact: John Lewis Partnership is the company that made clothes through
natural renewable products and services. Negative Impact: It can not take much focus on society welfare as their main objective is
to earn profits.
PESTLE analysis of BBC
Political factor- BBC is the broadcasting company that provides broadcaster services to
the public. BBC is the independent firm that regulated by the government which get influence
through political stability.
 Positive Impact: It can be positive for BBC because it is the public sector organisation
that definitely gets priorities (Song, Sun and Jin, 2017).
 Negative Impact: If the political situations are not stable then BBC get negative impact
because it is regulated by government.
Economical factor- BBC contributes a very large proportion to the GDP because it
serving the services to wider population.
 Positive Impact: BBC convert their organisational structure through centralised into
decentralised. That means it get positive impact on their economic conditions.
 Negative Impact: UK face recession so they face negative impact due to the downing in
prices.
Social factor- BBC provides broadcaster services in many languages that means they get
affected by the social factors.

 Positive Impact: They provide web portals in many languages that means that they are
following many religions, customs, etc (Vezzulli and et. al., 2016). Negative Impact: BBC is not in a single country, it is the multinational company that
provides services to many countries. So they can affected by many of the social factors.
Technological factor- BBC is the technology based company that requires new techniques so
that they can provide broadcasting services at reasonable prices.
 Positive Impact: They use many upgraded technology for distributing the broadcasting
services to the consumers. Negative Impact: It get be negative, when the company doesn't follow new techniques
and they follow obsolete technologies which reduce the productivity and profitability.
Legal factor- BBC is the public company that has to follow many rules and regulations.
 Positive Impact: It can be give positive when BBC follows all rules and regulations. Negative Impact: Because it is the broadcaster company, they have to follow many rules
and regulations that create the problems of many lawsuits.
Environmental Factor- They are the factors that BBC should follow only with the right
information providing in the news channels to the audiences.
 Positive Impact: It get positive when BBC gives right information so that consumers get
trust on them.
 Negative Impact: BBC get be negative impact because of the upcoming competitors.
From the above discussion, it is analysed that macro environmental factors have both
positive and negative impact on the organisations.
TASK 4
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
SWOT analysis is the most commonly tool that helps to understand the internal strengths
and weakness. It can be better understand with the help of SWOT analysis of two firms that are
mentioned below:
SWOT Analysis of John Lewis Partnership
Strengths Weaknesses
 John Lewis partnership has high online  As compared to supermarket the range

presence which helps it in getting more
and more customers.
 It focuses on creativity and innovation
which strengthen and robust its growth
strategy and also helps in extensive
product offering.
 Its staff of over 3500 employees is also
a strength for the organisation (Yin and
et. al., 2018).
of items offered to customers are
limited.
 Higher prices than stores limits its
target group of customers.
 Organisation has inconsistent profits.
Opportunities Threats
 Organisation has high scope of opening
more physical stores in the market as
popularity of brand id increasing.
 Increasing brand demand also increase
demands for private labels which helps
company to grow more.
 As the youth is focusing on healthy
food so they want to go behind the
brand only because of trust issues
which open doors for the organisation.
 Their is an intense competition between
the organisation and supermarkets or
grocery stores.
 The changing laws and regulations
should be rigorously followed by the
organisation.
SWOT Analysis of BBC
Strengths Weaknesses
 BBC has its old reputation of largest
broadcaster which makes him a brand
and is a biggest strength of the
company due to which they know every
pulse of journalism and always tend to
bring new and updated things for the
public.
 News covered have sometimes biased
perspective which led to raise
controversies against the company.
 There are lack choices with the
customers as there is low product range
which can give a chance to new
competitor.

 Their advanced marketing strategies
and technology helps them to be one
step ahead always.
 BBC's strength are its employees, they
have a staff of about 23000 employees
with 2,000 journalist globally.
 They maintain their bureaus in 44
foreign countries and cover over all 240
countries with their correspondents.
 Structure of organisation is compatible
for only present business modal which
limits the expansion and growth of
BBC.
Opportunities Threats
 There is an opportunity for BBC to
serve unbiased to the public which
helps them to be strongest in the
market.
 The new taxation policy can impact the
business of BBC significantly by
opening new opportunities.
 There is an opportunity for BBC to
have more correspondents and to cover
global events with proper analysis.
 BBC can even organise some global
events to strengthen its brand name and
image.
 Newspapers are a threat for BBC as the
general public preferred to read
newspapers.
 There is a strong competition for BBC
in the market which is a threat for
company's growth and sometimes
sometimes it gets disturbed too.
 There are so many other domestic
channels emerging in the market which
decline the company's viewership.
 As it is a global organisation, so
shortage of skilled workers in any
global market led to a threat for the
growth of BBC in that market.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
Political factors: Companies strengths and weakness are very important for dealing with
political factors. John Lewis is the private sector company that are not getting priority as
compared to public sector organisations. This weakness gets trouble the organisation.

Economical factors: John Lewis is generating lots of profits that strengthens the finance
part of the company that helps to invest in many other funds. It directly helps to deals with
recession of UK.
Social factors: John Lewis provide a wide range of products and services that becomes
the strengths of company and help to deal with social factors such as customs and traditions.
Technological factors: The company is not so up graded with the technologies that
becomes the weakness of John Lewis. This weakness gives the problem of reducing sale because
customers are getting more technological up graded.
Legal factors: The company have not record of past lawsuits that really boost their
strengths and deal with legal status.
Environmental factors: John Lewis make their products through natural renewable
resources that helps to make their strengths more stronger. It helps to build the trust of customers
that they fulfil their CSR policy.
It is analysed from the above explanation that strength and weakness are interlinked with
the macro environmental factors. That means both are helping to deal with the external
environment.
CONCLUSION
It is concluded from the above explanations that PESTLE and SWOT analysis gives the
great help to understand the macro and micro environmental factors. It helps to being aware the
possibility of upcoming unknown happenings to deal with them. Both tools are very essential for
the organisations' success and failure. PESTLE helps to analyse the external environment
whereas SWOT helps to understand the internal environment. From this report, it is also
concluded that strengths and weakness are interlinked with macro environment factors. Strengths
are helpful for dealing with the external environment and whereas weaknesses are can be
improvise and turn into strengths.

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