Business and the Business Environment: A Report on Marks and Spencer

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Business and the Business Environment
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Table of Contents
Introduction................................................................................................................. 3
LO1............................................................................................................................. 4
LO2............................................................................................................................. 7
LO3........................................................................................................................... 10
LO4........................................................................................................................... 15
Conclusion................................................................................................................ 18
Reference list............................................................................................................ 19
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Introduction
The organisations need to analyse the external as well as internal factors that are
influencing their business so that effective strategic business plan can be made. This
study will highlight the scope and size of the public, private and voluntary
organisations. In addition to this, the legal structures of these organisations will be
discussed here. PESTLE model will be applied here to evaluate the negative as well
as positive impacts of external environment on business operations of Marks and
Spencer (M&S).
Moreover, the internal factors analysis of this organisation will be performed with the
help of SWOT model. Marks & Spencer is a British retailer having stores in more
than 1463 locations. The revenue of the company in 2019 is £10,377.3 million
(marksandspencer.com, 2019).
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LO1
Explain three different types of organisations their size and classification to
highlight the differences among them.
As per the viewpoint of Gomez and Gambo (2016), three types of organisations are
there such as profit venture, not for profit venture and non-government
organisations (NGO). Discussion on various types organisations are followed by-
Element Public Private Voluntary
Concept The main aim of
this type of venture
is to bring social
development so
that healthy life can
be lead by the
people. Earning
profit from
business is not the
goal of this kind of
venture (Bryson,
2018).
In the profit
ventures, the
primary focus is
provided towards
profit generation so
that the ventures
are able to
generate their
revenue from their
business (Gomez
and Gambo, 2016).
This type of
organisation is kind
of institutions,
where support is
provided to the
individuals, if
required, so that
they can lead their
life properly
(Bryson, 2018).
Size Large / medium Small-medium /
large
Large/medium
Scope The scope of these
ventures is to fulfil
the demand of
customers related
to their healthy
living such as
innovating new
technology, new
invention in
science, providing
security to the
people and many
others. It also helps
to develop the
society effectively.
These
organisations try to
fulfil the daily
requirements of the
customers such as
clothes, home wear
and many others.
Therefore, form-
fulfilling demand of
customers, the
organisations focus
on increasing their
sale and it
generates
organisational profit
as well.
This type of
venture tries to
provide support to
the people, who
are suffering from
different diseases
such as cancer,
autism and many
others. These
institutions try to
remove diseases
from the people,
where the ventures
provide their
services.
Legal structure Partnership legal
structure is
generally followed
Partnership, sole
trader, joint
venture, limited
liability company,
and others
Cooperative
structure is
maintained in this
type of
organisations.
Key stakeholders In traditional type,
no shareholders
were there in this
business.
Customers,
employees,
suppliers,
shareholders,
Donors, owners
and partners are
the stakeholders
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However,
government and its
agencies is the
stakeholder in this
type of business.
union are the
stakeholders
Example Ministry of
Defence is the
example of this
type of business.
Marks and
Spencer (M&S) is
the instance of this
venture.
Cancer Research
UK is example of
this type of venture.
Table 1: Three types of organisations
(Source: Created by Learner)
In order to provide the example of public sector, Ministry of Defence is selected.
This department is responsible for providing security to the people of UK. It is a
large sized organisation and their employee strength is around 56860 as per the
assessment of 2016. The annual budget of this venture is around £52 billion. They
follow partnership legal structure and partnership with various agencies is
monitored in this type of business (gov.uk, 2019).
On the other hand, M&S is the instance of private sector. Their scope is to generate
profit by providing products as per requirement of customers. They offer various
products such as cloths and foods, which help to meet the requirement of customers.
The organisation follows public limited company structure in order to operate their
business. They serve for worldwide and they have branches in 1463 locations. The
number of workers is around 80787 and in 2019, their revenue is around
£10,377.3 million. From this evidence, it is clear that it is a large-sized organisation.
Customers, suppliers and employees are the main stakeholders of this venture
(marksandspencer.com, 2019).
In case of voluntary organisation, Cancer Research UK is chosen and their motto is
to minimise the attack of cancer among the people so that people of UK can lead a
healthy life. 3964 employees are there and 40000 volunteers work in this institution.
Their revenue is around £634.81 million and it indicates that organisation is under
small-medium sized venture. As it is a charitable venture, cooperative legal
structure (NGO) is followed (cancerresearchuk.org, 2019).
Analyse how the structure, size and scope of different organisations link to the
business objectives and product and services offered by your chosen
organisation.
The main market considered in this part is the UK segment. it is a major aspect to be
considered as well. Size of an organisation is dependent on the employee numbers
and the amount of revenue generated (Budhiraja et al., 2019). The bigger the size,
the better the services and revenue generation can be observed. For example, M&S
has a good market concentration and support. The size of other organisations from
the market in the same genre is different and they have a proficient impact on trade
management process. The scope of M&S has potential to earn more from the market
but other organisations like Burberry, Tesco and others have consumed a significant
amount and made changes in the system. The structure of the companies is
associated with market demand, in this case, the structure will define whether the
market is getting a good amount of return on investment or not (Bonnefoy-Cudraz et
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al., 2018). Therefore, it can be illustrated that if the company has a good size, scope
in the market then the possibility of having netter market concentration is higher than
estimation.
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Chief Executive
Marketing departmentHRM
Board of directors
Customer manager
Employees
Product development department
LO2
Explain the various functions within the business and create an organisational
chart to demonstrate the interrelationships between different functions and
how they link to organisational objectives and structure
The following depicts the organisational structure of M&S:
Figure 1: Organisational chart of Marks and Spencer
(Source: Created by the learner)
The diagram above has depicted the organisational structure of Marks and Spencer.
The following describes the functions of each of the departments along with their
interrelation with each other:
Chief executive
The chief executive has the top most position in the management of M&S and
therefore has detailed comprehension of the various influential roles as well as
responsibilities in the major decision-making procedures of the organisation. The
chief executive has the responsibility to manage various operational procedures that
keeps the organisation propels its way into the labyrinth of the highly competitive
market. As per the knowledge provided by Wheelen et al. (2017) There are several
resources including technological as well as financial resources that have to be
maintained by the executive in order to ensure that the organisation prepares for the
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incoming impacts due to several external factors such as political, economical,
technological, as well as environmental factors.
Apart from this, being the leader of the organisation, the chief executive of M&S has
to ensure that the employees are motivate as leaders inspires the employees and
motivates them that helps in increasing the productivity as well as efficiency of the
employees. The chief executive has to be informed regarding the various issues that
are faced by the employees as well as from both the external as well as internal
stakeholders of the organisation. This allows executive has developed several
strategies that allows them to mitigate the internal issues of the organisation and has
to ensure that the stakeholders are satisfied. Furthermore, the varied sources of
information related to the markets also need to be analysed by the executive in order
to ensure that the position of the organisation is stable in the existing market.
Board of directors
There are several laws, legalisations, as well as policies regulating the trade and
commerce of the organisations operating in UK. These laws have to be followed by
the organisation or they have to face significant penalties. Therefore, the board of
directors has to ensure that the decisions that are made by the organisation ensure
that the organisation has an alignment of the laws as well as regulations that are
passed by the government. According to David and David (2016), one of the primary
roles of the board of director is to ensure that the organisation is to ensure that the
affairs of the business and meet the needs as well as requirements of the
stakeholders of the organisation. Therefore, they have to play a crucial role in the
decision-making procedures and have to provide advices to the chief executive as
well.
The board of directors also has to review the organisational structure of the
organisation. The directors also have to acquire a detailed knowledge of the needs
as well as requirements of the stakeholders of the organisation and ensure that the
organisation develops a suitable strategy that caters the demands of the
stakeholders and keeps the affairs related to the organisation remains feasible.
Human Resource Management
The HRM has the responsibility of managing the moist valuable assets of an
organisation. According to Wheelen et al. (2017), the employees are regarded as the
most valuable assets to organisations as it is their intense hard work that allows the
organisation to propel the strategy in to action. The Human Resource Management
has to recruit talented individual from the pool of candidates and ensure that they are
provided with suitable training as well as an intense orientation. Training allows the
freshly recruited employees to gather an in-depth knowledge of their roles as well as
responsibilities for the betterment of the organisation. In addition to this, they have to
ensure that the employees are provided with a suitable atmosphere within the
workplace that promotes the growth of productivity as well as efficiency.
Apart from this, the HR professionals have to motivate the employees and have a
detailed record of the major transactions of the organisation including the
expenditure on the salaries of the employees along with business transactions. The
leaders of a business highly depend on the records of HR and HRM has to play an
essential role in the decision-making procedures as well.
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Marketing department
The marketing department has to ensure that the promotion of the products as well
as services are strategized that allows M&S to reach the vast population. According
to Cacciolatti and Lee (2016), a viable use of the social platforms allows retail
industries to reach a vast amount of customers in a cheap cost. Furthermore,
posters, TV commercials, as well as Newspaper advertisements are some of the
procedures that are applied to promote the products as well as services of the
organisation. The marketing department has to ensure that the preferences of the
customers are analysed and convey the information to the product development
department.
Product development department
The products as well as services of the M&S have to be developed according to the
taste and preferences of the customers that consolidates the existing trend in the
market. According to Goodman (2019), the marketing department has to deliver a
vivid portrait of the existing trends in the market as well as the preferences of the
customers. This allows the product development department to develop suitable
designs that can satisfy the randomly changing demands of the customers and
ensure that the organisation develops a suitable competitive advantage.
Analyse the advantages and disadvantages of the interrelationships between
organisational functions and the impact that they can have upon
organisational structure
The following table depicts the advantages as well as disadvantages of maintaining
interrelationship between various departments of M&S:
Advantages Disadvantages
Increases team strength Chance to raise conflicts
Build trusts among the employees Wastage of time
Better understanding the job roles Decreases flexibility and innovation
Validation of the operational procedures Affect decision making procedures
Table 2: Advantages and disadvantages of interrelationships between various
departments of M&S
(Source: Created by the learner)
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LO3
Use PESTLE to identify the positive and negative impact the macro
environment has upon the business operations of your chosen organisation.
Elements Positive impact Negative impact
Political As per Companies Act
2006, the organisations of
UK have to share their
business information with
their stakeholders so that
they can be able to avoid
any type of organisational
conflicts
(legislation.gov.uk, 2019).
M&S can mitigate internal
conflicts among the
stakeholders by following
this legislation.
Moreover, the managers
of M&S need to be
restricted to use financial
resources of the company
for their individual
purpose. The
management has to follow
the Government policies
and regulations related to
the retail industry
otherwise they require
facing legal issues.
In case if the business
information will be shared
with every stakeholder of
the company then
protection of the sensitive
data cannot be
maintained. For this
reason, while sharing data
the management has to be
careful that the sensitive
data sets are secured
among them.
Economical In UK, it is found that 8.61
million individuals aging in
between 16 to 64 years
are unemployed
(tradingeconomics.com,
2019). M&S would be able
to recruit labour from UK
and as a result, their
productivity would be
increased.
It is seen that in 2019 the
rate of corporate tax is
19% in UK (gov.uk, 2019).
Due to this reason, the
management of the UK
organisations are
encountering major
difficulties while they are
going to invest on their
business. The higher
authority of M&S is also
facing the similar issue at
the time of investing
financial resources for
their business
development.
In addition to that, the
employees are also
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unable to get their
expected employment
benefits due to poor
financial condition of their
company. After that, the
satisfaction level of the
employees can become
lower and productivity can
be affected.
Social As commented by
Velásquez and Meunier
(2017), it can be said that
the company has to offer
products based on their
preferences so that they
can show their interest to
purchase the developed
products. In context of
M&S it can be seen that
the organisation is offering
in-house food products for
the customers of UK
market. People are
nowadays are highly
concerned regarding their
health. For this reason
The employees are using
fresh ingredients while
preparing the foods.
Moreover, they are
analysing the cultural
preferences of the
consumers so that people
from different culture can
be able to get the foods as
per their expectation.
In this way, the company
is making a strong image
in the target market that
would be beneficial for
them to reach new
customers.
In addition to that, the
company has taken
decision to introduce
diversification in the
workforce. As a result, it
would be easy for the
company to fulfil the
requirements of the
M&S can encounter
challenges to fulfil the
changing preferences of
customers of UK. Due to
lack of skills of the
employees, the company
cannot be able to cope
with the changing needs of
their target customers.
Furthermore, the company
has to be involved in
continues improvement of
their products and
services to maintain their
brand image.
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consumers of different
background.
According to Nandonde
(2019), the organisational
management can provide
employment opportunity to
every individual instead of
focusing on his or her
background. M&S is
committed to offer
employment to everyone
having sufficient skills and
knowledge. In case if the
employees are not, getting
equal treatment from the
organisation then their
motivation level would be
lower.
Technological As stated by Cleary and
Quinn (2016), the
organisations have to
adopt modern techniques
within their workplace so
that the delivery of
services can become
faster. M&S is giving
online transaction as well
as product ordering facility
to the potential customers.
They can order product
from the official website of
this company and get the
delivery of product as
soon as possible. Cloud
technology can also be
beneficial for the company
to store their business
information. Moreover, the
staffs can access the data
at any time from any place
to make sure that no delay
occurs in their business
activities. Then their
customers would also be
able to get the service
delivery on the expected
time.
On the contrary, Opara-
Martins et al. (2016)
argued that, if the
organisations are highly
dependent on modern
technologies then there
could be the chances of
cyber attack. The cyber
attackers can implement
attack on the database of
the company by injecting
malware or spyware in the
organisational system.
Legal Consumer Protection Act
1987 indicates that
maintaining safety of the
Sometimes customers
provide wrong information
to the other consumers
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