Impact of Business Environment on Marks & Spencer: A Detailed Report

This report examines the business environment of Marks & Spencer (M&S), a UK-based retail organization, analyzing its structure, purposes, and legal frameworks within the public, private, and voluntary sectors. It explores the size, scope, and stakeholder relationships of these sectors, focusing on how these factors influence M&S's operations. The report delves into the impact of organizational structure and size on meeting business objectives, and it examines the interrelationships between various functional departments within M&S, such as finance, marketing, and HR, and their effects on organizational structure. Furthermore, it provides a detailed analysis of the macro-environment through the PESTLE model, and the micro-environment through SWOT analysis, evaluating their positive and negative impacts on M&S's business operations. The report concludes with a critical evaluation of how these environmental factors influence the company's business objectives, highlighting the importance of adapting to both internal and external influences for sustained success. The report also contains tables and illustrations to show the data.

BUSINESS AND THE
BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
SECTION 1......................................................................................................................................1
P1) (a) Purposes and legal structures of different sector organisations......................................1
P2) (b) Size and scope of organisation's structures.....................................................................3
M1) Impact of structure and size of organisation to meet business objectives...........................5
P3) (c) Relations between various functions of Marks and Spencer..........................................6
M2) Advantages and disadvantages of interrelationships between organisational functions and
their impact on organisational structure......................................................................................7
D1) Critical analysis of different types of business structures and interrelationships of
organisational functions..............................................................................................................7
PART 2............................................................................................................................................7
P4) (a) Positive and negative impacts of macro environment on business operations of M&S. 7
M3) PESTLE model to support detailed analysis of macro environment..................................8
P5) (b) SWOT and PESTLE analysis of M&S...........................................................................9
P6) (c) Influence on strength and weaknesses on business operations of M&S.......................12
M4) SWOT analysis and its impact on decision making regarding operations of M&S..........12
D2) Critical evaluation on impact of micro and macro factors upon business objectives........13
CONCLUSION..............................................................................................................................13
REFERENCE.................................................................................................................................14

INDEX OF TABLES
Table 1: SWOT analysis of M&S....................................................................................................9

ILLUSTRATION INDEX
Illustration 1: Sectors of organisations............................................................................................4
Illustration 2: PESTLE analysis factors.........................................................................................11

INTRODUCTION
Business environment is sum total of internal and external factors affect company's
structure and performance. In which, internal factors are controllable includes finance, workers'
performance etc while external factors are beyond control as political, legal, social and cultural
etc. It affects business operations both positively and negatively. The present report is to
understand environmental factors' impact on performance of Marks and Spencer (M&S). It is
retail sector organisation of UK has around 1400 stores worldwide for providing food, clothing
and home products. In this regard, different sectors' organisations' purposes, legal structures, size
and scope can be understood. However, relations between organisational functions is to be
recognised impact on performance of M&S. Including this, internal and external environmental
factors and their impact on business entity's performance will be introduced. Therefore, this
assignment is to signify for understanding influence of business environmental factors on
business operations of M&S.
SECTION 1
P1) (a) Purposes and legal structures of different sector organisations
There are different sectors in UK for business operations as; public, private and voluntary
have different purposes, size, scope and legal structures can be understood as:
Public sector organisations:
Business operations are made in consideration of government's rules and regulations
affect aims to contribute in nation's effectiveness. In accordance to this, government interferes in
business operations for social welfare (Wetherly and Otter, 2014). Different organisations are
there work for various purposes as; Tesco, Sainsbury, Morrisons, NHS and so on. In this regard,
its purposes and legal structures can express as:
Purposes: Objectives of public sector organisations are as:
 To increase productivity and profitability of the organisation effectively.
 To build up society's trust with services provided by entity at maximum level.
 To incraese social awareness and spread information about the goods and services on
large scale.
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 To contribute in nation's effectiveness and its economic as well social development.
Legal structure: As government interferes in business operations of public sector
organisations, therefore for establishment and other activities, it is needed to take government's
approval (Cross and Miller, 2014). However, different legal formalities are recognised regarding
business operations and its further implementations. Thus, following on government's policies
regarding business operations is mandatory for the entity.
Private sector organisations:
This sector organisation aims to increase its profit level at maximum level. However, for
decision making on business activities, government interferes less than for public and other
sector organisations (Khilji, 2015). Some example of private sector organisations are as; Marks
ans Spencer, Johns Lewis partnership, Iceland and River Island etc. In this regard, it purposes
and legal structure can be understood as:
Purposes: Objectives of Marks and Spencer are to be identified as:
 To increase profitability of the organisation at maximum level.
 To enhance number of stores for business operations of M&S sin wide range globally.
 To adopt new technologies regarding business operations also for improving its quality
services. To provide online marketing services and maintaining relations with customers
effectively.
Legal structure: There is less government interferes in compare to public sector
organisations (Lewis, 2013). Therefore, for decision making and different business strategies,
individual business owner takes decision foe operating business activities. In addition to this,
there is no need to take approval of government for business operations and creating something
different in activities.
Voluntary sector organisation:
It is also considered as third sector organisation which establish for social welfare and
contribution in nation's social development at maximum level (Pancoska and Carr, 2014). Under
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this sector, organisations are established as; NGO, charitable trusts, foundations and so on. Its
purposes and legal structure is to be discussed as:
Purposes: Voluntary sector organisations are established for following purposes as:
 To public welfare at the highest level and helping needy people at most. To contribute in social development of the country as welfare of people efficiently.
Legal structure: There is the least government interfere in comparison to private and
public sector entities (Reinalda, 2013). Therefore, no legislation and rules are recognised for
business operations regarding their establishment and operations.
P2) (b) Size and scope of organisation's structures
Different sector organisations are different, scope and stakeholders for business
operations and decision making for their operations. It can be understood as:
Public sector organisations:
Under this sector, business operations are decided as per government's policies, rules and
regulations. Therefore, size, scope and stakeholders' number get impacted can be introduced as:
Size: For expansion of entity in terms of establishing new entities and new creations,
public sector entities have to take approval from country's government (Tibbetts, Jeremy and
Danika, 2013). Therefore, some rules and regulations are amended for expansion and setting up
new stores which impacted on its size. Thus, this sector organisations are moderate for business
operations in comparison to private sector entities.
Scope: Scope of public sector organisation can be understood with example of Sainsbury
plc operated in UK and belonged retail sector. However, its scope is to maximize productivity
and profitability as well public welfare effectively. In this regard, it scopes for increasing
working efficiencies of workers for customer dealing and satisfying them on large scale
(Qureshi, Rasli and Zaman, 2014). Along with this, innovative technologies are adopted for
improving services and further implementations efficiently.
Stakeholders: For appointing employees, there are some legislation for specific number
of workers. However, decisions for business operations are made by managers in consideration
to government's policies (Kuipers and et.al., 2014). Therefore, stakeholders' number is specified
under public sector organisation.
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Private sector organisation:
This sector's organisations aim to expand business enterprise and gaining profitability at
maximum level (Nica, 2013). However, decision making regarding business operations for
Marks and Spencer also depend on its size and scope is to determined as:
Size: There are almost 1400 stores of M&S globally for providing food, clothes and
home products. Besides this, it adopts new technologies for improving services and sustaining
market position with facing competition at higher level (Loukis and et.al., 2016). Including this,
there is less government's interferes in comparison to public sector entities affect decision
making regarding expansion of M&S as per managers' strategies. Thus, private sector
organisation has the largest size in comparison to public and voluntary sector entities.
Scope: M&S scopes for increasing stores and expansion of entity at the highest level for
maintaining its good position in global market. Including this, it adopts new technologies for
improving services and increasing customer loyalty towards services at maximum level (Khilji,
2015). Along with this, it scopes for facing all challenges and sustaining in competitive market
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Illustration 1: Sectors of organisations
(Source: Different sectors organisations, 2016).

for longer time period. Thus, scope of M&S is quite effective and developing impact further
business operations and goodwill in competitive market efficiently.
Stakeholders: Decisions regarding business operations for M&S are made by its
managers and owner than in less government's interferences (Cross and Miller, 2014). Therefore,
less restriction is identified for number of stakeholders as employees. However, M&S establishes
and maintains good relation with its customers, supplier impact on its business operations
effectively.
Voluntary sector organisation:
There is no government interference in business operations of voluntary sector
organisation for decision making process (Jahn, 2015). It depends on its size, scope and
stakeholders is to understood as:
Size: There is no obligation for setting up entity and increasing its branch. Therefore, its
size can be high and moderate which depend on sustainability and its society's trust with its
social care services.
Scope: Voluntary sector organisations scope for social care of people at maximum level
(Kuipers and et.al., 2014). Including this, it views itself to contribute in nation's social
development as building up society's trust with its services on large scale.
Stakeholders: There is no limitation for specified number of stakeholders for social care
services. However, it can be greater and less than other sector organisations of the country.
M1) Impact of structure and size of organisation to meet business objectives
It is analysed that different sectors of organisations are of different purposes, size and
scope affect ways to meet its objectives. For example; size of private sector organisation is
greater than of public sector therefore, decision making regarding expansion of it get affected.
However, number of stores of private sector will be greater than of public sector entities (Lewis,
2013). It influences productivity and profit level of the entity therefore, size, scope and structure
of entity impacts to meet business objectives for the further years as well.
P3) (c) Relations between various functions of Marks and Spencer
There are different departments within Marks and Spencer work for managing entire
business operations (Reinalda, 2013). For example; finance, marketing, production and
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operation, research and development and HR department etc. However, their functions and
relations with other departments and organisational structure can be described as:
 Finance department:
This department of M&S work for managing fund and maintain records of financial
transactions of the organisation. On behalf of which decisions are made regarding further
implementations as reducing expenses and increasing sales revenue (Pancoska and Carr, 2014).
It is linked with production and distribution system as well other business operations of the
organisation. Therefore, manager of finance department is liable for managing and allocating
fund for its business operations.
 Marketing department:
This department's manager of M&S analyses market position and customer demand
towards its services (Snieška, 2015). Therefore, decisions are made for its profitability,
marketability and competitiveness. It is related with business and marketing strategy of company
for decision making and further implementations.
 HR department:
This functional department of M&S liable for performance management of its employees
and increasing their working efficiencies (Bull and et.al., 2016). However, it conducts
recruitment, interview and training for improving workers' skills and creating effective
environment of the entity. It is related with organisation's effectiveness and further
implementations affect business operations and coordination among all departments.
These departments' functions are linked with organisational structures to meet its missions, goals
can be identified as:
 Functional structure:
Under this organisational structure, all departments' functions are structured for which
their coordination is identified (De, Dimov and Thongpapanl, 2013). On which, different ideas
are generated for effective coordination among them as well for improvement in business
performance of M&S.
 Matrix structure:
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In this organisational structure, entire business performance and functions are structured.
It impacts on production and distribution system as well profitability and business performance
of M&S (Drennan, McConnell and Stark, 2014). Therefore, matrix structure is to increase
productivity and creating balance of entire business operations effectively.
M2) Advantages and disadvantages of interrelationships between organisational functions and
their impact on organisational structure
Organisational functions are interrelated with each other for which its goals can meet
effectively. However, analysing departments' functions generate ideas for entire business
operations' management. Including this, good coordination can be created among workers to
enhance effectiveness of M&S as well improving quality services (Ashforth and Reingen, 2014).
On critical evaluation, it is recognised that due to imbalanced production and distribution system
affect profitability and business operations negatively. Likewise, creating coordination among all
functional departments remain challenging task for the entity.
D1) Critical analysis of different types of business structures and interrelationships of
organisational functions
Organisational structures are effective for analysing link of different departments'
functions and further decisions are made regarding business operations of M&S. Including this,
several ideas are generated for balancing its operations and improving efficiencies. On the
contrary to this, it is also determined that lack of required fund and resources impact on business
performance in terms of its productivity (Becker and El-Said, 2013). Similarly, employees'
coordination towards team building and coordination remain difficult to achieve organisation's
effectiveness. Therefore, creating relation between organisational structures with its functions is
challenging task for its further operations.
PART 2
P4) (a) Positive and negative impacts of macro environment on business operations of M&S
Macro environmental factors are beyond control but affect business operations of M&S.
It includes factors as political, legal, social, economic and so on (Belás and et.al., 2014).
However, changes in these determinants affect business performance of the entity both positively
and negatively. In this regard, positive and negative impacts can be understood as:
Positive impact:
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Political factor as changes in government policy in terms of interest rate and income tax
rate impact on financial position of M&S. For example; decreasing in these rate influences
monetary position of the entity also it remains able to invest effectively on business operations.
Similarly, adoption of new technologies improves quality services of products and services for
which new creations are determined as well customers get attracted towards services at
maximum level (Boeker and et.al., 2014). It influences productivity profitability and market
position of the enterprise effectively for which further ideas are generated related to expansion
and its efficiencies. Besides this, conducting market and fulfilling customers' requirements
impact on demand for services and their loyalty towards them on large scale. Therefore, macro
environmental factors impact on business operations and effectiveness of M&S positively.
Negative impacts:
On critical evaluation, negative impacts of macro environmental factors are determined
affect production and distribution of goods and services of M&S. For example; changes in
customers' attitude and interests towards clothes and products is difficult to attract them and
maintain their trusts. However, for adopting new technologies, it is required to allocate fund and
resources which considered as challenging task and ineffective for the organisation (Bohari,
Cheng and Fuad, 2013). Including this, changes in government policies and legal factors affect
business operations of M&S negatively as of economic slowdown, changes in market prices etc.
Besides this, occurrence of uncertain environmental issues as natural calamities impacts business
operations adversely.
M3) PESTLE model to support detailed analysis of macro environment
It is recognised that PESTLE environmental factors affect business operations of M&S
also related with its services. However, changes in macro environmental factors as political,
social and economic affect its business operations (Bull and et.al., 2016). It can impact in both
aspects as positive and negative. Therefore, business performance and its effectiveness get
affected on which decisions are made regarding future business activities.
P5) (b) SWOT and PESTLE analysis of M&S
Internal and external factors of business environment is required to analysed which
impact on business operations and its further implementations (Dailey and Browning, 2014).
However, SWOT and PESTLE environmental factors of M&S can be identified as follows:
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