Exploring the Business Environment: Internal and External Factors

The assignment explores the multifaceted nature of the business environment by distinguishing between its internal and external factors. Internal factors include aspects such as company culture, human resources, financial health, and organizational structure, all of which can significantly influence a firm's operational effectiveness and strategic decisions. External factors encompass economic conditions, market trends, regulatory frameworks, technological changes, and social dynamics that a business cannot control but must adapt to for sustained success. The analysis underscores the importance of recognizing these variables as they collectively shape business strategies, competitive advantage, and long-term viability. By understanding how both sets of factors interplay, businesses can better navigate challenges, capitalize on opportunities, and achieve growth objectives.

BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
P1 Types and purposes of distinct organisations....................................................................1
P2 Size and scope of distinct organisations............................................................................2
Size and scope of Public Sector enterprises...........................................................................3
P4 Positive and negative impact of macro environment on business environment...............4
P5 Covered in PPT.................................................................................................................6
P6 Covered in PPT.................................................................................................................6
CONCLUSION................................................................................................................................6
REFRENCES...................................................................................................................................7
.........................................................................................................................................................8
.........................................................................................................................................................8

INTRODUCTION
Business environment is of dynamic nature which indicates that future of any enterprise
is uncertain. All factors related to business must be analysed effectively and efficiently such that
products and services created for organizational growth and development must be provided to
them with relative marketing environment (Klapper and Parker, 2011). Following report will
discuss about various kinds of organisations that are present in overall surroundings (private,
public and non government constitution) and how they operate. Their objectives and structure are
studied in detail which will help in distinguishing each from one another. Later in this report it is
discussed, how Nokia a mobile company manages its operations by dividing its whole business
into different departments. Lastly, it will be studied how cited company will be affected by
various micro and macro factors through doing its PESTLE and SWOT analysis.
P1 Types and purposes of distinct organisations
In business environment there are many entities that operate on various types of goals and
objectives. They can be classified into public, private and voluntary sectors which are run and
operated by different individuals. These are-
1. Private- This type of business have main objective of profit maximization. It can be
continued in various forms like sole proprietorship, partnership firms, business
organizations, and many franchises. Theses are different in all aspects. While sole
proprietorship is business which is run and operated by individual proprietor and he
manages all activities of business (Arasti, Zandi and Bahmani, 2014). Partnership firms
are those business organizations who have joint hands in a particular business. In these,
firms all activities related to business are owned and managed by a group of individual.
Organizations are those companies which are being managed by various group of
individuals. In these, businesses all members have different roles and responsibilities.
While franchises are those which are bing provided to small individual business owners
for purpose for providing big company's products and services to consumers. For
example- TESCO Is a private owned organization which was established in 1925 with
main purpose of providing values to customers by earning lifetime loyalty.
2. Public- These enterprises are owned and managed by Govt. and they are controlled at
different state levels. In this sector, satisfaction to customers is main objective. Source of
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investment in this sector is through various taxes which will be provided through general
public. Various types of funds are also provided to different citizens on basis of
developing business and earning standards of living. These enterprises are beneficial for
providing effective resources to various sectors so that they can run their business
operations effectively and efficiently. For example- PRIMARK being a subsidiary
organization has purpose of providing quality products and services to customers.
3. Voluntary Groups- It is entirely different sector of an economy. They work towards
developing society and needy persons by providing them proper assistance in terms of
helpings required. Govt. intervention is also not full because it's a different sector form
Govt. departments which helps poor and disabled persons in getting proper facilities that
can be provided to them (Pikka and Iskanius 2011). These groups are an integral part of
our life because whenever there is any criminal or harmful activity these groups are
always there for people help. They provide morale, financial and social support in
developing an individual from being infected one to a healthy and fit one. For example-
Oxfam helps in providing effective and efficient systems of working to all customers by
providing them proper assistance in terms of health, safety and finance.
Although various types of business units provides different advantages to employees but
these must be analysed effectively and efficiently such that consumers must get desired benefits.
Major differences between NGO'S, non profits and profit organizations are:-
Basis Profit Non – Profit NGOs
Objective Wealth
maximisation is
prime objective
Providing services is
core duty
Society enrichment is
only goal
Sources of finance Personal savings Taxes, rents, fees Charity donations grants
Owners Shareholders State authorities No one
Financial statements Balance sheets Business position
statement
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P2 Size and scope of distinct organisations
There are various sectors that run and operated by different individuals with various
benefits, objectives, scales and scopes. This is because everyone has distinct set of benefits and
scopes which must be analysed at different stages (Lee Olson and Trims, 2012). Scope of small
entrepreneurs are less than that of big companies which indicates that all objectives must be
different at all stages. This is because in enterprises funds are made and developed by individuals
while in companies, these funds are being managed and owned by various stakeholders (Reed
and et.al, 2013). The size and scope of different organizations are given below:
Size and scope of private sector enterprises
 Size of private sector companies are relatively more. TESCO has been the major private
sector player of U.K with over 10,000 employees who are working in business.
 Scope of private sector is to earn more money by providing effective products and
increasing sales.
Size and scope of Public Sector enterprises
 Size of public sector enterprises are less than private sector and they generally provide
support to business organizations. PRIMARK being an enterprise of public sector has
provided job to many employees and approx. 5,000 employees are working there.
 Scope of public sector enterprises – Their main scope is to provide support of finance to
small and medium enterprises so that they can start their own business.
Size and scope of Voluntary Organizations
 Size of voluntary organizations- The no of employed people in this department is very
less. Oxfam has provided job to nearly around 1000 employees on the part of helping
society.
 Scope of voluntary organizations- Their main aim is to help poor people who are in need
of support and they provide effective solutions to provide them effective morale, ethics.
P3 Relationship between different organizational functions
For every organization it is very important to have a complete structure which will help in
providing effective and efficient working of business organization (Khan and et.al, 2011).
various departments in an organization can be classified on basis of -
Marketing-It is an important function of Nokia because it generates revenue for
company. Company try to produce such types of products and services which increases levels of
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sales. This is an important function because if an organization want to grow and develop then
proper products should be developed and for this proper investments must be made (Palo and
Tähtinen, 2011). This is because medium of marketing must be analysed according to target
market as if low or high methods are used then company can develop loss.
Finance- It is considered backbone of any company as huge cost is to be provided in
analysing all resources needed to produce products and services effectively. Money in Nokia is
being invested financially and it is responsibility of financial team that all projects must be
prepared as per requirements. It is to be provided such that wastages could not generate on
developing any product or service.
Human Resources- Recruiting and selecting all employees of organization in such a way
that they can produce effective and efficient results which are beneficial for organization. Nokia
also uses this function to ensure that proper employee is being recruited and appointed at place
where he can work effectively and efficiently and can benefit organization.
Research and Development- Part of planning and analysing all resources required in
generating finance, human and technology, and services which can provide advantage to
organization. It is almost an important and continuous process because Nokia wants to research
on such types of products and services which can be beneficial for organizational growth and
development.
Production – It means to develop certain types of products and services which will help
in getting new and differentiated products. This will be major organization which can affect
working of business in best possible way. This will be considered critical part of developing
products and services which accuses to capture long term business growth. In Nokia major
production was on developing consumers beneficial products which will be highly valuable and
satisfactory to all consumers.
Purchasing- Companies must purchase products and services that are beneficial for
consumers usage. For this all resources like HR, Finance, Marketing must be evaluated and
accordingly products are purchased in order to generate certain standards of products set up for
effective and efficient growth and development.
P4 Positive and negative impact of macro environment on business environment
Major impact that macro environment have can be analysed through PESTEL Analysis.
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Political Factors- All factors that affects legal, governmental, political systems and processes
that are used in generating intervention of government on an economy. It must provide proper
and effective utilization of policies beneficial for products and services development. These also
include certain factors like foreign trade and tax policies, international markets, trading and
economic restrictions. For Nokia, its very important to know political systems because it will
generate product's performance in different environmental conditions.
Economic Factors- All those processes which generate development of products and
services in any nation. It includes economic policies, tax rates, inflation, interest rates, etc.
Nokia will implement such systems of economic analysis which will help in providing effective
and efficient impact on organizational development.
Social Analysis- All societies where product or service is being provided develop certain
rules and regulations. These regulations or restrictions may be cultural, societal rules, values or
norms. These regulations must provide values effectively sufficient for organization. As Nokia
has developed certain social values like providing effective and efficient products and services to
targeted audience and developing standardised goods for targeted audience.
Technological Analysis- All changes that affect any product or service in way that these
can be developed effectively and efficiently useful for getting new and standardised products.
This will include technology which is of high quality or better software to be installed in
particular products such that consumers must develop a positive response against such items.
Nokia tried to develop its products which are highly technical and upgraded which will provide
the latest quality smartphone to its customers by helping them in creating consumers beneficial
items. This will enable company to gain competitive advantage over its rivalry firms.
Environmental Analysis- All factors either internal or external which can provide proper
implementation of both within environmental and outside environmental systems beneficial for
organizational and personal goal's achievement. In this process every small change will affect
development of product's and services in order to achieve competitive advantage. Nokia will
develop such environments which will be profitable for achieving profits of company by
generating and developing certain types of macro and micro analysis.
Legal Analysis- All laws and legal procedures which must be implemented in way that
product or service must cater to be legally acceptable for society as a whole. This includes all
legal, political and social laws and legislations which will affect in development of
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organizational items to effective usage. In this process Nokia will develop such types of
strategies legally which will affect business organization in part of developing certain laws and
legislations.
P5 Covered in PPT
P6 Covered in PPT
CONCLUSION
From above study it can be concluded that distinct organisation operates with different
motive and objective. Prime goal of private sector is wealth maximisation whereas goal of public
and NGOs are to provide services to public although their method of functioning also differs.
Report says that every different sector has a completely different way of operating as their
stakeholders and polices against each are distinct from each other. We can analyse that all macro
and micro environments must be catered to develop certain types of products and services which
are to be effectively and efficiently produced. In last above study concluded with external and
internal audit of NOKIA which shows how it is effected by various factors of environment and
their relation with each other.
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Palo, T. and Tähtinen, J., 2011. A network perspective on business models for emerging
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Online
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<http://www.yourdictionary.com/business-environment>. [Accessed on 6th July 2017]
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