Business Environment: Organizational Structure, Analysis, and Impact

This report provides a comprehensive analysis of the business environment, exploring different organizational structures including private, public, and voluntary sectors. It examines the size and scope of organizations, the relationships between various organizational functions, and their contributions to overall objectives. The report delves into the macro or external environment, assessing its impact through political, legal, environmental, social, technological, and economic factors. It also includes internal and external analyses, using PESTEL and SWOT/TOWS analyses of H&M and Morrisons to illustrate how companies navigate challenges and leverage opportunities. The analysis covers the relationship between organizational strengths and weaknesses and the broader business environment, providing a detailed understanding of how these elements interact to shape business outcomes.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Types of organisation...................................................................................................................3
Size and scope of different organisation......................................................................................5
Relationship between different organisational function and contribution in organisation
objective.......................................................................................................................................5
Macro or external environment and its impact............................................................................6
Internal and external analysis.......................................................................................................7
Relationship of strength and weakness with macro environment ...............................................8
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Every company is doing its business activities in the framework of business environment. Since,
the operation and governance of every company or organization is different which means some
companies operates, in terms of sole proprietorship like Alan S Kindred while some companies
are operating in public form like Morrisons or while some companies operates in private mode
like H & M. These companies are governed by different authorities or works under different
governance and follows different type of organizational structure. However, Business
environment including the external environment and internal environment also plays an
important role and affects their business operation. In this project we will study about the
different form of organizational structure including their types, size, governance along with the
adverse or favourable impacts of business environment which affects the companies and their
business.
MAIN BODY
Types of organisation
Every organisation have there different organisational structure and have benefit and
disadvantages. They have to check the merits and demerit of the type of organisation they have
taken mainly there are three main ownership.
Private sector
These organisation is govern by an individual for having motive of profit, which is
divided to proprietor, share holders and the people who are investing the money in the company.
There source of money is there personal money, bank loans and the share holders. They follow
the legal laws which are made by the state government in the relevant areas. Private organisation
are based in various fields such as retail, beverages, technological and the clothing.
Private legal structure generally private sectors provide less law protection to the shareholders.
The private have the limited and the partnership legal structures. Private organisation are limited
by there particular shares, by whom the finance value is limited to respective value. Private

companies having more than one partner is partnership in this agreement show the investment
and accounts are made of partners (Ahmady, Mehrpour and Nikooravesh, 2016).
H & M is one of private company establish in 1947, founded by erling persson. Deals in
clothing- retailing and know of the good quality of clothes for man, women and kids. H&M is
the second most largest retailer of the world. H&M is manage by there board members on share
holders point. These team is leaded by the chairman and CEO who manage the daily work in the
organisation. They have the limited legal structural system in which the liability is limited with
the shares (Berger and et. al., 2005).
Public sector
These is ruled by the government. The government use to make available goods and
services that have advantage for the community. Generally these are govern by government so,
the operations are done with taxes. Public sector or government organisation set the goal other
than gaining profit, they work for the welfare of the community. In these organisation if there is
profit than it is not distributed to there partners, they use that in public to help them. They
generally function in education, religious sectors.
Public legal structure public sector legally run by local government body. These company get
the fund by the government directly they focuses on providing quality service to the people
rather on profit.
Morrisons is one of the public enterprise, who is number fourth largest series of
supermarket in the Great Britain. Morrisons is founded in the 1899 by William Morrison. There
store are mainly in northern england and afterwards in southern england too. They deals in food ,
drinks and clothing. Morrison is running there business with public legal structure. Public sectors
provide those commodity which can not sell by the private because they have welfare motive.
Voluntary sector
The voluntary organisation are those who's function is to build the social impact instead
of profit earning. This sector also know as third, non-profit and civil sector. They are not
controlled by the local or country government. The main work is charity for the voluntary
sectors. Voluntary organisation use to deal with the issue which have to resolve. They achieve
there goal with various activities.
Voluntary legal structure such organisation carry there work with unpaid management.
Voluntary organisation is not for profit. The legal structure involves trust of organisation name

and there structure. These are charitable incorporation that are trustee and the people have legal
duty welling to work for faith. These are apart judicial entity.
Size and scope of different organisation
Private organisation H&M generally have the motive of earning profit in the market. Private
organisation H&M deals in the private sector, that means the company is operated by an
individual or a group excluding control of government yet it is regulated by the authorities. The
H&M have follow the rules set by the government for them. Private sectors use to generate there
profit and reinvest in the organisation or distribute in the partners of there business like
owner,shareholders according to the legal model.
Public organisation Morrison is a public organisation which means these is a not for profit
company there motive is not to earn the profit but to serve the people in the wellness. Morrison
can differentiate by the private company through the general motive and purposes. Mostly public
organisation are not going business but Morrison is a retailer of food and clothing. The
organisation profit is not distributed among the partners, they donate that to social well fare.
Voluntary organisation National council for voluntary company is a NGOs company is non-
profit firm, operate freely from the government generally there are two NGOs operational and
advocacy. National council is a top level voluntary organisation use to do charity there purpose
is to connect more peoples and do there social responsibility. They work and support the
voluntary sector (Ricciardi, Zardini and Rossignoli, 2018). National council for voluntary having
large member in the community and use to work on a local stage.
Relationship between different organisational function and contribution in organisation objective
Aim is to recycled 100 percentage or sustain source resources and provide quality of
products and services with innovative production style. Objectives of H&M is to increase the sell
as well as productivity through innovative production style.
Organization is having different function performed to achieve the objective of the organization.
H&M is a private company used to perform different organizational functions that are :
Human resource department with marketing department : As the human resource is doing
its work with marketing department as the people who perform the activities of marketing are
recruited by human resource. The human resource try to recruit those people who are efficient to
perform the activities related to marketing functions. Human resource also set the budget for

doing the activities in particular department, so they also set budget to perform the activities of
marketing function.
Marketing function with finance function: as the marketing function is continuously working
with finance functions as the finance department allot a respective budget to marketing function
so that they can preform the activities in efficient manner. The finance function check the
performance that has to complete by marketing and allot the fund accordingly.
Macro or external environment and its impact
It includes all those forces which are present outside the company and has serious impact on
company in terms of decrease in their sale or profits or non achievement of their objectives.
Since, this environment is continuously changing which make it very difficult for the companies
to cope with such changes. This environment is full of risk which means new risks and problems
comes in front of companies in a very frequent manner and that creates a lot of difficulties for the
company (Shtal, and et.al., 2018). The various elements of external environment and their
impacts are:
Political and legal factors:
These both factors includes rules and regulations of the government or the political
situation of the country which affects business. For example, like if the government policies
regarding the business running are smooth or favourable, like low tax rates then this would have
a positive impact over the business. Similarly, in case of low tax rate, profits and sale percentage
of H&M will got benefited. Also, political environment of the country affects the whole market
in terms of arisen of peace or crises which again affects the H&M and its sale.
Environmental factors:
Since the whole production process of the H&M depends upon the raw material and
which is directly related to the environmental condition of the country. If the environmental
conditions would be favourable in terms of good weather or climate or availability, then this will
benefits H&M in comparison of adverse situation in the form of bad environmental condition
(Akpoviroro, and Owotutu, 2018).
Social factors:
It constitutes the taste and preferences of the customer which is continuously changing as
per situations or needs which again has impact over the companies in terms of either raise or

depletion in sales. If this factor is in favour of H&M then this will definitely lead to raise in its
sale but on the other hand any changes in this factor will negatively affect company in terms of
loosing its customers.
Technological factors:
Technology is the base of production for H&M but any changes in the prevailing
technology would affect the whole production process of the company which is again very
harmful for them.
Economic forces:
This constitutes the economy's condition regarding the growth rate or inflation or the
status of economy. This has a direct impact over H&M in the form of affecting the business or
working or non achievement of its goal.
Internal and external analysis
Internal and external analysis is very important for the companies in order to identify their
strength and weakness. The biggest strength of the company is that the speciality which make it
different from the other companies and clarity means clarity of objective which company has to
achieve. On the other hand weakness includes identifying those factors which the companies
have to overcome to convert it into its strength.
Internal analysis:
It helps H&M to know its inner strength or their capabilities. It helps it to know that
whether their working or their actions are going in right way or not which means the
achievement of their main objectives. It also helps to know that whether they are properly
utilizing their resources or not in terms of achievement of objectives. The resources includes all
kind of resources like human, natural, financial which are the assets of the companies and helps
the companies to meet the competition of the market (Clarke, and et.al., 2017).
External analysis:
It includes the study of pertaining environment of the company in which it operates. It
shows the current market requirement and trends which helps the company in making their plan
accordingly.
External analysis can be done through PESTLE which means analysis of the social, cultural,
economic, environmental, political forces. This help H&M to know what exactly the market or

environment wants or demands which helps the companies to determine their strength or
weakness in order to meet the market demand and it also helps the companies to know that what
could be the future opportunities or threats which could expand their business or affect their
business.
Relationship of strength and weakness with macro environment
Strength and weaknesses of the companies are both related to internal and external environment
of the business. A company by using its policies and strategies which means strength to cope
with political, economical, social, technological, environmental and legal forces or changes
while a sudden change in business environment would adversely affect the companies and
proves as a weakness for the company, This could be easily understood with Pestel analysis and
swot analysis as under:
PESTEL and SWOT/TOWS analysis of Morrisons and H & M:
Pestel analysis of Morrisons and H & M:
Economic factors:
As Brexit is one of the biggest and major incident or change of UK which affects the
whole economy of UK leads to the high rise in prices or create the inflation situation in UK
which affects the both Morrisons and H & M in terms of decrease in their sales proportions
because of the rise in prices of raw material. As now the people in UK are spending very less
money for buying the products which directly affects their business profits and becomes their
weakness at that point (Parniangtong, 2016).
Social Forces:
As now the people's behaviour and needs are continuously changing regarding the
products and the transparency issues. But, both the Morrisons and H & M are benefited in terms
of meeting social forces because of their strong and consumer friendly policies and products and
the transparency which they offered to their customers in terms of prices and reviews.
Technological Factors:
Technology is the base for initiating the production and running of the company. By
adopting the latest technologies like digital marketing or mobile applications, the business of
both the Morrisons and H & M has rose which results in good sales ratio. Also, by making the

good policies regarding the investment in technology which means by making low investment
better results will be produced, also benefited both the companies.
Political forces:
Brexit is one of the major political change of UK which leads to many other changes in
the prevailing political environment of UK. As, Morrisons also deals with food products and
drinking products and due to strong political restriction in UK, affects its business. And, as H &
M has many branches or it deals in many countries which also become a threat for H & M
because it has to do its business by considering the political environment of all the countries.
Environmental Factors:
By using the renewable sources for the production of main product and using those
methods of production which reduces the carbon emission benefited both Morrisons and H & M
in terms of favourable environmental impact.
Legal forces:
By adopting or following the various acts and laws regarding the food safety the
Morrisons have benefited in term of good trust of its customer over it. On the other hand due to
the various infringement and legal disputes the reputation of H & M affected but due to its strong
policies and risk management techniques the H & M is now successful in meeting such risk
which affect its reputation.
Swot analysis of Morrisons and H & M:
Strength:
Good and consumer oriented product with distribution system act as a strength for
Morrisons on the other hand strong strategy or broad presence of the brand of H & D, helps them
to face market competition.
Weaknesses:
Slow change adoption and low worldwide sailing of Morrisons while sometimes outdated
products or low consumer devoted products, would act as a weakness for these companies and
affect their business badly (Sarsby, 2016).
Opportunities:
E-marketing or diversification of products or focussing the trending market act as an
opportunity for growth to Morrisons and H & M.
Threat:

High competition and changing trends would act as threat to Morrisons and H & D
businesses and operations.
CONCLUSION
These report concluded that the organisation types are different and have different
controlling powers and there legal structure is based on there products and services. The H&M is
a private company in retailing and purpose to earn profit. Morrison is an public company having
motive of social welfare. National council for voluntary company is an voluntary organisation
run on charity fund and help the peoples. Each of the organisation is having narrow and wide
scope in there field. Organisational function help in achieving the objectives. The macro
environment is political and the legal factors having certain positive and negative affects in
operating a business. SWOT and PESTLE help in analysis the companies power and weaknesses
points.

REFERENCES
Books and journals
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Ahmady, G.A., Mehrpour, M. and Nikooravesh, A., 2016. Organizational structure. Procedia-
Social and Behavioral Sciences. 230. pp.455-462.
Akpoviroro, K.S. and Owotutu, S.O., 2018. Impact of external business environment on
organizational Performance. IJARIIE.4(3). pp.498-506.
Berger, A.N. And et. al., 2005. Does function follow organizational form? Evidence from the
lending practices of large and small banks. Journal of Financial economics, 76(2).
pp.237-269.
Clarke, and et.al., 2017. Brexit. Cambridge University Press.
Janićijević, N., 2013. The mutual impact of organizational culture and structure. Economic
annals. 58(198). pp.35-60.
Pan, X. and et. al., 2018. The effects of organizational justice on positive organizational
behavior: Evidence from a large-sample survey and a situational experiment. Frontiers
in psychology. 8. p.2315.
Parniangtong, S., 2016. Strategic Sourcing: Internal Analysis. In Supply Management (pp. 15-
48). Springer, Singapore.
Ricciardi, F., Zardini, A. and Rossignoli, C., 2018. Organizational integration of the IT function:
A key enabler of firm capabilities and performance. Journal of Innovation &
Knowledge. 3(3). pp.93-107.
Sarsby, A., 2016. SWOT analysis. Lulu. com.
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