Business Environment Analysis: A Case Study of Sage Group Plc

This report provides a detailed analysis of the business environment of Sage Group Plc, a multinational software company based in the UK. It begins by outlining the company's structure, management, and governance, highlighting its hierarchical organization and the roles of key personnel. The report then delves into the purpose and application of PESTLE analysis, explaining the significance of political, economic, social, technological, legal, and environmental factors in shaping the business landscape. Each PESTLE factor is discussed in relation to Sage Group Plc, with specific examples of how these factors impact the company's operations and strategies, including the implications of Brexit and the importance of corporate social responsibility. The report concludes by emphasizing the need for organizations to adapt to changing business environments to maintain competitiveness and sustainability.

BUSINESS ENVIRONMENT
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Executive summary
This study is effective for analyzing importance as well as validity of business environments
for increased efficiency of business operations. This study has been effectively conducted by
selecting an organization to evaluate its current market position as well as organizational
details in order to have knowledge about the recent condition of technological organizations
within United Kingdom. The next part of this study has effectively described importance of
the PESTLE analysis for businesses to understand all the important political, environmental,
social, legal and technological factors that are affecting the current business scenario of Sage
Group Plc. On the other hand, this study effectively explained the Pestle analysis done here
with adequate instances, which efficiently stated all the necessary steps that each organization
belonging to this sector should took as well as changing demands and trends in business
environment.
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Table of Contents
Introduction................................................................................................................................4
1. Describe the structure of the company, its management and how it is governed..................5
2. Identify the purpose of PESTLE analysis for a business organisation................................10
3. Briefly discuss the PESTEL factors.....................................................................................12
Conclusion................................................................................................................................16
Reference list............................................................................................................................17
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Introduction
Understanding the environment within which a business operates its functions is essential for
running a business unit effectively at any place. Hence, it could be said that business
environment signifies a collection of all entities, individuals and other components that could
influence its business performance, development, profitability issue and others. Each business
operates in an individual environment, as it could not survive in isolation. In this study,
several factors related to the internal and external business environment would be explained
with sufficient examples. The first phase of this study would be centred round exploring the
business structure of SAGE GROUP PLC. Purpose and discussion related to the influence of
PESTLE analysis on the selected business would be explained afterwards in this study.
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1. Describe the structure of the company, its management and how it is governed
Overview of SAGE GROUP PLC
The SAGE GROUP PLC, broadly known as Sage, is a United Kingdom multinational
software organization that is situated in Newcastle Upon Tyne, UK. This organization is one
of the largest technology companies within their domestic market and is the world’s third
largest supplier of the enterprise resource planning software system. David Goldman,
Graham Wyliein and Paul Muller founded the SAGE GROUP PLC in 1981 in order to
develop calculating as well as accounting software for small sized organizations (Sage.com,
2018 A). As per the performance review of this organization, it was bestowed as one of the
best shareholder of the 90’s across the United Kingdom. On the other hand, from 2010 to the
present time, this organization has confronted gradual development of their organizational
profitability and recently it has acquired almost £3,223 million of total assets in 2017
(Sage.com, 2018 A).
Organizational structure
The organizational structure of SAGE GROUP PLC clearly defines systematic specification
of the power and responsibilities as well as allocation of works among individuals as per their
standing or respected position within the hierarchy. Each task within this company is
allocated according to the authorities’ position. Chief executive, executive director,
chairperson, chief accountant, non-executive directors and others control the entire business
process (Sage.com, 2018 A). They are the main governing body of this organization. The
hierarchical structure of this organization is cited below through a picture.
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Figure 1: The hierarchical organizational structure of Sage Group Plc
(Source: created by the Learner)
How is the company managed nationally and internationally?
This organization had started their journey in the United Kingdom in 1981 with a small
amount of resources and currently, this company is one of the leading business software and
service provide across the world (Sage.com, 2018 A). This organization has almost 14,500
workers worldwide who are dedicated to provide services to around 5.8 million consumers
across the globe (Sage.com, 2018 A). The leadership team as well as the management team is
responsible for providing the necessary business management software and products for
medium and small sized organizations. The management team is accountable for monitoring
and controlling providing improved software services for accounting enterprise resources,
payroll, consumer-relationship management programs and others.
Sage group plc is one of the well-known market leaders in UK, US, ASIA and others. The
economic performance of this company worldwide is listed below,
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Chairman

Figure2: The global economic performance of Sage group plc
(Source:)
The financial performance across its domestic market could be helpful to demonstrate the fact
that this organization is managing its domestic market along with international market
profitability effectively (Sage.com, 2018 A). According to the current financial performance,
this organization is listed on the London Stock Exchange as well as become enlisted in the
FTSE 100 Index.
Brief discussions of how the Sage group plc is governed
As described above, this company follows a hierarchical structure as the core business
functions are controlled by the Board of Directors. This organization has new Chief
Executive Officer & Executive Director, from 2004, the new President & Executive Director
(Daniel Blair Crump) is in this company since 2016 and Soni Jiandani as the new non-
executive director is taking care of organizational responsibilities since 2017 (Sage.com,
2018 A).
Definition of a stakeholder
Stakeholder is an individual or a group of individuals that has concern or interest in a
business. Stakeholders of an organization consist of customers, employees and shareholders.
The shareholder list of this company is given below. The United Kingdom government is also
an important stakeholder of this company.
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Figure 3: The shareholder review of Sage Group Plc
(Source: Sage.com, 2018 A)
As per the above figure related to the shareholder list of sage group plc, it could be said that
this organization has business dealings with other potential companies that help them to
provide more effective software solutions to their customers. This organization is responsible
in delivering as well as taking care of the interests of their each shareholder (Sage.com, 2018
A). This is an effective point for this business in retaining its business growth both globally
and domestically. On the other hand, currently, this company has almost 13,795 employees
across the world and around 5.8 million customers internationally. The employee and
customer numbers are attributing the fact that fulfilling all the preferences of their
stakeholders is one of the business priorities of Sage Group Plc. This kind of relationship
with workers is effective in delivering and communicating the code of conduct of their
business with their employees.
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Corporate Social responsibility of Sage group Plc
The CSR responsibilities of this organization are divided among four points such as industry,
people, environment and community. This organization has been separately assessed against
the FTSE4Good criterion and it has satisfied the requirements of this criterion for becoming a
constituent of the FTSE4Good index (Sage.com, 2018 B). This index is helpful for
facilitating investments in organizations that meet internationally recognized CSR standards.
In case of addressing industry issues, the Board of directors of this company aims at
leveraging the unique connections, which this organization has with its consumers across
worldwide in order to continue to understand as well as support the factors and difficulties
that this organization faces (Sage.com, 2018 B). On the other hand, the board of director is
dedicated to implement proper Code of Ethics that identifies treating all of their workers
fairly. Stating effective employee conditions within their organization covers issues such as
diversity and equal payment, responsible employment and others. As per their responsibilities
in the area of environment, this company is concerned in reducing the impact of several
business operations on the environment. The board of director in this company is committed
to reduce energy consumption as well as associated emissions where possible. As per the
community development, this organization supports a series of charities as well as
community companies across the globe to make an effective impact on the communities
where this organization has a presence (Sage.com, 2018 B).
Form the above discussion, it could be said that this company is concerned in operating all its
functions in an ethical way. From employee condition to the effects of operations on
environment, the board of directors is trying to develop their policies so that negative
influences on society, employee and environment could be reduced as much as possible. This
organization is concerned with the employee rights of their workers as well as negative
impacts on the environment. Therefore, they have targeted to reduce energy consumption as
soon as possible.
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2. Identify the purpose of PESTLE analysis for a business organisation
According to Camilleri (2018), a PESTLE analysis is a means applied by marketers to
evaluate as well as monitor the macro-environmental factors, which have an influence on a
company. Purpose of using a PESTLE analysis for a business (Sage Group Plc) is given
below,
Figure 4: The PESTLE analysis
(Source: Abbott, 2015)
The political factors often have an influence on the core business operations of organizations.
Changing political decisions of the government often force organizations to change their
internal business policies and companies should take care about the changing political
decisions of the government to ensure any kind of legal complexities are not there within
their business functions (Blanton, and Kegley, 2016). This organization need to be capable in
responding to the recent as well as anticipated future rules and regulations as well as adjust its
marketing policies according to the changes. On the other hand, economic factors in relation
to the business environment have an effective influence on the business profitability and
market performance. Changing financial condition of a country, effects on the net income,
organizational revenue and other factors affect the performance of an organization
(Claessens, 2017). All the economic factors include interest rates, inflation, financial growth
and other points. Analysis of the social factors are important for realizing impact of the
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business operations on the community as well as how the corporate social responsibilities are
impacting on the society’s conditions. Technological analysis within PESTLE analysis is
important for understanding factors for an organization that is specialized in providing
technological services to others. Technological changes, current trends and innovativeness in
technological services are valuable factors for an organization to be able to stand in the
market competitiveness (Dosi et al., 2015). Legal factors are needed to be considered for
organization such as Sage GROUP Plc in order to address equal opportunities for employees,
health and safety rules, customer rights related rules and regulations by the government. On
the other hand, the environmental factors involved in the PESTLE analysis is important for
providing sustainable business and services to their customers as well as meet all the current
demands and trends in the target markets.
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3. Briefly discuss the PESTEL factors
The PESTLE analysis of SAGE Group Plc is listed below,
Factors Analysis
Political (Change of
government)
The Government of the United Kingdom has proposed
policies related to the low trade restrictions. After Brexit,
the UK organizations like Sage Group plc need to consider
exactly how much financial integration it wants in two
main areas (Hayes, 2016). These two areas are tariffs on
trade in services and regulatory barriers, which affect both
services and products trades. Starting with the tariff issue,
the United Kingdom is recently part of the customs union
with the European Union. This means all the internal
tariffs between the EU and UK have been removed after
Brexit (Burrage, 2014).
Removal of all the internal taxes between the UK and EU
would be helpful for Sage Group Plc to operate its
business within UK as well as elimination of external
taxes for non-EU organizations would also help this
company to trade its services in an effective way. On the
other hand, changing regulations would influence the
business rules and laws of this company and, Sage Group
Plc needs to change their business code of conducts as per
the changing political conditions.
Economical (High rate of
inflation)
The recent rate of inflation around the United Kingdom
stood at 3% in 2018, which is same with the previous
month and above the market expectation levels, that is
2.9% (Kirby et al., 2016). Currently, the cost related to
transportation and food developed while the cost of
recreation and culture raised more. This high rate of
inflation has serious effect on the business environment of
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Sage Group Plc. The two major factors would be affected
due to this condition. These factors are business
uncertainly and competitiveness. High as well as unstable
inflation rates of UK is not effective for the business
condition of Sage Group Plc because business owners
could not be sure about what their prices and cost are
likely to be (Kirby et al., 2016). On the other hand, high
inflation rate is effective for the export business of Sage
group Plc. Due to continuous high rate of inflation the
exports businesses would be less competitive throughout
the global markets. This condition could develop negative
multiplier as well as accelerate influences on national
employment and income.
Social Cross-border of individuals from one country to UK has
become a significant feature of the globalising world and
this raises various essential social, political and financial
factors. According to the current population ratio in the
United Kingdom, approximately 200 million people live in
the country that is not aboriginal to this land. This
condition is affecting the current business scenario of Sage
Group Plc as rising immigration rates are influencing on
the employment opportunities for significantly younger
employees in many countries including UK where this
organization is operating its business. Differences in
wages for corresponding jobs also influence on the job
opportunities offered by this company.
Technological (Latest
technology)
Changing condition in the technological growth has had a
positive impact on this organization. The major
technological changes include the development of latest
technology on a regular basis, because of which the
operations become more efficient and quicker. If Sage is
unable to keep up with these changes, then it will have a
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competitive disadvantage and consumers will not prefer
availing the services of the company.
Technological development in United Kingdom as well as
the current trends and demands in technological
development has helped this organization to form a
“Technology Advisory Group”. This group is helpful in
providing more explicit as well as effective solutions for
various organizations. This group include external, well-
known technology sector practitioners as well as internal
experts who would act as an important source for
independent thinking on a broad range of technological
issues. This group would help as a collaborative body for
keeping side-by-side developments in the broad
technological sector. All these factors are attributing the
fact that, current technological development and the
governmental efforts to ensure the fact that technology is
essential for all round development of the organizations
help this company to manage their internal technological
development for business profitability and performance
(Sage.com, 2018 C).
Legal Current changes in law include several factors such as rise
to the minimal wage, employment related laws, data
protection, tax evasions related laws and others (Rodger,
2018). Each regulation has an impact on the business
operations of Sage Group Plc. The minimal wage rate for
employees would be increasing and this organizational
board of director needs to implement this minimal wage
rate as per the current rules of UK government. This
condition would be affecting the entire business and
internal costs of the company will rise (Rodger, 2018). On
the other hand, employment related laws are changing to
provide best results to the employees from the working
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environments they are belonging. This change would
compel Sage group plc to change their internal
organizational policies in order to provide better working
opportunities for their employees in UK as well as across
the globe. On the other hand, data protection laws are
becoming more stringent. All the important documents
related to the organizations to which Sage group plc is
providing services would have to be kept confidential
(Cockburn, 2018). Denying this regulation could affect on
the core business operations of this organization and
serious consequences could be happened to this company.
Lastly, the tax evasion is an illegal act. The new
regulations, introduced by the UK government under the
Criminal Finances Act 2017, would ensure sage Group
Plc and other similar organizations liable for criminal acts
asserted by their workers who support this act by others
like their consumers or suppliers (Cockburn, 2018).
Environmental (Climate) The climate change is a serious threat for the environment
all around the world. This climate change is pointing out
the issue of sustainability that each organization should
consider as a serious matter (Bryson, 2018). According to
the current business scenario in the United Kingdom, it
could be said that reduction of carbon footprint is
necessary for organizations to ensure minimum negative
effect on the environment. Investment in the renewable
energy projects would help this company to develop their
sustainable business functions within UK and across the
globe (Doppelt, 2017). All these factors are helpful for this
company to develop an effective brand image among their
suppliers and customers.
Table 1: The Pestle analysis of SAGE Group Plc
(Source: Created by the Learner)
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Conclusion
This study is effective in demonstrating the impact of business environment in each business
operations of Sage Group Plc in their domestic market as well as internationally. Each
important factor has been demonstrated effectively that is portraying the fact that in order to
operate a business successfully, an organization should consider their market environment,
stakeholder engagement and other components included within the business environment.
Importance of the Pestle analysis for realizing and analyzing current business satiation is
clearly stated in this study. The Pestle analysis along with entire business details of Sage
Group Plc is efficient enough for developing knowledge regarding this organization and what
are the factors that have a serious impact on the organizations operating their businesses in
the same sector.
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Reference list
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2017. Cengage Learning.
Bryson, J.M., 2018. Strategic planning for public and nonprofit organizations: A guide to
strengthening and sustaining organizational achievement. John Wiley & Sons.
Burrage, M., 2014. Where’s the insider advantage. Civitas (London, 2014).
Camilleri, M.A., 2018. The Marketing Environment. In Travel Marketing, Tourism
Economics and the Airline Product (pp. 51-68). Springer, Cham.
Claessens, S., 2017. Regulation and structural change in financial systems. Centre for
Economic Policy Research.
Cockburn, H. (2018). The four laws coming into force this month you need to know about.
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Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
business, government and civil society. Routledge.
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competitiveness: from countries and sectors to firms. Research Policy, 44(10), pp.1795-1814.
Hayes, J.P., 2016. Making trade policy in the European Community. Springer.
Kirby, S., Carreras, O., Meaning, J., Piggott, R. and Warren, J., 2016. Prospects for the UK
Economy. National Institute Economic Review.
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gb/about-us/ [Accessed 13 Mar. 2018].
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Sage.com. (2018 B). Corporate social responsibility. [online] Available at:
http://www.sage.com/company/about-sage/corporate-social-responsibility [Accessed 13 Mar.
2018].
Sage.com. (2018 C). The Sage Group plc announces formations of Technology Advisory
Group (Sage Group). [online] Available at: https://www.sage.com/company/news-and-
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[Accessed 13 Mar. 2018].
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