Business and the Business Environment Report - Module ABC

This report offers a comprehensive analysis of Sainsbury's business environment, focusing on various organizational structures, including private and public entities, and their legal frameworks. It delves into Sainsbury's operations, size, and scope, examining its products, services, vision, and mission. The report explores the interrelationships between different departments within an organization, such as marketing and finance, and human resources and marketing, highlighting their contributions to achieving organizational objectives. Furthermore, it evaluates the positive and negative impacts of macro-environmental factors, such as political and economic considerations, through PESTEL analysis. The report also conducts internal and external analyses of an organization, assessing its strengths, weaknesses, and the relationships between them and external macro factors.

Business and the Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Elaborate various kinds of organisations with their legal structure.......................................3
P2 Explain size and scope of different organisations..................................................................6
TASK 2............................................................................................................................................7
P3 Explain interrelationship in various departments and their link with objectives and
structure.......................................................................................................................................7
TASK 3............................................................................................................................................8
P4 Evaluate positive and negative aspect of macro environment on business...........................8
TASK 4..........................................................................................................................................10
P5 Conduct internal and external analysis of an organisation by evaluating strength and
weaknesses................................................................................................................................10
P6 Relationship in strength and weaknesses by relating with external macro factors..............11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13
.........................................................................................................................................................1

INTRODUCTION
Business and business environment refers to chain of individuals, firms and other factors
that not in control of an organisation but influence activities in performance, profitability and
growth for survival in fierce competitive world. This report is based on Sainsbury which is a
third largest chain of super market in UK with market share of 16.9% in that sector. This report
is based on kinds of organisations that exist in economy with legal structure, size and scope of
organisations. That report also elaborate about various organisations with their department and
their relationship. Further it elaborates about macro environment with its positive and negative
impact on organisational works and procedures and micro environmental factor and their
interrelationship in organisational context.
TASK 1
P1 Elaborate various kinds of organisations with their legal structure.
There are various kinds of organisations exist that contributes in economic development
by identifying hidden needs and wants of consumers that ultimately raise living standard of
people (Abe, Bassett and Dempsey, 2012.). This report is based on analysis about contribution
of organisations that belong from different sectors in which Sainsbury which is private limited
company. National Audit office that is a public sector organisation and in Voluntary Wellcome
Trust. Here are the descriptions of those organisations and their legal structures.
Private organisation:
Private organisation that is owned and operated by individuals by focusing on earn profit
by identifying hidden needs and wants of consumers in better way (Barnes and Hunt, 2013.). In
that report chosen organisation is Sainsbury which is a large chain of supermarket with great
portfolio of products and services by identifying and build product and services according to
consumers’ needs and wants. To reach at desirable goals and objectives organisation have to
follow a legal structure.
Purpose/ objective:
The main objectives behind existence of Sainsbury that they always focus on build strong
customer relationship while shop their products and services.
Legal structure:

Legal structure is one of significant factor for organisations to reach at desirable goals
and objectives that are as follows:
 Sole trader: Sole trader: Sole trader is an individual person organisation in which small
amount of money or finance is required to set up their business.
 Partnership: To solve out problems of sole traders, partnership firms should be framed
in which a large association of individual and group of individuals consist in it. In it
between 2 to 20 partners can work under it.
 Private limited company: It is a kind of Joint stock company in which business possess
individual legal identity and they majorly small and family business and owned by
shareholders.
 Public limited company: It is a kind of large joint stock company and it is an
incorporated business and operated by board of directors. Sainsbury come operate under
public limited company.
Public organisation:
Public sector is one of significant part in country’s economy and operated by government
to serve in best way requirements of masses (Campling, 2012). In public sector chosen
organisation is National audit office that is an independent body of parliament in UK which is
responsible for auditing departments of central government, various government agencies and
non departmental bodies.
Purpose/ objective:
National audit office accountable to carried out value regarding money into policy of
administration (Dima, Grabara and Modrak, 2014.). It conducts audit of various government
department such as central government, government agencies and public bodies and many more.
Legal structure:
Public sector organisation follows a structure that helps to attain organisational goals and
objectives that are as follows:
 Local government: It is a form of public administration for towns, cities and districts
and consist of country and municipal structures. The main purpose is to serve local
people and community.
 State government: It is the government of a nation and divided into federal form of
government that has strong political power and autonomy.

 Central government: Central government is the unitary and possess absolute supremacy
and equivalent with federal government. National audit office come under central
government.
Voluntary organisation:
Voluntary organisation is a group or union of people that come in into agreement and
usually work as an volunteer to reach at desirable goals and objectives (Doyle, McEachern and
MacGregor, 2015.). In that trade associations, unions and societies and professional association
exist.
Purpose:
The main purpose of existence of Wellcome Trust that to give best treatment to human
and animals by examine their diseases in proper way.
Legal structure:
 An unincorporated association: That kind of legal structure best for small groups of
members to attain short term goals and objectives and that organisation that not possess
adequate property and staff.
 Trust: Trust majorly working with objective to manage money or property to attain pre
determined goals and objectives (Evans and et.al ., 2017.). They build a strong
relationship within three parties that are donors, trustees and beneficiaries. Wellcome
trust is a trust that work to provide best treatment to animals and human being.
P2 Explain size and scope of different organisations.
There are kinds of organisation exist in business environment that establish to serve
different motives that are as follows:
Sainsbury
 Background details: Sainsbury founded in year 1869 and start their business from a
small dairy shop and frequently become a well known brand in market by offering high
quality products and services at low prices.
 Products and services: There main products are groceries in which they have large
products and in different ranges that serve all kinds of consumers in better way.
 Size and scope of organisation: Sainsbury have large market with 16.9 % and it is one
of largest food retailer of UK with 600 supermarket, 800 convenience stores with acquire
2,50,000 orders in a week.

 Vision and mission: The vision of Sainsbury to become most trusted retailer in which
masses love to work and shop. Means that by selecting the skilled workforce, bring
creativity and diverse in works and procedures so that consumers can get best services
while they shop products of them.
 Major stakeholders: The major stakeholders of Sainsbury are consumers, suppliers,
competitors, shareholders, employees and investors (Gillon and et.al ., 2014.).
Wellcome Trust:
 Background details: It is an biomedical charity trust of research situated in London, UK
since 1936 with legacies of sir Henry and the main objectives is to improve health of
human being and animals with conduct biomedical research to support understanding
towards science.
 Products and services: They provide services to people and animals by find out diseases
from their body.
 Size and scope of organisation: It is one of large trust with 2057 employees working
under it and it has £25.9 billion (2018) endowment that builds it third richest charitable
foundation.
 Vision and mission: The main vision and mission of Wellcome trust to promote research
excellence by eliminating challenges of health by conduct research and establish various
institutions. Their mission is to conduct high quality research and partnering with
institutions from middle income countries.
 Major stakeholders: Their major stakeholders are employees, patients and fund
providers and many more (Hintermeister and O'keefe, International Business Machines
Corp, 2012).
National audit office:
 Background details: It is an independent parliamentary body in UK that conducting
auditing of various departments in which central government departments, various
agencies and public bodies and many more.
 Products and services: Their major products and services is to conduct audit to measure
proper results that eliminate gaps in income and expenditure of an organisation.

 Size and scope of organisation: National audit commission come into central
government and have 796 employees at world wide with audit various organisations of
government.
 Vision and mission: The vision and mission of National audit office to provide
independent assurance by proper accounting by using public resources that helps to
improve financial performance.
 Major stakeholders: Their major stakeholders are Government, employees and other
government departments.
TASK 2
P3 Explain interrelationship in various departments and their link with objectives and structure.
In an organisation there are various department that commonly work to achieve
organisational goals and objectives majorly (Ji-fan Ren and et.al ., 2017.). Although they have
separate aims and objectives but ultimately all unite for organisational goals. There are close
relationship in various departments of organisation and share roles and responsibility by
communicating with each other in proper way.
Relationship in marketing with finance department:
Marketing department are closely related with finance department to reach at desirable
goals and objectives. Marketing department gives major information to Human resource
department about requirement of skill and talented workforce to attain desirable goals and
objectives (Morgan, 2012.). Also finance department gives major information to marketing
department about position of finance in organisation and how much they can spend on various
activities so that coordination should be maintained in roles and functions of both the
departments in better way. In context of Sainsbury they give proper information to each and
every department so that organisational goals and objectives should be achieve. In some other
organisation such as Zara and John Lewis they all departments are interrelated with each other
but they possess own role sn and target that always give motivation to give their best.
Human resource with Marketing department:
Human resource and marketing department are closely related with each other to attain
pre determined goals and objectives in proper way ( Muff, 2012.). In context of Sainsbury they
build some goals and objectives such as select no. of skilled and competent workforce for that

marketing department give proper information to HR department about kind of skills that are
require to remain always competitive in market place. In other organisation such as Zara and
John Lewis which are large organisations marketing department not only give information to
Human resource department but also to all departments and ultimately report to higher authority
to attain desirable goals and objectives.
TASK 3
P4 Evaluate positive and negative aspect of macro environment on business.
The analysis of the macro environment can be done with the help of PESTEL analysis. It is a
kind of framework which is being used for analysing different aspect of the macro environment.
Herein, the PESTEL analysis of the Sainsbury company is mentioned below:
Political factor- This consists the political conditions and situations which can impact
the business performance (Anishitani and et.al ., 2012). If political situations remain constant
then it will be easy for the companies to expand their business into different countries. On the
other hand, if political conditions flex too much then it becomes difficult for the companies to do
the business in other countries. In the aspect of the Sainsbury company the political condition of
the UK is very important. Like if political relationship of UK is good with the other countries
then it will be easy for the company to expand their products and services in different nations.
Advantage- The main advantage of this factor is that if political conditions are stable and
relation of political parties is good then it will be beneficial for the companies (.Rohrbeck,
Konnertz and Knab, 2013.).
Disadvantage- The drawback of the political factor is that if relation of the political
parties is not good then it can create many issues for the companies.
Economical factor- This factor includes various kind of aspects regarding to the
economy such as interest rate, exchange rate, prices etc. Eventually, variation in these rates can
impact the companies. Like in the Sainsbury company, if these rates flex then it can be result
negatively and positively. For example if the interest rate decrease then it will be easy for the
company to get the loan from the banks at lower interest.

Advantage- The benefit of this factor is that if some rates like interest rate decrease then
it can beneficial for the companies.
Disadvantage- On the other hand, the drawback of this factor is that if there are too many
variation in this factor then it can be resulted in the many issues.
Social factor- It is related with the people's culture, religion, norms, values, like-dislike
etc. Basically, companies have to make their plans, policies as per these factors. If the Sainsbury
company provides the products and services as per these factors then it will be easy for them to
satisfy the need of the customers (Tutunea and Rus, 2012.).
Advantage- The main advantage of this factor is that if companies makes their plans and
policies as per these factors then it can be beneficial for them.
Disadvantage- While the drawback of this factor is that it becomes tough for the
companies to consider all the elements and due to this the need and demand of the customers can
not be satisfied.
Technological factor- The technology is getting change rapidly as the time passing. It is
necessary for the companies to implement new and advanced techniques in their operations. In
the aspect of Sainsbury company if they adopts the new technology in their process then it can
help them in attracting new customers. On the other hand, if company ignores this factor then it
will be difficult to sustain in the competition.
Advantage- This factor can be beneficial for the companies if they adopt new and
advanced techniques timely.
Disadvantage- The one of the drawback of this factor is that it removes the dependency
of the human resources and due to this unemployment increase.
Environmental factor- It contains different kind of environmental aspects such as
climate condition, natural disaster etc. Eventually, these factors are not under control of the
organisations. Like the Sainsbury company is located in the UK, if any natural disaster such as
flood occurs there then it can effect their business badly (Yoon, 2012. )).
Advantage- Though, there are not too many advantage of this factor but if natural
conditions are in the favour of the companies then it can be useful for them.
Disadvantage- The limitation of this factor is that unwanted climate changes can effect
the performance of the businesses.

Legal factor- These factor includes legal laws, rules, regulations and legislations. It is
necessary for the companies to follow all the rules and regulations. In the Sainsbury company, it
is important for them to run their business activities as per legal frameworks and laws ( Muff,
2012.).
Advantage- The benefit of this factor is that if companies follow different laws for
protection of the right of customers and labour then it will increase the goodwill.
Disadvantage- Same as the other factors, it also consists some drawbacks. Like in the
absence of implementing these laws the company can be declared illegal.
TASK 4
P5 Conduct internal and external analysis of an organisation by evaluating strength and
weaknesses.
The macro environment analysis of the companies can be done with the help of the
SWOT analysis. The SWOT analysis of Sainsbury company is mentioned below:
Strength- It refers to the those elements which are existing in the company and can give
advantage. Like the strength of the Sainsbury company is the innovative promotional strategies.
Due to this, the company can get the advantage over the rivalry firms.
Weakness- It is associated with the elements or factor in which companies are weak and
due to this their profitability is getting effected. The weakness of the Sainsbury company is that
their customers are not loyal towards them as well as their growing cost is increasing
significantly.
Opportunities- It is related with those factors which are existed in the environment and
company can get the advantage of this if they grab the right opportunity (Tutunea and Rus,
2012.).. Like for Sainsbury company, they have the opportunity to expand their market in the
rural area and due to this they can generate more revenue. As well as they will be able to expand
their business in large area.
Threats- These are the negative aspect for the companies in the environment. It is
important for the companies to prevent these threats by effective strategies. In the context of the
Sainsbury company, the threat is tough competition. Due to this company's sell, profit and
performance can effected. The reason of this threat is that there is no any barrier for entry of new
entities and because of this competition increase.

P6 Relationship in strength and weaknesses by relating with external macro factors.
There are interrelationship in internal and external factors of an organisation and by observing
them in keen manner organisation can be taken appropriate decisions that are as follows:
Political environment:
The major advantage in front of Sainsbury that they are always capable to accept changes
that occurs in environment and with their innovative products and services they are majorly
contribute a lot in advancement of organisation as well as economy. Their major weaknesses that
their consumers are not loyal yet that affects on their business in negative but due to innovative
products and services they can enlarge opportunities.
Social environment:
In social environment consist of changing taste and preferences of consumers to reach at
desirable goals and objectives in better way Yoon, 2012. ). In context of Sainsbury they are very
much concerning about consumer preferences so that they can easily can grab attention of large
no. of consumer base.
Economic environment:
In economic factors consist of fluctuations in interest rates and other factors but they are
enough capable to reap advantages out of them and relate with organisational benefits in positive
way. In context of Sainsbury they have strong presence in market so when they proceed in any
other marketplace they also get advantages from that place.
Technological environment:
To reap benefits from adaptation of advance tools and techniques organisation can be
able to cope up with changes in taste and preferences of consumers and get advantages out of it
in positive manner. They are very well known name in field of providing advance services to
consumers.
Legal environment:
for an organisation to operate in various nations but legal rules and regulations impacts in
both negative and positive manner in organisation. For an organisation to overcome from their
major weaknesses they have to cope up with consumer needs and their ethical values so that
coordination should be maintained.