Report on Toyota UK's Business and Macro Environment Analysis

This report offers a comprehensive analysis of Toyota UK's business operations and its external environment. It begins by explaining different types of organizations, including public, private, and voluntary sectors, and their legal structures, with examples like Toyota, Sainsbury’s, and the National Health Service. The report then examines the size and scope of various organizations and the relationship between organizational functions, objectives, and structure, using Toyota as a case study. Furthermore, the report explores the positive and negative impacts of the macro environment on business operations, including factors such as technology changes, government interventions, and market competition. The report also determines the internal strengths and weaknesses of specific businesses and explains their interrelationship with external macro factors. It concludes by explaining how strengths and weaknesses interrelate with external macro factors, providing insights into Toyota UK's strategic positioning in the global automobile market. The report provides a detailed overview of the business environment and the impact of macro factors on the business.

Business and business environment
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Contents
LO1..........................................................................................................................3
1. Explain different types and purposes of organisations; public, private and
voluntary sectors and legal structures.....................................................................3
Generally there are some hybrid non profitable organizations which have no legal
liability such as public schools and health care centres. Nottingham High School,
Uppingham School, Harrow School, Hospitals and Clinic of the University of
Kentucky are considered as non-liability organization in UK. Those non profitable
organization voluntary served the students and patients. The business concept of
that organization is that the people have to pay their debits for services. On the
other hand being non-limited liable company, the organization does not publish
their annual financial report. ...................................................................................6
2. Explain the size and scope of a range of different types of organisations. .........6
LO 2.........................................................................................................................8
3. Explain the relationship between different organisational functions and how they
link to organisational objectives and structure.........................................................9
Conclusion.............................................................................................................13
Task 2:...................................................................................................................... 14
Introduction:...........................................................................................................14
LO3........................................................................................................................14
1.Demonstrate both the positive and negative influence/impact the macro
environment has on business operations:.............................................................14
LO 4 ......................................................................................................................16
2. Determine the internal strengths and weaknesses of specific businesses and
explain their interrelationship with external macro factors.....................................16
3. Explain how strengths and weaknesses interrelates with external macro factors
.............................................................................................................................. 17
Reference list ........................................................................................................... 19
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Task 1
Introduction
An organization is organized by group of people with a particular purpose such as
business or public serving. There are different types of action taken the managers in
the organization such as planning, coordination, structure selection, organizing,
arrangement, running, logistics and management. Toyota is a popular global
automobile organization established by Kiichiro Toyoda in 1937 at Japan (toyota-
global.com, 2016). In 19th century the organization has already expand their
business in different country including UK(Scheer, 2012).
The organization has critically observed the change in business environment in
global world. The demand of automobile has decreased the price of cars and fuel
prices are gradually increased. Apart from the vehicle parts and equipment cost are
getting higher than last year. However, the value for money and innovative
production practice strategies of the organization help them to sustain in global
competitive market. Therefore, the continuous improvement strategy of the
organization helps them to get a reliable place in global automobile market
(Sørensen, 2012). However, based on the recent competitive scenario in, the learner
has planned to produce this report which will assist Toyota UK to understand
different functions in different organization and organizational structure of other
organization.
LO1
1. Explain different types and purposes of organisations; public, private and
voluntary sectors and legal structures.
Business refers to the convertible process of skills and materials according to the
request of customers or provides service as per the request of the customers. As
stated by Anandarajan et al. (2012), business environment contains different factors
such as customers, resources, competitors, suppliers, distributors, industry trends,
substitutes, regulations, government activity, the economy, population and
demography and innovation and technological development. It has been observed
that resources such as human, physical and financial resources are most important
components for any organization. Global organization like Toyota may seek to gain
competitive advantage through price, quality and marketing strategy. It has been
observed that business prospective of organization has been affected by the several
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factors such as technology change and government intervention. It has been
observed that the customers are vital for organizational survival and prosperity. It
has been noticed that the competitors of this type automobile industry are generally
two types such as direct and indirect.
There are generally five types such as private organization, public, government
organizations, co-operatives, charities and NGOs. As stated by Craig and
Campbell(2012), private sector refers to the ownership and control of the
organization is controlled by the private individuals or group.
A private company is one which does not allow general public to buy the shares of
the organization. In other words the shares are privately held by the owners of the
organization.
A public company is one which has the general mass as the shareholders of the
organization. The shares of a public company are listed on a stock exchange and
the holders of the shares get a percentage of profit which is also known as dividend.
A voluntary organization on the other hand can be a private or a public concern.
However these are mostly not for profit concerns.
The limited company refers to the organization that mainly maintains the business
operation. The limited company such as Virgin Atlantic, JCB and New Look are
responsible for in its own right for different management system such as financial
management, profit margin and corporation tax limit. The members or the
shareholders are considered as owner of the organization. The owners select the
directors who are responsible for running business. The directors are using skills,
experience and judgement for success of the organization. The legal liability of the
organization is to return the invested amount to shareholders.
Sainsbury’s is a public limited company in UK. The entire business operation has
been managed by 1200 supermarket and convenience stores, online groceries and
general merchandise operation. As stated by Sørensen (2012), the commercial
enterprise undertaken jointly by two or more companies which retain their distinct
identities. It has been noticed that joint venture relationship is characterised by
shared ownership, shared returns and risks and shared governance. Like most joint
venture, Sainsbury’s developed the joint ventures along with land Securities Group
Plc and British Land Company Plc. Apart from that the banking service provides the
range of quality banking and insurance service. The joint venture strategy is based
on different prospective such as percentage of profit, percentage of paid government
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tax and percentage of revenue. According to the statistics, the Legal and General
Group PLC holds approximately 3.98% market share among 121,435 share market
shares.
It has been observed that the economy of the public sector is directly controlled by
government or government agencies. Therefore, the business operation is runs the
different types of organization on behalf of its citizens and for their general well-
being. National Health Service is one of the popular public organizations in England.
Public organization maintains stationary accounts and sends a confirmation
statement to company’s house. Company Tax return statement is send to HMRC
and the organization is registered for VAT, if the organization earns more than
£83,000 for a year. Apart from that the organization has to pay self-assessment tax
return and national insurance system through PAYE system.
As stated by Tayuret al. (2012), the activities of the voluntary sector are involving in
different organizations such as charity, voluntary bodies and business community.
Those organizations are basically non-profit enterprises and non-governmental
organization. It has been noticed that Cancer Research is popular voluntary
organization in UK. There are four types of legal structure of the organization such
as getting a group started, responsibilities of the management committee, route map
and legal structure for the group. The group started organization has to follow
specific legal structure such as:
 Arrange an initial meeting
 Publicise the aim of the organization
 Venue and facilities
 Agenda
 Involve everyone in discussion
 Gather names and addresses
 Set a specific date for next meeting
 Follow the constitution
As opined by Werbach and Hunter (2012), the concept of business organization like
Toyota UK covers different types of sectors such as people, objectives, management
and resources. The business concept of Toyota depends on different factors such as
profit, market share, technical excellence and corporate social responsibility. It has
been observed that Toyota is typically sole traders’ organization. Therefore they can
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easily develop their business without any legal formalities. The owner or the centre
head has total control on their business. It has been found that entire business
operation of Toyota manages by headquarter in Japan. The management itself
choose the working time and patterns of working for their organization. The human
resource department able to establish close personal relationships with staffs and
marketing team establishes close relationship with customers. The entire business
operation of Toyota is based on interest and skills of the top management rather
than employees.
Generally there are some hybrid non profitable organizations which have no legal
liability such as public schools and health care centres. Nottingham High
School, Uppingham School, Harrow School, Hospitals and Clinic of the
University of Kentucky are considered as non-liability organization in UK.
Those non profitable organization voluntary served the students and patients.
The business concept of that organization is that the people have to pay their
debits for services. On the other hand being non-limited liable company, the
organization does not publish their annual financial report.
2. Explain the size and scope of a range of different types of organisations.
There are generally five types’ organizations like private organization, public,
government organizations, co-operatives, charities and NGOs.
It has been noticed that limited companies are generally corporate association; they
have legal identity in its own right. Therefore, the properties and other assets are
owned by company but not their members. On another hand the assets of the
members are not for organization use. Therefore, the liability of the individual is
limited.
As stated by Sharma et al. (2012), limited companies have been formed by two or
mere individuals. It has been found that business partner have to submit different
documents such as memorandum of association and articles of association.
As argued by Zairi (2012), the private limited companies must have minimum one
share holder but organization can offer large share to the public. However, the
organization can offer large share to those people who want to sign business
contract with this organization. It has been noticed that public limited companies
have started as a public limited companies.
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It has been noticed that Toyota starts their business as public limited company in
1937. There are three important share holder of Toyota such as TYO, LSE and
NYSE (Sørensen, 2012). The organization has at least one director in every branch
of the organization. Currently the organization has $1.5tn shared capital in UK. It has
been observed that Toyota UK offers their share for sale to the general public.
It has been observed that organization has maintained different rules and legislation
to maintain their business profile as a public limited company. The organization has
registered them with the London stock exchange to sell the share to general public.
The London Stock Exchange strictly monitors share trading process. The
organization has arranged annual general meeting with their shareholders once in a
year (Kirchmer, 2012). It has been noticed that Toyota act trough their Company
Directors. The shareholders of organization choose the individual who takes
decision about important matters such as investment and marketing development.
There are three different types’ public limited companies such as small, medium and
large. As stated by Holcombe and Ipate (2012), Small businesses have faced
difficulties to sustain in the competition with large businesses. It has been found that
small business works in a very small market. Small business organization has low
employee resource. It has been observed that 99% small business organization has
maximum 9 employees. Small business accounted for 32% employment and 19%
turnover. On another hand there is small scope for the organization to changes their
management strategy randomly. Generally, entry of competitors could damage their
business significantly. However, the organization has less resource to protect
themselves from new entries of the market. Therefore, large businesses can protect
themselves from new competitors better through creating a high cost to enter the
market.
According to Willard (2012), medium sized businesses have got better position than
small size organization. They have served a larger market and can change their
strategy once or twice a year. Even they can expand their business in new market
with existing products. It has been found that 99% medium size organizations have
maximum strength of 249 employees. The organization has managed 74%
bushiness, 79% employment and 72% of employee turnover. They have more
resources to protect themselves from new entries to the market. However, the
medium size organizations have faced risk due to the competition with very large
organisation. The large organization has more resources the risks may be too high
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to sustain protection. Large organizations have more than 250 employees. It is
accounted for 0.1% of business but 40% of employment and 53% of turnover.
It has been noticed that organizations are classified based on the production such as
primary, secondary and tertiary. Primary organization generally produced the raw
materials from natural raw materials and sends it to the secondary organization. The
secondary organizations convert the raw materials into products and transfer the
products to the tertiary organization. Tertiary organizations are generally retailers
who sales the product or providing the service to the customers.
The scope of the organizations is depending on their product types. The scope for
coca cola organization is to produce and supply soft drinks such as carbonated
drinks, concentrates, fruit juice, ready to drink coffee, tea, sports energy drinks and
bottled water. It has been observed that OXFAM is a charity organization has a
broad target that supports more resources to protect themselves from new entries to
the market; however against a very large organisation with more resources the risks
may be too high to sustain protection.
It has been observed that the organization has selected vision, mission, goals and
objective to improve their business performance. Vision refers to that position where
the organization wants to go. Mission refers to the purpose and role of the company.
As stated by Chen et al. (2012, p.1665), the reason for selecting mission is to
provide the scope of the organisation so that the organization can fulfil its
Objectives. Objective refers to the specific and shorter target of the organization.
The business operation of the organization is depending up on the shareholders and
stake holders. Stake holders are considered as individuals or group of people who
are interested in the business. However, these people are generally affected by the
business activities. It has been found that there are different features in business
environment of global firm like Toyota such as dynamic, differs and uncontrollable.
Therefore, the business environment of Toyota is changing gradually based on the
trend of customers and society but it is unpredictable also. The business is
expanded internationally by the supportive industries. The business is uncontrollable
because the entire business operation is based on macro environment, forces and
factors.
LO 2
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3. Explain the relationship between different organisational functions and how
they link to organisational objectives and structure
The function of organization is depending on different functions such as human
resource, sales and marketing, research and development, production and
operations, customer service, finance and accounts, administration and IT.
Marketing is considered as bridge of relationship with the market in order to satisfy
the customers (Onetti et al. 2012, p.339). The marketing process is beneficial for
both customers and suppliers. The marketing hel0ps the organization like Toyota to
deliver customer information for developing new products which will support t quality
life of the customers. It has been observed that Toyota has created a competitive
business environment through their competitive pricing strategy. The organization
has developed product distribution system which allows the customers convenient
access to product and service. The high demand of the Toyota cars allows the
organization to grow and expand its operations and collect more profit from UK
market. it has been noticed than communicating messages of the organization helps
to improve social behaviour in positive way. It has been observed that the
organization sometimes provided awareness messages such as anti-smoke alarms
as well as unsafe driving in drunken condition may increase responsibility of the
organization on the society.
As stated by Bøllingtoft (2012, p.305), finance is quite related with the expenditure or
usage of organizational resources for different operation. The financial function
provides valuable reports on financial performance and position in relation to
business plan. The organization has allocated the funds to various parts of the
organization in line with budget and measuring the use of financial resources against
performance budget. In order to manage the cash flows the organization has to
ensure that there are sufficient funds to meet business requirements. The financial
performance of the every department monitors by the internal auditors. The finance
of the large company was involved in the investment of surplus funds. It has been
observed that many organizations have created the treasury fund to look after the
business of the organization. Therefore, the organization gets best returns and
reduces the risk from investment. The investment of resource is generally
considered as risk by most finance department which includes internal projects of
additional production lines, cost improvement project, buying new technology to help
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quality and efficiency (Sørensen, 2012). It has been noticed that financial report of
Toyota ensures that the organization meet large requirements of UK. It has been
observed that global business operation of Toyota is based on the cantered
communication system. The head office directly communicate with other global
offices through email, phone calls and own server. Therefore, there is internal
communication among all departments of the organization. Every department such
as research and product development department, production department and
marketing department are coordinating with each other over telephone, internet,
Email and LAN connection.
As stated by Yuet al.(2012, p.36), accounting in an organization like Toyota will be
tracking all daily transactions of the purchases, sales, utilization of business
resources internally and externally to the organisation. The cash flow in Toyota
ensures that the organization pays sufficient funds to maintain business liabilities
when the organisations need to pay. It has been observed that the finance team is
responsible for sourcing additional funding for expansion of the business.
Toyota has involved advance human resource management department to look after
the employee by the organization. The goal of the human resource department is to
manage the employees to achieve 100% efficiency and good performance. The
human resource management department also concern about the legislation and
policies. The role of the human resource management involves in different activities
such as recruitment, administrations, job design, maintaining employment law,
employee relation, managing compensation, training and development of employee
skills. This vision statement reads, “Toyota will lead the way to the future of mobility,
enriching lives around the world with the safest and most responsible ways of
moving people. Through our commitment to quality, constant innovation and respect
for the planet, we aim to exceed expectations and be rewarded with a smile. We will
meet our challenging goals by engaging the talent and passion of people, who
believe there is always a better way.”
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Figure 1: Functions Relate to Mission and Objectives
(Source: Scheer, 2012)
It has been observed that Toyota has implemented corporate objectives which are
supported by a detailed Corporate Strategic Action-Plan. The Corporate Strategic
Action-Plan involves different the functions of the Organisation. Any plan has been
prepared by the higher level managers who take ownership for their Objectives.
Each Function then using this objective and its due date will prepare its own
Functional Strategic Action-Plan with sub-task and sub-deliverables/objectives that
will be formed with input from unit heads within the Function. It has been observed
that the organization follows bureaucratic leadership strategy to manage their
operation. According to the bureaucratic leadership style the higher level managers
decide or develop the strategy. After that the employees and team leaders have to
fulfil the goals or strategy in mentioned timeframe (Scheer, 2012).
It has been observed that relationship between functions have an impact on
Toyota’s business. The responsibility of the human resource department is to
manage employee, track their performance and provide them with appropriate
feedbacks. According to Scheer (2012), it has been noted that human resource
management department manages the sales teams. They provide proper
arrangements to train the sales team and motivate them by enhance their incentive
system. The regular implication of strategies and communication system, the sales
of the organization gradually increased. On the other hand the sales and marketing
team work side by side and collect survey data and transfer the information to
product design and development department. Based on that market survey, the
planning and designing department develop new car model or redevelop the existing
models by providing additional features. It has been found that the marketing team
has developed new marketing strategy that can boost the sales of the organisation.
Based on that marketing strategy, the role of the sales team is to initiate the sales to
increase sales percentage. Therefore, responsibility of the human resource
management is to recruit experienced professionals for marketing team who can
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design innovative marketing plan for new market as well as existing market and
improvise on the sales forecast.
According to the key concept of Toyota, the bottleneck factor limits the production in
a specific time frame. The organization follows own implementing strategy such as
bottle neck factor, cycle time concept, idol time strategy, specific process of
production system, thought put time, utilization of resources.
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