Business Environment: Types, Macro Impacts, Strengths and Weakness

This essay provides a comprehensive analysis of the business environment, focusing on different types of organizations (public, private, and voluntary sectors) and their purposes, size, and scope. It examines Iceland Foods Ltd (private), British Business Bank (public), and Leonard Cheshire Disability (voluntary) as examples. The essay also explores organizational functions and structures, the positive and negative impacts of the macro environment using PESTEL analysis, and internal strengths and weaknesses through SWOT analysis. Furthermore, it investigates the interrelation of internal strengths and weaknesses with external macro factors, offering a holistic view of the business environment and its influence on organizational operations. Desklib provides this assignment and other study resources to support students.

Business and business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1 ................................................................................................................................................1
P1) Different types and purposes of organisations; public, private and voluntary sectors.........1
P2) Size and scope of a range of different types of organisation ...............................................3
LO 2 ................................................................................................................................................5
P3) Organisational function and structure ..................................................................................5
LO 3.................................................................................................................................................7
P4) Positive and negative impacts of macro environment .........................................................7
LO 4.................................................................................................................................................9
P5) Analysis of internal and external strengths and weakness...................................................9
P6) Interrelation of strengths and weaknesses with external macro factors ...........................11
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Business environment can be defined as a combination and sum total of all the internal
and external factors that have capability to create significant effect and influence on working or
business operations of organisation. The main factors that are included in business environment
are clients and suppliers, business partners and owners, competitors, laws and regulations of
government and policies of political authorities, technological change, economic and social trend
and all other related parties and stakeholders that create influence on performance of
organisations (Ayios, 2018).
This assignment is based on business and business environment and three organisations
are selected form different sector of economy to accomplish this report. From private sector
Iceland foods Ltd is taken, from public sector British Business Bank is selected and as a
voluntary organisation Leonard Cheshire Disability is selected. In this report different types, size
and scope of organisations is included with interrelation among various function and
organisational structure. Beside this a PESTEL and SWOT analysis is also there to evaluate and

analysis the various macro factors and internal strength and weakness. And finally, this report
also consist interrelation between internal strengths and weakness and macro factors.
LO 1
P1) Different types and purposes of organisations; public, private and voluntary sectors
The success, performance, growth and profit level of an organisations is directly depends
on the features and characteristics of its business environment which includes all the related
parties and factors tat create influence on operation of a company (Baporikar, 2019). Thus,
proper understanding of business environment is necessary for all organisation to have better
position in target market. In every business environment various types of organisations are found
a description of which is provided below:
Public sector
The organisations of this section are operated and managed by the government dan other
legal authority of a nation. The main purpose of organisation belongs to public sector is to
provide basic and public services to citizen and individuals of nations to maintain the standard
and convenience in their life. The main services provided by public organisation includes
education and health facility, safety and security through maintaining peace with the help of
military, army and police, and also provide public transportation and other facility.
Legal structure
On the basis of there legal composition and ownership public sector is categorise into
three types which are as follows:
Central government- These organisation are under the control of central government
and all its operations, functions and funding are managed by central authority of nations (Boone
and et.al., 2019).
State government- The firms and companies which are managed and handled by state
authority in which the maximum part of their operations are carried out belongs to this legal
structure of public sector. The main operations and overall management and funding of these
organisation falls under the jurisdiction of state government.
Local government- These are the organisations which are liable to local or municipal
authority and works at a smaller level up to local jurisdiction (Charter, 2017). Thus, these all
operations and control are in hand of local government or municipal operations.

Private sector
These sector is also known as corporate sector and organisations of these sectors belongs
to private individualise. The main purpose of private companies is to maximize their profit and
yield for future growth through making efforts to attract larger number of customers.
Legal structure
On the basis of its compositions and number of owners, public sector is divided into
following three types as per their legal structure:
Sole proprietorship- These are the companies which are fully control and owned by a
single or sloe private individual who is responsible to bear all risks and enjoy maximum share
and part of profit. In UK every sole proprietorship needs to get registered and timely tax return
are also filed by them (Hamilton and Webster, 2018).
Partnership- It is a privately owned organisation the operations and functions of which
are controlled and managed by two or more private individuals or group of people (the number
of partners ranges from 2 to 20). In UK partnership are governed by the acts or provisions of
The partnership act, 1890.
Private limited companies- Commonly these organisation are called as joint stock
company as there ownership and functions are jointly belongs to a large number of stakeholders
who are having limited liability. Board of directors are appointed by shareholders to manage and
handle the day to day operations of company and its business activities are governed by AOA
and MOA (Hillary, 2017). Apart form this in UK private limited companies need to perform
their business activities as per the provisions set by companies act 2006.
Voluntary sector
These are the organisations which are having the main purpose of serving the society and
work for welfare and upliftment of vulnerable group of society. The main aim of these
organisation is to provide basis amenities to deprived and economical weaker and helpless
people. The financial needs of organisation belongs to voluntary sector are meet through the way
of charity and donation.
Legal structure
Voluntary sector is further categorised or divided into various types on the basis of their
legal structure. The two main type of voluntary sector are as follows:

Trust- It is the most commonly seen voluntary organisation in which a group of
individual form an organisation for welfare of people. A trustee is appointed by the members to
handle and mange the assets and to control and operate the day to day function of the trust to
meet the objective of social welfare.
Company limited by guarantee- As per the provisions of British law, company limited
by guarantee are primarily non profit corporation that require a legal personality (Jabłoński,
2019). These companies mainly not have the share capital or shareholders and are managed and
operated by members who are known as guarantor and responsible foe various activity for
welfare of society and to meet desired ends.
P2) Size and scope of a range of different types of organisation
The different types of organisation include private, public and voluntary sector
organisations the main purpose, objectives, scope and mission of which are provided below:
Iceland Foods Ltd
As per the legal structures and its jurisdiction this organisation is a private limited
company which basically deals in retail sector and is a well known British supermarket chain
having its headquarter in Wales, UK. Iceland Foods Ltd deals in frozen foods which include
prepared vegetables and meals. Beside this, non frozen grocery product are also provided by
Iceland foods Ltd which includes meat, dairy and other dry goods (Nikitina and Lapiņa, 2019).
Around 23000 employees are currently working for this organisation thus, it is a macro firm. The
main objective of Iceland foods Ltd is to increase its customer share through including new
varieties in its product portfolio. The mission of this firm is to become one of the leading
supermarket retail chain of UK through serving its customers for maximization of growth.
British business bank
It is a state owned economic development bank which was formally established by
government of UK in 2014 (British business bank, 2019). The legal structure and control of this
public sector organisation belongs to the department for business, energy and industrial strategy
of UK. The main objective of British Business bank is to increase the supply of credit and
provide easy loans to small and medium sized enterprises and also providing business advice and
services for betterment of nation through providing more emphasis on the basis needs of citizen
so that economy of UK can prosper and grow with rapid phase. British business bank is also
focused towards managing taxpayer's money more efficiently for development of economy of

UK through creating more diverse finance market. The mission of British business bank is to
facilitate economic growth by making finance market of UK work better especially for smaller
businesses to enable them to prosper and grow.
Leonard Cheshire Disability
It is one of the major health and welfare voluntary organisation working in UK which
was founded in 1948 (Leonard Cheshire, 2019). The registered head office of Leonard Cheshire
disability is in London, UK. The main objective of this organisation is to provide support to
disable people through providing local care services to physically and mentally disabled
individuals which includes providing residential homes, domiciliary support, day services,
supported living,respite care, activity centre, transition services and skill support and opportunity
of employment (Khatun and Miah, 2019). The mission of Leonard Cheshire is to encourage and
support disabled people to live a independent life with freedom and through overcoming their
disability and providing services for facilitating welfare of disabled people by the way of
conducting various campaign on issue affecting disabled people. In 2013-14 it was among top 40
UK charities and its 90% of income came from government grants, donations and charity.
Comparison of organisations on the basis of there size
Basis Micro Small Medium Large
Definition Theses are the
smallest type of
organisation
mainly operated by
a single or two
individuals.
Theses organisation
are slightly bigger
that micro and
around 2 to 10
people mange and
operate its function
(Pearson, 2017).
These organisation
are bigger than
small and employs
around 100- 200
employees.
These are the big
organisation that
have a huge
workforce to
mange its
operations
Scope The scope or main
purpose of theses
organisation is to
earn revenue for
living
There main scope is
to earn sufficient
amount of profit to
better living
standard.
There business
scope is towards
achievement of
higher level of
profit to ave better
growth.
There main scope
is towards
achievement of
better expansion
of business
operations and

achieving
sustainable in its
production.
Geographic
al area
served
Limited to local
boundaries
Limited to domestic
level
Limited up to
metropolitan city
level
No limit and
mainly operates at
international level
LO 2
P3) Organisational function and structure
The main functions of Island food Ltd and any other organisations are as follows:
Marketing- This function is related with promotion and advertising of a product or
organisation to attract larger number of customers to have better sales revenue and profit. Best
efforts are made by marketing team Island food Ltd to have biter connection and communication
with its customer so that larger number of consumer can attracted for the organisations
(Ruohomaa and Salminen, 2019).
Human resource- This function of an organisation is related with selection and
recruitment of most skilled and talented employees for various job of organisation. The HR
department of Island food Ltd make efforts to employs most suitable candidate for a specific job
so that objectives can be achieved on time with efficient performance.
Finance- The main role played played by this function is timely preparation of budget
and other accounting report to keep a check on all income and expenses of organisations. The
finance function of Island food Ltd is very effective a proper check and monitor is maintain on
all activities to achieve the objective of cost efficiency.
Interrelationship among various function
Marketing and finance- A collaboration among marketing and finance in Island food
Ltd ensures control on expenses made on advertising and other promotional tool so that wasteful
activities of marketing function can be eliminated to enhance its efficiency and meet the
objective of cost efficiency.
Finance and HR- An interrelation between HR and finance function ensure better
efficiency and performance of employees through providing timely incentives and other
monetary benefits to workforce to motivate them for having better performance (Shu, Jain and

Liang, 2019). Thus, a connection between Finance and HR ensure overall improvement in
performance and efficiency of manpower of Island food Ltd which facilitates effective
achievement of targets and objective.
Various organisational structure
the most commonly found organisational structure within any organisation are as follows:
Functional structure- Under this type of organisational structure the the operations of
company are divided and grouped on the basis of various tasks and function performed by it. the
advantage of this structure is that employees are grouped on the basis of skill set and function,
which allows them to focus on their collective energies on executing their roles as a department
in a more effective way.
Divisional structure- This type of organisational structure is mainly founded in large
sized companies where there are several horizontal objectives thus, allow more autonomy among
groups within the organisation (Singh, 2019). Under this type of structure, each division is
essentially operates like its own company, controlling its own resources and how much money it
spends on certain projects or aspects of the division. Thus, divisional structure brings more
clarity in operations of a large or multinational organisations through eliminating complexity of
its task.
Use of functional organisational structure is made by Island food Ltd as it brings more
efficiency and better coordination among various functions of organisation and direct effectors of
all activities towards the mutual target of organisations.
Illustration 1: Functional structure of Island food Ltd, 2019
(Source:Functional structure of Island food Ltd, 2019)

LO 3
P4) Positive and negative impacts of macro environment
Use of PESTEL analysis is made to analysis and evaluate the factors that are impacting
the retail sector of UK.
PESTEL analysis
It is a framework used by different organisation to have a detailed and in depth
knowledge and information about the various macro factors that have both negative and positive
impact on functioning and business operations of a firm (Tura, Keränen and Patala, 2019).
Following PESTEL analysis is conducted by Island Food Ltd to have a analysis and
understanding about various macro or external factors that are creating impact and influencing
the UK retail sector.
Political- This various factor comes under the head of political environment are
government policy, political stability, tax, industry regulations, global trade practises and other
international tariffs and restrictions which lead to sufficient effect on retail industry (Wirtz,
2019). The various government act levied on goods plays a vital role in deciding the prices of
various goods in which the retail sector deals. In current scenario, the Brexit issue i.e. decision
by UK of leaving EU has made the pound weaker thus, various uncertainty are faced by retail
sector in future trade restrictions in Europe which is adversely affecting the profit margin of
retail sector and organisations like Island food Ltd.
Economical- The main factors that form part of economic factors are the bank rate,
exchange rate, globalisation, inflation, interest rate, disposable income, level of demand, etc. The
strong economic conditions of UK are ensuring smooth flow of household articles and retail
business as a strong economy allows customer to buy the product they wants and like and they
are having more disposable income to spend. But currently some uncertainty prevails in the
economic market and growth rate of UK due to Brexit issue which has lead to made exchange
rate Volatile thus, affecting negotiations power of Island Food Ltd and other organisation of
retail sector with their suppliers which are creating increase in prices of product and also
diminishing profit margin in retail sector.
Social- This factor reflects the consumer trends and taste, current fashion and buying
habits of customer, lifestyle of society, demographics aspects of populations, etc. The maximum
population of UK with disposable income belongs to demographic characteristics of age around

40-65 thus, retail sector needs to make signifiant changes in its strategies to attract this aged
section of society (Wood and Logsdon, 2017). The attitude and perceptive of society of UK is
shifting towards health consciousness thus, providing more items for facilitating better health is a
good opportunity for retail sector. Island food Ltd can also included more healthy and food items
in its product portfolio to attract more customers. Beside this a craze of online shopping is also
seen in society of UK which is further creating positive sign for retail sector of UK.
Technological- This part of macro environment is concerned with automation, social
networking, innovation, disruptive technologies, robotics, artificial intelligence, etc. The
technological environment of UK is highly dynamic in which new innovations are going on with
a rapid speed. This has created a positive impact on organisation through developing better scope
for e-commerce and e-business. Technology has brought out better ways for online shopping
which is useful for both organisation and customers as goods are delivered to door step of
customers through just making click or ordering products through on line website. This has lead
to better sales and revenue for organisation in retail sector like Island food Ltd and also
eliminated the barrier of locations. But some security threats regarding the safety of personal
information of customer i.e. about their debut and credit card is also at stake as the chances and
cases of cyber crime are also increasing with the development of technology. Better ways should
be created by retail sector to provide and safe and secure inline payment method through
efficient use of technology.
Environmental factors- In this factor various environmental restrictions imposed by
government of a country are included which are basically made for preservation and protection
of environment from Hazardous business activity. Retail sector also needs to focus on
sustainable development with adopting use of eco-friendly items and renewable energy to
eliminate the hazardous impact created on environment (Yamamoto and Zhi, 2019). Efforts
should also be made by Island food Ltd to fulfil its corporate social responsibility and should
operate in an ethical way.
Legal- Under this factor of external business environment all the employment law, heath
and safety act, local labour laws and all other common regulations made by government of the
nation is included. The UK of government is little strict in providing safe and positive
atmosphere to its employees and customers which is creating a negative impact on business

operations of retail sector. Every organisation need to provide a minimum wage rate to its
employees which is increasing day by day hence increasing cost of operation of retail sector.
LO 4
P5) Analysis of internal and external strengths and weakness
For conducting analysis of internal and external strength a weakness of an organisation
belonging to any particular sector use of SWOT analysis is made. Following SWOT analysis is
based on Island Food Ltd which belongs to supermarket sector of UK.
SWOT analysis of Island Food Ltd
Strengths Weakness
 Strong distribution network is the biggest
strength of Island food Ltd with more
branches over 800 locations of UK
(Zwikael and Smyrk, 2019)..
 Wide of range of frozen and non frozen
quality food items is provided by Island
food Ltd which includes meals,
vegetables, meat and other dairy products.
 Passionate and dedicated staff and
workforce is also a strength of Island Foo
Ltd.
 Limited product portfolios which
includes online food items is
reducing its target market share.
 In efficient use of technology and
ineffective marking strategies as
compared to other competitors is a
weakness of Island food Ltd.
Opportunity Threats
 Opportunity to focus on natural and
organic food items to attract health
consequences individuals and new
products can also be included to attract
wider number of customers.
 Opportunity to make use of technological
more effectively to provide the facility of
online shopping and to create better
 High level of competition from other
super market chains and
enhancement in number of online
retailer are the biggest threat.
 Increase in minimum wage rate
through government of UK is
increasing its cost of operations, thus
profit margin is reduced (Ayios,