Business and the Business Environment: An Analysis of Yorkshire Bank

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Business and the Business Environment
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Table of Contents
Introduction......................................................................................................................................3
TASK 1............................................................................................................................................4
TASK 2............................................................................................................................................8
TASK 3..........................................................................................................................................11
TASK 4..........................................................................................................................................15
Conclusion.....................................................................................................................................18
Reference List................................................................................................................................19
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Introduction
With the increase in the intense market competition, it has become very essential for the business
entities to adapt successfully with the significant changes in order to provide efficient services to
the customers and maximise their satisfaction level. The study is going to provide relevant
discussions on scope, size and legal structures of different kinds of organisations. For preparation
of the study, Yorkshire bank is going to be considered. The study will shed light on the
interrelationship of various departmental functions towards achievement of organisational
objectives. In addition, the organisation is going to highlight a thorough internal and external
analysis of market by the help of PESTEL and SWOT model for encouraging the organisation to
identify and adapt with the market changes, which can help the company to overcome weakness
and potential threats associated with business. Besides, it will discuss the interrelationship of
weaknesses and strengths with the external macro aspects.
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TASK 1
P1 Explain different types and purposes of organisations; public, private and voluntary
sectors and legal structures.
Sole trader
The sole trader is defined as a simple arrangement of business in which an individual is the sole
owner and manager of the business. The sole trader is personally responsible for the profits and
losses generated by the business (Brown and Harmer, 2016). The sole trader has unlimited
liability towards the debts incurred in business. The purpose of this business is to generate
profits and provide quality services to the customers. These kinds of enterprises possess an
essential legal structure. For carrying out business activities and obtaining a name of the firm,
the sole trader is required to obtain license from county clerk; however, it is not necessary for the
sole trader to choose a trade name.
The sole trader pays tax for the profits or losses gained in business under personal tax on income
section. The advantage of the carrying sole trading business is that the trader alone enjoys entire
profits generated in business and does not require much capital investment in operating business.
However, the trader is held personally liable for all debts incurred in business. One of the most
appropriate examples of sole trader in UK is Anglia Tax Help. The purpose of this firm is to
provide efficient services to its customers or business clients to pay taxes effectively. This firm
makes the customers aware of the tax exemption, tax laws so that they can pay taxes properly,
and ensure sustainable growth of business.
Public organisations
These organisations are managed and owned by government. Public organisations carry out
business activities to ensure public welfare (Horton and Farnham, 2015). The purpose of this
organisation is to resolve the issues of public by providing them with quality services. These
organisations provide significant services such as, health, education and others at affordable
prices. The demerits of the organisations are existence of high political pressure and
embezzlement of fund. The legal structure of the organisation is that it enjoys a separate lawful
entity; the shareholders have limited liability towards unpaid amount of shares held. The public
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organisations contain the acronym “Ltd” or plc after the name of organisation. DEFRA is a UK-
based organisation, which carries out business activities for ensuring development of
environment protection, food standards and production, rural communities, fisheries as well as
agriculture. The purpose of this organisation is existing and potential life quality. On the other
hand, Yorkshire bank is a subsidiary of CYBG plc, which is a public organisation and provides
quality financial services to the customers. The purpose of this organisation is to gain a large
base of customers by providing quality financial services.
Partnerships
The purpose of partnership business is to generate profits or losses and distribute it equally or
proportionately amongst different parties (Bendell, 2017). Additionally, individuals form
partnership business with the purpose to distribute risks tolerance amongst different parties. In
order to form partnership business, it is necessary for the company to legally enter into written
agreement (partnership deed) containing the relevant information of the firm and the parties as
well as terms and conditions for operating the business. The partners have unlimited liability
towards debts incurred in partnership business. The biggest advantage enjoyed by partners is
availability of substantial capital and shared risk. However, most considerable drawback of these
firms is unlimited liability. John Lewis Partnership is carries out a partnership business in the
retail sector with an objective of earning maximum profits and providing quality services to the
customers globally.
Private organisations
Private organisation is managed and owned by the private individuals (Långström, 2018). The
purpose of carrying out business activities is to expand business by gaining maximum profits.
The private organisation possesses significant legal structure. The companies have to insert an
acronym named “pvt ltd” after the organisation’s name. These organisations contain a maximum
of 200 members as shareholder and a minimum of 2 directors in business. They issue shares only
to the individuals functioning internally from the company. Issue of shares to public is
prohibited. The private organisations enjoy certain advantages such as limited liability, less
compliance of legislations in comparison to the public organisations. However, the considerable
limitations of the organisations are prohibition on public share issue, which restricts
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development of business. Tesco is a private organisation based in UK, whose purpose is to
provide excellent quality commodities and services and at a reasonable cost. It can help the
organisation to gain maximum sales and profits.
Voluntary organisations
It is defined as the association established for solving social issues of people instead of
generating profits. It improves social conditions of the country (Mellor, 2018). It enjoys cheap
labour. However, existence of social pressure and limited funding creates a negative impact on
business activities of the organisation. The three basic legal structures of voluntary companies
are trust, unincorporated association and company limited by guarantee. Wellcome trust is a UK-
based voluntary organisation, which provides financial services to provide support to the
researchers and scientists for improving research activities on animal and human health. The
purpose of the organisation is to increase health and well-being of the animals as well as
humans.
P2 Explain the size and scope of a range of different types of organisations
Basis of distinction Private
organisations
Public organisations Voluntary
organisations
Objective The objective of
private organisations
such as, Tesco is to
earn maximum
profits by providing
quality services to the
customers.
The objective of
public organisations
such as Yorkshire
bank is to provide
quality financial
services in order to
ensure public
welfare.
The objective of
voluntary
organisations such as
Wellcome trust to
ensure health and
well-being of animals
and humans.
Size Tesco operates its
business on a large
scale with large
strength of 476000
employees’
Yorkshire bank
carries out business
activities on a large –
scale having 4616
employees
It carries put its
business activities on
a large-scale with
2057 employees.
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Scope As the organisation
provides wide-range
of quality products
and services to the
customers at a
reasonable rate, it has
a wide scope of
developing its
business in future.
Yorkshire bank is a
subsidiary of CYBG
plc, which provides
quality financial
services to the
customers and is
aimed at improving
customers’ base.
Therefore, the
company has a
comprehensive scope
of development.
There is a large scope
of development for
Wellcome trust as it
provides substantial
financial support to
the scientists for
conducting research
process to find ways
to improve the health
animal and human.
Table 1: Size, scope and objective of a range of different types of organisations
(Source: Created by the learner)
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TASK 2
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure
There are different types of organisations, adopted by the organisation for functioning its
business activities in a systematically. Additionally, the different functions in the organisation
are effectively interrelated to each other. It helps the organisation to achieve the long-term
objectives within a stipulated period.
Hierarchical structure
Organisations adopting hierarchical structure follow the structure of pyramid. Every staff
excluding the chief executive officer is the accountable to their superiors (Yang et al., 2016).
This structure implies that the decisions are passed from the higher authorities and are required
to be followed by the middle and lower level authorities. There are certain merits and demerits of
the organisational structure. Various opportunities for promotion enhance motivation of level of
the staff to perform effectively. It enhances loyalty of employees towards their job and the
organisation. This structure helps the managers to make the employees perform their job
according to the guidelines set by the top management in order to meet the targeted objectives.
However, increased bureaucracy creates rivalry amongst different departments, which is likely to
hamper workplace relationship. Additionally, organisations following this structure will have to
pay remuneration to various layers of the management, which enhances cost to company.
In context to Yorkshire bank, the hierarchical structure will help the organisation to improve the
quality of its business activities by motivating the employees to perform well. It will enable the
management of the organisation to engage the employees successfully in their job so that they do
not waste time in gossiping with the employees. By providing opportunities for promotion, the
company can enhance employee efficiency to improve their productivity and accomplish the
targeted objectives in the long run.
Flat structure
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The flat organisational structure implies existence of levels between the management and staff.
Organisations implementing the structure, supervise the employees less during enhancing their
involvements in the process of decision-making. This structure comprises with certain
advantages and drawbacks (Faul, 2016). It enhances the responsibility levels of the employees in
the company. Low of level of management enhances coordination as well as communication
amongst employees. Elimination of salaries of the middle-level management decreases the costs
of the organisation. This structure contributes towards easy decision-making. However, lack of
employees’ accountability to a specific boss enhances confusion amongst employees in
performing their work, which can reduce their work quality. As there are no specialists for
forming significant decisions for the organisation, it can restrict sustainable growth of
organisation’s business.
In context of Yorkshire bank, this structure will enhance the sense of responsibility of employees
and increase involvement towards their job and the decision-making process in the company. As
this structure ensures reduction in remuneration costs, it can increase the productivity and
profitability of the organisation.
The different departmental functions of the organisation are explained as follows:
Human resource department
This department plays an important role in the growth of business activities of the organisation.
In order to ensure systematic functioning of different organisational departments, it is very
necessary for the company to hire efficient and skilled employees to the business (Banfield et al.,
2018). The HR department of the banking company hires hard-working and skilled employees to
the company and placing them to appropriate departments as per their knowledge and skills. The
matrix-structured department of human resource assigns an HR employee for working directly
head of the expending department. With the growth of business, certain departments contain
many employees. At that time, the HR departments of the company provides a skilled HR
professional for handling employee benefits and relations.
Marketing department
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This department plays an important role in enhancing the sales volume of the organisation. The
department performs different marketing activities to attract customers towards its services (Feng
et al., 2015). The help of effective market research helps the department to gain information
regarding the changing demands of customers, techniques implemented by competitors to
improve their business operations and others. The marketing department of Yorkshire provides
low-interest rate on loans and high-interest rate on deposits to attract the customers to make
deposits and obtain loans from the bank (Secure.ybonline.co.uk, 2019). The department while
following the matrix structure develop the customers’ wants, produce commodities according to
their needs. After producing the services, it offers value and satisfaction to customers. It
enhances profit margin and sales volume of the organisation, which enables the company to gain
significant market share.
Research and development department
This department conducts research and development process to identify different technologies
being emerged in the market and its suitability to improve the financial performance of the
company (Vohs and Baumeister, 2016). It helps the different departments to implement latest
technology for improving the performance quality. This department contributes towards effective
performance of business activities such as, proper maintenance of data, provision of innovative
quality services to the customers and others. The role played by the departments enhances the
quality of services provided by the company and helps to gain a large base of customers.
Finance and accounting department
This department plays an important role in maintaining the financial stability of the company. It
allocates finance to different departments for enabling them to perform the activities successfully
(Gitman et al., 2015). On the other hand, it maintains proper books of accounts to provide
relevant information regarding the incomes and expenses associated with business. The finance
department also provides guidelines to the different departments to reduce the costs and increase
profits in performing activities. The accounting department following a hierarchical structure
contains a chief financial officer who provides guidelines to the management and financial
accountants for preparing the accounts. These accounts are re-evaluated by the CFO in order to
provide accurate information to the top management for decision-making.
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TASK 3
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples
Factors Explanations
Political The political factor, which affects Yorkshire Bank the most, is Brexit. The
recent event has caused the United Kingdom to withdraw itself from the
European Union. This event has caused much turmoil in the banking
industry. The import and export of goods in the UK market has plummeted
because of Brexit (Hobolt, 2016). Because of this status and now taking
lesser loans from banks and there are lower levels of foreign direct
investment coming from outside sources as well. Furthermore, there are
complications on the side of labour trade as well, as lesson number of
employees wish to come and work in the country.
Economic Post Brexit there is a higher level of unemployment in the banking sector of
UK with higher number of banks letting go of their employees because of
financial constraints and the horrible economy (Clarke et al., 2017). Ever
since the economic recession from 2008 and 2009, Brexit has been the most
influential incident, because of which there has been such an increase in
unemployment. Because of this incident, there is high level of instability in
the financial market as well as more number of investors are being wary
about where they put their money as they have less reliability in the current
market.
Social Inside United kingdom, there has been a technological boom, which has
socially affected the banking sector as well as everyday life. There has been
an immense shift from using offline communication methods to online
communication channels. Platforms such as bank websites, blogs, Facebook
and other means help the banking industry as well as everyday consumers to
connect with each other on a much more simpler basis and attain
information which is vital for each party. People now communicate with
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banks directly through social media channels and their official websites to
eliminate any issue, which they have.
Technological For the employees, within the banks present in the United Kingdom, it is an
easy method to import the data of consumers within the systems of the bank.
They do this through better computers and software that is the process of
computation and data entry. Currently with an increase in the digital
communication, there is a decrease in paper communication, as vital
services such as making an account, paying loans, can all be done through
online methods. This is a positive impact as banking companies have to
spend less on papers.
Environmental There is an increase in natural phenomenon such as global warming, ozone
depletion and greenhouse effect (Harvey, 2016). Because of this, there is
lesser amount of oxygen in the environment and the level of carbon dioxide
keeps on rising. Until recently, banks have been using quantum levels of
paper, which increased the level of tree cutting around the world, which in
turn added to the problem of there being more CO2 in nature. Adding to
this, there is a huge excretion of waste material by the banks within United
Kingdom as well as many of the businesses produce high levels of waste
paper, which creates large landfills around the world. Landfills cause more
accumulation of waste and more usage of land that can be used for planting
trees. This is a negative effect on the environment.
Legal There are many types of regulations such as Market Abuse Regulation,
European Market Infrastructure Regulation and other laws, which requires a
business to comply with them. The process of compliance takes a long time
since all aspects of the law have to be fulfilled and until this process is
finished. Business decisions by the board of Yorkshire Bank cannot take
place as business activities are delayed.
There are several laws and regulations, which have been implemented by
the United Kingdom state government so that there are better operations
within the banking sector. Some of the laws, which can be, mentioned
which are most prevalent and prominent for the banking sector are laws
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