The objective of this report is to understand the direct impact of external and internal environmental factors upon business decision making. In this regard it is required to conducts an analysis based on different aspects as:
- Evaluate different types of organization as well as their size and scope.
- Evaluate the interrelationship between different functional departments of M&S and analyze it link to organizational structure.
- Analyze the positive and negative impact of external environmental factors over business activities.
- Discuss strength and weaknesses of Marks and Spencer and its interrelationship with macro environmental factors.
An organization observes many global changes in business environment. It is organized by a skilled group of employees and leaders having a some goals and objectives to achieve like public serving or doing business. Organisation is run by different actions like coordination, structure selection, organising, logistics management and planning (Abdel-Basset, Mohamed and Smarandache, 2018). Here affects of business environment in Marks & Spencer, River Island and Oxfam has elaborated. Marks & Spencer is a popular retail group which has been listed in London's stock exchange. It is specialised in home products, luxury food products and attires. It has long- term relationship with British manufacturers.
P1 Different types and purposes of organisations: public, private and voluntary sectors and its legal structures.
There are various types of business organisations which have convertible process of materials and skills according to the request of customers and their service. Business environment includes different factors like resources, competitors, suppliers, distributors, regulations, economy, industry trends, government activity and many more. There are almost three types of organisations like public, private and voluntary sectors. Public sector like Marks & Spencer has direct control from government and its several agencies. Thus, different operations are held on its behalf and for the well being of public (Atighechian, et.ail., 2016). It does not include any voluntary or private companies and it has government ownership. There are many ways of owning a company such as by becoming a sole trader in which if a business fails then owner is responsible for all debts. Then through partnership and lastly licence is required by giving name to a company. Here by selling shares capital is raised.
In private sector such as River Island the firm is completely controlled by group of people or private individuals. Their purpose is only profit of organisation. This profit is restricted to stakeholders of the company, then transparency in annual and financial reports should be there. Legally they have to follow provision of Companies Act 2013 (Banahene, Ahudey and Mensah, 2016). Each Shareholder has limited liability. Company is awaken all the time in case of bankruptcy, death, insolvency etc. It is compulsory for every private firm to use private limited for its name. Lastly voluntary sector is there such Oxfam whose purpose is fully social and provide benefits to society. It never aims at material wealth. Its focus is on social welfare. It comprises organizations which enrich society without profit and have no government intervention. The return received by voluntary sector is again invested back to the community or in its organisation. It complies with the charity law and act according to legal obligations of charities under Companies and Charities Act. Records are kept as evidence and checks (Bentley, et.al., 2016). Community should know about rules and regulations that are applied to them. Oxfam provides services for legal help. There should be accountability and transparency in the records by the board of trustees.
P2 Size and scope of different types of organisations
According to the size, business can be categorised into Micro level, Medium level and Macro level. A micro business is a small business which have a turnover less than a definite amount. It depends on different sectors depending of the economy of the country. These micro enterprises do business to support their families and themselves. Plans and inventory in micro business are grown due to demand at local level. Customers tastes and pattern of buying changes with time and so they have to remain aware. Micro business have fewer employees and they are firstly the proprietors who run the business. They have threat from other competitor as they have less resource. It faces difficulty in sustaining the business. While, medium level business have employees ranging from 50-300. Various small business grow into medium size business. Companies yield profit with low barriers and lack product differentiation. Medium level face risk due to competition with the Macro level business. Macro level industries grow domestic product and is concerned with government policies (Borio, Drehmann and Tsatsaronis, 2014). They have larger number of employees. Macro level business is expanded at various level. Government here plays an important role in macro economy and it is internationally attached to various companies all around the world. The scope of different organisations has extended widely. Marks & Spencer has extended its retail to by managing it top level and baseline staff and left responsibility on front line staff to answer the delayed customers. By cutting middle men cost and decreasing communication barriers it has increased its productivity. Scope of voluntary sector like Oxfam is examining charity's governance and handling general disclosure to the Commission, agencies and stakeholders which have taken place since 2011. it protects themselves against large organisation with more resources and thus risk factor for sustaining in the market is high. It has increased its supervision of its employees and level of recruitment has also increased. Lastly Private sector involves only one shareholder but the entire firm can offer large shares to public and those people are allowed who are ready to sign agreement with the organisation. Business organisations depends on vision, mision and objectives of it.
M1 Structure, size and scope linked to objectives and products of organisation.
Structure, size and scope are connected with organisation's objectives and products. Any organisation has a good structure only if it has a primary objectives which followed by its leaders as well employees. If the employees are not aware about the target then that firm cannot reach skies and its structure is also will also fail (Brouwers, Sotiriadou and De Bosscher, 2015). Also, every firm set its objectives according to its size. Big targets are set if organisation is macro and if it is of micro level then employees are fewer. On the other hand if scope of organisation is to function for customers nationwide then it has to set targets at larger level and huge amount of money is required as well.
D1 Complexities of types of businesses and interrelationship of different organisational functions
Complexities in business involves investing internally in private corporations, while public firm impart their growth through individual growth. These corporations also receive tax credits and are tightly restricted. They have advised under law and have infinite potential for functional growth. Organisation is creating interrelationship between finance and marketing to improve their marketing methods and efficiency (Cochrane, 2017). This can be done by using particular marketing campaigns, assessing financial property and using financial tools. Synergy can be created by allowing different business function collaborate and share information. Most organisations are adopting flatter structure instead of hierarchical structure as it enable to intensify organizational performance.
P3 Relationship between different organisational functions and how they link to organisational objectives and structure
Organisational functions depend on various functions like sales, human resource, research and development, marketing, production and operations, accounts, customer service, IT and administration. In order to satisfy customers marketing is considered as a link between market and consumers (Cooke, 2017). It is advantageous for both suppliers and customers. This department helps organisation like Marks & Spencer to support quality life of the customers by providing customer information of the products. It has been ascertained that Marks & Spencer has created a competitive business environment by using its strong pricing strategy. Customers have convenient access to products and services which has developed its production distribution system widely. Another factor on which organisation function works is finance which is related to usage or expenditure of organizational resources for various activities. This function provides meaningful reports and elaborates the financial performance and position of business planning. There is allocation of funds in different parts to line up budget so that financial resources can be measured against performance budget. For management of cash flow in the firm there has to be availability of funds so that business requirements can be easily met (Daniels and Greguras, 2014). On the other hand accounting of regular transactions of sales, purchases and its utilization internally and externally is also an important part. It has to be ensured that business liabilities are managed properly by paying funds and this responsibility is taken by finance team. Advance human resource management also keep its eye on the performance of employees. They should achieve their aim by selecting knowledgable and skilled staff. River Island's HRM is concerned about is policies and legislation. Role of human resource department includes practices like training and development, maintaining employment law, employee relationship, managing compensation, salary, tracking employee skills.