Business environment is considered as one the important tools that need to consider at the time of running the business smoothly. Further, there are different factors like profitability, performance and overall growth of business which need to be consider at the time of starting business which include political, economical, technical, social, environmental and legal factors which leads to both positive and negative impact on overall operations of business. Further different changes coming in dynamic environment therefore it is essential for organisation to scan all the innovation and digitalisation in respect of those product and services in which they are dealing currently (Reed, O. L. and et. al., 2013). Under this assignment the company which is preferred i.e. Nestle which is swiss transnational food and drinking company headquarter in Switzerland engaged in different items and expand their market at global level and become top most company in FMCG sector. Further this report discusses about the type and purpose of public, private and voluntary organisation, size and scope and interrelation between different department and SWOT analysis in order to know actual market position which allow them for improvement and achieve targets on specified time period.
P1 Interrelation between different organisational departments and their link to objectives
In every organisation success and failure among management is fully depend upon the working capacity of management and further Nestle is consider as multinational organisation require to understand all the significance of interrelation between different departments and divisions and this will also helpful in grabbing all the market opportunities on the basis of which they make further changes in their products and services that help in satisfy all the needs and requirement of customers. Apart from it in Nestle there are different department like human resource, finance, marketing and operational will need to be coordinated and managed in order to accomplish all the targets in specified time period (Karagiorgos , Drogalas and Giovanis ,2011).
Further, it helps in creating harmony and peace in atmosphere which leads to positivity and higher productivity in future. Interrelation between different departments of Nestle are discussed below: -
- Human resource department: - This department is considered as important division who are responsible for recruiting and selecting the able and professional employees for vacant job position. Further HR manager require to formulate various policies and procedures related to rewards recognition, performance appraisal and also the factors related to determination of remuneration. Further, it allows them to organise training development programmes that improve overall performance and motivate them for higher performance.
- Marketing department: - This department consider as one of the important division in every organisation who formulate different policies and strategy regarding marketing promotion in which different tools and techniques has ben used by marketing department like roadshows, exhibition and social networking through which they aware the customers regarding all the new changes and features in respect of goods and services through which enhance the sales and profitability of business.
- Finance department: - This department of organisation has to take all the responsibility related to preparation of budgets in which they analyse the amount of revenue earned during the year. Further this will help in comparing the actual performance with standard performance and if any deviation is their then it is solved by them so no problem arises for the execution of projects in financial terms.
- Production department: - This department take concern regarding all the matters related to manufacturing and producing of goods and services. Under this they also make deep analysis regarding demand and supply of their products on the basis of which stock has been maintain so they are able to deliver the goods to end user at specified time period.
Company divided their structure on different segment which are stated below: -
- Function based: - Under this task are divided among individuals on the basis of functions which are performed by them. For example Nestle one of the famous organisation in FMCG sector therefore they have to divide their work on the basis of functions so that each activity can be accomplish within specified time period.
- Divisional structure- In this structure, there is use of various approaches which are competent to company. There is use of policies which can be effective for working. In this structure, one department works on their own and this makes policies as per their goals and objectives. There are possibilities of repetition of activities.
- Strategic business unit- In this type of business unit, there is division of activities which are competent to company and they perform actions to run some particular product and service. There is use of techniques which are competent to business operations. Their main aim is to develop profits from such product and services.
- Matrix structure- This is the mixture of various structure, such as functional, divisional, etc. their main aim is to work as per get work completed and this affects business operations. Sometimes there is need of combination of various actions through which changes are possible.
From the above discussion it is clear that as Nestle has good brand image, this is because they use techniques which are effective for developing changes in operations. As there are various departments in Nestle, so in case association is launching new product, then there is strategic business unit, because main aim is to come with new techniques which helps to increase sales and profits. But for existing product, matrix structure is used. Its aim is to satisfy demand of customer.
P2 Impact of macro-environmental factorsTASK 3
In every organisation working atmosphere has been affected due to macro and micro factors of environment therefore, it is essential for business to scan all the relevant changes coming in form of innovative technologies and digitalisation in respect of goods and services done by rivalry therefore it is essential for business to formulate their ow policies and strategies through which they make innovative modification in respect of their goods and services which help in satisfy the needs of customers. Further, nestle one of the leading organisation in FMCG engaged in food and drinking sector but in order to sustain in external market for longer period they need to analyse the tactics of their rivalry (Kolk ,2016). Different external factors which has both positive and negative impact on business are describe below: -
Political factors: - This factor affect politically to the working conditions of business and further Nestle expand their business in different countries but they have to adhere with all the legal rules and regulations. Elements like dynamic government policy, taxation, export import policy and other political condition affect business decision making.
Positive impact: - Political policies formulated by government are generally made for enhancing the growth of corporate industry this will help in increasing the revenue of country.
Negative impact: - Complex import export policy and heavy tax charged on manufacturing and production of goods and services lead to increase the cost of production.
Social factors: - There are different factors and element which need to be consider at the time they developing their branch in different countries. They promote their goods and services after considering the feeling, sentiments and emotions of society and ensure their social promotion is not detrimental to the interest of individual because it affect their brand equity.
Positive impact: - Nestle will incur expenditure on CSR activity that will help in establishing positive image and brand equity n the society where they establish their branches which lead to higher sales and profitability.
Negative impact: - Management must ensure that whatever the marketing promotional tools used by them like advertising, public relations and social networking must ensure that contents used in marketing must be ethical and does not impact negatively to the feeling of target audiences.
Legal factors: - Under this macro environment factors management require to ensure that all the legal regulations and rules are properly adhere enforced by particular country on the basis of which other activities has been conducted. Compliances of laws help company in avoiding penalty and punishment.
Positive impact: - Adherence of all legal rules regulations allow organisation to run their business effectively. Market image and investor investment is wholly depending upon brand image and goodwill of company so it is essential for business to manage all over operations of organisation.
Negative impact: - If there are in-compliances in rules regulation of business then it is very difficult for organisation to survive in market for longer period of time. Further once the image is diluted then it is difficult to improve it in eye of target customers.
Economical factors: - Nestle is top most organisation in FMCG sector who expand their business and branches then they need to analyse all the conditions related to inflation, deflation and level of income in that particular country.
Positive impact: - Under this there is need for preparation of report related to analysing the situation this will allow them to get the idea regarding inflation deflation conditions.
Negative impact: - If purchasing power of people is low in that particular country then it will affect the sales and profitability of that particular country.
Technological factors: - In modern corporate world there are different changes are coming in the form of technology and innovation in respect of goods and services so in order to beat the challenges of competitors Nestle company required to update with latest technology they included in their products which also helpful in increasing their growth.
Positive impact: - Helpful in meeting the current expectation of customers in the form of improvised goods and services offered by them and charge premium prices also.
Negative impact: - Lack of able staff and high cost incurred in the implementation of technology leads negative impact on the sustainability of company.
Environmental factors:- It is an utmost responsibility of Nestle company is to clean the environment. They have to follow such rules and regulation which helps in production of healthy foods and environment friendly operations. Under this company required to focus on social welfare by contributing through CSR activities.
Positive impact: - Conducting different events and take initiatives for the cleanness of environment which also educate society for the protection of environment.
Negative impact: - Producing high carbon footprints become threats for the long-term sustainability of business.