The objective of this report is to evaluate impact of business environmental factors over business practices and decision making. In this regard, it is required for organisation to make specific strategy that can assist them to reduce negative impact of such factors.
- Discuss different types of organisation as well as their size and scope.
- Identify the interrelationship between different functional divisions of Bentley Motors Limited.
- Discuss positive and negative impact of external environmental factors.
- Evaluate strength and weaknesses of Bentley Motors Limited and provide its interrelationship with external factors.
Environment of a business is a combination of various internal and external factors which create a large impact on operational activities of a company. It includes customers and suppliers, employees, competitors, technological advancement, governmental laws, market trends and more (Chetwood and et. Al, 2014). This assignment is made on one of a manufacturing company of UK named by Bentley. It deals in engineering and distribution sector also by selling luxury cars and SUVs. In this regard, an explanation on different type of organisation with size and scope is discussed in present report. Moreover, interrelations of all functions of business and their links with organisational structure is described. In last part, demonstration on positive and negative impact of macro environment on business activities with internal strengths and weaknesses of Bentley is given.
P1 Explain the relationship between different organisational functions and how they link to organizational objectives and structure.
The organisational structure covers entire activities and departments of a company in hierarchical manner. It determines how roles and responsibilities are assigned, coordinated and controlled by management of an arrangement. Along with this, it also shows how information is transferred between various department for conducting business activities (Crane and Matten, 2016). In general, structure of organisation is based on objectives therefore, in context with Bentley Motors Limited, the main aim of this company is 'to manufacture most luxurious and powerful cars in the world'. So, it follows centralised structure under which top management has gained power to make major decisions and control functions of all departments in order to achieve mentioned objectives.
There are different departments working within firms such as human resource, finance, sales, research and development, production and many more. All these divisions are interlinked with one another in order to accomplish objectives of business (Türetken and et. al., 2011). For example: manager of marketing conduct research to find out preferences, needs, attitude, perception, behaviour etc. This would help Bentley in running business with latest trends of marketplace and gain high advantage by satisfying requirement of customers. In this regard, interrelationship of different functions of company is explained as beneath:
Finance department and marketing:
Functions of both of these departments are somehow interlinked with each other. As marketing division of Bentley identify sources from where company can obtain necessary funds used for running business activities in proper manner. Therefore, by this process, financial department gets sufficient funds and utilise it appropriately (Gharajedaghi, 2011). This section helps marketing division in conducting its major operations by providing required funds. Thus, it has evaluated that without marketing division, finance department cannot arrange funds easily. Along with this, only with the help of financial support, marketers can conduct research properly.
R&D with manufacturing department:
Research department of Bentley carries out various functions like conduct research for development of its luxury products, manage quality and regulatory compliance etc. Therefore, this division provide information to manufacturing department related to new product and provide solutions how to improve quality of existing ones. Through this process, managers of manufacturing department can determine process of new product development and take responsibility to turn input into finished outcomes as per want of customers. Thus, both of these departments transfer information to each other in regular manner so that innovation in cars can be done.
Human resource department with operational management:
The main functions of HR managers are recruitment and selection, training and development, reward and punishment etc. In Bentley, it gives employment to high skilled candidates who have possessed technical knowledge. Therefore, HR department help other divisions in providing best employees through which major tasks can be done in appropriate manner. In context with operational management, by getting skilled and capable knowledge, it can integrate their efforts in utilisation of other resources. Along with this, operational managers help HR divisions in resolving workers related issues like conflict resolution, employee engagement, decision-making process and more.
Thus, it has analysed that interrelationship of all of the above departments give support to Bentley in providing powerful and innovative cars to customers (Gilboy, 2016). These divisions transfer information with each other in order to accomplish major activities of business in short period of interval. Therefore, through effort of all departments, this company has acquired a good position at marketplace and improved its sales performance as well.
P2 Identify the positive and negative impacts the macro environment has upon business operations, supported by specific examples.
In today's business environment, there are many factors present which create a large impact on performance of company in both positive and negative manner. So, it is main responsibility of management of an organisation to identify effects of factors present in external environment on business (Vaiman, Sigurjonsson and Davidsson, 2011). It includes political laws, economical fluctuations, demand of socio-ethical culture, technological advancement and more. In context with Bentley, which is a British car manufacturing company and offer luxurious and powerful car at marketplace, these factors of external environment also impact its operations and business activities. Therefore, in order to reduce negative impact of such factors, managers of this company are required to develop effective strategies and policies. It will help in turning negative impact into positive one which lead to enhance sales performance as well. In this regard, some external factors are given below which affect operations and decision-making procedures of Bentley: -
It play an important role in identifying factors which impact on long-term profitability of an organisation in a particular country. With respect to Bentley Motors Limited, this firm serves its products worldwide. So, it shows that this company exposes itself to various types of political environment and risks (Kian Chong, Shafaghi and Leing Tan, 2011). Therefore, in operating its business in UK and other countries, managers of this enterprise are required to concern on many factors like- Political stability of country in which it conducts business, trade regulations and tariffs for import-export, taxation rates, intellectual property rights and more. All these aspects put impact on profitability and performance of Bentley Motors in both negative and positive manner.
Globalisation, policies of international trade and many others help Bentley to operate business activities effectively and gain long-term sustainability appropriately.
Risk of military invasion, level of corruption, government uncertainty and bad relationship with nearby nation effect operational activities in negative manner.
Also Read: Impact of Law Over Business Activities
This factor includes interest rate, inflation, deflation, foreign exchange rate and economic cycle which identify demand and investment in economy. So, all these factors influence business activities and performance in direct manner (Kaufmann, Kraay and Mastruzzi, 2011). Thus, in context with Bentley Motors Limited, this firm is required to develop its strategies on regular basis as per economic situation of country. Before exporting products or operating business in other countries, it is necessary for managers to evaluate stability of financial condition first. After this process, they should determine government interventions, exchange rate of currency, economic growth rate and more. It helps Bentley in obtaining advantage by operating business in those countries which have good financial condition.
As economical condition of UK is good and stable so, it is beneficial for Bentley to run business in profitable manner. Along with this, economic growth rate of other countries in which it operates business, also good. Therefore, all these aspects aid Bentley in expanding its business market in other locations.
High interest and taxation rate, low level of income, high exchange rates, recession period and more, creates negative impact on sales performance of Bentley.
Social and cultural Factors:
Several social elements like lifestyle, living standard, belief, ethics and many more, effect business operation activities (Li and et. al., 2011). Bentley conduct its business at global level so, there are many factors like demographics, culture, leisure interests and perception of customers towards products that need to be considered for conducting operations.
Higher brand appeal of Bentley among clients has create high demand at market place. In present market luxury car has a symbol of rich lifestyle.
From the perspectives of automotive industry, it has analysed that product life cycle of motor cars are getting shorter. So, it puts a negative impact on production and sales performance of Bentley.
In current trends, technology changes at fast speed therefore, it is essential for business organisations to implement latest techniques at work place. In automotive industry like Bentley, many incremental changes in technology are found (López-Gamero, Molina-Azorín and Claver-Cortés, 2011). These innovations help in designing hybrid cars which are used for petrol saving purpose.
Changes in technologies create a large impact on mind of customers, they are desired more to get high innovative products. They demand high powerful and fuel-efficiency cars. Therefore, it gives advantage to Bentley to enhance sales performance by providing best quality of luxury cars to customers.
But implementation of new technology in business consumes much time and cost which directly impact on budget of company in negative manner.