The scenario of this report determines the impact of business environmental factors over the functions, operations and decisions making of firm. In this regard, it is required for an organisation to implement strategies in order to reduce negative impact of such factors.
- Provide a discussion over different types of organisation as well as their size and scope.
- Identify the interrelationship between different functional divisions of firm as well as discuss their link with business structure.
- Analyze positive and negative impact of external environmental factors over business decision making of Marks and Spencer.
- Determine strength and weaknesses of Marks and Spencer as well as its interrelationship with macro factors.
Business environment means combination of all internal and external factors that affect the performance and profitability of an organization at large. Basically it is a sum total of all micro and macro forces that have direct or indirect impact on business and its operation. It include suppliers, competitors, owners, clients, customer, social and economic trend, change in technology, laws and regulation etc. It is important for all managers to view such forces that directly affect working of the company (Asif, Garvare and Ahmad, 2011). The given report is based on Marks and Spencer which is a leading UK-based multinational retailer. The selected firm specialise in selling luxury food products, home products and clothing. It covers different purpose, size and type of organisation including voluntary, public and private. It also includes relationship between various functions of company and how they related with its objective, identifying positive and negative impact of external forces and its inter-relation with internal elements.
P1 Types and purposes of different firms and its legal structures
One of the main objectives of existence of every business firm is to attain high profitability ratio by offering innovative products & services to target audience. In order to maintaing long term sustainability in market, it is very important to satisfy needs and wants of customers. In today's competitive business environment, various organisations are performing its operations such as public, private & voluntary. Each have its own legal structure and puropse as well which distinguish it from others. It is crucial for every business enterprise to follow all the laws and regulations frame by government so that activities can run smoothly. Types of organisation as well as its legal structure and purposes are defined below:
Private individuals are the one who owned and controlled such kind of organisations. Involvement of government in activities and operations of private firms is less. Contribution of this sector in growth and development of economy is very high. The main purpose behind running of private organisations is to yield high revenues and profits. Around 89% of contribution is given by private companies in gross domestic product of country. Their main aim is to expand their business operations area and cover market share. Marks & Spencer is fall under the category of private organisation.
Marks & Spencer is a British multinational retailer which is headquartered in London. It offers clothes, luxury food and home products to its target customers. The company was established in 1884 and perform its operations in various countries of the world. Its primary purpose is to earn high revenues by effectively satisfying needs and requirements of customers.
Purpose of firm:
- To administer those goods and services to target customers which are of high quality.
- Satisfy customers by providing them some value for money.
- To improve profit ratios of firm and acquire large portion of market share.
- To enhance and expand operations of business on constant basis.
Types of legal structures of private organisation:
Partnership: When any business is started by two or more persons then it referred as partnership firms. For starting such kinds of firm, a legal document or an agereement is signed by all the partners which considers as a legal proof of business ownership. Profits and losses are divided among all partners equally on the basis of their share in firm.
Sole proprietorship: Single person is responsible for operatintg and managing all operations and activities of business in such kind of firms. They enjoy all profits but at the same time, they have to bear all losses of company solely. Decision making is quick and effective related to business functioning as there is single owner in such kind of legal structure.
Limited companies: These firms are bifurcate into two types – limited by share and limited by grantee.
Advantages and disadvantages of private firm:
Interference of legal authority in activities of firm is less.
They ignore society from their area of interest and emphasize only on earning high profits.
Highly innovative goods & services are offered by company for meeting consumer needs.
People has less confidence in such firms as its affairs are not known.
Public sector organisation:
These are the organisations that are fully managed and controlled by legal authority of respective nation. They emphasize more on development & welfare of society rather then earning profits. Educational departments, health care institutions, electricity board etc. are the sectors that comes under public organisations. For instance: National Health Services is the organisation which works for earning profits as well as society welfare.
NHS is publicly funded organisation which deals in providing health care services to population of respective country. It also administers free of cost services to local residents of country. In case of emergency as well as treatment of infectious diseases, some facilities are also rendered to visitors free of cost.
Purpose of NHS:
- Provide medical facilities free of cost to domestic people and visitors as well.
- Constant improvement in delivery of health services.
- Contribute in administering healthy life to people.
Types of legal structure of public firm:
Central government: Affairs of whole nation is regulated & controlled by central government. Main activities that comes under this legal authority are printing of denomination & collection of taxes.
State government: All the functions of state government is performed by the support of central government. Their main aim is to improve standard of society by giving them better educational facilities.
Local government: This legal authority handles affairs of particular city, area or town. It performs their duties at local level only.
Merits & demerits of public sector enterprise:
Along with earning profits, society welfare is also the main purpose of public firms.
These firms are restricted to comply with all regulations and laws made by government.
Financial assistance is provided by government to public firms for running its operations.
High involvement of legal authority in operations of company.
Voluntary sector firm:
These are the organisation which are run and perform its activities with assistance of volunteers. These are non profit firms which exists only for purpose of well being of society. Oxfam is comes under this sector. They needs to take government permission for running activities.
Oxfam is a voluntary enterprise which works and perform functions for the purpose of declining poverty from society. Volunteers highly contributes in smooth running of operations of firm. They fulfil basic needs of needy population of society by providing them food facility.
Purpose of firm:
- Bringing effective solutions for eliminating poverty from world.
- Administer food assistance to poor population of society.
P2 Scope and Size of different types of organization
The size and scope of every business association is distinct from one other. Size can be measured in term of firm's operation that is carried out all across the globe. On the other hand, Scope can be determined by vast number of products or services offered to general public.
Mark and Spencer: It is a private limited company whose size and scope are mentioned below:
Size: It is major British multinational retailer that is located in Westminster, London. It deals in offering clothes, luxury food items and household products. It was founder in the year 1884 and from past 184 year, the firm gained popularity by operating in more than 10 major countries including Dutch, Germany, Belgian, Austria and so on. It has strong market base in United Kingdom including more than 615 stores that only sells food items. Number of employees employed in M&S is near about 84,939 and its annual revenue as of 2017 was computed as £10.622 billion.
Scope: It specialize in delivering household products, clothing, food products to vast number of customers. It's cloth range normally categorise into woman, children and men as well as food and home products. Apart from these, M&S also offers products that is made under its home brand including Indigo Collection, Collection Junior. It had 6 sub-brand within its men wear range and 10 sub-brands within its women wear range. M&S food product line encompasses lunches, sweets, main meals and savoury