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How Business and Natural Environment Shape Organisation Behaviour- Sainsbury

University: Imperial College London

  • Unit No: 4
  • Level: Undergraduate/College
  • Pages: 12 / Words 2998
  • Paper Type: Assignment
  • Course Code: MGT201
  • Downloads: 453
Question :

This assessment will cover following questions:

  • Sainsbury is a multinational supermarket chain in the United Kingdom. Analyse the key elements of internal environment used by the Sainsbury organization.
  • Examine why countries benefit from trade with each other.
  • Identify how a market economy functions and the role of government within it.

 

Answer :
Organization Selected : Sainsbury

INTRODUCTION

Business environment is collection of all internal as well as external factors like customer needs, employees, clients, suppliers, owners, activities by legal bodies, innovation in technology, market & Social trends, economic changes and many more (Hassanien and Dale, 2019). All these factors have direct impact on function of organisation as well as how company works directly or indirectly. In simple terms, sum of these mention factors influence environment and situation of business organisations. Moreover, business environment assist in identifying business opportunities, aid in planning, tapping useful resources, enhance overall people and business profitability. There are several type of business environment such as micro environment and macro environment. Here, micro environment involves factors which have direct impact on performance as well as decision making of business such as competitors, market intermediaries, customers, suppliers and many more. On the other hand, macro environment is set of external conditions which have impact on efforts made for business development in negative or positive manner. These elements are beyond control and effect overall performance of business (Niemimaa and et. al., 2019). It includes gross domestic product, inflation, staff members, spending as well as monetary and fiscal policy.

For this report chosen company is Sainsbury's which is second largest chain of supermarket in UK with 16.0% share of supermarket sector. It is part of retail industry and area serving by them is only United Kingdom. It was founded in 1869 and its founder was John James Sainsbury's as well as headquarter is located at London, UK. In addition to this, Sainsbury's supermarket is offering over 30,000 products out of which 40% of these are respective company own brand. They are offering wide range quality food as well as grocery products and several stores are offering bread which baked in their stores, fish, meat shelves, restaurants, coffee shops and many more. Supermarket of Sainsbury's have more than 150,000 employees out of which 60% are part time workers and remaining 40% are full time. Supermarket of respective company providing more than 18.5 million customers within a week as well as 60% stores are located in town centre locations. Apart from this, value of Sainsbury's is passion for health, fresh, safe, tasty food and focus on delivering great products with fair price.

This report will going to discuss how business, culture, natural environment shape organisation behaviour. Along with this, SWOT and PESTEL will also going to conduct for analysing external as well as internal factors of business environment which impact company.

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BODY OF REPORT

How do the Business, Cultural, Natural Environments shape the behaviour organization

Organisational behaviour is application as well as study of knowledge related to that how people act within an business firm. In simple term it can be said that, organisational behaviour is human tool for the benefit f human (Yusoff, Omar and Kamarudin, 2019). It is applicable broadly to behaviour of people in every type of organisation like business, government, school and many more. In short, organisational behaviour revolves around mainly two fundamental concepts i.e., nature of man and organisation.

Business culture is related to the beliefs as well as behaviour which determine how staff of organisation and management interact with each other as well as conduct transaction which are outside of business. In simple words, company culture is related to the personality of business firm and also define environment within that workers are working. Moreover, there are several elements which included within this such as work environment, mission, vision, value, goals, ethics as well as expectations of company (Newman and et. al., 2020). For employees company culture is important because staff like to enjoy their time within workplace only when they get fit with culture of organisation. In addition to this, Business Culture within United Kingdom has been characterised by business meeting etiquette, business communication, business etiquette, social media guide, work life balance and many more. Sainsbury is largest and well known retail industry organisation in United Kingdom. It was founded in 1869 and its founder was John James Sainsbury's as well as headquarter is located at London, UK. In addition to this, Sainsbury's supermarket is offering over 30,000 products out of which 40% of these are respective company own brand. Their is wide impact of business culture on organisational behaviour as well as it can be in both manner positive and negative. By using model it become easy to understand how business culture have impact on behaviour of organisation. Explanation of this are as follows :-

Hofstede model of organisational culture – organisation culture is related to several ideologies, beliefs as well as practices of an business firm which help in creating differentiation from others (Franken and Wattenberg, 2019). The culture of an company decide behaviour of their staff members with each other or by external parties also. Respective cultural model is also known as Geert Hofstede proposed which state that both national as well as regional factors have contribution in culture of organisation and also influence behaviour of workers in company. There are five major factors of culture which influence behaviour of organisation. Explanation of these in relation of Sainsbury are as follows :-

  • Power distance –As per power distance, within staff member of company power has distributed equally irrespective of their designations. This creative positive culture within Sainsbury working as well as also on its staff members which result in health organisational behaviour. Along with this, there are some companies in which special treatment enjoyed by manager and team leaders only (Ward, 2019). They delegate responsibility to each and every employee's as per position within company. Thus, power distance index have both positive and negative impact on organisational behaviour as per the delegation of power within staff members.
  • Masculinity vs Feminity– It is related to the effect of differences within male and female values within culture of company. As organisation where males are dominated and female counterparts are following different policies in comparison of companies in which female play major role in decision making (Lu, Wang and Xu, 2019). As already discussed that, in Sainsbury mainly women's are working this create positive culture and also have optimistic impact on organisational behaviour.
  • Individualism- There are several organisation which focus on working in team. Here, individual come with some common interest and started working in in team as its member. Sainsbury also believes in working within team because outcomes are always more when particular person exchange ideas as well as conduct discussion among themselves for coming out with some innovative ideas. Within such environment staff member share healthy relation with each other and help them if needed. Such practices create positive culture in company and behaviour of employees also become optimistic (Malinen and et. al., 2019).
  • Uncertainty Avoidance index– It is related to the culture I which staff members know how they have to respond unusual as well as unforeseen situations. Thus, uncertainty avoidance index deal with the tolerance level of staff members in both favourable and unfavourable condition. Sainsbury create such culture and prepare their employees to deal with situation in appropriate manner.
  • Long term Orientation– There are several type of organisation which focus on long term relation with staff members. In these type of business firm people have steady approach as well as strive hard for fulfilling the expectations (Štrukelj and Gajšt, 2019). As staff member of Sainsbury get attached with it and focus on long term objectives which have positive impact on organisation behaviour and result in accomplishing goals as well as objectives within effective manner.

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After going through this model it has been identified that business culture have wide impact on organisational behaviour. Because the practice which implemented in company as its culture have to be positive and also by considering employees, as it have impact on behaviour of Sainsbury. Apart from this, natural involves geographical as well as ecological factors which effect on the organisational behaviour. In simple term it can be said that, these factors involves availability of natural resources, weather, climate condition and many more. Organisational behaviour is application as well as study of knowledge related to that how people act within an business firm. In simple term it can be said that, organisational behaviour is human tool for the benefit f human. It is applicable broadly to behaviour of people in every type of organisation like business, government, school and many more. In short, organisational behaviour revolves around mainly two fundamental concepts i.e., nature of man and organisation.

PESTEL and SWOT analysis

Sainsbury's ls one of the leading organisation in retail industry and they maintain their dominant position within business environment by properly analysing as well as reviewing SWOT analysis (SWOT analysis of Sainsbury's, 2017). It is an framework which provide assistance to company in identifying internal factors as strength and weakness, external factors which are opportunity and threats.

Strength

Weakness

  • Sainsbury's have high level of customer satisfaction as they are dedicated towards customer relationship management through which they able to achieve high level of their customer satisfaction (Marijs and Hulleman, 2019). Along with this, good brand equity among potential buyers.
  • Automation of activities bring consistency of equality to offering of respective company as well as enabled company to scale up and down based on demand condition within market.
  • As retail sector have growing competition as well as risk of online retailers result in losing volumes of other retailers. Thus, for attracting customers to shop Sainsbury's trying to cut cost and also keep price of their offering lower than competitors which is not sustainable for long term.
  • Brand Switching is also one major weakness of Sainsbury's as they also face risk related to same (Groskovs and Ulhøi, 2019). After conducting loyalty and promotion programs for respective company it is still challenging to retain their customers.

Opportunities

Threats

  • Sainsbury's have several opportunities on of them is growth in villages because people living there are not using branded products (Alevizou, Henninger and Spinks, 2019). Thus, it result in growth of supermarket culture for retailers.
  • Along with this, lower inflation rate will also opportunity for Sainsbury's as it bring more stability in market as well as enable credit at lower interest rate to their customers.
  • One of the major threat for Sainsbury's is competition from several companies like Tesco, Lidl, Asda ALDI and many more.
  • Demand of highly profitable products is not regular and any type of unlikely event take place during peak season may have wide effect on profitability of Sainsbury's in short to medium term (Somers, 2019).

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PESTEL analysis – It is an framework which marketers use for analysing as well as monitoring external factors which have direct or indirect impact on company. PESTEL stands for political, economic, social, technology, environment and legal. In relation of Sainsbury's PESTEL analysis are as follows :-

  • Political factors– In UK, political factor have wide impact on performance of Sainsbury's. As in United Kingdom government as well as consumers debts are very high which will impact on attitude of customers and business condition will also experience high pressure (Caputo and et. al., 2019). In addition to this, respective organisation is not operating only within these market condition but also have to develop business continually. Thus, political factors are not in favour, Sainsbury sustain in market for long term because of their long heritage of providing high quality products at competitive prices.
  • Economic factors– In any type of industry economic play play crucial role as it have impact of demand, profitability, cost, price and many more. There are some economic factors which affect Sainsbury significantly such as economic slowdown, inflation in food price and rising unemployment rates. Result of this will be negative because unemployment as well as high food prices reduce demand for Sainsbury which in turn decrease production of food products. Moreover, increasing supermarket chain in UK is always a strong economic factor through which respective organisation have to deal. There are some old competitors of Sanisbury such as Asda and Tesco as well as few new also like Lidl and Aldi.
  • Social factors– In present scenario, customers prefer one-stop shopping which simply means that customers want all the product under one roof (Sewchurran, Dekker and McDonogh, 2019). This is the reason that customers shop from super market instead of local retail stores as well as there is one another reason also that they come with some special schemes which includes several discount benefits. Thus, it provide high satisfaction to customers by saving their few bucks and in supermarket such as Sainsbury customers purchase more than what they required.
  • Technological factors– This factor have wide impact on working of retail companies as Sainsbury introduced their eCommerce store which is helpful in catering present tech friendly generation. In addition to this, there are several other technology which help respective company in providing better satisfaction to customers such as data based analytical systems i.e., big data and AI. This will help Sainsbury in understanding customer demographical needs in more effective manner and also in catering them. These will also help company in increasing sales as well as run better marketing campaigns.
  • Environmental factors –On organisation it is high pressure to act in social responsible manner for keeping environment safe. Because operations of business firm have impact on environment in both direct as well as indirect manner (Tirabeni and et. al., 2019). In elation to this, Sainsbury has taken initiative in relation of environment factors such as reduce, recycle and reuse approach which help them in managing waste, packaging and recycling. Along with this, they also work for reducing operation carbon footprint.
  • Legal factors– Policies and legislations given by government have direct impact on performance of an business firm. For instance, legal bodies introduced new tax on advertising highly processed as well as fatty food. Thus, Sainsbury have to adapt this by implement changes in their products and also complied to legislation needed.

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CONCLUSION

After going through entire discussion it has been summarised that, business environment is dynamic in nature and modification take place in this gives impact directly as well as indirectly on working of organisation. In simple term it can be said that, business environment is sum of internal as well as external factors such as customer needs, employees, clients, suppliers, owners, activities by legal bodies, innovation in technology, market & Social trends, economic changes and so on. Moreover, business environment is of two type i.e., micro and macro environment. Here, micro environment involves factors which have direct impact on performance as well as decision making of business such as competitors, market intermediaries, customers, suppliers and many more. On the other hand, macro environment is set of external conditions which have impact on efforts made for business development in negative or positive manner. These elements are beyond control and effect overall performance of business. It includes gross domestic product, inflation, staff members, spending as well as monetary and fiscal policy. For analysing these factors in effective manner Company conduct SWOT analysis through which internal as well as external factors both identified in effective manner. Internal include strength and weakness as well as external are opportunity and weakness.

In addition to this, for analysing macro environmental factor PESTEL analysis company conduct. Here, PESTEL stands for political, economic, social, technological, environmental as well as legal factors. It is essential to analyse these factors in effective manner because it have both positive and negative impact on working of an business firm. Apart from this, Organisation behaviour is study of the way people act within group. Principle related to this are applied primarily for making operation of business more effective. In simple terms, organisational behaviour study behaviour of individual within their organisational roles. There are several factors which affect behaviour of an organisation such as business culture as well as natural environment. Within this geographical and ecological factors included which influence organisational behaviour. It involve availability of natural resources, weather, climate condition, topographical factors, location aspect and many more.

REFERENCES

  • Hassanien, A. and Dale, C., 2019. Hospitality business development. Routledge.
  • Niemimaa, M. and et. al., 2019. Business continuity of business models: Evaluating the resilience of business models for contingencies. International Journal of Information Management, 49, pp.208-216.
  • Yusoff, Y. M., Omar, M. K. and Kamarudin, M. D., 2019, January. Does organizational learning capability allow improving business sustainability? A quantitative analysis in the manufacturing SME context. In IOP Conference Series: Materials Science and Engineering (Vol. 469, No. 1, p. 012015). IOP Publishing.
  • Newman, C. and et. al., 2020. Corporate social responsibility in a competitive business environment. The Journal of Development Studies, pp.1-18.
  • Franken, S. and Wattenberg, M., 2019, October. The Impact of AI on Employment and Organisation in the Industrial Working Environment of the Future. In ECIAIR 2019 European Conference on the Impact of Artificial Intelligence and Robotics (p. 141). Academic Conferences and publishing limited.
  • Ward, J., 2019. Using Arts-based Research Methods: Creative Approaches for Researching Business, Organisation and Humanities. Springer Nature.
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