This assessment will cover following questions:
- Marks and Spencer are the luxury brand and is one of the top multinational retailer. Explain the different functions of an organisation and show interrelationship between the same?
- What can be the strength and weakness of Marks and Spencer and show its interrelationship with the external macro factors?
- Describe mission, vision and objectives of Marks and Spencer?
Business environment can be defined as the collection of all the factors, both internal as well as the external impact a business (Capel and et. al., 2018). The factors can have an impact on each other as well as on the business. The factors can range from technological advances, implementation of government policies, market conditions etc. An organisation has to keep all these factors in mind before developing and formulating any new strategies. Marks and Spencer is an international brand, headquartered in Westminster which was founded in 1884 by Michael Marks and Thomas Spencer. The brand is recognized globally offering clothing, food and home products of high quality. The report covers an explanation of various types of organizations, their purpose, size and scope. It also describes the various functions within an organisation that link themselves to the objectives and structure of the organisation and work in coordination and the positive and negative impacts of the macro environment on different operations of business. An internal and external analysis of the company and the interrelation of strengths and weaknesses with the various external macro factors is also explained.
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P1 Different types and purposes of organisations
There are different types of organisations that have their own goals and objectives such as private, public and voluntary organisations. All organisations vary in their sizes, scope and structures. A company from each sector and its organisational as well as legal structu5re is described below -
- Public sector organisations –Public sector organisations are the ones that are owned by the government of a country and are primarily focussed at providing services to the local citizens in order to fulfil their needs and meet expectations (Clarke, Li and Xu, 2016). NHS or National Health Service is a public organisation that provides health services to the people and is owned by the UK government.
- Purpose :The primary purpose of this company is to give health services to the people who can't afford to avail heath services because of their low levels of disposable incomes. Therefore, the services that NHS provide are affordable and cheap. Public sector organisations are funded by the government and hence their main mission is not to make profits but provide affordable services to the citizens.
- Objective :The main objective of the company is to create an environment that is helpful for the patients by providing them health benefits and a courteous staff.
- Legal Structure :The company was formed through the implementation of various acts by the Parliament and also receives funds for the government.
- Stakeholders :Competitors, customers etc. are the stakeholders of the company.
- Voluntary Organisations –Voluntary organisations are non-profit in nature and include various companies that provide services relating to education, healthcare etc. Oxfam is a voluntary organisation in the UK that is mainly focussed on providing services to the poor people for their overall development (Davies, 2016).
- Purpose :The major purpose of the company is to provide services to people below poverty line who cannot afford even the most basic necessities. Oxfam work towards developing solutions in order to remove poverty.
- Objective :The organisation aims for the development of the people who have no source of finance and thus focuses on their overall development and advancement.
- Legal Structure :Voluntary organisations can either have a corporate or an incorporate legal structure wherein the rules are executed through various parties who donate funds. Oxfam has an incorporate legal structure as the company is not developed according to a stable framework.
- Stakeholders :Voluntary organisations have both internal as well as external stakeholders. The respective company has donation parties, general public as its stakeholders.
- Private sector Organisations –These organisations are run and controlled by sole proprietors like Marks and Spencer which is an internationally known brand (Erasmus, Strydom and Rudansky-Kloppers, eds., 2016).
- Purpose :Marks and Spencer aims to provide services to people in middle and upper class segments by offering products of high quality.
- Objective :The company's main objective is to build itself as a brand that profitable besides being sustainable through constant and continuous efforts.
- Legal structure :Private sector firms can be formed either through partnership or there may be a sole proprietor. Marks and Spencer, although is a joint venture.
- Stakeholders :The company has both external stakeholders like suppliers, clients etc. and internal stakeholders like the staff, managers and board of directors.
P2 Size and scope of different types of organisations
The size and scope of the different types of organisations are described below -
Types of Organisations
National Health Service is a public organisation that primarily aims at bringing transformation which will not only help it overcome challenges but also identify new opportunities that come up in the medical sector (Gavurova and et. al., 2017). The organisation provides services to the people of the United Kingdom without being asked to pay the service cost which includes services like visiting a doctor for a surgery, getting a treatment done if you are unwell or injured, getting an urgent help at the time of an emergency etc.
The company has its own hospitals, fundamental care units and a community and all of these have approximately 320,000 midwives and 150,000 doctors that attend the patients and provide them services. The company appointed a total of 106,430 doctors, 285,893 nurses, 21,597 midwives, 19,772 ambulance staff, 21,139 managers and 9,974 senior managers at different locations (NHS statistics, facts and figures, 2019).
Being a voluntary organisation, Oxfam can exercise its services in different parts of the world and this can be done by partnering up with a company where free services are provided to people who do not have a strong financial background. Also, the company has a determination of changing the conditions of these people who suffer from poverty. The company's scope is help people claim for a better life, save lives today as well as in the future and increase money for basic development services like health, education to more people so that they participate at their fullest in the economy of the country (Hamilton and Webster, 2018).
People of the United Kingdom can avail the services provided by the respective company to overcome their existing conditions. Oxfam also has approximately 20 charitable companies that are independent and perform various activities for improving the conditions of the society. The company has operations in more than 90 countries and is also known for carrying out various charitable practices (About us, 2019). The company runs projects that are driven by the community. The company has thousands of partners and communities that are available for help in times of emergencies to help people rebuild their lives during those situations.
Marks and Spencer majorly focuses on growing and expanding itself across the globe and to be able to sustain in highly competitive markets. Since the company has major operations in fashion, the company has plans of exploring new markets world wide so as to reach a broader customer base and attract new potential customers thereby gaining a competitive advantage against its competitors which will help the company in increasing its overall sales and profitability as well.
Marks and Spencer operates in a variety of regions across the world and has got a powerful system of distribution. The company is recognised by people as a high quality brand globally. The company currently is present in approximately 1463 locations with a net income of nearly £37.3 million every year.
P3 Relationship between different organisational functions and the way they link themselves to organisational objectives and structure
Organisational structure refers to an organisation assigns and supervises various roles, responsibilities as well as tasks in order to achieve its goals and objectives (Hillary, 2017). Different organisations have different structures like pre-bureaucratic, bureaucratic, post-bureaucratic structures. An organisation function can be defined as a set of activities that is carried out within a department of the company like operations, finance, human resources etc. Different organisations have different departments that work collectively towards achieving goals and objectives. The activities carried out by some departments in a company are explained below -
- Finance Department – The Finance Department within an organisation is primarily focussed on managing and controlling the cash flows within the organisation. The finance department at Marks and Spencer has the responsibility of analysing the data and reporting it. The department also carries out the process of capital budgeting and financial forecasting in order to make the company being able to make sound decisions when a challenge comes up (Ibrahim, Abdullah and Ismail, 2016).
- Operations Department – The operations department in an organisation makes sure that the products that are manufactured by it pass through the correct processes and is delivered at the right time. The department performs quality assurance and audits which are evaluations of an independent process and helps in ensuring that the process is functioning properly. Whereas quality assurance is done in order to inspect the products and services regarding any defects. Process improvement is one of the major functions of the operations department in Marks and Spencer. The process involves examining the current work flow and redesign it for creating a more efficient system. The operations specialists in the respective company are responsible for carrying out various activities that focus on the development of a project like improving internal business processes and improving the workflow.
- Marketing Department -Marks and Spencer has a special team that works on various marketing activities like promoting, advertising, analysing the market conditions for the company's products (Kolk, 2016). The department analyses the activity of the competitors as well as the conditions of the market in order to formulate the best strategies for promoting the company's products in the market and to reach a broader customer base worldwide.
- HR Department –The HR department in the respective company is basically responsible for carrying out the process of hiring the right people for the right positions in the company (May, 2019). It is also responsible for promoting a healthy environment where the employer and employees share a healthy relation with each other which in turn helps in improving their overall productivity and avoiding conflicts.
The interrelationship of these departments is explained below -
- Finance and Operations Departments – Both finance and operations departments work in coordination with each other in order to improve the overall business operations. The finance department in Marks and Spencer advices all the other departments including the operations department on how to make use of the funds that are available in the company. Similarly, the operations department asks for funds when the need arises like implementation of new machinery or technology etc. If this is not done, it will result in poor performance of the company.
- Marketing and HR Departments – The HR department hires the right people for the positions that are vacant in the company and those who are qualified and have skills that match the job description. Whereas, the marketing department of the company makes use of the skills of the hired candidates to the fullest in order to generate more effective and efficient outputs that are beneficial for the company in the long run. If both these departments don't work in coordination, other departments in the company will be affected negatively.
P4 Positive and negative impacts of the macro environment on business operations with examples
Macro environmental factors are those factors which are uncontrollable and externally impact on the business operation as well as management decision making (Oriesek and Schwarz, 2016). This will include numbers of factors such as political, technological, social, economical, environmental and so on. It has both positive as well as negative impact which impact on the business operations and functions. Below PESTEL analysis of Marks and Spencer is given below:-
Political factors - In this M&S need to consider several elements like government policy, foreign trade, tax policy, labour law and so on.
- Positive impact -Political condition of UK is stable which help respective company in gaining various opportunities to grow their business.
- Negative impact -After Brexit implementation, respective firm go through issues due to they need to close some store because they are not able to do proper shipping due to hard placed tax.
Economic factors - In this factors this firm need to consider economic growth, exchange rates, interest rates, inflation rate and several other factors of country at which they are operating (Prajogo, 2016).
- Positive impact -Economic condition of UK is strong which is beneficial for respective firm because it provide numbers of opportunities to expand business.
- Negative impact - At UK there are numbers of local clothing store which provide quality and wide range of clothing products in budget of customers which impact on M&S business.
Social factors - According to respective retail company they need to consider several factors like population growth rate, career attitudes, safe emphasis, cultural barriers and so on.
- Positive impact :M&S is operation their business from many years at UK due to which they have strong goodwill and brand value.
- Negative impact :Now respective company is not consider as company for youth due to which their business get fall and they are losing their majority of customers.
Technological factors - According to this factor M&S need to consider elements like level of innovation, Research and Development activities, technological awareness, technological incentives and many more (Sharafizad and Coetzer, 2016).
- Positive impact :Respect company adopt new technology which help in attract more and more customers at United Kingdom market.
- Negative impact :There are numbers of store at UK who also adopt new technology and innovation who are attract more youth customers of Marks and Spencer.
Environmental factors - This factor will include several other factors like climate, weather, environmental laws, climate change, pressures from NGOs and many more.
- Positive impact :Marks and Spencer advertises itself as a luxury brand and according to that it can create concern about environment because that this may impact its brand image.
- Negative impact :There are several environmental rules and regulations in United Kingdom according to which respective company need to operate which impact on decision making.
Legal factors - In respect of these factors M&S need to include factors like discrimination law, employment law, customer protection law, copyright and patent law, health and safety law and many more.
- Positive impact :Respective company can develop its strategies, plans and policies according to legislation developed by United Kingdom government which can help it in conducting work effectively.
- Negative impact :In last few year M&S involved in numbers of legal disputes which impacted its overall brand image and name (PESTLE Analysis Of Marks And Spencer, 2019).
P5 Internal and external analysis of the specific organisation
SWOT stands for strengths, weaknesses, opportunities and threats where strengths and weaknesses are considered internal to the organisation and opportunities and threats are considered to be external to it. A SWOT analysis can be conducted for an individual, groups and even organisations in order to analyse the current situation of the market, understand their strengths and weaknesses and act in an effective manner when an opportunity shows up or when there is a threat posed to them. The SWOT analysis of Marks and Spencer is described below -
- Strengths –Marks and Spencer is a brand with high recognition that is a UK giant having headquarters in Westminster. The brand value of the company is high as people who prefer shopping high quality products can visit the company's stores in order to fulfil their needs and expectations as the brand target people in the premium segment (Somers, 2019). Although the company is nearly 135 years old, it has still managed to remain in the race majorly because of keeping in line with the market trends and constantly innovating its products.
- Weaknesses – Besides being a successful brand, Marks and Spencer has not been able to penetrate successfully in foreign markets like Europe and the US. There have been cases where the customers were not found to be satisfied with the company's products and there were several issues with respect to the returns of the products as well as the in store experience of the customers. As a result, there was a decline in the customers' loyalty as they switched to other brands.
- Opportunities – Since the brand majorly deals in fashion, there is an opportunity for the company to expand itself in new segments as fashion is a constantly evolving business where new segments keep coming on a regular basis (Stott, Stone and Fae, 2016). Constantly upgrading itself online will help the company to increase its revenues as the concept of online shopping is constantly rising. For its food products, Marks and Spencer an focus on promoting healthy products as customers today have become more health conscious.
- Threats - Marks andSpencer has been facing threats not only from various market leaders like Zara, Tommy Hilfiger, Gap and United Colors of Benetton in terms of innovations and uniqueness in the products but new entrants as well. Also, increasing the prices of its products will lead to people spending less on the brand and opting for other brands instead. The company's inability to meet the needs of the customers previously can also post threat to it in some way or the other.
P6 Interrelation of strengths and weaknesses with external macro factors
Different changes in the macro factors can impact the functioning of an organisation. Thus, analysis of various macro environmental factors can provide an insight about the challenges may come up in the future and how can the organisation react towards them in an significant manner. The interrelation of strengths and weaknesses with various external macro factors like Political, Economic, Social, Technological, Environmental and Legal factors is explained below -
Political Factors -
- Strengths :The decision of the European government to permit free flow trade between themselves and other countries makes it easier for the company to import products in time making it an easier process than before which can act as a strength (Yashkova and et. al., 2016).
- Weaknesses :But the competitors of the company took advantage of the same which resulted in a decline in its market share.
Economic Factors –
- Strengths :Marks and Spencer is a brand that understands the needs of its customers very significantly which acts as a strength in satisfying their customers.
- Weaknesses :Price is considered as an important factor as far as the retail industry is concerned. But the number of budget retailers entering the market has increased as they supply products similar to big brands like Marks and Spencer at a much cheaper rate.
Social Factors –
- Strengths :Being among the oldest brands in the UK, Marks and Spencer is widely known by people. Therefore, a strong brand name has acted as a strength for the company in reaching out to a large number of customer segments and attracting potential buyers over time (Davies, 2016).
- Weaknesses :However, this has also acted as a weakness as the customers have now started associating the company with the past.
Technological Factors –
- Strengths :By implementing latest technologies like self-checkout which is among the biggest trends of the retail industry, Marks and Spencer has gained a competitive advantage over its competitors. This has also helped the company in saving money that would have been otherwise spent on appointing cashiers for their stores.
- Weaknesses :Another big trend in the market is online shopping which has acted as a weakness for the brand as it does not deliver food items online as compared to other big food stores.
Environmental Factors –
- Strengths :The company's move in order to become more sustainable can act as a strength and help it gain a competitive advantage (May, 2019).
- Weaknesses :Most companies today, including Marks and Spencer produce products that are environment friendly that are manufactured using renewable resources. This has posed a big challenge for many brands in order to maintain their share in the market.
Legal Factors –
- Strengths :Marks and Spencer follows various legal rules and regulations in order to remain sustainable and offer high standard products to its customers as the UK retail industry closely monitors the organisations (Evans and et. al., 2017).
- Weaknesses : Different countries have their own legal structures which they keep on updating. As a result, the company has to update its own legal rules and regulations which affect its operations.
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From the above report, it can be concluded that business environment forms an important aspect for an organisation in order to carry out its business operations in an effective and efficient manner. Also, there are various kinds of organisations depending on their scope, size and stakeholders and structures like pre-bureaucratic, bureaucratic structures etc. and have various departments like finance, human resources, marketing departments that function in coordination with each other towards achieving the goals and objectives of the organisation on a whole. All the departments in a company are interlinked with each other and non-efficiency of even one department can cause a dis balance in the overall performance of the organisation.