Business environment refers to external and internal environment which impacts functions of an organisation involving consumers, employees, demand and supply, management and also regulations of business. Internal factors are related to inside of company that impact on business like for an instance organisational structure, management structure and organisational culture (Bagtasos, 2011). On the other hand, in external factors involve political, social, economic, technological and environment. This present report is based on Marks & Spencer organisation. It deals in retail sectors and provides home items, beauty products, clothing etc. Under this mention report discuss about relationship among various organisational functions. External and internal analysis of particular organisation to determine strengths and weakness will be discuss in this. There is mention about weaknesses and strengths interrelate with external macro factors. If you are interested in an Entrepreneur Sample paper than you must visit Characteristics to become a successful Entrepreneur.
P1 Different types and purposes of organisations
Under this, there are various kinds of organisations are working in an environment. These are private voluntary and public (Cantwell, Dunning and Lundan, 2010). The aims and legal structures of all companies are different from the each other. Difference among profit, not for profit and non governmental organisation given below:
|Basis||Private||Public||Non- governmental organisation|
|Meaning||These organisations are run as well as controlled through private organisations as well as individuals. These are not controlled through government.||These firms are under control of central, local and state government. These are funded through government.|
|Resources from||Customers||Citizens||Donors, funders|
|Example||Marks & Spencer||UNICEF||Bank of England|
At market place, there are different size of organisation like micro, small and medium to run their business in order to generate income and increase profit. Various size companies mention below:
Micro sized enterprises- Under this, there is one owner with up to five staff members consisting owners (Cheng and et. al., 2012). These businesses are modifying wealth creation, life quality and dynamic of income. Annual turnover of this company is less that €2 million.
Small size enterprise- Under this, less than 50 staff members are working and its annual turnover is not more than €10 million. These firms work on provide employment opportunities to local people.
Medium-sized enterprise- In this type of firm, minimum 250 employees are working with an annual turnover is less than €50 million.
Along with them, the purpose and legal structure of every sector is different from the each other. Legal structure and objectives of private, public and voluntary sector given below as above:
Private sector- It is a necessary part of an economy that run through organisations and persons for the purpose of earn profit (Child and Möllerin, 2013). It is not controlled through government and employees workforce in some cities and countries. Marks & Spencer is private firm and its size is large. Products which are supplied through this company are home items, foods products and clothing.
- Marks & Spencer objective is to regain its leadership in food and clothing.
- Its focus on provide great expedience to customers so that they can loyal towards firm.
- Its purpose to serve as general store that provides services for middle to the lower- upper class.
Partnership - It refers to an agreement among two or more than two people in order to conduct business together by sharing profit, investment, authorities etc. Their aim is to achieve common goal of firm.
Sole proprietorship - In this, business is owned through single individuals with having authorities to take decisions. An individual is liable to take risk and there is not any legal distinction.
Limited companies - It is explained as business entities of two kinds guarantee and shares. Under this, members liability is limited (Gebauer, Paiola and Edvardsson, 2010).
Public sector- It is a part of an economy that composed of public firms along with public services. This sector is controlled through local, state and national government. Bank of England is private company and it is Central bank of UK. This bank is owned through Treasury Solicitor on behalf of government.
- Its main objective is to provide monetary services to people of United Kingdom.
- It works on promoting financial stability.
- Its aim is to maintain the monitory stability.
Local government - Role of this government is to provide system in which Council perform exercise and functions the conferred powers.
State government - It is responsible for developing the state laws which can be the state legislations. It has some reserved, particular powers.
Central government - It gives functions concerned to business operations of centra; as well as state governments.
Voluntary sector- It is comprised of companies which aims is to enrich and benefit society without earning profit and intervention of government (Hamilton and Webster, 2015). United Nations International Children's Emergency Fund (UNICEF) is voluntary company and it give emergency health care and food services to children.
- Protect rights of children to help the meet of basic needs.
- It gives humanitarian help at the time of emergencies and crisis with motive of save live of children.
P2 Size and scope of a range of different types of organisations
There are various factors on which company is varies with each other consists scope, turnover, size, employees, aims etc. Under this, firms are divided in to three categories and these are small, medium and large (Kian Chong, Shafaghi and Leing Tan, 2011).
Difference among large, medium- sized and small organisations
|These businesses are owned through single person.||These firm are run privately and there can be two owners of firm.||Under this, organisations are mostly operated in partnership and also public investor.|
|There are less than 50 employees are working.||Under this, not more than 150 staff members are working.||In large organisations, more than 250 employees.|
|Its market is small customer base generally local market.||It has limited consumers base (limited to industry or geographical niche)||It has diverse market with the diverse consumers.|
|These organisations have limited growth opportunities.||It has growth opportunities to the key staffs.||Many career growth programmes.|
Transnational organisation- It is commercial company that operates the substantial facilities and also does not have the business in more than the one country and also not include any specific country in its national home (Klapper, Lewin and Delgado, 2011). These are complex firms and invest in the foreign operations.
International companies- These are exporters and importers and also have not any investment from outside home country. They have no FDI and also make services or goods in only home country.
Global Organisation- They invest in many different countries but maintain only one strong headquarter in home country. They conduct their business activities in all over world.
Difference among franchising, joint ventures and licensing
|It is an agreement under which an organisation sells right to use the intellectual property.||It refers to an agreement in which two firms are together working to attain common goals with in given time period and funds.||It is license to operate business by using name of franchisee, standardized process and operating methods.|
|It is governed through Contract law.||Governed through partnership law.||It is government by franchising regulations.|
|Its registration is not necessary||Registration is required.||Registration is mandatory.|
Industrial structures and competitive analysis
Industrial structure- It is designed for the purpose of fulfil particular function in an industry such as raw materials, communication lines, equipments etc. The structure of every country is different from each other.
Competitive analysis- It is necessary part of marketing plan of firm and helpful in determine the marketing position of company at competitive market (Lewis and Gates, 2015).
Market forces and Economic operations
Factors are impact on cost as well availability of services or products in an economy of market. Under this, forces of supply and demand shows an aggregate impact of self- interested sellers and purchases on quantity and cost of services and goods. There are different tactics taken through Marks & Spencer given below:
Supply and demand: It is necessary that services or goods should be adequate in store on the basis of demands and needs to consumers.
Scarcity and Choice: Marks & Spencer provides various categories of products like foods items, home goods and clothing. So, there is a requirement to management of this company to use resources properly and deliver goods in relation to current market trends.
Income elasticity: Customers buy goods in exchange of available money. Marks & Spencer offers many goods which aid in gain attention of more consumers and enhance demand of products (Teece, 2010).
These are people which take interest in activities and operations of company. They can be employees, suppliers, investors, consumers etc. At market place there are various organisations and their stakeholders are different from each other. In addition to this, stakeholders analysis refers to procedure of assessing potentiality and system changes which are relevant to the interested parties. Different types of stakeholders given below:
Primary stakeholders- These are more impacted wither negatively and positively through actions of companies.
Secondary stakeholders- They are intermediaries and firms or individuals are indirectly impacted through firm's actions.
Territory stakeholders- They are less affected (Machuki and Aosa, 2011).
Key stakeholders- They are influences on importance of company and relate with other groups.
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P3 Relationship between different organisational functions
Marks & Spencer is retail company and it conduct its business in many different countries. Under this organisation, there are many different departments are working in order to attain the common goal and objective with in specific period of time. Various departments of firms are recognised as necessary part in order to develop an internal structure consists human resource, operation, marketing and finance. Relationship among various functions of company and link with organisational structure given below:
Human resource- Its main function is to perform functions related to design workforce and also hire employees on the basis of their skills and capabilities. Different functions of this function are performance appraisal, training and development, recruitment etc. It is related with other different departments such as finance, marketing and operations, it helps in hire employees for these departments and provide them training (Mahmood and Hanafi, 2013).
Marketing- Function of this department is to be carried out activities related to advertisement related to existing offerings of Marks & Spencer to spread awareness between consumers. This function is related to the operation department under which it conduct activities on continuous basis. It aids in achieving two way aims set through operational as well as marketing divisions regarding grab attention of large number of people to improve revenue and sales.
Finance- This department function is to plan and arrange funds which are necessary to carried out business activities. Company develop budgets for various departments to conduct their functions. It is a responsibility of finance department is to identify various sources to raise funds.
Operation department- It helps in proper functioning and develop coordination between function which are to be performed in continuous basis. It is a responsibility of firm to perform activities concerned with monitoring, planning, controlling etc. It is interrelates with marketing department to attain target for increase sales (Palo and Tähtinen, 2011).
Different organisational structures
Organisational structure explains about activities like coordination. Supervision and task allocation are to be directed towards attaining aims of firm.
Bureaucratic and post-bureaucratic- Bureaucratic organisation structure refers to management form that has pyramidal command structure. It is organised with high formality degree in a way firm operate its business. In Post bureaucratic, decisions are taken according to consensus as well as dialogue instead of command and authority.
Parent- It owns voting stock in other company to control operation and control management through doing as well as including board of directors.
Strategic business unit- It is functional unit of business that has its own direction and vision. It operate business as separate unit and also necessary part of firm.
Matrix- Under this structure, reporting relationship are to be set up as matrix or grid rather than traditional hierarchy.
Functional levels- In this, company is segmented in to the small parts and also depends on some functional areas like for an instance finance, marketing, operation etc.
P4 Positive and negative impacts macro environment has upon business operations
Marks & Spencer is retail company and provide its services to large number of consumers in all over world (Rose and et. al., 2013). Macro environment develops positive and negative impacts on operations. These are given below as above:
Political factor- It is concerned with government bodies and policies of every country is different from each other. Under this, government set some regulations for firms. At the time of conduct business in other countries, it is essential for firm to know about their political stability.
Positive- Under this, if political stability will be will then, company can able to perform its functions.
Negative- If in country, there will be no political stability then its affect will be bad.
Economic factor- Marks & Spencer company is impacted through discounting cost of rivals. Its main focus on high quality of services or products which are led to the short term loss and consumers are attract towards the value. This factor determinants of performance of an economy which have directly affect firm and long term impacts.
Positive - It helps in improving living standard and reduce poverty.
Negative - High tax rate negatively impact of business and also enhance income equality.
Social factor- The tastes and demands of consumers are changing day by day. It is a responsibility of company to provide products on the basis of needs of consumers (Scheer, 2012).
Positive - If company will produce goods on the basis of demands of consumers then its results will be positive.
Negative - Produce goods with out knowing demand of consumers will negatively affected.
Technological factor- It impacts business negatively as well as positively. It is necessary for company to use the modern technology in order to update technology. It helps in provide competitive advantage to business.
Positive - New technology develops positive impact on business. It helps in doing business operation and production easily.
Negative - In purchasing new technology, more cost will be required.
Environmental factor- For Marks & Spencer, it is necessary to measure policies of government and also identify climate and weather of business.
Positive - By this, firm can increase its sales as well as development of company to generate more revenue ( Zsambok, 2014).
Negative - If firm will not use eco- friendly products then people will not way to buy products of company.
Legal factor- Under this, firms need to determine the legalisations of every country in order to conduct business in better manner. The legislations of every country is different from each other.
Positive - Marks & Spencer organisation company focus on conducting its activities by following regulations.
Negative - If in case, company will not use any legislations at workplace then it will develop negative impact on business.
P5 Internal and external analysis of specific organisations
Internal analysis refers to process in which activities are concerned to determine the necessary aspects those are available at market place (Bagtasos, 2011). SWOT analysis is helpful in determine strengths as well as weakness of Marks & Spencer in better manner. SWOT analysis of Marks & Spencer given below:
P6 Strengths and weaknesses interrelate with external macro factors
Under this, it is observed that the business environment develops impact on activities as well as operations of firm in an effective manner (Cheng and et. al., 2012). Marks & Spencer business organisation has some weaknesses and strengths which should be know by top management of business. This firm conduct its business in all over world and earn more revenue. But at the time of run business in other countries, it is necessary for company to determine its micro factors. During expand business in other cities and countries, Brexit and Europe both facing different problems. Like it has a strengths to perform its activities in well manner and its employees are well trained but political factor of macro environment does not permit business to perform in a country in well manner (Hamilton and Webster, 2015). In context to this, kind of external factor making some modifications for Marks and Spencer to invest money as well as time during perform different responsibilities. The manager of this company works on analyse the external factors so that it can not face any problems at the time of conduct business .
Marks & Spencer brand equity is more stronger. Its main focus on clothing segment. It provides its services and quality products in many different countries and people are like to purchase its products more. Its economic growth along with the market share is high. On the other hand external factor is helpful for Marks & Spencer to screen investment in minimum time period (Klapper, Lewin and Delgado, 2011). This firm is operate in the premium segment of food and clothing for promising employment opportunities to local people. It helps in increasing income level of middle and lower class of people.
It has been concluded from the above given report that business environment develops direct affect on profit level as well as operations of business. Before conduct any activity or operations, organisation analyse its internal and external factors both. Under this mention report studied about scope and size of various kinds of firms. Negative and positive affect of business environment on operations of business has been also discussed under this. Students can also visit Law Assignment Help to get assignment services from expert writers.