Business and the Business Environment

University: REGENT COLLEGE

  • Unit No: 12
  • Level: Undergraduate/College
  • Pages: 9
  • Words: 2250
  • Paper Type: Assignment
  • Course Code:

    M/508/0494

  • Country: UK
  • Downloads: 0
Question :

The purpose of this report is to analyze the influence of environmental factors over business decision making and functional activities. In this regard, it is required for an organisation to construct strategic directions in order to reduce negative impact of such.
•    Identify different types of organisation as well as their size and scope.
•    Discuss interrelationship between different organizational departments as well as their link to business structure.
•    Evaluate positive and negative impact of external environmental factors over Halifax.
•    Determine strength and weaknesses of Halifax as well as its interrelationship with external environmental factors.

Answer :
Organization Selected : Halifax

Business environment

Introduction

to report

Business environment is inclusive of all those factors that put a direct /indirect impact on the entre functioning of organization in a positive or negative way. These include the consumers, suppliers, rival firms; PESTLE factors etc (Hamilton and Webster, 2015). The present study has thus laid emphasis on finding out different types of

organizations that can be the potential client of Halifax followed by

discussing

there organizational structure and there relation with

objectives

of the company. Other than this,

business environment of one of the client of Halifax bank which is Debenhams has also been studied.

Task 1

Different type,

size and scope of

organizations

Introduction

An organization can be defined as a group of individuals that work together to accomplish goals and objectives. The purpose of any organization is attainment of collective goals and earns profit (Fleisher and Bensoussan, 2015). These usually exist when a group of people work together then they can attain more as compared to a single individual. The UK economy has got a presence of primary, secondary as well as tertiary sectors where the organizations function (Do and Smallbone, 2017).

Sole trader

Sole trader is the one where an individual owns as well as runs the entire business entity. These kinds of firms are involved in creating self-employment opportunities and ensuring that there is productive use of funds opportunities for self-employment and making fruitful use of funding. The advantage is in form of ways setup and full control over the business decisions and assets. But there is an existence of

unlimited liability that may act as a threat if things go wrong.

There is also a chance of less tax planning as a single person has a liability to pay all the taxes

(

Quinn and Kristandl, 2014

)

.

One of the sole

traders

that

exist

in UK is Angila tax help which provides accountancy services to the companies and belongs to tertiary sector

(Angila UK, 2018)

.

It works on the purpose of rendering quality services to the consumers.

Partnership

Partnership

is a kind of business arrangement where two or more

individuals

exists to share profit and liabilities that are there in a business setup.

The members in which

partnership

is

formed can go

up to

The advantage of this business is that there is an

existence

of low startup cost; ease of establishment and more capital availability. On a negative

note

, the partners have a presence of unlimited liability to debts that

exist

in business followed by

chances

of

conflict between partners

(Hair and et.al., 2015)

. A famous example of partnership firm is Google that was formed on account of

partnership

between

Larry Page and Sergey Brin (Larry Page and Sergey Brin, 2008). As the company provides technology based service hence it comes under tertiary sector.

Limited company

Limited company is that private firm whose owners have a legal responsibility for the debts but only to the extent of capital amount that has been invested in it. These play the role of maximizing the profit that is received by shareholders followed by ensuring that there is an overall transparency with respect to financial reporting (Dimitrova and MacKay, 2017). The advantage of this type of company is in form of limited liability with respect to amount of shares owned by members; ease in terms of raising finance and presence of a stable form of structure. The disadvantages are however in form of expensive setup cost; complex rules for accounts and bookkeeping (Botha, Kourie and Snyman, 2014). Along with this, these firms cannot sell shares publicly which puts an overall limitation on their growth. As the shares are not traded on

stock exchanges hence there is also a limitation with respect to rasing adequate amount of capital.

Example of a limited company is Angila waters present in east of England and it belongs to primary sector of UK. Other than this Debenhams is also a private limited firm in the tertiary sector of UK that provides retail services to the consumers in the area of clothing, beauty products household items as well as furniture (Debenhams, 2018).

Public limited company

Public limited company is the one that offers shares to the general public and also has a presence of limited liability. These firms try to maintain a balance between primary objective of profit making with the social and environmental goals that aids in pacifying shareholders (Hair and et.al., 2015). These firms have a better access to capital as well as liquidity and a presence of increased opportunity with respect to acquisitions. They further own a

prestigious profile but have a presence of increased regulatory requirements and are

required to maintain high

transparency

. An example of a

Public limited firm that operates in UK is oil company British Petroleum which belongs to primary sector as it is involved in making of oil and related products.

Charitable

 

organization

Then

is the

charitable organization whose primary motive is to carry out social well-being and philanthropic activities. It does not pay any income tax and none of the income earned by the firm is distributed to the directors or members of the firm. The advantages of this firm are in form of public recognition, trust factor in people; tax relief as well as benefits in funding (Hameed and Abbott, 2017). However there is a restriction on the kind of work that has been carried out by the company followed by a lock on assets as these cannot use them for the purpose other than charity. Other than this, the companies do not have the permission to raise

equity investment followed by an unpaid board unless charity commission in

ready for the payment.

Cancer Research UK is the charitable organization that has been working on the cancer disease and it falls in tertiary sector.

Conclusion

From the above section it can be concluded that

the

organizations

can be classified on the base of the

purpose

served by them as well as legal

structure with which they carry out

their

operations.

Task 2

organizational structure of Halifax bank clients and the relationship between the various functions and how they relate to objectives and structure

The two types of organizational structures that the clients of Halifax bank may have are matrix and

divisional.

The matrix structure is the one where company is divided into departments such as HR, finance, IT, marketing as per the

specialization which makes it highly sophisticated and there is an involvement of high planning so that implementation can be done correctly. Then is the divisional structure where focus is given on grouping

individuals on the basis of

project

or product that has been taken by them

(

Dey

and et.al., 2015)

.

There is an existence of huge relationship between organizational functions/department with objectives and structure. These have been discussed below.

First is the

human resource department which

performs

the function of selecting, recruiting, training, developing as well as

appraising

the employees.

In

case of divisional structure, the HR

ensures

that

all the staff members carry out the

different

functions in a proper manner. While in matrix structure the HR helps to team up the employees so that they can perform the diverse functions

(

Park, Kwag and Bae, 2016

)

.

Then comes the operational department

where the operations manager is required to train, monitor and supervise the employee performance. Both

matrix as well as divisional structure can aid in smooth flow of operations. In context of finance department, the matrix structure will assist in linking the finance employees with other functional areas while divisional structure will help in bringing increased control on the employees. Then is the Marketing department where both the structures will help in maintaining brand image of the company.

Task 3

the

positive and negative impacts of the macro environment upon the business

operations

As per secondary data findings one of the clients of Halifax in

UK

is Debenhams whose

macro environment

and how it effects its working has been described below;

Political – many factors have put an impact on the overall clothing industry of UK during 2017.

These are in form of terrorist attack in London that deterred the tourists to pay a visit in UK and caused a decline in sales.

Then is the brexit issue that decreased the overall purchasing power of consumers. On a positive note, the presence of free trade agreements led to the growth of retail clothing

sector

of UK as well as Debenhams.

Economic – UK economy

has seen a fall on pound on account of exit of

Britain

from EU which

decreased

the demand of clothing and affected sales of Debenhams. The decrease in wage rate further

reducing

buying capacity of people. But it is also true that UK has been known as a

fashion

hub all over the world which has boosted the

operations

of clothing

sector

as well as

Debenhams

(Hamilton and Webster, 2015)

.

Social –

Debenhams

has usually based its concept on affordable clothing which has ensured that consumers come to the

stores

in large numbers. The company also has a presence of plus sized clothing in order to cater to the needs of fat men and women. The Ageing population has however created a negative impact on the staff members but has generated old people as

consumers

who have a

presence

of higher disposable income.

Technology –

the present times are of e-commerce and technology that has aided in the overall growth of online stores of

Debenhams

and also generated new consumer base for

the company.

The management is thus required to be in tune with the latest technology so that it can meet up with the needs and requirements of consumers

(Fleisher and Bensoussan, 2015)

.

Environmental –

the UK has seen a huge rise in consumers who adhere with ethical and environmental friendly standards. This

has

given rise to new trends such as use of organic cotton and

buying

clothes that are made out of recyclable material. Hence

Debenhams

should

ensure that it

tries to

maintain its carbon footprint to the minimal possible level so as to be

recognized

as an environmental friendly firm.

Legal

the company is

required

to

adhere

with the legal norms as set by the UK government in the area of

consumer rights; marketing, advertising; health and safety of workers among others. It must adhere with these laws on a stringent basis and also train its staff members towards it.

Task 4

Carry out SWOT analysis and explain how strengths and weaknesses interrelate with external macro factors

SWOT analysis

Strengths

The company has high brand equity in fashion world.

The stores are spread all over UK, Ireland and Denmark as well as 40 nations (Do and Smallbone, 2017).

The company has been known to provide excellent consumer services.

A wide range of product offerings in the area of fashion, beauty, gift, furniture and electrical.

Weakness

There is no clear defining of unique selling proposition that has resulted in less success as compared to competitors.

The management has not carried out proper financial planning.

The company has invested very less in Research and Development which has made it is below par with competitors.

Opportunities

The brand can evolve with the changing preferences and choices of consumers with respect to fashion industry.

The company can invest more in research and development facilities .

It is required to tap new trends in the consumer behavior by involving itself in market research (Fleisher and Bensoussan, 2015).

Threats

There is a presence of high competition from other retail outlets such as Primark, Marks and Spencer, Next plc. Among others.

Rising prices of cotton may put an increase in manufacturing cost.

As the firm operates in different nations hence it is exposed to currency fluctuations.

The movement of consumer towards online stores can act as threat for its physical infrastructure.

How

strengths and weaknesses interrelate with external macro factors

From the above SWOT analysis it is clear that Debenhams has got high brand equity in UK and a good presence in the market which has led to increased brand loyalty thereby linking it to social factors. The strong brand equity also provides benefit to the company in political and legal front as it is least likely to face any issue while expanding to international markets. This is as the governments of various nations are aware about the business of Debenhams and will thus welcome its entry to the nation. The company has also got a presence of good consumer service which has attracted the buyers towards the brands (Hamilton and Webster, 2015). This thus gets linked with the socio cultural factor and can result in maintaining of overall brand value.

As per the weakness the company has invested quite less in research and development because of this it may not be able to meet up with the changing market trend. This can interfere with the social factors and consumers demand for new clothing. Further the company has not been able to capture all the consumer segments which can cause a reduction in its sales and profitability. Hence the need is to capture more segments and invest in other nations as well (Do and Smallbone, 2017).

.

Co

nclusion

A conclusion can be derived from the above report that there exits many kinds of organizations within UK that can be the potential client of Halifax bank. These are inclusive of public and private limited firms, sole trader, partnerships as well as voluntary firms. One such client of the bank is Debenhams that has a strong presence in UK and all over the world. The pestle analysis has further revealed that there is enough potential of growth for Debenhams however weaknesses such as lack of research and development activities and threats from other fashion retail can affect the overall operations of the company.

References

Journals and Books

Fleisher, C.S. and Bensoussan, B.E., 2015. Business and competitive analysis: effective application of new and classic methods. FT Press.

Quinn, M. and Kristandl, G., 2014. Business information systems for accounting students. Pearson Education Ltd.

Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University Press, USA.

Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business environment: Knowledge management and knowledge management technology. Elsevier.

Do, H. and Smallbone, D., 2017. UK SMEs' entrepreneurial behaviour and planning in BREXIT.

Dimitrova, K.K. and MacKay, S., 2017. An Evaluation of the Effects of Social Media on Client: Advertising Agency Relationships in the UK. International Journal of Online Marketing (IJOM)7(2), pp.23-41.

Hair Jr, J.F. and et.al., 2015. Essentials of business research methods. Routledge.

Hameed, W. and Abbott, C., 2017, September. Critical review of the success factors of strategic alliances in the UK construction industry. In 13th International Postgraduate Research Conference 2017: conference proceedings (pp. 15-26). Salford University.

Park, E.Y., Kwag, D.G. and Bae, S.U., 2016. A study on the market competitiveness of small-to-medium sized businesses utilizing CBMI (Convergence Business Model Innovation). Indian Journal of Science and Technology9(26).

Dey, P.K. and et.al., 2015. Strategic supplier performance evaluation: A case-based action research of a UK manufacturing organisation. International Journal of Production Economics166, pp.192-214.

Online

Anglia UK, 2018. [Online]. Available through: < > [Accessed on 4th June 2018].

Larry Page and Sergey Brin, 2008. Entreprenuer. [Online]. Available through: < > [Accessed on 4th June 2018].

Debenhams. 2018. [Online]. Available through: <https://www.debenhams.com/content/company-information> [Accessed on 4th June 2018].

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