The objective of this report is to analyse the influence of macro and micro environmental factors over the business decision making. In this regard, it is required for an organisation to construct an effective strategy and approach that can assist in minimizing the negative impact of such factors. The analysis of this report is based on:
- Evaluate different type, size and scope of organization.
- Identify the interrelationship between different functional division of Marks and Spencer.
- Analyse the positive and negative impact of macro environmental factors over the business operations and decision making of M&S.
- Discuss the strength and weaknesses of Marks and Spencer as well as its interrelationship with external environmental factors.
Business environment is a kind of link between organisation’s actions and its environment. Environment is the atmospheres of a company by which firm influenced directly or indirect manner. Where the political, economic, social, and technological factors shopping a business environment that are evaluated by a business for making forthcoming strategy. The company’s business environment also includes the suppliers and customers who play an important role in the business. There are two types of environment faces by the company such as internal and external. In Internal environment it considers internal factors like value system, mission and objectives, quality of human resources, organizational structure etc. whereas external environment includes external factors which are two types like micro and macro (Avramenko, 2012).
In micro external environment includes suppliers of input, customers, marketing intermediaries, competitors, etc. and macro external environment includes economic, legal, global, natural, and ecological. While preparing this report, Marks and Spencer, UK based company which manufacturer’s apparels, food products, and other household items are selected for this report. This report also summarized different size, kind, and scope of organization and also includes its important functions and structure. The strategic management tools and techniques are used in this report like SWOT and PESTLE to analyse the business environment factors. This report also summarized the strengths and weaknesses of the Marks & Spencer Company.
P1: Different types and purpose of organization
Following there are different types of organizations which are summarized below:
Private Sector Organization: A private sector organization is that organization which is owned, managed and controlled by private individuals or institutions. Maximization of profit is main priority of private sector (Karagiorgos, Drogalas and Giovanis, 2011). A private sector does not undertake risky ventures or those having low- profit margin. Private enterprises are run by businesses men; capital is collected from the private partners. For example, M&S is the private sector organization in UK which has operated its own business operations in so many countries. It has 1000 (approx.) outlets in UK itself.
- Private ownership
- Profit motive
- Independent management
- Private accountability
- Private management
Types of private organizations
- Partnership organization: A partnership organization is a type of business organization where there are two or more individuals or persons pool money, skills, and other resources, and share profit and loss in accordance with terms and conditions of the partnership agreement. For example, FAB.
- Limited liability organization: A limited liability organization is a corporate structure where the members of the company cannot be held personally liable for the company’s debts or liabilities. It has combination characteristics of a corporation and a partnership or sole proprietorship. For example, Associated British Foods, PLC. This organization can be classified into two types i.e. in the form of guarantee and shares.
- Sole proprietorship: A sole proprietorship is the ownership of a business by one person, who receives all of the profit, but is responsible for all debts and obligations as well. The individual who owns and runs the firm is called as ‘a sole proprietor’ or ‘sole trader’. For example, Restaurants, beauty salons, etc (Kolk, 2016).
Public Sector Organization: A public sector organization is the organization controlled by and accountable to central or state government. Such type of organization is established to provide services for its citizens. For example, the public sector organization includes education, electricity, emergency services, healthcare, etc.
NHS is an organization which is provides medical services at reasonable prices to the people of the country. This organization is basically focuses on the low income group who are not afford the expensive medical services. The organization has a main function by providing medical facilities to the society and its betterment in the UK.
Objectives of NHS
- To keep the lifestyle of every individual in healthy manner.
- Providing free check-ups to the low income group.
- Providing betterment of healthy life to the society.
- Providing more and more contribution in the society development.
Non- profit organization: A non- profit organizations, are privately held entities that don’t provide financial benefits for their members or stakeholders. In other words, they are privately incorporated groups with a charitable purpose of not profiting from the activities they carry (Nishitani and et. al., 2012).
For example, Oxfam-Wereldwinkles is a democratic volunteer movement that strives for fair world trade and fights for everyone’s right to a dignified existence. It is the main fair trade organization. The organization gives public awareness about unfair trade practices.
P2: Size and scope of various types of organization
There are various types of different organization which works on different fields and also in different sizes and scopes which makes the organization different from others. Organization may be public, private and non-profit. Size means organizations have business operations in different countries around the world and scope means organizations have capability to achieve their targets and winner in future period of time.
Following are the organizations which have different scope and size are discussed below:
Marks & Spencer (M&S):
Size: - Marks & Spencer is a leading multinational retailer based in the United Kingdom. The company has a long history within the UK market, with its first store in 1884. As of 2016, there are 914 M&S stores located in the UK, and 468 other store locations situated around the world. 306 of these stores were primarily focused on food. M&S has been increased worldwide revenue growth year on year since 2010, with 2016 revenue figures showing 10.5 billion British Pounds (Osterwalder and Pigneur, 2010).
Scope: - The Company focuses on many forms of retailing. It sells products such as clothing, home products and luxury goods, as well as food and drinks across the world which helps them to attain the more customer satisfaction and also helps them to increases their revenue.
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British Foods Plc.:
Size: - Associated British Foods is a diversified international food, ingredients and retail group with sales £ 15.4bn, 133,000 employees and operations in 50 countries across Europe, Southern Africa, Asia, America and Australia.
Scope: - ABF is a diversified group of businesses which enjoy a high degree of autonomy in the running of their operations. They are ground into five business segments: sugar, agriculture, retail, grocery and ingredients. Their scope of work is to serve different type of foods and beverages items to the national and international customers and earn a huge profit from them (Pikka, Iskanius and Page, 2011).
P3: Relationship between various organizational functions and their linking with the structure and objectives
Marks & Spencer (M&S) is well known retail outlet in the UK which provides different useful services around the world. The company provides variety of the products to the customer who helps them to earn more profits and also help the company to achieve strong brand image in the global market. To attain the success and growth in the world market, there are several departments which give support the company and provide quality products and services. Such departments are marketing, production, human resources and finance department works with the management of the company to attain the targets on the time. In M&S such departments are work together to attain the common organizational goals and objectives.
The functions of various departments in M&S are explained below:
Marketing Department: - This department is accountable to provide important information about the company’s product and services to the main targeted