Business and Business environment

Introduction

Business environment is an aggregate of all conditions, events and influences that are surrounded and affect business. It consist of  combination of all internal and external factors that influence company's operating function and decision making of business (Alles and et.al., 2018). To operate smoothly and functionally organisations depend on environment and the society in which it is operating to analyse the factors prevailing out there and helps organisations to sustain for long term.

These factors are complex in nature and changes from time to time. In this report chosen organisation is Marks and Spencer which is a  British multinational retailer headquartered in London, UK. It provides home and food products. Marks and Spencer chosen as private sector, National health service in public sector and Child care in voluntary sector. This report will analyse the size and scope of different types of organisation. Along with determining interrelationship of various function within the organisation and its connection with  achieving business objectives.

Moreover it also analyses the positive and negative impact that have influence on macro environment business operations . In addition to this it also identifies the strengths and weakness of different organisation and their interrelationship with external macro environment factors.

Different types and purpose of organisations; public, private voluntary and legal structures.

Business environment consist of all those factors which enables organisation to compete with its complex factors and attain goals and objectives of organisations. These factors play an important  role and allow business to properly function in the dynamic environment. There are three types of business organisations which are subdivided as public, private and voluntary organisations.

Private sector organisation

Private sector organisations are run by the individuals rather than the government and also helps in the economic development of the county by satisfying customer needs which in turn increase revenue for the respective company. As the chosen company Marks and Spencer is a private retail based company specialising in clothing sector, home products and luxury food products.

Legal structure-

Marks and Spencer has a flat organisation structure which has limited levels of administration  and management which allows execution of task in a proper manner and encourages all the employees to participate in decision making process for the company and allows respective company to realise its goals (Cantwell and et.al., 2010).

Types of legal structure

Proprietorship-

A single individual or a trader when run business whole and sole by themselves they are legally responsible for all the aspect of business. They are responsible for taking decision which help them to run smoothly and attain goals. They have all the liablities towards business.

Partnership-

It is that form of legal structure in which two or more parties cooperates integrally to mange and  operate business smoothly. In this form partners equally share profit and losses of the company and share same liabilities towards business.

Limited by guarantee-

A company limited by guarantee is distinct from its owners and is responsible for its own debts.

Limited by shares-

liability of the shareholders to the creditors of the respective company is limited to the capital originally invested.

Stakeholder of Mark & Spencer-

The major stakeholders are owners, employees, customers as well as all other internal ans external stakeholders (Carroll,and Shabana, 2010).

Purpose of private organisation

Purpose of private organisation is to provide products and services that benefits the consumer and help respective company to increase sales and revenue.

Public sector organisation-

It comprises of all those organisations which are owned and operated by government. In other words it is under the control of government and provides services to the individuals. Government can raise funds through many sources such as by charging fees and tax and internal transfers from other government levels. In this report chosen public sector is National health service (NHS), which is a public health service in United kingdom.

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Legal structure-

The primary legal structure of NHS is to provide a wide range of health services and to meet necessary and responsible reasonable requirement of the individuals.

Types of legal structure

Local government-

Local government have power regarding the specific geographic region and cannot enforce power or laws on particular state. They play an important role in taking care of health of general public and are responsible for many services which doesn't have impact on the health and for the well being of local population.

State government- It is subdivision of federal in the country which have certain power and policies for the particular state. They are responsible for meeting the needs of local people and have power laid with them to benefit the individuals in that state.

Central government-

This type of government holds absolute power and has the authority to make laws for whole country, unlike local and state government (Cavusgi and et.al., 2014). It is responsible for the benefit of whole country.

Stakeholder of NHS-

Academy for health science(AHCS), National school of healthcare science( NSHCS), North west healthcare science network and Heath science professional bodies etc.

Purpose of public sector

The main objective of NHS is to provide health care services to the individual patients and their families  by satisfying them with different range of products and services according to the need and preferences. As well as purpose of public sector is to provide services in the benefits of general public.

Voluntary associations-

It is a union made by the group of individuals who enter into an agreement with mutual purpose of serving society and not for earning profit. Chosen voluntary organisation is Child care which is supported by combination of rights at work place, public sector provision and private companies (Chavis, Klapper and Love, 2011).

Types of legal structures

Charity- It is the type of organisation which raises money in order to help the poor, disabled and sick people by giving money, food and clothes to those who are in need. This type of organisation help the needy people by providing necessaties.

Stakeholder of voluntary association- Investors, members and the local community.

Purpose of Child care

  To provide facilities to the parents who are going out for work and provide financial support for the cost of child care.

Size and scope of different organisation

Scope of organisation consist of different available opportunities for the respective company. Marks and Spencer has a renowned name in the market and has various opportunities of increasing its product lines to food and home products by satisfying the customer.

Marks and Spencer

Size- 

M&S is one of the leading retailers with around targetting 21 million customers. They can increase their size by selling high quality food products and devote fashionable clothing as per the needs of customer and increase the number of target customer.

Mission- 

Its main mission is to provide standard quality products to its customer and increase its potential customers.

Vision-

Its vision is to provide products according to changing needs of customer and improve its competitive strength.

Scope-

M&S can increase their business scope from united kingdom to various other countries and can expand its product lines in different product segments (Deasy, and et.al., 2015).

National Health services

It is a publicly funded world's largest health service which comes with new idea of providing good health care facilities which benefits all the individuals and their families.

Size-

NHS is sizing up with world's biggest employers in health care service and are operated an managed by trustees to provide better health care facilities.

Mission-

Its mission is to provide health care services to the individuals  according to their needs and requirements.

Vision-

Helps people to stay healthier and enjoy life with good health through quality care.

Scope-

To develop values which provides high quality products with utmost care to safguard the life of many individuals.

Child Care

Child care in UK, provides facilities for parents and more often by the mother who goes outside for office.

Size-  

The size of child care market has continued to grow and expand from overseas investors and providers.

Mission-

Its mission is to operate best and successful nursery schools by proper development of children's.

Vision-

Its vision is to raise child by providing certain educational facilities and supporting parents by helping their children to develop and providing them the most rewarding career.

Scope- 

To shape and support in such a way which is beneficial for the child and rest of its life. It should provide facilities which is to be trusted in every part of child's life.

Relationship between different organisation functions and its link to organisation objective and structure.

Organisational structure determines the hierarchical arrangement of lines of authority and responsibility and power and responsibilities of employees within the organisation. It defines how roles, power and responsibilities are  assigned, controlled and coordinated and helps business organisation  to attain business goals (Drucker, 2017). Organisations need efficient, flexible structure in order to achieve sustainable competitive advantage. There are various types of organisational structure such as flat hierarchical structure, functional and matrix structure. Their are different departments in the organisation which functions accordingly and helps to attain goals and objectives. Functional department in an organisation are interconnected with each other are as follows-

Finance department-

This department is concerned with managing of funds and capital. It is basically concerned with planning, organising and auditing of funds and resources in he organisation. In short it is accountable for all the work related to accounts and is interrelated with other departments. This department of M&S takes data from all other departments such as marketing, Hr, sales and production and helps in measuring profits and loss and estimate the expenditures. It is also connected with marketing department to estimate all the sales and marketing expenses and also provide funds for distribution of goods and services and increase profit for the company and allows M&S to achieve targets (Gecevska and et. al., 2010).

Human resource department- 

This department is responsible for recruiting and selecting the prospective candidates. It carries various other functions such as compensation, hiring and selection of employees. HRM department of Marks and Spencer provide information to all other departments about employees knowledge and skills which can work accordingly and helps respective company to meet its objectives.

Marketing department-

Marketing department of M&S is responsible to drive the sales of its products and services to immediate customers. They are responsible for analysing the needs of the consumer by providing products as per their needs and demands. Managers at respective company connects with the finance and the HR department as finance department provide them funds which helps them to conduct market research  and achieve high sales in turn attaining business objectives. Moreover with the help of finance department it gets knowledgable employees

and bring efficiency in performance of work.

Advantages and disadvantages of interrelation of departments

When departments in the organisation are interrelated it brings higher efficiency in carrying business operations and helps respective company to realise its business objectives. On the other hand departments becomes highly interdependent on each other and sometimes failure of one department leads to failure of all other departments and doesn't allow business to attain goals.

Critical analysis of different business structures and interdependence of departments

As per the view of (Gupta, A., 2013) there are different types of business structures such as corporation, non profit as well as proprietorship which allows business to carry their operations accordingly and helps company to attain goals as well as their interdependence on other departments make them highly dependence to work as per the functions of all other department.

Identify the positive and negative impacts the macro environment has upon business operations.

PESTEL analysis helps in determining how these factors  affects business and performance in long term. Marks and Spencer which is private retail company is effected by such factors and impacts its operations. Below PESTEL analysis of Marks and Spencer is given to understand the impact of macro factors on business.

Political factors-

It includes various government policy, tax policy that impacts the functioning of organisation. There are various taxes which affects the functioning of respective organisation. There are various positive and negative impacts of political factors on respective company.

Positive

It allows M&S to interact within the government rules and allows company to develop strategies which acknowledges wider public objectives.

Negative

They are highly affected by the heavy taxes of the government which leads to increase in the price of the products and would decrease potential customers.

Economic factors-

It include all those factors such as interest rate, inflation rate which affects economy performance and directly impacts the respective company's performance. It also affects the purchasing power of consumer and changes in their demands.

Positive

M&S can focus on fashionable products in clothing sector and target the younger generation which have more focus towards lifestyle and personalities and can satisfy consumer demands (Hilton and Platt, 2013).

Negative

The company is highly effected by the high inflation rate in particular country which leads to decline in sales.

Social factors It involves the beliefs and attitudes of the people towards respective product and service. Sales of the M&S can be effected by due to changing preferences of their prospective consumers. Increase demand in the market led the respective company to concentrate on clothing segment an meet the needs.

Positive

M&S are improvising as well as providing products to the customer according to changing taste and achieve business objectives of increasing profits and sales (Iskanius and et. al., 2010).

Negative

Because of changing demands the company has to change their products according to the customer which incurred high level of expenditure in research in fulfilling needs of consumer.

Technological factors-

It is the way company market their products with the adoption of new methods and process. Fast growing retail company can adopt new methods of delivering  goods to the ultimate consumers. This has some positive and negative impacts for the company.

Positive

Marks and Spencer can provide improvised products to the customers changing needs by adopting appropriate technologies.

Negative

The respective company has to modify their products according to the customer needs which incurs high level of expenditure in research for analysing the potential needs of customers.

Environmental factors – 

These are those factors which is influenced by surrounding such as includes climate, weather, geographical location. Marks and Spencer has to properly analyse the environmental factors regarding the quality of food products (Kewand and Stredwick, 2017).

Positive

It increases the emphasis of the company to determine the factors and introduce wide variety of products related to food processing.

Negative

Climatic condition allows marks and Spencer has to properly determine sourcing of fresh milk from dairy farms and produce environment friendly and sustainable products.

Legal factors

It covers aspects like health and safety laws, quality requirements which affects businesses to comply with certain rules and regulation of certain industry.

Positive

 By this respective company insures integrity and enhance consumer confidence by choosing appropriate standards of raw materials.

Negative

It has created difficulty in production process as it has to fulfil all aspects of laws relted to production and health regulation

More Suggestions: 

Internal and external analysis of organisation in order to identify strength and weaknesses

Strengths:

  • Clear brand image – Marks and Spencer take position itself as a high valued product that are mainly target premium segmentation. With the help of brand image, they are sold variety of goods and services in the large market area (Klapper, Lewin and Delgad, 2011). As per the result, they are clear branding and customers make sure about what they are expected from marks and Spencer stores.
  • Multi channels presence – M&S has offer products and services to their desired customers in all over the world. The firm mainly operate and regulate their business 300 full line stores, 910 stores in the United Kingdom.
  • Wide variety of products – Marks and Spencer has wide variety of goods and services that can assist customers to select the best offer among all commodities. They are mainly focus on analysing customers needs and demand as per them they are make proper changes in their products.

Weaknesses:

  • Inability to penetrate successfully in foreign market– Marks and Spencer has operated and existence in United Kingdom, United states and Europe. With the help of this, they have opened stores in some other nations such as Asia and Middle East where they have unsuccessful winning of customers.
  • Customer satisfaction– M&S often exhibit lower satisfaction level and there are various issues which occurs while distributing products and services that can effect on experience. As per this result, the customer gain poor brand loyalty and enhancing brand switching.

Opportunities:

  • New segmentation – In current time period, the company has offering variety of fashionable products and services to their customers on daily basis. In Asia, there are huge demand and requirement of ethnic and traditional wear that are currently been unable to capitalised. The main opportunities which are deal by company is to enhancing the methods and techniques of market segmentation in order to increasing its branches in all over the places (Klem, 2013).

Threats:

  • Competition– The main rivals of M&S are Gap, Uniqlo, Tommy Hilfiger, Zara and United Colors of Beneath. They are create major conflicts and disputes among employees as well as organisation. The threat for company is to lose its scope in the business due to the high competition in which increased competition in the retail sector is big worry as the retail rivals like SDA, Sainsbury and Tesco (Luo and Zhao, 2013).

Strengths and weaknesses interrelate with external macro factors

External and internal factors influence the organisation and puts significant impact on the profitability of marks and Spencer. Internal factors present within the organisation are controllable as well as external factors present in the organisation impacts organisational profitability.

Political factors- These are connected with interference of the government and effect both in positive and negative aspect to business.

Strengths

M&S are interconnected with government to provide better quality of product and services and had developed strategies and policies to satisfy wide range of consumers and helps in econom,ic development.

Weaknesses

Due to increase in the price of their products it led to the loss of number of potential customers and decrease the level of profit.

Economical factors

It helps to determine current and future value of the particular organisation.

Strengths

One of the greatest strength of M&S is that they can focus on more fashionable products and can satisfy the needs of younger people.

Weaknesses

The company is highly effected by the high inflation rate in particular country which leads to decline in sales and effects competition in market(Oster, walderand PigneurPulver, 2012).

Social factors This factor include change in taste and preferences of customer according to their beliefs and values.

Positive

M&S are improvising as well as providing products to the customer according to changing taste and achieve business objectives of increasing profits and sales and helps in achieving larger market share.

Negative

Because of changing demands the company has to change their products according to the customer which incurred high level of expenditure in research in fulfilling needs of consumer.

Technological factors-

This factor evaluates the technological abilities of the respective organisation in context to macro environmental factors.

Positive

Marks and Spencer can provide improvised products to the customers changing needs by adopting appropriate technologies.

Negative

The respective company has to modify their products according to recent demand in the market and incurs heavy expenditure.

Environmental factors – 

Marks and Spencer has to properly analyse the environmental factors regarding the quality of food products such as climate, weather and geographical location.

Positive

It increases the emphasis of the company to determine the factors and introduce wide variety of products related to food products(Sena, Ferreiraand et.al.,  2012).

Negative

Climatic condition allows marks and Spencer has to properly determine sourcing of fresh milk from dairy farms and produce environment friendly and sustainable products.

Legal factors

It covers aspects like health and safety laws, quality requirements which affects businesses to comply with certain rules and regulation of certain industry.

Positive

 By this respective company insures integrity and enhance consumer confidence by choosing appropriate standards of raw materials (Siewiorek, and et.al.,  2012).

Negative

It has created difficulty in production process as it has to fulfil all aspects of laws related to production and health regulation

Conclusion

From above report it has been concluded that business environment plays  a crucial role  while deal in competitive milieu. In organisational environment insist different  factors such as market, rivals,

customers,  manpower and employees and society which helps  to Marks& Spencer to deal  in competitive  environment and  control in fierce market dealings. Above report  study on varies  enterprises which deals  in different fields and their role in worldwide .  In addition to it focus  on scope and contribution of varies enterprise that deal in market. It also elaborates external and internal factors of marks & spencer to access its market share and its focus on strengths and weaknesses of  marks & spencer by concluding it that factors both internal and external play very crucial  role in Marks & spencer.

References

  • Alles, M., and et.al.,  2018. Continuous monitoring of business process controls: A pilot implementation of a continuous auditing system at Siemens. In Continuous Auditing: Theory and Application (pp. 219-246). Emerald Publishing Limited.
  • Cantwell, J. and et. al., 2010. An evolutionary approach to understanding international business activity: The co-evolution of MNEs and the institutional environment. Journal of International Business Studies. 41(4). pp.567-586.
  • Carroll, A. B. and Shabana, K. M., 2010. The business case for corporate social responsibility: A review of concepts, research and practice. International journal of management reviews. 12(1). pp.85-105.
  • Cavusgil, S. T., and et. al., 2014. International business. Pearson Australia.
  • Chavis, L. W., Klapper, L. F. and Love, I., 2011. The impact of the business environment on young firm financing. The world bank economic review. 25(3). pp.486-507.
  • Deasy, and et.al., 2015. User interface for controlling use of a business environment on a mobile device. U.S. Patent 8.954,050.
  • Drucker, P. F., 2017. The Theory of the Business (Harvard Business Review Classics). Harvard Business Press.
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