H5080525 Business and Business Environment Unit 2 Level 5
H5080525 Business and Business Environment Unit 2 Level 5
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In understanding the various type of organisation, it has been found out that the organisations are different from each other by their purpose. This purpose of this organisation is also developing different operations and functions for the organisation. However, there are three types of organisations in the United Kingdom and the rest of the world. These organisations are interrelated to each other because after all together these organisations contribute to the country directly or indirectly. Depending on the purpose of these organisations the organisational structure, legal structure and corporate policies are being constructed. However, in this discussion, a different type of organisations their structure their function and the influence of external and internal factor on this organisations will be analysed.
LO1 the different types, size and scope of organisationsP1 Explain different types and purposes of organisations; public, private and voluntary sectors and legal structures.
Depending on the purpose of the organisation there is three types of organisations which has identified in the United Kingdom. Among them, the contribution of this type of organisations is directly or indirectly related to the country's development and growth process (Drucker, 2017).
The government of the country develops public organisations for improving the state and provide service to the general population. However, the civic organisations are wholly controlled by the government. In addition to that welfare of the society and different public services is the primary functions in which these organisations are associated. However, the public organisation can be run by the local government, the national government, the provincial government, etc. However different public services like police service, educational services, health services, transport services are part of the operations maintained by the civic organisations (Hillary, 2017). In the country United Kingdom, some of the public services are free for the citizens, and the facilities are run by the taxes given by the public of United Kingdom.
The public organisations are usually medium or large size and run by the government or government-sponsored funding. Not all the public organisations internationally spread but if any public organisation spread globally, then the main reason for this expansion is contributing to the economy of the country. However, the process of spending any public organisation into international boundaries is one of the most complicated methods of business history. Because if a general organisation of United Kingdom wants to expand their business in another country, then they have taken legal permission from the Government of those countries or need to collaborate with those countries’ government (Botha et al. 2014). However, this process is usually more time to consume and also long process in nature. Some of the business, which used to expand in international boundaries and also public organisations, are the banks, the public railways, etc.
The word private can easily show that the General public owns the private organisation. However, it is ever done that private organisations can be built up by a private owner or multiple private owners. The primary purpose of the private organisations is to develop a business for gaining profit by selling services and products (Hair Jr et al. 2015). In addition to that, the private organisations have an essential part of their organisational practice which is their shareholders. Most of the private organisations have their share in a market which has been sold and purchased by their shareholders. However, this shareholder is counted on the part of the organisation and stakeholders, and their view and decisions are counted as necessary as the decision of the owner. In addition to that, a private organisation can be built by a person, Association, a corporation or a partnership. The private organisation did not contribute directly to the country, but the contribution of private organisations in the country's GDP is remarkable. In addition to that in the state of United Kingdom, the private organisations are majority in number then public or voluntary organisations. A private organisation can be both not for profit, and in identifying the examples for the private organisation, the credit unions retail stores a different type of local business can be counted (Goleman, 2017).
There is a huge possibility that a private organisation will expand internationally. Most of the private organisation, who is successful in their country, wants to grow their business out of the national boundaries. This is considered as a development process of private organisations. The best part of their expansion is they can very flexible develop their business in other countries because only a considerable amount of investment will be enough for the expansion process (Charter, 2017). Most of the time for gaining profit in abroad these organisations collaborates with the local organisations of those host countries. But if these organisations want to expand without any collaboration some challenges in the initial days they have to fight with. For instance the lack of human resource, the language problem in a foreign country etc can be highlighted. Most of the time the expansion of private organisation in foreign nations is successful and this organisation able to develop a more significant customer base in the international market (Deasy et al. 2017).
Development of voluntary organisation is mainly related to the growth of the society. However, it has been seen that a group of people who are interested in some specific issue or social agenda develop their group to make the change in their similar belief. However, most of the voluntary organisations are not related to the government, but government funded voluntary organisations are also seen. It has been observed that these organisations are either self-governance or established by the funding of trustees or business icons (Crane and Matten, 2016). In addition to that, the voluntary organisations want to improve the condition of the society and also well known as not for profit organisation. It can be said that the common interest of a group of people for the improvement of the nation help to develop a voluntary organisation. Voluntary organisations have not always paid employees, but they have volunteers who contribute their work to the development of the organisation and situation of the society.
In the voluntary organisation, International expansion is limited. It is only possible when no country or similar voluntary organisations that have the same goal then collaboration can be made up within them (Bryman and Bell, 2015). It has been identified that most of the voluntary organisations who are working in different countries is internationally recognised and work in different countries. However, these organisations have a massive contribution to the society and the country, but the economic contribution is absent.
P2 Explain the size and scope of a range of different types of organisations.
The United Kingdom has multiple public organisation among them the department of transport is a significant one, and it is divided into 21 different agencies. Among them the driver and vehicle licensing agency of United Kingdom he is critical because this organisation consists of multiple responsibilities related to the database of drivers and vehicles of United Kingdom (Sekaran and Bougie, 2016). However, this organisation has found it in the year of 1965. This organisation issue driving licence as well as counted under the exclusive agency of the department of transport. However different problems related to the licence of vehicle and individual are being responsibilities of this organisation. In addition to that, there are various stakeholders of this organisation which is the government public of United Kingdom, different vehicle organisations, their employees, etc. The future scope of this organisation is to develop their supervision for issuing the driving licence for both vehicle and individuals (Kolk, 2016). This is counted under one of the large organisation operated by the government of United Kingdom. The Vision, mission and business objective of this organisation is to increase the flexibilities of the road of this country for better transportation facilities. In addition to that, the organisation has a proper legal structure which is developed by the government.
There are numerous private organisations in the country of United Kingdom. Among them one of the leading, 134 years old organisation is Marks and Spencer. However, this organisation is international organisation and spread all over the world (Savrul et al. 2014). They are mainly famous for the luxurious food products, clothing items and home products. Except that this organisation has more than 80000 employees globally who are providing the customers best services in their retail stores. The mission and vision of this organisation are to be the leader of the Retail Industry by providing the customers best quality of product and services. However, there another objective is to expand their business in all of the countries by either opening their stores or collaborating with other local organisations (Islam and Mamun, 2017). This organisation has a structure which is pyramid shape where the so or management level are in top positions and the general employees or retail storekeeper in the bottom. In addition to that, this organisation is internationally spread the legal structure of this organisation depends on the country; they are operating. Finally, this organisation has numerous stakeholders which include their shareholder customers, employees, suppliers, etc (Moro Visconti, 2016).
The purpose of this organisation has made it unique because this organisation is associated with preserving The Heritage culture of the United Kingdom for a particular geographical region. This organisation is essential for their non-profit nature, and their contribution to conserving the natural beauty of United Kingdom is remarkable. However, this organisation fully names at National Trust for places of historical interest or natural beauty. This organisation is counted as one of the greatest charities of United Kingdom, and there are 61000 volunteers of this organisation (Islam and Mamun, 2017). In addition to that, there are Board of trustees who are associated with the financial backup of this organisation. However, the national trust has developed in the year of 1894, and the original vision and mission of this organisation are forever for everyone. In identifying the total staff of this organisation more than 4900 stuff is listed. In addition to that, the organisation is also well known for their work. The stakeholders of this organisation are the population of the United Kingdom and the government (Moro Visconti, 2016).
Sole trader : it is termed as easiest type of business and comparatively cheap to other business start-up. Entrepreneur alone control and manage all operations of business and responsible for all decision-making.
Partnership : it is a form of business, where two people come together to establish new venture. It consists of agreement between two partners which, agree to share profits and loss equally. Two individual take all decisions mutually and accomplish goals and objectives of the organisation.
Public Limited Company : two or more individuals come together to form a company which is known as PLC. In order to raise capital, company allow to sale their share to investors and public. This grantee limited liability to shareholders up-to the amount of unpaid shares.
Private Limited Companies : This company is privately held by individuals and they manage and control all the activities of business. This type of entity limits the liability of the owners and restrain shares from being traded in open public.
Domestic company : it consists of the operations which are limited in the boundaries of home country. They pay duties on importation of products and services.
International company : it deals with trading of goods and services at global level. It included buying and selling of goods between the two bordered countries.
Multinational company : it has been termed as a business which has its assets and equipments in a country other than home country. They have factories operating at large scale and follo the centralized system of management.
LO2 The interrelationship of the various functions within an organisation and how they link to organisational structure
P3 Explain the relationship between different organisational functions and how they link to organisational objectives and structure.
Marks and Spencer is one of the oldest retail organisation which is initially founded in the United Kingdom. This organisation is currently a multinational organisation nearly situated in every country of the world. However, this organisation has around 979 retailing stores worldwide (Marksandspencer.com. 2018). In addition to that for their expansion in every country, they had to maintain the illegal structure of that country. Except that, in each of the country, they have individual CEO under them different department’s works. As it is evident the organisations mainly have their retailing stores for food items, home products, and clothing items. There are five different departments of this organisation. Among them, for especially observing the products there are other services. Except that there are four different departments under the CEO those are the security department, the administrative department, the retail shop and the Logistic department (Drucker, 2017). In each of this department, there is a different type of employees and management systems.
Figure 1: Departments of Marks and Spencer
(Source: Marksandspencer.com. 2018)
However, for the product management, the organisation has a different structure. The product management section the organisation has three different managers. Those are Development Manager, Quality Assurance manager and business analyst manager. As the organisational structure is a pyramid-shaped structure therefore under the business analyst manager, there is a different business analyst for each of the product they sell. Similarly, under the development department, different developers are associated with developing the total package item. And finally, the quality assurance manager works with different taster who is associated with one product each.
Figure 2: organization chart
(Source: Marksandspencer.com. 2018)
Another important structure of this organisation is the retailing shop (Hillary, 2017). The organisation Marks and Spencer have their retailing shops which have a unique structure of the different type of stuff which is associated with maintaining shop only and initially connected with the customers of the shop and ready to give them service.
Organisational objectives- this world-famous organisation has three different type of objective related to the organisation. The main or primary objective of this organisation is to develop this organisation as a leader in the industry. Except that the organisation also takes care of their main two selling items and one to grow their business in clothing and food selling. In addition to that, providing the customers of the organisation the best quality of product with the value of their money is also important (Botha et al. 2014). The second objective of this organisation is their employee orientation. The organisation wants to expand their business but also want to develop the career of their employees. For providing the best quality of work environment, they have given their employees flexibility and also provide the opportunity to grow their career and for achievements of their professional life. Besides, the organisation also provides motivational lessons and development training to their employees not only for meeting organisational objective but also for their career development. The final objective of this organisation is to expand their business globally and gaining profit from their business (Hair Jr et al. 2015).
Interrelationship between the organizational objectives and functions- Marks and Spencer is one of the growing United Kingdom-based organisations who is known for their best quality of products and customer service. However, this organisation has some specific objective which has been developed by the multiple owners of this organisation. For developing these corporate objectives the leaders of this organisation has done their research on the market of the United Kingdom and rest of the world, especially in the Retail Industry. However, it can be said that these objectives have been developed by the leaders to develop their business strategy and business planning for the organisational future (Goleman, 2017). For achieving the organisational objectives, the leaders develop different operations within the organisation which are being performed by the employees. The different functions of this organisation are related to the objective. For example, it can be said that all of the products of the organisation is being stored in the warehouse. From the warehouse of Marks and Spencer, the products are being delivered to the retailing store from where the customers can easily buy it. However was the objective of this organisation is to provide the customer best quality of products and for meeting this objective the organisation has developed the functions of delivering the product to retail shops and storing the product in the warehouse (Charter, 2017). However one of the objectives of this organisation is to provide the customer best quality of products and for meeting this objective the organisation has developed the functions of delivering the product to retail shops and storing the product in the warehouse.
In addition to that for providing the customers best quality of products, the organisation has a structure which has different business analyst developer and tester who has the responsibility of testing the product before storing it in the warehouse. Finally, it can be said that this world famous retail organisation of United Kingdom has developed the organisational function for achieving the organisational objective just like other organisations (Deasy et al. 2017).
LO3 Both the positive and negative influence/impact the macro environment has on business operations
P4 Identify the positive and negative impacts the macro environment has upon business operations, supported by specific examples.
For understanding the external factors of an organisation, six different major external forces need to analyse. However, by doing a PESTLE analysis the external business environment of Marks and Spencer can understand. The external environment includes the political, environmental, social, technological, economic, legal factors of the organisation. However, after appreciating this external environment or macro environment the positive effect and adverse effect of these factors can be easily understood.
The political situation in this country impacts this UK based retail organisation. However, the governmental regulation of this organisation refers to free trade policy which helps them in providing sourcing cost at a low rate. In addition to that, the situation of Brexit has also influenced the sales and other functions of this organisation (Crane and Matten, 2016). However, the Government of this country is stable but changing Government and the taxation rules of the government will be going to affect the organisation anytime.
This country is one of the most economically stable nations in all over the world. Instead of that, the organisation is associated with different type of suppliers from home they purchase their products. However, different small conflict also is seen in their suppliers and even sometimes in the retailing shops due to the impact of economic factors. In addition to that, the Brexit situation has impacted on the currency of this country which has negatively impacted on this organisational development (Bryman and Bell, 2015).
Marks and Spencer is one of the famous retailing stores in the United Kingdom; however, the existence of different communities in this country is evident. Instead of that sometimes the supply chain of the products create other kind of negative social trend in the organisational process. In addition to that if the organisation was not able to change the product with the social trends, then it will also affect their sales pattern (Sekaran and Bougie, 2016). However, the income of the society can also affect the organisational profit because if high price product is the sale by the organisation, then most of the population will not going to purchase their products.
It has been identified that technological advancement is a necessity in any organisation including Marks and Spencer. However, the organisation Marks and Spencer need to develop better infrastructure which is technologically developed in both of their warehouse and retailing stores. The main specification needs to do in their risk management and security issues(Kolk, 2016).
Marks and Spencer need maintain a proper legal structure because in every country they expand their business they need to cope up with a new set of laws and regulations. However, therefore, different laws related to the organisation like health and safety law, discrimination law, gender equality law, diversity law, labour law need to maintain in every part of the world in they are operating.
As this organisation is associated with food products, they need to provide the customers best quality of food with his dependent on the environmental condition of the country (Savrul et al. 2014). Therefore for providing the best quality of food to the customers, they also need to maintain different environmental factors within the organisation. In addition to that, the warehouse facility needs to develop more for keeping the food items in a healthy condition. Instead of those different environmental issues like energy consumption, waste management, and pollution need to maintain them for maintaining their corporate social Responsibility properly. Finally, if they want to enhance their organisational position in the market, they need to produce more environmentally friendly and sustainable products.
However for this organisation Marks and Spencer this external factors somehow positively and negatively impact the organisational functions and growth process.
The positive impact- according to the current situation the political factors of the organisation positively enhancing the business by their free trade policy. Instead of that the technological advancement and legal facilities are also helping this organisation in their Rapid growth. These positive external factors sometimes also act as a negative factor because they are ever changing (Moro Visconti, 2016).
The negative impact- however because of the Brexit situation the economic factors of this organisational microenvironment are regularly fluctuating. Most of it is negatively impacting on this organisational business. Instead of that, the social factors of this organisation are somehow disrupting this business process. Supply chains and ever-changing trends of the society can any time negatively affect the organisation. Finally, it can be said that it is not always possible for this organisation to develop environmentally friendly and sustainable products; however, due to the environmental changes sometimes the food items also generate unexpected conflicts in the retailing stores (Islam and Mamun, 2017).
LO4 The internal strengths and weaknesses of specific businesses and explain their interrelationship with external macro factors
P5 Conduct internal and external analysis of specific organisations in order to identify strengths and weaknesses
The SWOT analysis of the organisation Marks and Spencer help to understand the strengths and weaknesses of this organisation.
The organisation is one of the oldest and most reputed organisations in United Kingdom. Instead of that, the organisation always offer latest trend of the industry. The infrastructure of the E-Commerce system is also stronger than other retailing organisation. In addition to that, the organisation is highly associated with maintaining their corporate social responsibility. Finally satisfying the customers is another positive strength of this organisation (Moro Visconti, 2016).
The financial performance of this organisation is more than others retail stores. Instead of that, Marks and Spencer did not concentrate on the local market of United Kingdom. The expansion in China is one of the biggest failures in this organisational history (Marksandspencer.com. 2018). Finally it can be said that the organisation is associated with frequent product recalling. This frequent process is reducing the confidence of the customers.
The organisation wants to enhance their online presence for better performance in the Retail Industry which is going to increase the opportunity. In addition to that, investing or expanding in growing developing country like India will be beneficial for their future. The organisation is mainly known for their clothing line which needs to reshape for better performance. Finally, the operating model of this organisation is complex in nature which needs to simplify by the leaders for enhancing the flexibility of the employees (Marksandspencer.com. 2018).
The Brexit situation is a big thread for this organisation. Because if it will result as a heart breaks it then the organisation is going to affect massively. Instead of that the competition in the UK food sector is increasing which can affect this organisation in future. The trends of the society are changing and depending on it the clothing space of this organisation need to develop and improve (Drucker, 2017).
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The strengths and weakness of this organisation are usually related to the organisational decision-making process. For instance, it can be said, that the organisation has failed in their China expansion which they want to restructure again but in analysing the future opportunity in the Indian market the organisation is going to invest on the country India without following the previous plan. However, depending on the changes in the strength and weaknesses the organisation develops their strategy or changes it to get more benefit from their new policy (Botha et al. 2014).
P6 Explain how strengths and weaknesses interrelate with external macro factors
The external factor of the organisation Marks and Spencer and the internal factor or strengths and weaknesses of this organisation are interrelated to each other. It is understood, that the external elements of the business environment are affecting the organisational performance either positively or negatively. Depending on this impact or influence of external factors the internal factor of this organisations are highly related. For instance, if the Brexit situation of the country United Kingdom will emerge as hard Brexit, then it will and hence the weaknesses of the organisation. However, it can be said that if the organisation able to introduce more technological advancement for their customers in the retailing stores which can simplify the way of shopping then this advantage of this retailing store will be counted as the organisational strength (Hair Jr et al. 2015).
Therefore, it can be said, that the strength and weaknesses of the organisation develop depending on the external factors affecting the business environment of the organisation Marks and Spencer.
The strength of organisation is clearly related to technological factor of macro economics, as Marks and Spencer has established its e commerce systems, this has helped them attracting the attention of its potential buyers. The business weakness is that fails to focus on the local market because of they lack in the social factor. Management fail to recognise the customers taste and preferences, as a result their sales gradually decreased.
Transformation of weaknesses into opportunity
Marks and Spencer do not focus on the local communities, as result it has experiences downward fall in the sale. Social factor can be used transform its weakness in strength. This factor play crucial role in identifying needs and requirements of customer's living I local area. Marks and Spencer can utilise the information and develop products on the basis of their requirement. It will enhance the profits and productivity of the organisation.
In light of the above study, it can be concluded that like every other country in the world United Kingdom has three type of organisations public, private and voluntary. These organisations have different size, scope and functions which have developed they are a distinct identity for organisational structure legal structure mission vision and various stakeholders from each other. However, in these business organisations, there is a significant impact on the external business environment. Instead of this, these organisations have their strength and weakness which are interrelated with these external factors. Finally, it can be concluded that if these organisations want to develop their current status in the market, they have to properly examine their external factors for enhancing their strengths and reducing their weaknesses.
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business environment: Knowledge management and knowledge management technology. Elsevier.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Charter, M. ed., 2017. Greener marketing: A responsible approach to business. Routledge.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
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