LSBM306 Business and Business Environment Level 6

Task 1

M1 How the structure, size and scope of different organisations link to the business objectives

Each and every organisation has a different structure and size which is based on their objectives and goals. Owners of these firms manage their business activities properly on the basis of their resources and funds (Hamilton and Webster, 2015). Through this, they can easily structure a firm's size. All these procedures are based on their future objectives and goals which are required to identify properly. These activities include employee analysis and management, resource allocation and funds management to getting higher profitability and growth. The structure, size and scope of different organisations are properly linked to the business objectives and goals.

Task 2

P3  Relationship between different organisational functions

In a business organisation, different departments and employees work to provide effective and quality services to achieve their future goals and objectives in an effective manner. Management of organisations analyse business activities and approaches to classify responsibilities to them properly (Klapper, Lewin and Delgado, 2011). These roles are based on the skills and working capacity of employees. Nestle is the largest organisation which provides quality services in food or drink. This basically deals in dairy products, chocolate, coffee, ice cream and pet food. They are implementing their operational and functional by different departmental approaches -

The sales and Marketing division of Nestle works to provide quality services to customers on the basis of their requirements and needs. The marketing division helps to introduce new products and services in the target market to maximise product sales and organisational revenue effectively. The main objective of this division is to provide quality products and services to organisations in several countries to build strong connections with target customers. This department has a direct link with the activities of research and development and the human resource department. HR department helps to appoint qualified candidates within the organisation and the research and development department provides the function regarding assessment of current trends.

The research and development department of Nestle is working to analyse several marketing procedures to provide appropriate services to them. This division analyses customers' demand and their requirements for specific products. After this analysis, Nestle makes appropriate and desirable modifications to their products and services (Osterwalder and Pigneur, 2010). This department's functioning has a direct link with marketing operations. Information provided by such departments helps to grab the required knowledge as per needs.

The production and manufacturing division works to produce quality products in the firm on the basis of customers' demand and their requirements. Through this, they provide quality services to their customers. The main objective of this department is to provide higher satisfaction to customers through their appropriate desirable products. This department has a link with marketing. Marketing functions help in the assessment of the different needs of customers which is used by the production department in future to produce goods.

The human resource division of Nestle works to build effectiveness in several organisational approaches. For this Human resource manager of the firm plays a most important role to analyse employee's skills and capacity to enhance them through different training and development procedures. They also conduct recruitment and selection processes to hire new candidates in the firm. This department has direct links with all divisions of the organisation as it helps in the recruitment of qualified candidates as per requirements.

The finance division works to manage all statements and accounts of the firm in an appropriate manner. For them, it is required to manage all funds, reserves, investments and expenses to get higher growth and income in a proper manner. This department prepares the budget for marketing and production which is required to adhere by the employees while performing their tasks. This will provide the opportunity is to complete the tasks in a cost-efficient manner.

Organisational Structure

Function-based: This works to manage the organisation's structure and functional activities to get higher business approaches (Scheer, 2012). In it, Nestle manages their business activities through different departmental approaches such as - Human resources, finance, marketing and  Production.

Product-based: This structure is based on the customer's demand and requirement for a specific product that is required to be produced in proper manner. For Ex., Nestle provides their effective and quality services in several countries through food and drink products.

Consumer-based: In this procedure organisations analyse customer's demands and requirements to make appropriate modifications to their services. For this Nestle requires to use innovative ideas and creative thoughts.

M2 Advantages and Disadvantages of Interrelationships Between Organisational Functions

For a business organisation, it is required to work through different functional approaches that help to achieve future targets and goals in an effective manner. In this procedure management and managers are required to analyse the working capacity and approaches of different employees to distribute them several responsibilities and tasks as well.

Advantage -

• The interrelationship between organisational functions helps to maximise productivity and product valuation in the target market.

Disadvantages -

• It creates lots of dependency on each division of the firm.
• It takes maximum time to complete a task.

D1 Critical analysis of complexities and interrelationships of different types of business

According to Shigang, (2010), different business organisations work to provide effective business approaches through their own contribution. Lots of dependency on each functional approach creates complexity in the firm. These approaches maximise issues and problems in the firm. All different business organisations create their own motive and objectives in a firm which helps to analyse their own working procedure. Through this, they implement working approaches in the firm to maximise the productivity and profitability of the organisation. In this process manager of the organisation is required to analyse issues to resolve them in an appropriate manner.

Task 3

P4  Positive and Negative Impact of  Macro-environmental Factors

For a business organisation, it is required to analyse the impact of macro environmental factors on their business procedure. In an economy number of companies are running to provide effective and quality services to target customers (Aterido, Hallward-Driemeier and Pagés,  2015). Nestle is also the largest organisation that provides effective services in several countries. It is required to analyse the Positive and negative impact of  macro-environmental factors on their business process as -

Political and legal factors - For a business organisation, is required to implement legality and political views to achieve effectiveness in their firm.

• Positive impact - This helps to create legality in the firm.
• Negative impacts- An organisation is required to implement them to get higher business advantages easily.

Economic and social factors - The main motive of organisations is to provide quality services and higher satisfaction to their target customers. For this, they make a proper analysis of each and every aspect of the market to grab several opportunities easily.

• Positive impact - These factors help to maximise the firm's sales and profitability as well.
• Negative impacts - Inappropriate implementation of market procedures reduces image and goodwill (Carroll and Shabana, 2010.).

Technological factors - The advertising techniques which are used by the organisation are high in cost which increases the budget of the market department has an impact on the cost of products and reduces their profit margin. So this firm needs to use advanced technological factors and innovative ideas in their firm.

• Positive impact - This helps to maximise the productivity and profitability of the firm.
• Negative impacts - Obsolete techniques reduce the quality of the firm's foods and services.

M3 PESTLE model to support a detailed analysis of the macro environment

A business organisation is always surrounded by different environmental factors that impact on its operational activities. These environmental factors are classified into two different elements internal and external. Internal factors are controllable while external factors are beyond the control. For this management and managers of the firm are required to analyse these factors through the PESTEL model to make an effective strategy for them. Through this, they can easily reduce the negative impact of these factors. This model helps to analyse each and every factor of the external environment.

D2 Critically evaluate the impacts of environmental factors have upon business objectives and decision-making

As per the words of Bryman and Bell, (2015) business environment has a direct impact on the business objectives and decision-making approaches of a firm. For a firm, it is required to analyse the effect of these elements to make the appropriate strategy. An organisation need to analyse political, economic, environmental and legal factors of the external environment that can directly impact on business process. These type of external factors directly impacts on decision-making process of a firm.

Task 4

P5 Conduct internal and external analysis

SWOT analysis is an effective tool which is internally used by the management of the organisation to ascertain information about their strengths, weaknesses, opportunities and threats (Charter, 2017.). This tool is used by NESTLE to use their strength situations to grab the future opportunities to improve their profitability and achievement of the targets within stipulated period of time. It helps the manager to make different strategies which assist in overcoming weaknesses. This will provide the opportunity to build the organisation structure more strongly and profoundly. The SWOT analysis of NESTLE is defined below:

Strengths

• NESTLE is a multinational organisation which provides diversified products in different produce lines and also has different markets.
• Due to providence of the large number of products related to the different market segments enable the organisation to become financially strong
• It is observed that NESTLE has good relationships with other big brands in the market such as Coca-Cola, Colgate, General Mills etc. (Chesbrough, 2010).
• NESTLE is considered the most recognised brand which has a good customer base. They have good power regarding retention of the customers for longer periods of time.
• They have strong relationships with retailers which prevail in the market and contribute to the timely delivery of products to end customers.

Weaknesses

• Most of the sales and revenue depends upon some of the popular brands. Some changes in consumer behaviour regarding such products affect their business badly.
• Some of the brands of NESTLE are recognised as old fashioned which impacts their attraction power to new potential customers
• The sales of grocery products are in the hands of some retailers like Walmart, Kroger and Tesco which allows them to get a sharp reduction in the process of their products which has a direct negative impact on the sales and brand image of NESTLE.

Opportunities

• There is huge growth opportunities are available in the online retail market through the use of digital platforms like Amazon which removes the role of traditional retailers
• It is observed that there is a high growth of the middle-class segment in China and India which is positive for the business of NESTLE (Commander and Svejnar, 2011).
• The development of the interest of the individuals of society in healthy products helps timely the demand for many products of NESTLE like an energy drink
• High changes are happening in the lifestyle such as working hours, more women workforce etc. which enables the organisation to effectively expand their business operations.

Threats

• A huge amount of competition is present in the market in the form of Walmart, ALDI etc. which has a direct impact on their customer base and market share.
• High pressure regarding cut prices through large retailers like Walmart.
• The growth of Amazon on the digital platform also threatens the business of NESTLE which reduces its attractiveness among the minds of customers (Craig and Campbell, 2012.).

P6 How Strengths and Weaknesses Are Interrelated with External Factors

Nestle is the largest food and drink company that provides effective services in several countries. For them, it is required to analyse their own strength and weaknesses that are interrelated with external factors can be - 

Political factors - A business organisation, is required to analyse the political and legal values of different countries before expanding their business structure in different countries. Nestle always works through the legal terms of a country that provide effectiveness in a business organisation. These factors always create strength for organisations to work in several countries with a positive image (Dahan and et. al.,  2010).

• Strength - By implementing all the legal factors and policies in the business process, Nestle can easily expand their structure in several countries.
• Weaknesses - Illegal and inappropriate working practices can be a negative approach for business organisations.

Social factors - These factors are based on customers' requirements, changes in different marketing aspects and trends that can affect organisational procedures. In this process, Nestle is required to analyse each marketing aspect properly to get exact information related to customers' requirements.

• Strength - Nestle, it is required to make positive changes in their business activities in order to get higher benefits and desirable outcomes.
• Weaknesses - These factors can impact negatively of firm not creating effectiveness in the business process. Changes and modifications are required on the basis of customer's demand.

Technological factors - Nestle is required to implement advanced technology in their organisational approaches to maximise the productivity and profitability of the firm. In this process, they always use innovative ideas and creative thoughts to represent their products attractively in front of target customers (Drucker, 2017). 

• Strength - Implementation of advanced technology assists in maximising the performance of employees by enhancing their interpersonal skills and knowledge criteria.
• Weaknesses - Advanced technology always requires skilled staff, proper timing and funds. Ineffective resources impact negatively on business procedures.

M4 SWOT Analysis and Justify How They Influence Decision-making for the Chosen Organisation

For a business organisation, it is required to analyse internal strengths and weaknesses that influence in decision making process of a firm. For internal analysis of the firm, Nestle can use a SWOT analysis that represents four different factors of business strength, weakness, opportunity and threat (Trkman, 2010). Through this managers easily understand the effectiveness of this model to make appropriate strategies for this. These help to analyse opportunities to grab marketing advantages while making impactful plans to improve organisational weaknesses.

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Conclusion

As per the above report, it has been summarised that an organisation is required to analyse the impact of business environmental factors to make an appropriate strategy for this. Each and every business in an economy is established with a specific objective that they are required to achieve through different approaches. For this they need to analyse the size and scope of different firms and its business procedures. An organisation is required to analyse the relationship between different functions and operational activities. After this firm is required to analyse the impact of environmental factors that can be internal and external. For this firm can use SWOT and PESTEL model.

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