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Introduction

Business environment refers to the study of such factors that may affect effectiveness of operational activities. All the factors may leave positive or negative impact upon business operations. If the managers of the company are not able to make effective decisions in critical situations then it can result in decreased strength of the business (Hilton and Platt, 2013). There are various factors such as market trends, government policies, customers preferences that affects profits and sales of the company. Company taken in this project report is mainly based on Unilever which is a private sector organisation.

This report consists different topics that are different type of organisations and their purpose, size and scope, relationship between organisational functions and objectives. Positive and negative impacts of macro environment, internal and external analysis to find strength and weaknesses and the way in which both of them related to the external macro environment are also discussed under this project report.

TASK 1

P1 Different Types of Organisations and their Purposes

There are different types of organisations that are running their business in the market and performing all the operational activities. Each of them have own objectives and purposes to execute the business. The types of the organisations are explained below:

Public organisation: Such type of organisations are operated and executed by government or regulatory authority of a country (Savrul, Incekara and Sener, 2014). It includes different activities that are performed by police, transport, military and educational institutes of the nation. Government is responsible for all the controlling and monitoring of the businesses.

NHS is public company and providing medical services all around the world. Main purpose of the organisation to provide free health care services to helpless people of society. It also provides optical and dental care and their missions is to supply basic medical facilities to poor people who are not able to afford the same.

Purpose:

  • To provide basic health care services to the poor people of the society.
  • Achievement of quality in their services for the optimum care of patients.

Private organisation: These organisation are controlled and operated by private individuals. The companies who are running their business in private sector are also called non government organisation. These are mainly run to attain higher amount of profits and they have different legal structure.

Unilever is a private company which is established in UK and supplying products to whole world. Various products are delivered by the company that includes food and beverage item, personal care goods and also provide services like cleaning agents. Currently it is providing services and products in more than 190 countries.

Purpose:

  • Main objective of the company is to attain higher amount of profit.
  • To improve the standard of living of the society.
  • Attain the targets such as acquire higher market share by putting full efforts.

Voluntary organisation: It includes all such organisations who are operating their business activities for the purpose of development of society and not for earning profits. All the tasks of such type of organisations are performed by volunteers who join the administration willingly. It is important to take permission from government to establish such type of companies (Boons and Lüdeke-Freund, 2013).

Oxfam is a voluntary organisation who is working for social welfare and to remove poverty. Various activities are performed by the company which are simultaneously provided and includes advocacy, disaster relief, policy research etc. Food relief is also provided by the company to poor individuals whoa re not able to buy food and fulfil their basic needs.

Purpose:

  • Main objective of then company is to remove poverty from the world.
  • To provide secure future to individuals of the society who are helpless.
  • Conduct educational program all around the world to enhance education level.

P2. Size and Scope of Different Type of Organisations

There are three different types of organisations in the market who are running their operations. These are private, public and voluntary companies. All of them work for different purposes and have their own size and scope which is required to operate and execute business. Size depends upon the regions where company is operating and the market share which is captured. Scope can be defined as the information about the products and services that are supplied by the organisation. Size and scope of all three companies are explained below:

Details

NHS

Unilever

Oxfam

Background

It was introduced by Aneurin Bevan in Manchester for the purpose of providing health and care services.

It was founded by Level brothers in year 1929 and currently it is running its business all around the world and based in UK.

It was established in year 1942 to provide services all around the world. It is concerned with poverty removing programs that are held in UK.

Product and services

Various health care services are provided by the company for the purpose of social welfare and to help poor people.

Various diversifies goods are delivered by the company that includes food and beverage items, health care products etc.

Company is working for social welfare and provide disaster relief, policy research and advocacy services to poor individuals of the society.

Size and scope

It is a large organisation and running its business all around the world. It is world's fifth largest health care organisation in public sector. The scope of the company can be defined with the help of the fields where it perform all the activities like dental and health care.

Unilever is a large sized organisation and supply products to the whole world. It was considered as the world's largest organisation in year on the basis of profits. Unilever is dealing personal care products, food and beverage items etc. which is its scope.

It was established in year 1942 and running its operations all around the world to reduce poverty. The scope of the company is social services that are provided with the help of volunteers.

Vision

Vision of NHS is to render enhanced health care and values all around the world for the purpose of social welfare.

Vision of Unilever is to attain long term sustainability in order to enhance effectiveness of the company.

To remove poverty from world and enhance standard of living for every poor person in the world.

Mission

Mission of NHS is to provide care and basic medical facilities to each and every individual every day.

The mission of Unilever is to meet daily needs of the customers and enhance brand loyalty by providing them good quality product.

To bring positive change in the society in order to reduce poverty.

Objective

Help those individuals who are not able to buy basic health care services.

Objective of Unilever is to acquire higher market share to spread the business.

Objective of the company is to find easy solutions for poverty problems so that every individual of society can live a happy life.

Organisational and legal structure

The organisation is following lean organisational structure that helps to increase customers. Central government legal structure is followed in the organisation.

Matrix organisational structure is followed in the organisation. Legal structure for the organisation is limited company.

Company is following divisional organisational structure. The company is following the legal structure of unincorporated association.

Stakeholders

Government, insurance companies, patients are the stakeholders for NHS.

Customers, suppliers, investors, shareholders, government etc. are stakeholders of the company.

Stakeholders for the company are government, society and trustees.

TASK 2

P3. Relationship Between Different Organisational Functions

Structure of firm

Structure of a firm determines the systems and arrangements which are essential to interconnect different organisational elements like teams and business office. Unilever accepts changes related to customer goods industry and international market.

Different organisational functions

Human resource department:- Human resources are appointed in an organisation to perform duties related to recruitment, selection, development and training of employees. It involves staff's development in effective manner to achieve organisational goals (Hilton and Platt, 2013). For recruitment of employees HR department should provide advertisements to make appropriate selection of employees. Advertising functions are mostly performed by marketing department, by this way marketing and human resource department are interrelated with each other.

Marketing and sales department:- Marketing ans sales department in an organisation are essential to identify customer needs through developing marketing strategy. The department investigates consumers information- background, age, etc. in the market. Sales department function is to sell the product designed by the production department through market research (Savrul, Incekar and Sener, 2014). It involves selling through different ways- telephone sales, mail shots, etc. By cooperating each other in different functions sales and marketing department are connected with each other.

Finance department:- Finance department performs functions related to the financial information like money paid and received by the organisation. All the information is necessary to prepare financial statements of the company to deal with legal necessities. The department prepare different budgets for different sections related to their salary, expenses, deductions etc. Therefore it is interrelated with different departments - sales, finance, marketing, etc.

All the above mentioned functions are linked with the organisational structure as all of them have to cooperate with each other and have to contribute in growth. If the divisions of the company are not working properly than it is not possible to attain goals. All the departments are interrelated with each other because finance sector allot funds to all departments, HR section hire employees for the organisation and marketing and sales division are liable to perform all the marketing related activities so that large number of customers can be acquired by the organisation.

TASK 3

P4. Positive and Negative Impacts of Macro Environment upon Business Operations

Unilever is a multinational company which make products available in more than 190 countries with lot of brands like – Rexona, Dove, Sunsilk, etc. Unilever measures the standards in which it is operating. It use PESTEL analysis to evaluate the external factors which influences the company in different ways.

Political Factors:- Political factors refers to those opportunities and forces which are brought by government and what is their impact on business. It includes trading policies, corruption, government policies, trading policies, tax policy, etc. These factors have both negative and positive impact on business.

Positive Impact:- Political stability is positive impact for company as it provides opportunity to attain its objectives.

Negative Impact:- Political factor like corruption put negative impact on company, as it arise difficulties in achieving desired goals.

Economic Factors:- Economy and it's performance is influenced through these factors which put direct impact on company's profit along with it (Boons and Lüdeke-Freund, 2013). It involves economy trends, industry growth, inflation, interest rates, unemployment rates, etc.

Positive Impact:- Positive impact of economic factors is that increasing employment rates will improve the standard of living and improve the level of national income.

Negative Impact:-  In UK the negative influence of economic factors is that increasing tax rates put direct impact on customer's purchasing power and affects the company's pricing strategy.

Social Factors:- In order to target several customers social factors are very essential for marketers to achieve the desired goals. It includes lifestyle trends, customer opinions, cultural trends, education, population growth, etc. These factors determines general workforce information and their working conditions.

Positive Impact:- In Unilever these factors considers the social environment and helps to identify customers preferences and needs.

Negative Impact:- Factors like unhealthy housing and poor education will put negative impact on business.

Technological Factors:- It considers technological development and innovation rates, incentives, barriers, etc. which affects the business or market. It involves innovation and research , emerging technologies, technological development of competitors which affects the business in both positive and negative manner.

Positive Impact:- Effective technological measures will help the business to achieve desired targets in different ways.

Negative Impact:- Improving technological development of competitor companies will put negative impact on company's performance.

Environmental Factors:- Environmental factors considers all those elements which influences the surroundings of company. It includes various ecological aspects like climate impact, ecological regulations, weather, sustainability, etc. It determines the environment concerns of the business.

Positive impact:- Factors like effective workplace efficiency represents employees comfort where they are working , it is a positive impact.

Negative impact:-  Factors like seasonal variations affects negatively due to changes in products nature.

Legal factors:- Legal factors have both external and internal parts which affects the business in different ways (Hamilton and Webster, 2015). An organisation must be up to date about the legislation changes and how they will influence the system. These includes consumer protection, tax regulations, future laws, employment laws, current laws, industrial laws, international laws, etc.

Positive impact:- Factors like relief in tax for business and its products will be a positive impact as it helps in expansion of business growth.

Negative impact:- If company do not follow rules and regulations made by government, then it will put negative impact on company's operations.

TASK 4

P5 Internal and External Analysis of Specific Organisations

Internal analysis of environment helps an organisation to identify it's weaknesses and strengths. It is necessary to determine competitor's activity and moves according to the changing environment. On the other hand external analysis helps to identify it's opportunities and threats. In Unilever, both external and internal analysis can be done using- SWOT, PEST, Value chain analysis and Porter's five forces.

SWOT of Unilever

Strengths

Brand image:- Having brand value is very essential strength for any company. As Unilever is consumer friendly brand, it has excellent brand value all over the world. It's products are famous and favoured globally.

Global presence:- Unilever started it's business in 1929 and now it has explored it's business in 190 countries. It is very popular brand and has large market share all over the world.

Distribution network:- Having increasing demand for products, it has vast distribution network. With the help of successful distribution network and supply chain Unilever manages its manufacturing costs and provide effective services to customers.

Weaknesses

Imitable products:- All products used by customers are easily copied. Along with other large companies Unilever has also same hindrances in handling these issues.

Substitutes:- One of the weakness of Unilever is accessibility of substitutes. Its products are easily replaced with substitutes in rising markets in Asia and Africa.

Lack of forward integration:- In Unileverdepending highly on the retailers results in lack of progressive integration.

Opportunities

Developing economies:- Living standard of people is improving through beginning of growing economies. It provides great opportunity to Unilever to put precise product at right place.

Health–conscious products demand:- Demand for health-conscious products are increasing which is a great opportunity for Unilever. By making healthy products it can prove and explore its business.

Social media:- People get more influenced by social media, as Unilever can use social media for advertising instead of TV ads. It provides effective results at low cost.

Threats

Competitors:- For Unilever it is difficult to sustain in the market because of many competitors like P&G, L'oreal, Nestle, etc. To overcome this threat Unilever can establish it's new products with emulous prices.

Ayurveda products popularity:- Demand for Ayurveda products is increasing day by day which is a big threat for Unilever. Like Lever Ayush manufactures Ayurvedic products which is a challenge for Unilever.

Imitation of product:- It is a big threat for Unilever, as it decides to invest millions to launch a new product and someone imitate the product, then it is big problem for company.

It can be concluded that SWOT is necessary to analyse both internal and external environment for a company. While evaluating environment all these factors must be considered and effective measures should be used by considering strengths and opportunities to overcome company's weaknesses and threats.

P6 Strength and weaknesses interrelated with external macro factors

Strengths and weaknesses are related with the external macro factors as they affects organisational efficiency. These are the factors that cannot be controlled. The relation in both of them for Unilever are explained below:

Political factors: these factors depends upon the government policies, strategies, norms and regulations that are required to be followed by a business.

  • Strengths:The UK government is providing end number of opportunities to the businesses after Brexit to enhance their economic strength and this is very beneficial for Unilever.
  • Weaknesses:Changes in government rules and regulations can affect operations of Unilever is the company is planning for expansion in different regions that it may create problems because all the policies of the government are not possible to be adopted.

Economic factors: These factors are mainly related to the economy that includes tax rates, inflation and deflation rates that may affect business practices.

  • Strengths:Standards of living is continuously improving in UK that can help to enhance the sales of different products (Hamilton, and Webster, 2015).
  • Weaknesses:After Brexit various business get affected and the economy as well. This can negatively affects the operations as there is a lack of funds in the company.

Social factors: Such type of factors depends upon the customers choice and demand that changes frequently.

  • Strengths:Population of UK is highly motivated toward the adoption of new and good quality products. As Unilever is providing good products hence it is a strength for the company because they are delivering good quality goods.
  • Weaknesses:Demand and needs of the consumers changes frequently and if Unilever is not able to supply innovative product than its sales and profits get decreased.

Technological factors: All these factors are depended upon the technology changes that may affect business practices of Unilever (Wetherly, 2014).

  • Strengths:Unilever is implementing latest technology in the marketing and promotional activities that may attract higher amount of customers.
  • Weaknesses:Continuous changes in the technology are hard to adopt easily hence it is a weakness for the company.

Conclusion

From the above given project report, it can be summarized that various internal and eternal factors are there which largely affect the decisions and performance of an organizations. various tools such as PESTLE and SWOT are there which can be used by company to determine and examine the elements which have an impact on company's strategies and policies. various functions are perform by company to achieve its set business objectives and to sustain in market for long run.

References

Books and Journals:

  • Hilton, R. W. and Platt, D. E., 2013. Managerial accounting: creating value in a dynamic business environment. McGraw-Hill Education.
  • Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a globalizing business environment.  Procedia-Social and Behavioral Sciences. 150. pp.35-45.
  • Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. Journal of Cleaner production. 45. pp.9-19.
  • Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University Press, USA.
  • Wetherly, P., 2014. The business environment: themes and issues in a globalizing world. Oxford University Press.
  • Smith, B., 2016. Nature and Geography: Tragic Voids within Marketing Textbooks and the External Business Environment. In Global Perspectives on Contemporary Marketing Education(pp. 47-64). IGI Global.
  • Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
  • Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
  • Chen, H., Chiang, R. H. and Storey, V. C., 2012. Business intelligence and analytics: from big data to big impact. MIS quarterly, pp.1165-1188.
  • Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
  • Andersson, U., Forsgren, M. and Holm, U., 2015. Balancing subsidiary influence in the federative MNC: A business network view. In Knowledge, Networks and Power (pp. 393-420). Palgrave Macmillan, London.
  • Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge

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