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BTEC HND in Business Environment Unit 1 Regent College Level 5


Business environment has different factors which impacts the activities and functions of company. These is divided into two parts such as internal and external that highly effects on organisational performance and effectiveness (Business Environment, 2018). Both business and environment are has different elements in this business meaning is human activities which includes purchase, production, sales or extraction of services and products. Meanwhile environment means the components of surroundings (Adeoye and Elegunde, 2012). Therefore basic business environment meaning is the set of political, social, institutional, legal and economic conditions. All these are uncontrollable for the company and highly impacts the functions and operations on enterprises. In this assignment, three types of business are considers such as private, public and voluntary. Best example of these organisation is ASDA , NHS and Oxfam. All these organisations are play essential role in the development and growth of economy. In the present study, different purpose and types of enterprises, as well as their scope and size with its legal structure, will be determined. Relationship between business functions in accomplishment of long term objectives of company will be explained as well. PESTLE Analysis and its interrelation with enterprises strengths and weakness also shown in this project


P1 Relationship between different organisational functions and their link to organisational objectives and structures

Behind the development and growth of all business there is foremost role and responsibility of their various departments (Al-Debei and Avison, 2010). In this entire functions and activities of organisation are highly depends on their working and functioning for accomplishment of common objectives. In the ASDA, there are different departments are work which are explained as below:

Human resource department: In the ASDA, HR manager play vital role in hiring and selecting knowledgeable people who can easily accomplish business goals and objectives in limited time period. There are different functions which are play by the HR such as performance appraisal, identification of remunerations, employees management, training and development and so on.

Research and development department: Main role and duty of these department is to organise effective research program which help manager to identify basic needs and wants of the audience about retail and grocery products. Thus, it benefited for the ASDA to maximise their sales as well as attain long term targets and objectives easily.

Finance department: It is another department in the enterprise which has different roles and responsibility to arrange proper amount of capital or fund. They also help in the achievement of predetermined and set objectives (Aula, 2010). Thus, in the business they take an effective decision for the growth and success of company.

Marketing department: Marketing manager of the ASDA has various roles in providing their goods and services to the end user. In this company follow different kind of promotional mix including advertisement, public relation, publicity, sales promotions and many other. All these are highly beneficial for the enterprise to easily attract large number customers as well as gain competitive advantages within an organisation.

Organisational structure: In the company there are mainly four type of structure which are used by the ASDA are determined as below:

Functional based: In this structure of the enterprise is divided as per the business functions and activities. In this various departments whose are performed in the firm such as marketing, finance, operating, human resource, research and development.

Geography based: In this all activities and functions of the business are divided as per its area. It assist in determination of customers taste, preferences and needs (Bill Pasmore PhD and CMC, 2010). It is useful and valuable for the ASDA to operates their activities at different level.

Product based: Under this entire structure of the company is based on products and services which are given by the company. For example: enterprise render financial service, general and grocery merchandise to the customers.

Consumer based: It is another structure which is mainly relay on customer satisfaction about the business products and services.


P2 Positive and negative impact of macro environment on business operations of ASDA

Macro environment is highly effects on the ASDA operations and activities in direct way. One of the main and foremost part of macro environment such as PESTLE Analysis which has favourable and unfavourable impacts (Brannon, 2010). These are determined as below:

PESTLE Analysis


Favourable impacts

Unfavourable effects


This factors mainly related to the legal authority of nations and the rules and legislation made by government in link to business activities and operations. In this different factors are includes such as international laws, legislation, government stability etc.

ASDA is a grocery and multinational business that conduct their activities in different nations. Positive laws of the country support them to easily perform all activities and functions in various nations (Cantwell, Dunning and Lundan, 2010).

Rules and regulations of the country is highly effects on business performance. In this unstable government of the country adversely impacts on ASDA and its profitability.


This is another factor that includes different factors such as economic condition, cost of credit, labour demand and supply, pay level, competitive pressure etc. These are identify as a country economy.

If the countries economic condition is better and having effective policies about inflation and credit rate in marketplace then it is facilitated ASDA to run their operations at global level.

If there is deflation situation and the income level of persons is not high then it impacts there capability of demand to various products.


In this different factors are consider which are the part of society. In this person age, education level, occupation and behaviour of customers are positive effect on business operations.

If the individual education level is higher and they are capable to apply online technology assist the ASDA to maximise their sales and revenues by launching their operations online.

Poor education level is negatively impacts on business performance and profitability.


It is another important factor which includes new methods, technologies that highly effects on the ASDA performance and effectiveness (Cassell, and Blake, 2012).

Positive effects of the technological factor in the organisation is increase growth and success of the enterprise in an effective and systematic manner.

In the organisation some employees are less educated that highly impacts on its productivity and performance in adverse and negative manner.


This factor includes different forces such as copyrights, employment legislation, patent and many other. These are needed to apply by administration of ASDA to decrease the negative impacts in the organisation.

If entire rules and legislation are applied by company then it supports the administration of ASDA to make strong image in the marketplace (CGA, 2010).

All rules and regulations are not applied in proper manner that it effects adversely on business functions and operations.


It is another important part of the PESTLE Analysis which cover various aspects such as hazardous waste, large number po population , pollutions and many other.

If rules and regulation regarding environment are applied by company in proper manner that help business to make strong and better position in marketplace.

If the ASDA is not aware regarding environment and maximise pollution then they largely have to face unfavourable judgement of society.

P3 Internal and external Analysis of ASDA company with other similar organisation

Internal and external analysis is identify as a SWOT analysis which is important for the organisation to recognise their strengths, weaknesses, threats and opportunities (Charter, 2017). All these are beneficial for the entity to expand their business operations and functions at global level. Therefore SWOT Analysis of the ASDA is shown as below:



Business offers different kind of services and products considering financial services.

Company has appropriately 140,000 workers engaged in across 500 stores.

ASDA is a world famous and well established superior technology and economies of scale.

They mainly emphasis on organising marketing campaigns in order to target large number of customers towards grocery products and services (Chavis, Klapper and Love, 2011).

Socially responsible and liable considering Corporate social responsibility (CSR) initiatives.

In constant and better touch with its clients through social networking -conduct competitions, asks feedbacks and many other.

It is well known and famous enterprise with its amazing marketing campaigns.

Global presence of the company is limited as compared to other challengers.

Their ability and capability in order to sell prices of the products that have restricted their coming is few nations as the state fear a rivalry with local merchants.

They serve their services and products in limited states through maximum threat of local marketer.

As an enterprise is famous with its quality products and services.

Lack of promotional techniques which highly effects on business performance and profitability in negative and unfavourable manner (Craig and Campbell, 2012).



The business can also classify their services and products into many other industry such as insurance, broadband and travel services.

ASDA should emphasis on different developing nations such as China, India and many other in which they sell out their grocery products and services at different level and to the customers (Ebert and et. al., 2014).

They faces a difficult competitions or content from their challengers such as Tesco, Walmart and many other.

Variation in the strategy of government about taxations also get threat for ASDA.

Changing policies and strategies of different central government, it is also identify as a main threat for the company.



P4 Evaluate how strengths and weakness interrelate with the external macro factors

Weakness and Strengths of the company is highly connected with external factor of macro-environment. These will support the organisation in analysing best chances from market as well as exploiting them in order to achieve competitive edge in marketplace (Griffin and Pustay, 2012).

PEST Analysis



Political factor is mainly related with the regulations and legislation which is required by the company in order expand their business operations and activities at different level.

Complying with entire legislation and rules of legal authority support the company in running their business operations and functions smoothly and successfully.

As company launch in different nations, it is difficult for the company in order to formulate as well as know entire regulations. Thus, it may impacts on business activities and performance.

Economic factors includes some aspects such as GDP, interest rate and so on. These are highly effects on business functions and operations.

Effective and better economic situation of the nations assist in development and success of the enterprise. It support in rendering maximum profits and capturing maximum share.

Purchasing power of the clients and inflation rate highly influenced the demands and supply of the ASDA products in marketplace.

Social factor is another part of the PEST Analysis which effects on the business performance and activities. In order to enhance living standard and welfare of society, ASDA requires to satisfy basic needs and wants of the customers in an effective manner.

In this different involvement are completed by enterprise in social activities and welfare which develop favourable image and goodwill of the company in the mind of customer's (Halbert and Ingulli, 2011).

Low quality products manufacturing may reduce the sales of organisation and deciles its profit as well. If business entity not provide products and services as per the needs and wants of customer thus they can fall in the marketplace.

Technological factor is more important and beneficial elements for the success and development of company. It support the business entity to maximise their sales and revenues in limited time period.

It is important and essential factor which assist the business entity in order to maximise their revenues and sales in limited time duration. It is also support to the enterprise to gain competitive advantages and edge in limited time period (Harrison, 2011).

Technology is also effects on the business performance and productivity in the organisation. In the ASDA there are different employees, in this some worker has lack of knowledge and skills that highly effects on its performance and effectiveness in a negative or unfavourable manner.


From the above mentioned report, it can be concluded that, business environment is consider two factors such as internal and external that influence on company and its profitability ratio. Thus, it highly effects on profitability and goodwill of the company. There are different factors such as PESTLE, SWOT and many internal and external that impacted on the company and its profitability ratio either negative and positive. In this business has different size and scope that identify its position at marketplace. In this different department of the company are interrelated with the motive to achieve long term growth and success in limited time period.


  • Adeoye, A. O. and Elegunde, A. F., 2012. Impacts of external business environment on organisational performance in the food and beverage industry in Nigeria.British Journal of Arts and Social Sciences. 6(2). pp.56-65.
  • Al-Debei, M. M. and Avison, D., 2010. Developing a unified framework of the business model concept. European Journal of Information Systems. 19(3). pp.359-376.
  • Aula, P., 2010. Social media, reputation risk and ambient publicity management. Strategy & Leadership. 38(6). pp.43-49.
  • Bill Pasmore PhD, S. V. P. and CMC, T. O. S., 2010. Leadership agility: A business imperative for a VUCA world. People and Strategy. 33(4). p.32.
  • Brannon, N., 2010. Business intelligence and e-discovery. Intellectual Property & Technology Law Journal. 22(7). p.1.
  • Cantwell, J., Dunning, J. H. and Lundan, S. M., 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.
  • Cassell, M. A. and Blake, R. J., 2012. Analysis of Hofstede's 5-D model: the implications of conducting business in Saudi Arabia. International Journal of Management & Information Systems (Online). 16(2). p.151.

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