Some of the main assessments which are required to be answered are like:
- What are the different types of innovation in technology that also provide the economic growth of Glencore Plc?
- What are the sales and profit in order to manage the new technology of the company?
- Give the importance of CSR in Glencore Plc.
Environment of business is basically an integration of internal as well as outside elements which affects the working of an organization. It is dynamic in nature that is it keeps on changing according to the situation arising. Furthermore, business environment effectively helps in identifying several business opportunities which substantially improves overall performance, growth as well as profitability of respective business (Ahokangas and et.al., 2016). This report is based Glencore PLC which is a major British Swiss multinational commodity having head quarter in Switzerland. However, the outcome of this report will be based on several aspects which directly or indirectly impacts the working condition within an organisation. This report covers different types of organisation highlighting legal structure, scope and size inherit by them. Furthermore, relationship between different organisation functions is effectively identified in order to know how they are link towards the respective organisation. Lastly consideration is made to analyse the overall impact of macro and micro environmental factors on business performance. Strengths and weaknesses interrelationship with macro factors will be evaluated.
1) Different types of organisation
Public sector company: Public sector enterprises are those which are particularly owned by government. where it is carrying out its business operations (Cosic, Shanks and Maynard, 2015). Funds for these types of business are raised through taxes, fees and several other such sources. For example, National health service is that firm in which majorly works for social welfare of citizens.
- Purpose: Purpose of NHS is to provide citizens of the country with comprehensive clinical services irrespective of age, sex, gender and religion. However, services provided by NHS are free of cost.
- Supply of Services: NHS provides several health related service with the prime motive of saving life of individuals. It has introduced a smart application through which patients can operate digitally. Moreover, it also provides urgent and emergency medical facility.
Types of Public sector organisation
In this company aims at defining powers and function which is needed to be followed by management in order accomplish desired business objective.
Government Company: These are organisation whose 51 percent or more paid up capital is held by government itself (Falkner, 2017). However, there many such companies which carry outs its business operations under this category.
Legal structure: NHS legal structure includes central government which significantly aims at providing aid to needy patients as soon as possible. Through this legal structure decision regarding business are taken quite quickly.
Private sector company: Private sector organisation are usually controlled and owned by private individuals. Prime objective of this sector is earn as much profit as possible. Furthermore, this sector plays a very crucial within an economy. Marks and Spencer is an example of private sector organisation which works in order to make profit.
- Purpose: Prime purpose of Glencore PLC is to provide the company's potential consumers high quality home décor product, clothing and food products.
- Objective: Objective is to provide quality service to individuals and enhancing experience of consumers.
- Supply of goods and services: Glencore PLC basically supplies varied range of clothing, food and home based products.
- Sole Trader: It is a sort of unincorporated business which is owned and controlled by just one owner, who is solely responsible for all business decisions. This is one of the simplest structure of business.
- Partnership: Partnership is a type of business under two or more individuals aims at carrying out business activities together in order to gain profitability (Frösén and et.al., 2016). However, the profit sharing ratio of each partner is dependent on the contribution made by each individual.
Legal structure: Legal Structure followed by Glencore PLC is public limited company. Through which the desired business objective is significantly achieved.
Voluntary Organisation: These are organisations who primarily work to enrich and benefit the people living in the society (Gauthier and Gilomen, 2016). Voluntary Sector organisation primarily work with non-profit motive. Main source of finance for such organisation are charities. Example of voluntary sector organisation is Oxfam.
- Purpose: The main purpose of Oxfam is to provide solution to people regarding poverty which is faced by them. However, Oxfam is a part of global movement which aims at implementing change within the society.
- Objective: Oxfam aims at providing aid to children so that their future becomes secure and can live their life without difficulties.
- Supply of Services: Oxfam is a international charitable organisation which facilities solution to poverty which is faced by individuals.
Types of voluntary organisation:
- Charity: It is an organisation which essentially provides funds in order to provide assistance to needy individuals.
- Trustee: Trustee is an individual who usually have authority to control all the major activities regarding the organisation.
Legal structure: Oxfam is a charity based organisation which essentially aims at providing assistance to poor and needy people.
2) Size and scope of the organisations.
Size and Scope of each business organisation is different which essentially determines the profitability of respective organisation in long run.
Private Limited: Private sector organisation is a major part of country's economic system through revenue is generated (Haaker and et.al., 2017). The prime intention of all private sector organisation is attainment of profit. Marks and Spencer is a private sector organisation.
- Market Share: Marks and Spencer basically have approximately 1463 stores around the world and total amount of revenue earn by respective organisation is £ 10,337 million.
- Scope: The scope Glencore PLC is that the respective organisation provides around 35000 products geographically.
- Growth: The prime objective of respective organisation is to spend its business operation in several other major parts of the world.
- Mission: Mission statement of Glencore PLC states that company wants to produce goods which are inspirational in quality.
- Vision: Gain leadership by meeting needs as well as wants of company's potential customers.
Public Limited Company: Private limited company are usually operated by government and main motive of such organisation are serve the citizens of country (Linnenluecke, 2017). National Health Service is a public Limited Company. Such companies are usually owned and controlled by government. Furthermore, example of public limited company is NHS.
- Market Share: NHS is majorly carrying out its business activities in England which motive of providing medical assistance to them.
- Scope: NHS is operating its business operations with the motive of serving the large population. It is providing wide variety of services including dental care, health care, and many such health related services.
- Mission: Mission of NHS is to provide enhance quality of service in order to make life of consumers healthier.
- Vision: Vision of NHS is to deliver variety of healthcare services to the needy.
Voluntary Sector: Voluntary Sector organisation usually work with motive of serving society and the major source of fund for such organisation is charity. Example of voluntary sector organisation is Oxfam.
- It is operating with various organization which is charitable in order to significantly reduce the poverty and provide proper assistance to citizen of respective country. Furthermore, measures are adopted by Oxfam to facilitate welfare services in famine and drought prone locations.
- Mission: Mission statement of Oxfam is primarily to make a environment where people can live poverty free.
- Vision: Vision of Oxfam is a create a world without poverty. Their aim is to work together internationally in order to enable people to exercise their rights and manage lives
3) Organisation structures and functions
It are basically structure that can highlight several business related activities are directed in order to accomplish business objectives with efficiency. Furthermore, it also determines how data can flows from one sector to other.
Organisational followed by different companies:
- Glencore PLC is private limited company which follows flat organisational structure in order effectively carry out its business operations. Through adoption of this organisational structure employees are potentially motivated in order to take business related decision (Morecroft, 2015). Main reason of implementation this legal structure is to reduce the overall bureaucracy.
- NHS is public limited company which follows hierarchical organisational structure which has long chain of command from top to bottom level. This is a tall structure which basically looks similar to pyramid. (Organisational structure in an innovative environment A Capco case study, 2019).
- Oxfam is voluntary sector organisation which is a non-profit organisation. However, Oxfam also follows flat organisational structure in order to potentially carry of activities with efficiency. Under this information basically follows from top to bottom level.
For a business organisation it is very essential to effectively manage all the business related aspects with proper efficiency (Olszak, 2016). However, proper evaluation might be taken in order to identify which organisational structure will significantly help in accomplishing establish goals and objectives. Under transnational organisational structure business operations are organized into several dimensions like product, geographic area, functional levels. However, under global organisational structure integration is required and complexity regarding differentiation is witnessed. Under international division structure duplication of staff is enormously faced.
How firm related to overall objectives and aims of them
Within an organisation there several departments which are interrelated together and significantly aim at accomplishing desired business objectives with efficiency. Without proper coordination between all departments proper flow of activities can be never done.
Marketing department to Finance department: These two department of M&S regularly coordinates with each other in order to effectively accomplish mission and objectives. Marketing department significantly identifies the desire and wants of company's potential customers and further it is the finance department which fulfil financial requirements.
- Production with Marketing department: Both of these departments are also interrelated with each other so as to achieved desired business objectives. However, it is the marketing department which effectively communicates exact demand of customers and then production department ensures that goods and services are produced accordingly (Patrick, 2016). With reference to M&S production department effectively manufacture goods keeping in mind the guidelines given.
However, there are several other given business organisations which regularly interacts so that business objective is attain within the allocated time span. This coordination between all department ensures smooth functioning.
a) Apply the PESTEL model to the sector to analyse how the macro environment is impacting the UK retail sector.
In order to significantly study macro environment of Glencore PLC, PESTEL analysis is used so that several factors which impacts overall functioning of an organisation are effectively determined. However, PESTEL Analysis is a framework which is used to determine and monitor the impact of macro environmental factors on overall business performance. PESTEL with references to Glencore PLC is mentioned below:
- Political Factors: Glencore PLC business operations are enormously impacted due to free trade policy implemented by government due which export of goods and services as become much easier. Furthermore, under retail sector government policies keeps on changing on regular interval which negatively impacts the business operation of M&S because it’s not easy to cope up with such changes.
- Economic Factors: Economic conditions under for Glencore PLC is quite stable due to which more and more consumers are attracted which positively impacts the business operations. Whereas M&S was hit by recession due to which several number of stores were closed.
- Social Factors: Lifestyle of people living in UK is modern and however, M&S also effectively provide customers to trendy variety of clothing. Whereas with fast changing demand of customers under UK market huge amount to stock remains unsold which negativity impacts the productivity as well as profitability of respective organisation.
- Technological Factors: Glencore PLC have strong social media base as well as good online presences due to which avenue it capitalizes which positivity impacts the functioning. However, adoption on technology usually requires wide availability of funds.(Rezaee, 2016).
- Environmental Factors: Glencore PLC significantly aim at producing environmental friendly items which positively impacts the overall market reputation of respective organisation. However, if all in case any product of respective organisation harms the environment then the overall reputation would be negativity impacted.
- Legal Factors: This company regularly carry out training sessions in order to keep them updated with new legislations and laws invented by government. However, some of legal law implemented by government are quite difficult to follow due to which functioning within an organisation is affected.
However, through PESTEL analysis identification regarding each and every macro environmental factor is essentially made.
b) Apply the SWOT/TOWS analysis and also Porter’s five forces analysis
SWOT Analysis: SWOT Analysis is a strategic management tool which is essentially used to identify strengths, weaknesses, threat as well as opportunities of a business organisation.
Glencore PLC is a well-known company which have good brand image in market area (Schlesinger and Rahman, 2016). This company is providing high end value and quality products. It is focusing on customers and offering latest industry trend products to customers. This company is effectively following corporate social responsibilities which helps in gaining trust from customers.
This company is lacking in its financial performance which can be consider as its biggest weakness. Glencore PLC is not properly focusing on investments in new technology which is directly affecting its productivity and profitability. This company is inappropriate supply chain management which affects timely delivery of its goods to customers.
There are various opportunities available to Glencore PLC company that will help company in achieving larger market share. Company can increase its market segments as well as move to different market area. This company can improve its online presence which will help in increasing its sales. Company should use high and advance technology so that they can gain competitive advantage over its rival companies.
Major threat to Glencore PLC company is from its competitors. Fashion industry is very vast sector under which taste and preferences of customers changes which is the biggest threat of Glencore PLC . The company also faces issue in rising raw material which weakens the profitability. Therefore, in order to effectively carry out its business activities properly improvements might be adopted.
Porter's Five Force Model: It is basically a holistic strategy under identification is made to handle the competitive business environment effectively. Following factors are considered under porter's five force model:
- Threats of New Entrants: New entrants under retail industry is quite easy. New competitors easily entry into potential market. However, with regard to Glencore PLC, the firm need to reduce its prices in order to stray in marketplace (Tho and Trang, 2015).
- Bargaining Power of Buyers: Buyers now-a-days are very demanding in nature, they basically want best offers by paying minimum amount. Due this Glencore PLC business operation are affected in long run.
- Bargaining Power of Suppliers: Under retail sector there are numerous suppliers which are available in potential market. With reference to Glencore PLC there is moderate effect of suppliers.
- Threats of Substitute Products: In retail sector there is large availability of substitute product into market. In case of Glencore PLC the company faces high threats of substitute products.
- Rivalry: Rivalry among retailing sector is ensourmly faced. Therefore, with reference to Glencore PLC huge amount of competition is faced by respective company. In order to overcome this new and trendy product shall be introduced regularly.
Interrelation of weakness and strengths with macro environmental factors
Strengths and Weakness of Glencore PLC have a significant relationship with macro-environmental factors:
Political Factors: These factors basically highlight the policies and regulations which are introduced by government of respective country (Vom, Petry and Gonser, 2016).
- Strength: Economic stability under UK is greatest strength through policies implemented by government are followed.
- Weakness: Taxes incurred by government basically weakens the overall profitability of Glencore PLC to a great extent.
Economic Factors: These factors are primarily including: interest rate, inflation rate and several other such factors which impacts the overall performance of business.
- Strength: Wide variety of portfolio offered by Glencore PLC has significantly captured good market share.
- Weakness: Recession under UK market has negatively impacted the business of Glencore PLC.
Also Read: Unit 1: Business and the Business Environment- TESCO
From the above report it can be concluded that business environment is essentially very important aspect through which determination regarding all the major business activities is significantly made. These factors enormously impact a company in negative as well as positive way. Furthermore, evaluation is done in order to identifying interrelationship of various business departments so business objective is attained. Lastly interrelationship between strengths and weakness of macro environmental factors is considered.