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Unit 7 Business Environment Assignment Level 3

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Business and the Business Environment

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Introduction:

Initially when a business starts and slowly it operates the market then different type of promptness begins to affect the business and create trouble to achieve the expected outcomes. During the starts, a new operation, macro and micro environmental factors affect the industry. Therefore a unique plan is needed to generate that reduce the negative impact on the process. To make this happen, a company should try to identify its weakness, strengths, opportunities, threats by other companies and according to them it should develop a strategy. This project is intended to highlight different aspects of the business environment.

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LO1:

P1. Different Type and Purposes of Organizations:

In today’s world, many big corporations and various organizations formed to offer a better life choice to the human being and improve our society technically. In the world of business there are some common types of organization working for the industrial market which are given below:

  • Startup
  • Sole trader
  • Companies
  • Partnership
  • Charity Organization
  • Franchise

Different Type and Purposes of Organizations

Start-Up: The term startup is not a business or a manufacturing company for a particular product; it is a newly grown-up business strategy for an entrepreneurial venture. Its aims to find a recently develop marketplace for people facing an issue in their life. Although it is very risky project because this business deals with new market problems and the success rate of this type of project is very less. However once the business got success the profit amount will go to a very large amount. This business needs innovative skills that can use their skills to find a solution of the modern newly developing issue. The co-founders of this business are mostly college students, engineers, hackers, web developers etc. However that doesn't mean that only this profession have a future in this field, whoever has innovative thinking and problems solving skills with a different approach can create a carrier in this field. Meanwhile, it has a negative point, every business needs an investment, in other business as their success rate is quite as compared to the start-up business, the investor is easily shown their keen interest to invest another type of business rather than stat up marketing as the risk factor is more significant. The initial funding is an enormous problem, and that is the main reason to drop the business idea by many of students. However the country like U.S.A, U.K, China, Russia, and many other economically country have an excellent market for the start-up business, many investors are easily approachable and can invest their money for a perfect business plan. In India the market yet developing and take several years to come up.

Sole Trader: One of the most native cultures of the business is the sole trader, and it involves in a wild range of activates, which includes mobile filters, mechanical work, electrical work plumbing and many more, throughout the world. A significant portion of a sole trader is using in construction marketing business and also use in finance and catering business. No complicated paperwork and document it requires to establish a single trader business, and every conclusion can be made in no time. However for Business-related problems a close confidential contract can be made between the customer and employees. A good advantage to this business is that all profit goes to the sole trader that makes help to build a strong foundation and expand own business in the market. However, every business management system has a positive and negative portion and in this business too. All the essential decision makes on own and may have to try work hard and a longer time. The company requires management skills and bargaining power and also strong communication skills with customer. Being a sole trader, make once a great responsible person that helps to survive to deal with the modern market and all the investment have to provide the own businessman. As a sole trader, the business makes once a jack of all traders. In other countries including India, the sole trader is a successful business and makes the profit to the businessman. However, the necessary fund could not often be provided many times, and the problem is yet to be solved.

The Partnership: the partnership business can be done between two to five people but nowadays in online trading market policymakers are up to thirty people, due to the Partnership Act 2002, which means at a time some multiple people can access and control the business. It also has many advantages and as well as some disadvantage too. People in partnership can share their idea, business strategy and divide the workload among them. This helps to raise the capital needed for the business. For example, a group of people create a contain writer group, somehow one of them get injured or have some illness, then the particular person's workload can be divided by other writers. Partnership business contains a multiple calculate issue, like the total profit, is going to be shared among the total employees and who are going to gain a required amount as they work, this issue can generate a real-time problem in this business. However, the only disadvantage is that the internal conflict between the partners, which may harm the company. Thus starting Partnership business, one should have an out an out believe and confidence in their partner.

Companies: The Company should hold by the investor where the administrator of the organisation gives the direction of the business. The initial decision made by the chief supervisory officer of that company and a specialist group of the member will be assigned to run the company in support of the chief executive board. The shareholders put fund into a particular company to buy its share and invest it into share market to increase the amount of profit. Limited responsibility plays a role in protecting the company's shareholders. Every company should be registered with the company house and should contain an official address; nowadays it is mandatory for any company to hold its domain and official website because now most of the business deals occur in online platforms. The limited type of company has Ltd logo after their name. Ltd means the company is smaller than the privet companies. In private company, share can only be bought and sold with permission of the boards of directors of this company hence it is clear that the shareholders have fewer controls in the percentage in comparison to the boards of directors.

Franchising: Organizations made massive part of retail seals today which operating under the guidance of franchise like Subway's which now create its big franchise all over the world. It's become more and more famous and gain more popularity among the people involving the business world. Franchising maintains a particular business strategy, actually its use the brand names of the different company which is already famous. A franchise gives the authorisation to sell a product and trade under a particular area. The company selling the franchise is called franchisor and a person compensate for the franchise is called franchises. The franchise makes its benefit under a well-known brand or company and benefits from a local monopoly selling. Usually, franchisor provided the needed training. Most of the profits are taken by the franchise people.

Charity Organization: The charity Organization runs by publically or privately, and it is a nonprofit trust. Charities are mostly centred on some particular religion, social activates, related educational matters. Depending upon the location, all the legal issues are decided, and tax purpose settled. As stated it is a nonprofit organisation, but due to some unwanted authorisation, the charity makes the profit from the market. However, most of the charity funds run their charity to prevent lousy culture in society and improve the educational system in India. A good religion society can help to establish a charity organisation (Businesscasestudies.co.uk, 2018).

P2: The size and scope of a range of different types of organisation:

Sole Trader: According to the business market it is a small business to create self-employment which means the single trader business helps once to organise its work. Thus the person has not to go outside looking for another job. The company makes a country economically strong and gives partial freedom from depending on other countries. The sole trader can be provided with a duty to private individuals as well as a big company. Having a simple structure of the organiser, industrialist brings its capital. The entrepreneur is only responsible for the company's success as well as its failure.

Companies: The Company is an organisation, may contain a large number of shareholders. In these companies, every shareholder invests a particular amount of share into the market. The investment amount may be depended on various factors, as it depends on the company's exposure, how big the company is, the number of the investor in that particular company and how big its product market. Above all the mention factors, the investment money fluctuate.

Franchise: Franchise is work as a medium between the customers and the leading company or the leading brand. It is a system where an investor can distribute majors companies product like, for Coca-Cola Company, all its products distribute by a franchise to the ordinary people, but franchise distributes companies products in a substantial amount. In the U.S.A franchise is the leading economic powerhouse and spared all over America. One of the ten retail businessmen is work as a franchise, and almost eight million people work for them.

Start-Up: As the business is now developing and yet to become a significant market value, it has a limited scope and opportunities for people. It is nothing but to create an own business. If one has individual thinking ability and proper market strategy, have success in this business and make a lot amount of profit better than other company. Also Patience and continuously investment required for this business.

Charity: It is a type of nonprofit organisation, which runs from charitable funds given by others and government. Mainly it often depends on donation, if someone interest to help and solve the social causes, then it is recommended to those people (Wong, 2014). However, profit from the market is almost nil, but sometimes government gives that a particular charity a recognition that could help individual only.

Partnership Business: The business runs by two or multiple people, and in such activity, the partners have unlimited freedom from the debates incurred by the businessman and more responsibilities. The three most profit full partnership is the limited partnership, general partnership and limited liability partnership. In this business important decision takes by all the partners. As this business is running in small size, the business structure is the straightforward and less complicated procedure.

LO2:

P3: The relationship between different organisational functions and how they link to corporate objectives and structure:

For maintaining a proper balance and effectiveness, it is mandatory for any market to have separate stream such as production management, seals, marketing and development in a particular organisation. Being retail-based organisation most of the company has the various department for its business like for marketing, promotion, management, IT department and many more (Shaikh, 2016). All of that business-related function helps them to maintain their balance sheet and improve in a market by earning more amount of profit. It is also essential to establish a relationship between their function to survive in the market. Nowadays all those monition organisations linked up to the other organisation. For example, to promote a product a company needs the help of charity trustees to build a right image about its brand as well as its product and the charity helps to a particular brand for earning an amount of money regarding donation. Logically all the different organisation is connected with each other with a unique bond, and none of them can progress without each other. Every organisation must undertake six essential factors to increase its sells their product in the market. Here the vital functions are given below:

  • Design and Production: For presentencing and selling a particular type of product, it must promote good and looks good from customer's point of view. The design and production attract customers for the products.
  • Finance: A particular amount of amount should invest in every product. The amount, which is funded, entirely depends upon the product and its trend. So required amount of money should be financed as its necessary.
  • Human Resource: The head of all departments is the Human Resource management. It is the only crucial factor for running a business, for that every company have this department. HR department controls investment procedure, and employees workshop maintains the quality of the product and retail demand for the product in the market.
  • Sales and Marketing: Sales and marketing team looks after company’s every investment and seals report of product. It promotes every product through online as well as offline process, brings the investor to the company for product investment.
  • Administration: This department helps to bring the company's image in front of the public. They organise various types of social arrangements to promote socials causes. The primary responsibility is to convey the issue related to employees to the managers.
  • Research and Development: Day by day the market demands are increasing rapidly. To compete against other companies and survive to the market, for a company it is necessary to build an active research group. It helps to use the new technology for developing a better product or inventing a new product for the customer.

Every corporation has to work together because they all have the same aims, objectives and goal for future progression. All employees have to work together and share the workload between them, share the ideas and creativity. Thus with the help of such employees, a company reach the top of the success. To begin with, this type of communication system is the creation of a clear set of company's goal and objectives (Pine, 2009). These objectives need to be broken down further into more specific objectives for each function. It's a daily basis observation that how each service is performing against its target and also see that how the company is playing against its overall goals. It ensures that the employees and the company flow in the same direction. For example, to create a nice laptop, every employee first researchers about the new model of its processor and what is trending in the market about a computer and what is the model which is paid with maximum attention. As intended by Norton (2015), Human Resource should regard as with the investment department of the organisation and with the management system. Sales and marketing department should consider the new product future with the great modern feature, and research and development team should maintain a completive nature throughout the market, giving a new product every year.

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LO3:

P3: The positive and negative impacts the macro environment has on business operations, supported by specific examples:

Before discussing the positive and negative effects, everyone should have the information about the macro environment. To describe the elements of the macro environment in business management, acronym pestle is the perfect word for it. For further discussion, some points are highlighted is mention below:

Economic impact: Perhaps many of other concern, Environment is one of the most major manipulate business decision, especially in economically developing countries that are lying on your front to sudden and trivial economic shocks from external sources. According to the view of Leong (2015), the business can be affected directly by some of the different economic changes like interest rate changes significantly in a company that has a loan of a considerable amount. The company is very much depended from the financial condition for example if the bank interest is changed and comes down to a low percentage then it is easy for any investor to invest in the market as a considerable amount and with most of them is going to take alone from various banks. It means that less unemployed people and maximum tax paid from the business and also from the employees. However, the same thing happened if the bank interest is increased. Then fewer amounts will be invested in the market, and nothing will get paid from the business.

Political impact: In this topic, legal matters are not discussed but can consider some technical issue faced by the market. Other than local political parties and foreign activates, here the researcher consider some other political related organisation like various type of NGO's and individual groups that put on a force on the government to change a particular policy. It is also thinking about the different government policy, attitudes and plan towards economic development in the country over a long-term period (Klusmeier, 2017).

Technological impact: In today's lifestyle technology grab human's maximum time, everybody knows that the technology has a significant influence in all human life, and also it influenced the way in which business connect with their customer. Technology is one of the essential factors regarding today's business world like the human can see the technology become a part of daily human life as the day increasing. Technology reduces the human resources and decries the employee's number and save company's profit. Many consider it is a disadvantage of modern technology, but from the business point of view, it is an advantage for companies as because of these technologies companies are saving a tremendous amount of salary. For example, in Barclays, simple operations are done by the robotic and machines. As opined by Kaplan (2011), the modern new technology can do so many thinks for it that sometimes human's are not enough for those machines. In fact, the rise of internet system changes the way of many businesses delivers technique their product to the customer like nowadays most of the business deals occur in the social media platform. There are many businesses which are only depending on the internet system and all the finance calculation made on the internet. In this modern era, one should consider on the technology which has direct contact on business. Possibly in the way, it assembles its product. In the level of competition that could beat much other business organisation which fails to cope up with this new technologies.

Legal impact: This subject is similar to the previous topic that is political environment, which is already discussed earlier but here the question is bounded into only legal issue only. However, the primary factor recognizes the fundamental upcoming legal problems towards all the business association (Hilton, 2013). This would change existing legislation to new legislation which is going to help to establish new business with a little bit ease. In short that, change in this environment would have a straight impact on this business.

Ecological impact: There are two main factors in this environment. First, all the environmental issues have to be considered although it doesn't affect by this apprehension. However in this portion, one should notice that the ecological impact of the business operation, finding the negative public impression can have a substantial effect on the business reputation and most importantly the sales department. Thus the net revenue from the market is decreeing. Secondly, the business treats physical environmental not in the ecological stage but in the way in which trouble and noise are diminished. As said by Hellman (2010), in this environment the company was growing up exponentially and that why it can attract the investors and make an investment. In this way, the whole business chain proceeds successfully and will reach the top of the earnings shortly. In distasteful environmental circumstance once should invest in business carefully like that one can observe lower stand-in of growing of the company. The result of the final activity is lower than the political environment. Financial organisation markets and banks are affected hardly by the political situation. They are the primary factor in the investment process.

Social: In this environmental case business border market will be considered that is the changing attitudes and values of customers and the people fashion that affects the way the market purchase the product and service. In a social environment, everything will depend upon the client's precedence. Depends on that how much a customer is going to spend or how much the customer will save money. If the company has a better image in front of people or if the company promotes various social events, then it is said that the chances are high for people to buy the company’s products (Harrington, 2016). As much as the customer is open mind the better opportunity for the company for producing many new things in the market. Also, the result will be higher and better if the producer has all the information regarding the business.

LO4: Conduct internal and external analysis of specific organisations to identify strengths and weaknesses:

A report is a tool for determining the domestic as well as external faults for any business. Every company should conduct its survey to rectify its weakness and strength as well as external opportunities regarding the company. As opined by Fornell (2017), one can use this result to plan a proper business planning and try to achieve its goal. Some points mention below:

  • Decide the primary objectives of analysis: to get a net result from a survey one should have a particular aim at a very early stage.
  • Research business industry and market: Before begins the analysis one should do some research to understand the business, market and industry.
  • Measure Product Quality: In the analysis, one should check all its company's product to maintain its overall quality in the market.
  • List business strength: The analysis should rectify all the business strength and also should recommence to apply at the in the right place
  • List of business weakness: It is the most important duty to analyse the company's vulnerability. As intended by Farkas (2015), once identify all the weakness the management of the company should work on it in no time. Weakness could include the absence of new product in the market, bad quality of the product, a lack of intellectual property, staff absenteeism and many more.
  • List potential opportunities for business: these are not the same once the internal strength and it may not be adequately defined. An opportunity for one portion of a company could be a pleasure to be an additional one employee (Eid, 2014). Openings could contain new training programme, new technology, partnership, change of government and diverse culture.
  • Potential threats towards business: list external factors from various sources that could be a threat or trouble for business.

These are the primary factor should be taken into consideration while performing a new analysis.

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P5: Strengths and Weaknesses interrelate with external macro factors:

If one organisation believes to its employees to get better something into their activates, then it is compulsory to make threats with the association with success in the similar business. For example, Nvidia Graphics Company should increase its sells and marketing figure considering that Intel has a significant market in the U.S.A. Nvidia can have a good option for their business model.

SWOT Analysis:

Strengths: With the help of external macro factors, which is uncontrollable and cannot be changed by the decision maker of any organization, sometime helps with promoting their own strategy. Due to that, most of the time an organization can get a lime light for the new customers. According to that a pseudo promotional process can implement.

Weakness: As these external factors cannot be manipulated by any management of the organization, thus, a bad image of the organization can be created. Apart that, natural calamity also can take place to reduce the profit of any organization.

Opportunity: As intended by Duray (2015), customer retention and promotion is one of the most important factors for every organization to develop their business. On that case with the help of several Macro factors it can be implemented.

Threats: Nowadays, political involvement is one the most important Macro factor in Business Management subject. To get rid of different types of threats, management should maintain a good relation with the administrator of jurisdiction.

Conclusion:

The above argument finally concludes that every company can achieve the dynamic stability and sustainability if they contain and follow an organisational business plan. However, the effective corporate policy and strategy fail to provide a competitive environment with an advantage. To develop strength efficient strategy should be in consideration and also give equal importance in company's weakness, faults, threats and opportunities (Aguilar, 2017). Different macro and micro environmental factors also affect the organisation performance and lower down its morality. For achieving the final stability and build a solid foundation in the market, the micro and macro factors should be taken into consideration from now. Along with that effective strategy should be developed so that it could able to beat the adverse effects of those factors and minimised as much as possible. Hence chances to accept different external opportunities may be increased in future.

References:

  • Aguilar, J. (2017) Scanning the Business Environment. Macmillan, PP- 859-863
  • Buchholz, R. (2016) Business and its Environment, 5th ed. Plymouth: Alta Mira Press, PP- 363
  • Duray, R. (2015) Business environment, operation strategy 3rd ed. New York: Oxford University Press, pp- 529
  • Eid, R. (2014) Managing Staffs trust, satisfaction, and loyalty through information communication technologies Hershey, PA: Information Science Reference, PP- 541-546
  • Farkas, V. (2015) Employee and Employer relations New York: Nova Science Publishers, PP- 12-19
  • Fornell, C. (2017) “Management Relationship and Satisfaction with employees” International Journal of Relationship Marketing and Management, 2(1), pp.19-35
  • Harrington, H. (2016) Streamlined process improvement New York: McGraw-Hill. PP- 1028-1059
  • Hellman, J. (2010) How firms and bureaucrats shape the Business Environment Hoboken: Wiley, PP- 548
  • Hilton, R (2013) Managerial accounting: creating value in a dynamic business environment, 1st ed. Bingley: Emerald Group Publishing Ltd, PP-545
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