Unit 01

Business and the Business Environment

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 Table of Contents
Introduction.................................................................................................................................................3
LO1..............................................................................................................................................................4
P1 Explain different types and purposes of organisations; public, private and voluntary sectors and
legal structures........................................................................................................................................4
P2 Explain the size and scope of a range of different types of organisations..........................................6
LO2............................................................................................................................................................10
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure................................................................................................10
LO3............................................................................................................................................................14
P4 Identify the positive and negative impacts the macro environment has upon business operations,
supported by specific examples.............................................................................................................14
LO4............................................................................................................................................................17
P5 Conduct internal and external analysis of specific organisations in order to identify strengths and
weaknesses............................................................................................................................................17
P6 Explain how strengths and weaknesses interrelate with external macro factors.............................19
Conclusion.................................................................................................................................................21
References:................................................................................................................................................22

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Introduction
This report is going to describe different business types and highlight their differentiation. At the
same time, some famous and well-established businesses will be a significant part of the entire
report which are of different types. Mi5 the public limited company (a security service) is well
concerned throughout this report. The factors of macro environment and different framework to
identify different initiatives are described based on different businesses and Mi5. The entire
concept of macro-environmental factors’ helping and affecting business will be uncovered.

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LO1
P1 Explain different types and purposes of organisations; public, private and
voluntary sectors and legal structures.
The main purpose of businesses’ is to earn profit by trading in a legal way. But the type may
vary. There are many kinds of organizations with many different purposes. They hold unique
structures and different legislations to continue the workability.

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Sole Trader:
It is that kind of business or proprietorship that is owned, operated, performed by only one
individual who is liable for all the liabilities and able to take all the profit. This kind of business
is often started small in the beginning. It is also the easiest type of businesses. Sole proprietors
do not need to go through any registration process or act of law. But they may need trade license
to help their businesses go on. eBay is one of the successful examples of sole proprietorship
Purpose: The main purpose is to get the advantages of this form of business. It gives one
complete control on his work. The profit is all owners even after knowing that he took all the
liabilities. Avoiding some official necessities and having no trouble of registration are also
concerned (Kessler and Leong, 2012).

Figure: Different Types of Business

Source: Self

Partnership:
when some acknowledged persons will to come to an agreement with an intention to divide the
earned profit among themselves in a legal way, it is called a partnership business. It is directly a

Sole Proprietorship:
eBay

Franchise: Partnership:
McDonald’s Microsoft
Different Types
of Business

Charity: United Companies: Mi5

Way (Public)

legal relationship that is based on the contract. The partners are also divided in many kinds. This
changes their duties, liabilities and risk. Microsoft can be one significant example that founded
by Bill Gates and Paul Allen (Tayeb, 2013).
Purpose: The target was to bring all those advantages that sole proprietorship businesses cannot
bring. One of them is increasing the amount of capital. For the only one person of a one man

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business it is not possible to keep increasing the capital or quickly expanding the boundaries of
the business. In partnership business, partners are many in number and they all can invest
enough. Also, the partnership business has no many legal laws. But if the business is registered,
it can get some additional facilities.

Companies:
Companies are based upon the company act of the state they belong to, with the idea of
converting the each part of capital into shares. These shares are distributable to all those
individuals who are willing to be shareholders. There can be two types of companies (Parker,
2012).

1. Public Limited Companies: Public ltd companies can sell their shares to any market.
These companies has no limit for the membership. Mi5 is a public security service of the
United Kingdom..
2. Private limited companies: This company’s membership is limited by 50 members. They
cannot sell shares to anyone or to the public stock exchange.

Purpose: A company’s purpose is beyond the inabilities of partnership businesses. It can have a
huge amount of capital that can be brought by the shares. The share numbers can be manipulated
and changed. It will bring the company a big percentage of profit. Mi5 is determined to ensure
100% security of the individual State

Charity:
United Way, It is of non-profit organizations who do not keep a target to earn profit. They prefer
more efforts and provide help and fund. It is kind of voluntary to help people through money
(Pearse, 2011).
Purpose: It is clear that it has no main intention to create more profitability like other
businesses. Charity works for poor people and they are 100% devoted to showing limitless
kindness.

Franchise:
McDonald’s is an American franchise. Franchisee holds the right to use the identity of another
settle and well-known business and work as a representative under the franchising business
concept. They can have the right to use the name but franchisee has some limitations over his

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operations. They cannot sell whatever they want. The franchisor will give a guideline and list
some determined products which can only be sold by them (Gent, 2011).
Purpose: The purpose is to earn more using a famous name. Maybe the franchisee of an Asian
country can work for a European brand that has demand as Asian people want their products
madly. In this situation, it is a must-catching chance for the franchisee to keep using the name
and earning profit at the same time.

P2 Explain the size and scope of a range of different types of organisations.

Organizations defer to their size, spreading and chances according to their types. Different
organizations maintain different situations and structures which brings different opportunities
too.
High

Keep Satisfied Manage Closely

Power

Monitor Keep Informed

Low

Figure: Stakeholders Map

Source: Self

Organizations of all types follow Low

up the stakeholders
Interest map,
High and put them according to their

high/low interest and power.

eBay: Founder Pierre Omidyar programmed a personal site which is eBay today. It was also the
first site where person to person trading was allowed. The product it sold was a broken laser
pointer. The first employee hired by eBay was Chris Agarpao who used to check the mails.
Today eBay sells almost every kind of product including electronics, fashion and beauty
products, motors etc. Its Target is to give a global online-based trading platform.

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Internal Stakeholders:

 Employees

External Stakeholders:

 Investors
 Entrepreneurs (most prioritized)
 Environment
 Consumers

Microsoft: Microsoft is a well-known result of partnership businesses. Its target is to help people
and other businesses all around the world. It is a multinational technology company. They keep
144,106 employees in their organization. The to be mentioned products of Microsoft are Internet
Explorer, Microsoft Office, Xbox 360, Visual Studio, MS-DOS, Bing, Microsoft Solitaire and so
on.

Internal Stakeholders:

 Employees

External Stakeholders:

 Customers (most prioritized)

 Communities
 Governments
 Investors

Mi5: It is a well-known security service (Military Intelligence, Section 5) that has been formed
in 1909 in the United Kingdom. The agency executive is Andrew Parker who is also the director
general of this company. They work against the crime and terrorist attacks.

Internal Stakeholders:

 Employees (most prioritized)

 Directors

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External Stakeholders:

 Agencies
 Environment

United Way: This charity program was founded in 1887. It keeps assets of 103,2 million US
dollars. This charity fights for all three purposes to accomplish; Health, education and financial
support for each person from each community. Its range expanded to almost 1800 communities.

Internal Stakeholders:

 Employees
 Volunteers

External Stakeholder:

 Community
 Donors
 Non-profit organizations
 Corporations

McDonald’s: It is an American fast food company which was formed in 1940 as a restaurant. It
has 37,855 franchisees around the world having a total revenue of 21,025 billion US dollars.
They have different named food menu; Big Mac, World Famous Fries, Egg McMuffin, Mocha
Frappe and so many different named items.

Internal stakeholder:

 Employees (most prioritized)

External Stakeholders:

 Communities
 Customers
 Investors

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The mentioned above businesses have some vision, mission, and individual motives. As they are
different by the structure, they do business in different concepts. These individualities are
described through a table chart.

Organization’s Vision Mission Objectives/Strategies

Name
eBay One that is enabled by people, Giving sellers Acquisition, activation and activity
powered by technology, and platform and building
open to everyone communities around
world
Microsoft The development of the Empower every Provide a structure through which
business toward a desired future person and management and the Board set
condition organization on the objectives and monitor
earth to achieve more performance and strengthen and
safeguard our culture of business
integrity and responsible business
practices
Mi5 Committed to keeping the To keep country safe Ensure investigative powers are
country safe only used where it is necessary and
proportionate to do so
United Way A community where all Improving lives by The nation to tackle: working to
individuals and families achieve mobilizing the caring boost youth graduating from high
their human potential through power of our school on-time, to improve
education, financial stability community to advance working families' financial
and healthy lives the common good stability, and to keep Americans
healthy and avoiding risky
behavior
McDonald’s To be the world's best quick To be our customers' To serve good food in a friendly
service restaurant experience favorite place and way and fun environment, to be a
to eat and drink. socially responsible company, and
to provide good returns to its
shareholders

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LO2

P3 Explain the relationship between different organisational functions and how they
link to organisational objectives and structure.

The organization that had been chosen is Mi5 which is a security service founded in London.
Almost 330 staff are currently working in this agency including other government departments
and agencies. Their work includes investigations, languages, technology, surveillance,
information, administration, communications, protective security, catering and so on.

Threat levels:
Threat levels are well designed with an intention to provide broad indication of a terrorist attack.
They have 5 remarks to describe,

Low Moderate

Substantial Severe Critical

Figure: Threat Levels

Source: Self

Here, low means the attack is highly unlikely, moderate indicates that an attack is possible, but
not necessarily, substantial is indicating that an attack is likely. Lastly, severe means the highly
likely of the substantial level and critical shows remarks that an attack is highly likely and can
come in the near future.

Organizational Structure:
The organizational structure of Mi5 starts from the director general, Andrew Parker (current).
His duties are,

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  Mi5’s efficiency and operations
 Making annual reports and to the Prime Minister and Home Secretary
 Ensuring the political impartiality
 Ensuring the obtaining and disclosing of information only according to the statutory
responsibilities

JOINT TERRORISM DIRECTOR GENERAL CENTRE FOR THE

ANALYSIS CENTRE Corporate direction, PROTECTION OF
(JTAC) leardership and NATIONAL
Reports to DG accountability INFRASTRUSTURE
(CPNI) Reports to DG

DEPUTY DIRECTOR DIRECTOR

DIRECTOR GENERAL GENERAL LEGAL ADVISORS
GENERAL CAPABILITY STRATEGY

INTERNATIONAL TECHNICAL
COUNTER- ETHICS AND
OPERATIONS AND
TERRORISM SURVEILLANCE REVIEW

NORTHERN IRELAND
COUNTER- FINCANCE AND
ANALYSIS
TERRORISM STRATEGY

CYBER, COUNTER-
ESPIONAGE AND PEOPLE AND
COUNTER-
TECHNOLOGY
SECURITY
PROLIFERATION

INFORMATION

Figure: Organizational Structure

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 Source: Self

Then generally come deputy director general, director general capability, director general
strategy and legal advisors level from the DG of Mi5.
Three categories come from the first three subsidiary of second level which are international
counter- terrorism, technical operations and surveillance, and ethics and review. International
counter- terrorism leads to Northern Ireland counter-terrorism, and cyber, counterespionage and
counter-proliferation. Technical operations and surveillance leads to analysis and technology,
and then information at the last stage. Ethics and review leads to finance and strategy, and people
and security.
This structure helps the organization meet the desired goal through complete distributed and
leveled working sectors. The individual of a certain level is concerned about his or her position
and maintains everything that belongs to the duties he or she had been referred to perform. No
one interrupts in other’s workability and does own job, which makes senses about a perfectly
balanced and well-arranged structure for an organization.

Embracing Diversity:
Mi5 keeps some unique thoughts to bring diversities. They acclaim that the workforce is their
biggest asset. They give maximum efforts to keep the state safe and it seems a challenge to them.
So, it is important to bring diversities and proper workplace offering. Also, rewarding workforce
and gathering more challenging careers for all of them are also well concerned. Mi5 is the Gold
Sponsors of the National Diversity Awards.

Management Functions:
The management functions are well adapted by Mi5 to work with more efficiency. The functions
of management are well accepted by this kind of organization and it is obvious to ensure their
usage on the management process of a business (Organizational functions, 2014).

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 Planning

Controlling Organizing

Directing Staffing

Figure: Management Functions

Source: Self

Planning: Organizations plan as they need a prepared idea of what they are going to do. The
goals are set in this process. Mi5 had set their goal and work for its reach. They previously took
attempt to gather idea that what are they going to accomplish.

Organizing: Organizing includes distributing resources and using them as less as possible while
bringing maximum result. Mi5 also follows this step. They ensure proper distribution and usage
of the resources and divides them to the workforce. Each department manages each duty
(Bonneville, 2013).

Staffing: Staffing includes resizing, cutting, training work force. The workability of workforce
becomes raised and groomed through this level.

Directing: Proper direction leads to proper outcome. Mi5’s directors direct the organization
properly. Their direction to different levels of employees help them understand their work,
motivate them and inspire them to bring more effectiveness (Cobin, 2015).

Controlling: The proper control is from the top of the structure. Leaders control the business,
they monitor works, find lacking and bring the best solution for the issue.

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LO3

P4 Identify the positive and negative impacts the macro environment has upon
business operations, supported by specific examples.
Macro environment exists in the economy as the whole, it does not exist in a particular region.
The main external factors which are uncontrollable that influence the organizations’ decision
making, performance and strategies are named macro environment all together. It cannot be
often changed within the near future as this environment is uncontrollable.

PESTLE Analysis:
This analysis is a framework that is used to scan an organization’s macro environment. PESTLE
identifies different factors of macro environment and each of the letters stands for it. PESTLE is
analyzed below (Marmol, Feys and Probert, 2015).

Political

Technolog
Economic
ical

PESTLE
Environm
social
ental

Legal

Figure: PESTLE

Source: Self

Political: Political factors include Government type and policy, funding, grants and initiatives.
These factors are about what degree the govt. intervenes in a certain organization or the entire
economy.

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Economic: The factors of this kind are determinants of an economic performance. This kind of
factors are inflation and interest rates, labor, and energy costs. It affects the process companies
apply to do pricing of the products.

Social: Social factors are population, education, media, lifestyle, fashion and culture. This also
include trends like population growth rate and cultural barriers.

Legal: Legal factors mean the regulations, standards and employment laws. It can often be
related to the political factors. The constitution of a state imposes these legislations for a
business.

Environment: Thinking about the environmental chances and warnings is also necessary. The
resources are mostly collected from the environment. The impact on it is to be recognized that
industries put. It can be assumed that what are the environment factors; Weather, ethical issues,
pollution, recycling the waste etc.

Technological: Technologies are always important for a business. As newer and newer
inventions are being invented in today’s world, an organization needs to adapt the newer
discoveries. As a result, to compete properly in this era, this adaption cannot be avoided at all.
Technological factors are web, emerging technologies, IT, communication and this kind of
inventions.

Positive and Negative sight of PESTLE:

PASTLE has both positive and negative influences. Though the importance of PESTLE cannot
be denied, the disadvantages are often faced by the organizations.

Positive Influences Negative Influences

1 The cost-effectiveness is determined by 1. Some changes are difficult to
. PESTLE analysis. collaborate. As a result, it has been tough
for the management to anticipate
development that affects the growth of
the organization.
2 PESTLE leads to one step advanced 2. Sometimes, PESTLE analysis is no
. deeper understanding. comprehensive and sufficient.
3 Alertness development is necessary for an 3. The apply of PESTLE analysis is costly

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 . organization which can be possible and time-consuming too.
following PESTLE.
4 PESTLE includes the assessment of 4. It has some limitations. The limited
. opportunities and macro environmental information is not enough for the whole
threats. idea as PESTLE works with only the
macro environmental factors.

PESTLE in Today’s Time:

There can be many examples of the usage of PESTLE. Brexit, which refers to the votes by UK to
leave EU, was held in 2016 which is granted as one of the most important events of that year.
The potential consequences had been analyzed through the PESTLE framework. The solution
that hade been found by the analyses was economic and political cooperation between the two
regions.
PESTLE is also more likely an analytical tool. The E of PESTLE, saying broadly, the economic
factors of this framework help work with the interest rates often (European environment outlook,
2016).

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LO4

P5 Conduct internal and external analysis of specific organisations in order to

identify strengths and weaknesses.
MI5 is one of the most powerful leading Security Services in the UK. MI5’s main work is related
to recognize and taking actions against extremism which also International terrorism, Northern
Ireland- related terrorism, domestic extremism and countering terrorism.

The SWOT analysis carries out a lot of things that cannot be done through other processes.
SWOT has both positive and negative concerns about an organization. Throughout this analysis,
it would be a conduct of internal and external analysis for Mi5 also.

Figure: SWOT Analysis

Source: https://www.wordstream.com/blog/ws/2017/12/20/swot-analysis

Strengths: Strengths can be a strong brand and strong financial statements, loyal and stable
customers, unique technologies (Huntsman International SWOT Analysis, 2013).

 Things the company does good

 Comparative qualities that separates the one from others

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  Acknowledged and skilled workforce

 Intellectual properties, capital

Weaknesses: It stops the organization to perform at an optimum stage. Weaknesses from SWOT
can be identified also.

 Things the company has lacking in

 Things the competitors are doing better than the one

 Limited resources

 Unclear technologies that brings inabilities

Opportunities:

 Underserve target markets for individual good

 A small number of competitors around organizational area
 Needs to be emerged for services or goods
 Media coverage of the company

Threats:

 Emerging the competitors

 The change of regulatory environments
 Media coverage in a bad prospect
 Changing attitudes of customers

Mi5 uses some principle techniques to gather the right information on the right time, which we
will be describing below-

1. The agents they use are not MI5 employees and from reliable sources.

2. Very much directed surveillance which includes observing targets in the best of manners.

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3. Monitoring emails and phone calls.

4. Gathering information about “how & when” they were made and more details of those.

5. Bulk personal data and datasets of containing information about a large number of people.

6. Intrusive surveillance which includes adding or putting such devices in someone’s home or
car. Which can gather audio or video information.

7. Accessing computers or such devices to get information.

All the techniques that MI5 follows and uses are under the legal requirements established by the
SSA 1989 (Security Service Art), ISA 1994 (Intelligence Services Art), and RIPA (Regulation of
Investigatory Powers Act 2000). These high tech and strong agent source along with a huge
number of well qualified people is the main source of strength for MI5. Whenever they use
intrusive techniques to gather information, they always try to use the minimum way to get the
most effective result. They do not want to cross the line or do something which may cause
problems to other citizens.

Though they can use publicly available information for their purpose or to find out the problem,
they use secret intelligence to get better idea and knowledge.

The most effective power can harm them as well if they are not aware enough. It’s not simple or
easy to protect the UK from unnecessary involvements. MI5 is answerable for setting the threat
levels from Irish and other domestic terrorism in Northern Ireland and in Great Britain. They
must get information from sources which are very reliable and true to their words. MI5’s work
depends on the information they get, so this information can back fire as well. This is why both
MI5’s strength and weakness are their agents and source of information. Identifying these lack
by SWOT analysis and adapting the technique will be helpful for them.

P6 Explain how strengths and weaknesses interrelate with external macro factors.
The external macro-environmental factors have been described previously. At the same time,
SWOT analysis has also be done through the consequences. The strengths and weaknesses of the
SWOT analysis also interrelate with the factors of PESTLE, specially the economic factors
(Business environment, 2011).

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Economic Factors:
If Mi5 is facing financial troubles, it is a weakness for them. At the same time, PESTLE’s
economic factors are greatly affected by this situation. As economic factors include labor cost,
interest cost and other payments as well, financial weakness leads to the disabilities to perform
those expenses.
As a result, the company’s goal will not be met and their operations will not go through the path
they wanted. At the same time, investors will lose their interest to work with Mi5.

Political Factors:
The political instability, uncertainty and other circumstances can bring negative political
environment to a nation. So the lack of political suitability can be a weakness for Mi5. The threat
can come across the path that there can be a good chance for the terrorist to take this opportunity.
Therefore Mi5’s weakness can cost lives of thousand people.

Social Factors:
While everyone is living in the society, all of them have the right to choose their freedom staying
there. Cultural and religious differentiations can lead to violence among the people of different
casts. The massive attack by the rapidly growing community can be a unavoidable and
uncontrollable threat for the security agencies. Here the image and reputation of Mi5 will also be
a concerned that can be go downward in a single moment.

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Conclusion
The overview of business environment in accordance with some organizations has been well
described throughout the whole report. It also gives idea that, different situations come with
different perspective. But also with the accommodation and process of different analysis, way of
those problems can be solved if the company is well concerned about their success and lacking at
the same time. Mi5 did the same, and that is why it is one of the well operating organizations of
today’s time. Their motive and productivity are really appreciable. As a trainee business analyst
of the North West London Chamber of Commerce, I hope every business will go through the
observations to their environments and take all necessary steps including analysis to get the best
and reach the destination.

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References:
1. Bonneville, J. (2013). Organizing and financing business. Englewood Cliffs, N.J.:
Prentice-Hall.
2. Business environment. (2011). Oxford: Elsevier Science & Technology.
3. Cobin, F. (2015). A new concept of staff function in directing & controlling personnel
management. 1970.
4. European environment outlook. (2016). Copenhagen: European Environment Agency.
5. Gent, P. (2011). The franchise. New York: Open Road Media.
6. Huntsman International SWOT Analysis. (2013).
7. Kessler, M. and Leong, O. (2012). Becoming a sole trader. Potts Point, N.S.W.: NAVA.
8. Marmol, T., Feys, B. and Probert, C. (2015). PESTLE analysis. [Place of publication not
identified]: 50Minutes.
9. Organizational functions. (2014). [Harrisburg, Pa.]: Management Methods.
10. Parker, A. (2012). Company Business. Santa Monica, CA: MGM Home Entertainment.
11. Pearse, L. (2011). Charity. London: Arrow Books.
12. Tayeb, M. (2013). International business partnership. Basingstoke: Palgrave.

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