Unit 1 Assignment on Business environment

Assignment on Business environment

Unit 1 Assignment on Business environment


Diploma in Business

Unit Number and Title

Unit 1 – Business Environment

QFC Level

Level 5


Business environment refers to the business surroundings and include the factors which affects the business. The business environment is the internal as well as the external factors of the companies which affects the functions and the operations of the business. These factors include the employees, customers, managers, supply and demand. Some of the government decisions affect the business.

In this Unit 1 Assignment on Business environment the different organizational environment and the different organizational structure and their impact are discussed. The aim of this assignment is to understand the organizational structures of different organizations and the environment implications and influence of these on the business functions and the structure.

Unit 1 business environment - HND Help

The various advantages and disadvantages of the interrelationships of the organizational functions of the above mentioned organization are discussed below.

Interrelationships of the organizational functions: Interrelationship means the relationship of the functions of the organization and their dependency on achieving the different aims of the organization. The organizations have different departments and these departments have different functions. The functions of the organization together complete the targets and achieve the organizational objectives. The functions and the operations of the organization are interdependent on each other and the chain of command and the chain of responsibility provides the relationship of the organizational functions (Cai, et.al, 2011).

The Arcadia group is the retail clothing company which includes the different activities or the functions of the business organizations. The organization has the marketing, sales, finance and human resource activity which are to be maintained in accordance to achieve the maximum objectives of the organizations. The various advantages of the relationship between the organizational functions are:

  • Staffs are maintained by the different functions according to their speciality and the different functions helps to increase the managerial skills and efficiency of the work.
  • The company expertise in managing the different activities together and the relationship between the functions helps to provide the better understanding of the functions.
  • Employees get the chance to work with others and to understand the different job roles which enhance the skills of the employees (Cai, et.al, 2011).

The various disadvantages of the relationship between the organizational functions are:

  • The complexity of the organizational structure can increase and the confusions regarding the job will be created.
  • The failure of one function or the operation will lead to its affects on the other functions too which will be a loss to the organization.
  • Misunderstanding or the misconception of the different departments and their functions can create the work stoppage or the hurdles in the functions of the organization.

Impact of the organizational functions on the organizational functions:

The organizational structure is the design of the organizational departments and the organizational functions. The organizational structure gets affected by the organizational functions (Song & Singh, 2013).

The organizational structure includes of the different departments of the organization and the different departments of the organization are allotted with the different functions which are motivated towards the achievement of the organizational objectives. The different departments have the various different goals or the aims to achieve. If the one task and the objective are not achieved by the organization department it will affect the whole organization. The structure of the business is designed in a manner to interact within the organizational structure and if any one department fails in the accomplishment of the objectives than the whole organization suffers as they rely on each other. The dependency of the different functions on the organization has the various effects on the organizational structure (Song & Singh, 2013).

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Section 1

(a)The organization chosen is the Arcadia Group which is the retail business of the clothing and the profit organization of UK. The different macro environmental factors impact the organization and the organizational operations or the functions. The various factors affects the organizations are:

  1. Political- Political impact on the organization or the business is the factor which is related with the political situation of the country. The positive impact of the political factor is that they provide the promotions to the business. And the negative impact of the political factor is that they create the stressed and the intense environment that the business opportunities to grow declines.
  2. Economical- Economical factor have the crucial impact on the organizations. The negative impact of the economical factors are that the higher inflation rates increases the price of the products and the deflation lower down the profits of the business which affects the organization operations. The positive impact of the economical factors are that they provide the demand and supply analyse to the business which can be controlled.
  3. Socio-cultural- The socio-cultural factors are those which affects the organization so much. Being the clothing company the Arcadia Group has the affect of the social and cultural background of the country because the company needs to design the products according to the customer’s cultural background and the social background. The organization needs to be very specific in maintaining the cultural values through their products and the vales of the people should not be hurt by the organization to run effectively (Hedin, et.al,  2014).
  4. Environmental- The environmental factors are the SWOT of the company. The strength, weakness, opportunities and the threats of the organization are the important factors which affects the organization. The organization for better performance and the better position in the business should have a proper analysis of the organization and the strength, weaknesses and opportunities, threats of the organization. This helps to understand the factors that can affect the organization and to cover the aspects and take measures to cope up with these factors.
  5. Legal- Legal factors are the legal implications of the government that it puts on the country and the business operating in that country gets affected. The tax laws, the import and export policies, the international trade laws and the different laws related with the business or the organization which affect it are the legal factors.
  6. Ethical- Ethical factors are the factor which affects the organization includes the business ethics. The ethics that the business should maintain are the environment and its protection. The business should have the effective customer satisfaction (Hedin, et.al,  2014).


SWOT analysis is the examination and the assessment of the strength, weakness, opportunities and threats. The SWOT analysis is the assessment of the internal and external factors of the organization which have the influence on the organization and can affect the organization. The SWOT analysis is the factors which plays the positive role if analysed or assessed by the organization. The organizational strength, its weakness, the upcoming opportunities it has and the treats which can affect the organization in future is the SWOT analysis of the organization. The SWOT helps the organization to identify the factors which affect the organization and to find out the strength, weaknesses and the opportunities as well as threats of the organization (OANA & MARIOARA, 2014). The Arcadia group had the SWOT analysis and resulted in:

Strength- The strength refers to the advantageous factor of the organization which can affect the organization in a way that the positive aspects of the organization can be identified. The Arcadia group produces clothes for the women, men and the kids. The strength for the Arcadia group is that it can provide the epic own designs of the products to attract more and more customers. The designs and the quality of the company products are the strength for the company.

Weakness- Weakness is the negative aspect of the company which can affect the company operations and profits adversely. The weakness of the Arcadia group is that it has less no of employees or the staff in compare with the stores which affects the company’s achievement level of the objectives. The prices are also the factors which affect the company (OANA & MARIOARA, 2014).


The external macro factors are the political, economical, social, environmental, technological and legal. The company’s strengths get affected by these factors as these factors are considered non controllable and the political implications or the legal factor or the technological changes affects the organization and its operations and the strengths such as its quality and variety gets affected by this as well as the weakness of the organization such as the employees and others get affected by such implications (OANA & MARIOARA, 2014).


External analysis

  • Political- The political factors are the political situation of the country which has the political implications on the businesses of the country. The political parties and their opinions regarding the business and the different types of democracy of the country affect the organizations of the country. The positive impact of the political factor is that they provide the promotions to the business.
  • Economical- The economical factor of the organization are the demand and the supply of the country, the competitors and the environments of the different policies such as fiscal policy, monetary policy are included in the economical environment, the inflation and the deflation rates and the interest rates of the country. The economical factor affects the organization operations negatively as well as positively.
  • Social- T he socio-cultural factors are the social and cultural background of the country and its people. The social background and the cultural values of the country affect the organization operations (Campbell, et.al, 2014).
  • Technological- The technological factors are the factors those which are related with the technologies and the techniques. The organization is affected by the new technologies in the market and the various new techniques to conduct function.
  • Legal- The legal factors are the laws and the rules the government decide to imply on the country and the business. The laws of the country and the legal implications of the organization affect the organizational operations and the functions.
  • Ethical- Ethical factors are the factors which affects includes the business ethics and the values which affects the organization and its operations very much. The ethics that the business should maintain are the environment and its protection (Campbell, et.al, 2014).

Internal analysis

  • Strength- Strength is the factors of the organization which can give the benefit to the organization. The strength of the organization affects the organization in a positive way.
  • Weakness- Weakness is the negative factors of the organization. The weakness is the factor which affects the organization adversely and has the worse impact on the operations of the organization.
  • Opportunities- The opportunities for the companies are that they have the vast exploring place of the world where they can setup their brand and provide their products to the customers all over the world or internationally.
  • Threats- Threats are the facts which the organization have to face in the world of competition and which can affect the organization. Any company operating its business in the market has the superior threat with their competitors and the same industry’s companies (Helms & Nixon, 2010).

Reflective essay

In my opinion the macro environment of the organization which is uncontrollable has the huge impact on the organization decisions. The macro factors such as the political as well as the legal implications, the economical and the technological are such factors which cannot be controlled by the organization. The decision making of the organization gets affected by the factors affecting the business. The organization should consider all the factors and the aspects which influence the business operations and the functions while making decision to have the proper analysis of the threats and the risks the organization can face in the coming future.

 As the above report has depicted the impact on the organization of these factors are very drastic and has a huge influence on the business. The political factors include political implications or the party’s conflicts which affects the organization in managing the operations of the business and the objective of the organization. The legal implications are the different laws such as international trade law, taxation policies, monetary policies, business laws of the country which affects the organization decisions related to the international business etc.  The technological factor is the aspect which is uncontrollable and has the influence on the organization (Campbell, et.al, 2014). The organization decisions get affected by the change in technology as the organization has to be upgraded to be in the first position in the market. The other factors such as the social, economical, environmental factors are also the factors affecting the business operations and the decision making of the organization. The business has to keep into consideration the values and the beliefs to serve the country and to respects such beliefs to gain the competitive advantage of the organization. The customers should be taken into confidence and should decide the strategies to grab the attention of the customers. The organization should also take care of the internals factors such as the strengths and the weaknesses as well as the opportunities and the threats of the country to gain the maximum benefit (Campbell, et.al, 2014).


By this report we can draw a conclusion that the business environment are consist of different factors which affects the organization and they are the political, economical, social, technological, legal and the environmental factors which affects the business operation as well  as the decisions of the organization. The organizational factors such as the strength, weakness, opportunities and threats of the organization affects the business in a manner to provide the adverse impact on the organization and its efforts.


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