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Unit 1 Business and Business Environment Assignment Solution – IKEA
The present business environment is impacted by various aspects and also influences overall effectiveness of any organisational performance. This report will define various aspects related to the business environment that make impact on the overall effectiveness of an organisation. This report will define various aspects of business environment to develop an understanding about the ways that can effective for running business. There are explained business environment of different types of organisations like profit making and non- profit making companies and their process in which they operate their activities in effective way. The manner in which they take decisions in the organisation also defined in the report for different organisations.
This presentation will explain various aspects related the organisational structure and culture making impact on the overall organisational functions and objectives and also influence the values and size of the organisation. IKEA is profit making company established in the year 1943 and providing effective services in retailing of furniture and other products. Racial discrimination and its different aspects must be protested and actions must be taken for them. Video is made by Micheal Jackson ad Paul Mccartney who are defining that there exist unbelievable power in the people from minority communities which can make impact on their lives.There are different types of organisations and different business strategy that can make impact on functions and activities of the organisation. There are defined two companies and their business type’s one is non-profit making company working for social care and another is profit making company IKEA which is involved in furniture retailing and designing. Every organisation work for a purpose and these purpose and objectives of the business make impact on the various aspects which are making impact on overall effectiveness of the organisation. Both the companies are having different purposes and objectives which are making impact on the overall organisational activities and functions. Organisational structure is important from the point of view to effective providing and handling activities in the organisation and organisational structure varies in different organisations. There is different organisational structure of the companies which is defining their working structure and organisational environment. Organisational values are the code of conduct which is inspiring all the activities involved in the organisation and making impact on the overall effectiveness of the organisational activities. Both the companies are having different objectives and also different industries which are making impact on over their values making impact on the overall effectiveness of the organisation.Both the companies are different from each other as in having different structures, values, aspects and are also from different industries therefore they are offering different types of products and services which is making them different from each other. Both the companies are different from each other as in having different structures, values, aspects and are also from different industries therefore they are offering different types of products and services which is making them different from each other. The conclusion of the presentation is defining the various aspects related to the different organisations having different structures, values, objectives, and products and services which are making them linked with each other as well as making different from each other.
Organisational functions and their connection with the organisation’s objectives and structures
IKEA is a profit making multinational company based in Sweden and founded in1943 and providing its services in furniture manufacturing by adopting new and modern techniques and methods and also manufacturing various ready to assemble accessories. The company is serving huge number of customers and was largest retailer in the year 2008 which is defining the business operation’s level of the company (Weatherley, et. Al 2014). The company is fulfilling demand of the customers by analysing the requirement of the changing environment which make impact on the overall effectiveness of the profitability of the company. The company is focussed on the innovation in its business activities that can be influenced by various factors and these aspects show the business structure and objectives of the company.Organisational functions of the company are defined as the aspects which are involved from the designing to selling of the products of the company which involved various actions in it and also make impact on the effectiveness of the profitability.
Organisational objectives are the ultimate purpose for which the organisation is working and conducting its operations in the organisation. there are the following objectives of the company IKEA which are to be active by the functions of the company.
- The company is focused on expanding the business activities and functions of the company are different countries around the globe by using various aspects that can make impact on the overall effectiveness of the profitability.
- To enhance the production process of the products of the company that can be produced in effective and improved manner. There must be adopted effective and efficient technologies in the production process of the company.
- To make the production process more cost and time effective that can increase the profitability of the company.
- To effective and efficient implementation of the legal and regulatory requirements in the organisation that can generate profits in the organisation and lead to effective results and requirement of the internal and external environment (Worthington, 2014).
Impact of link of the organizational functions on organization objectives
The link between the organisational functions and organisational objectives is important and make impact on the overall effectiveness of the organisation as in these functions make impact on the overall performance and achievement of the organisational goals and objectives. The functions of the organisation are focused to achieve the organisational objectives and goals that can be achieved byleading the efforts in the direction of the achieving the organisational objectives. IKEA is furniture manufacturing company which is involved in the modern designs and interior providing to the company which can be effectively achieve the objectives to reduce the cost and expand the services in another countries and satisfying customers in effective manner. The company is following effective and strategic management in the organisation to lead its functions in the direction to achieve the organisational goals and objectives. There are various factors which make impact on the overall effectiveness of the organisational functions of the company which can be related to micro and macro environment (Cheeseman, 2016).
Section 1: Positive and negative impacts of macro environment on the business operations
In the business environment there are various aspects which make impact on the overall effectiveness of the organisation. These factors are diversified into macro and micro environment. Macro environment is wide approach which includes all the external factors which make impact on the internal working and effective execution of activities in the organisation(Cheeseman, 2016). Business operation are defined as the functions and activities which are involved in the overall process of business to achieve the goals and objectives of the company and lead to effective performance and productivity of the company. This can be understood by analysing the positive or negative impact of the macro environment on the business operations of the profit making company IKEA.
Positive impact: The company IKEA operates by effective and strategic marketing planning and management which requires considering all the aspects that can make impact on the overall performance of the company and can lead to effective results of the company. Macro environment and its factors are also considered while taking decisions in the company which make the operation of the company more effective and protect from any external threat.
Negative impact: There are also various negative impacts of the macro environment which can affect the operation of the company and lead to loss in the company. There can be situation in which the organisation requires to go beyond its set objectives and policies which can take advantage of the opportunities of the company but these macro environmentsrestrict the company. This is also defined as time consuming and high cost involved process which can make impact on the overall effectiveness of the organisation (BANICA, 2015). There is also required effective internal control in the organisation to implement the macro environment which requireseffective training and time consumption.
Section 2: Conduct an internal and external analysis to identify its core strengths and weaknesses.
In every organisation there is required to analyse different factors while taking any decision which can make impact on the overall effectiveness of the organisation. This can be done by analysing internal and external analysis which defines the strengths and weaknesses of the company in effective manner and lead to most effective decision that can generate effective profits in the organisation.
Internal analysis: Internal analysis of the company defined the strengths and weaknesses of the company. The company is involved in modern and effective manufacturing of furniture that can make impact on the overall effectiveness of the organisation. This new approach and technological development in organisation is helping in developing the competitive advantage for the company in themarket among its competitors. The company is lacking in effective management of legal and monitoring activities which is resulting as weaknesses for the company (BANICA, 2015).
External analysis: In every organisation there are various aspects which related to the external environment and can be treated as strengths and weaknesses for the company. IKEA is making profits and investing them effectively in various alternatives in the market which is making a positive strength for the company. The company is also effective in managing its funds from different sources from the market and make effective decisions by considering the government policies, regulations and legislations.
Section 3: Explain how these strengths and weaknesses are linked to the external macro factors.
External macro factors are defined as the factors like legal and regulatory framework and requirements, government policies which can make impact on the overall effectiveness of the organisation. The strength of the company IKEA to develop as modern furniture manufacturer is impacted with the external technological development and lead to effective and profitable position in the company (Gupta, 2013). There are developed various opportunities and threats in the external environment which can be identified and benefit can be taken from that by effective management of strength and weaknesses of the company. The external macro factors like tax and revenue managementlaws of the government leads to the internal effectiveness of tax management which converted as strength of the company.The internal operations of the company are influenced with the external macro factors which show their effective link with each other in the business operations of the company IKEA.
Section 4: Apply some analysis models -i.e. PESTLE and SWOT/TOWS- in order to develop an in-depth understanding of the impact of the macro environment as well as to justify how this affects organisation’s decision-making processes.
While taking decisions or in the process of decision making there are required to analyse different aspects and factors which are required to considered and make effective impact on the effectiveness of the taken decision and its consequences. These factors can be identified by effective analysis of internal and external factors that can make impact on the process of decision making in the organisation like IKEA. Following is the PESTEL Analysis of the profit making company IKEA which can be used in the decision making process(Pandey, 2013).
The company is focusing on extending its operations globally so that there is effective role of the political factors. These factors are essential as in the political environment make it possible to expand the business and its activities in different countries around the globe that can help in increasing profits of the company and lead to growth (Pandey. 2013).
The economy aspects make impact as in its ensures the availability of funds and their effective investment which can generate effective results. positive phase of the economy make positive impact on the profitability of the company. It also making it possible for the company to identify new opportunities and take their advantages.
The social aspects of the external environment ensure the effectiveness of the positioning of the company in the market. This shows that society is satisfied and the operations of the company are not making any kind of harm. Customers are the part of the society.
Technology factor of the external environment is important as in the technology changes and develops with the impact on time that make impact on the overall effectiveness of the business operations of the company as in the company is adopting new and developed technologies in the manufacturing process of furniture (Jacob, 2013).
There are also considers impact on the environment on the overall business operations of the company that can generate effective profits in the company. There are required to follow all the legal requirements to manage the environmental effectiveness in the manufacturing process of the company.
All the legal and regulatory frameworks related to the operating of the profit making company IKEA are required to be considered and there must be effective due diligence in the company and its operations (Jacob, 2013).
Business environment is important from the point of view to effectively handling of the activities of the organisation and achieving effective results by managing them in effective manner. Business environment can be different in different types of organisations but plays essential role in the organisation. Business environment is diversified in macro and micro or internal and external environment which includes various factors which make impact on the business operations.There are included various factors which are important and essential from the point of view of the organisational growth and must be managed and considered while taking any kind of decision in the organisation.There are included factors like government policies, legislations, legal, social, political and economic factors in the macro economics. Macro- environment influences the organisational activities on huge level.These external macro factors are influenced with the internal activities of the company and make impact on each other. The internal structure and business environment of the company is influenced with the external requirement of law and regulations of government.There are various aspects in which the macro environment influences the business operations in positive manner and lead to growth to the company.
Every organisation adopt strategic management in which there is required to take effective and most appropriate decisions before conducting any activity that can make impact on overall effectiveness and profitability of the company.There are available various models for the analysis which can be used to achieve effective results in the organisation. Results of these models of analysis prove as beneficial while taking effective decisions in the organisation (Jacob, 2013).
IKEA is a profit making company which is involved in manufacturing, designing and assembling wide range of furniture which is the business functions of the company. The company is established in the Sweden and focused on expanding its operations in different countries around the world by following all the requirements of eco-friendly and manufacturing system in the organisation while designing the furniture. The business environment of the company is influenced with various factors of macro and micro environment which are alsomaking impact on the strengths and weaknesses of the company that can make impact on the overall effectiveness of the organisation. To meet the requirement of the environment the company develops the code of conduct and various policies and procedures to be followed by the company to meet the requirement of the internal and external environment.
BANICA, L. & HAGIU, A. 2015, "BIG DATA IN BUSINESS ENVIRONMENT", Scientific Bulletin : Economic Sciences, vol. 14, no. 1, pp. 79-86.
Gupta, J.L. 2013, "Economic and Business Environment", Vision: The Journal of Business Perspective, vol. 17, no. 1, pp. 83-85.
Jacob, W. 2013, "Economic and Business Environment", Vision: The Journal of Business Perspective, vol. 17, no. 1, pp. 87-89.
Pandey, A. 2013, "Economic and Business Environment", Vision: The Journal of Business Perspective, vol. 17, no. 1, pp. 85-87.
Weatherley, P. & Otter, D. 2014, “The Business Environment: Themes and Issues in a Globalised World”, Oxford: Oxford University Press, 3rd Ed.