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Unit 1 Business and the Business Environment Assignment Copy 2
Diploma in Business
Unit Number and Title
Unit 1 Business and the Business Environment assignment
Business environment is direct relationship between the successful management and the influence and impact of the environmental change. There are different types of organizations such as public organization, private organization which are divided in two types such as production and sales organization and service industry. However, every organization has to manage two different environments such as internal environment and external environment. The Association of Independent Healthcare Organization (AIHO) is a private trade association for independent health care service providers in United Kingdom. It has been observed that this organization represents and manages more than 200 health care organizations (Aiho.org.uk, 2016). The organization ensures the service to the self-payingand NHS funded patients. AIHO assigns their members in every hospital in different designation such as specialist, surgery specialists and nurses.
On the other hand the National Health Service (NHS) is government organization of UK which provides the comprehensive health and re-habitation services for curing and preventing the disease. The organization looks after the health insurance andmediclaim of the UK people and funded for the treatment. More than 98% fund collected from the general taxation and national insurance contribution (Nhs.uk, 2016). It has been observed that both organizations have provided almost same service to the public. The stake holders of both organizations are almost same such as doctors, specialist, nurses, staffs, medicine suppliers, medical instrument suppliers, insurance company and patients (BBC News, 2016).
b) Various organizational functions & organization’s objectives and structures
It has been noticed that NHS and AIHO have provided the medical service to the UK people. According to the popular news report it is clear that more NHS have provided voluntary service in UK. The organization has already drafted a sustainability and transformation plan for the patients. As stated by Welford (2013), NHS has taken the strategy to reduce the excessive expense. The organization has already overspent £5.26 billion for curing and prevention of disease. The organization has planned to cut the bed numbers and changes to A&E and GP care in more than 43 areas(BBC News, 2016). According to the audit report of the organization, NHS has saved £11 billion in the efficiency saving. On the other hand the organization has planned to increase saving amount by £22 billion on 2020 (Davenport and Beck, 2013).
It has been found that AIHO has arranged awareness campaigning with the help of NHS. NHS has provided assigned the health specialist to grow the awareness about the bad habits such as smoking, drinking and health hazards. On the other hand the organization has planned to promote the new health care organizations to increase their profits. As stated by (Becker et al. 2013), AIHO has planned to open a training centers for the hospital staffs by 2018.
As stated by Nattrass and Altomare (2013), the aim of NHS is to improve the society through their services. The organization has also implemented the objectives to change the society. NHS has planned to provide sustainable development in the society. It has been observed that the organization has greater contribution in the national income (Davenport, 2013). First preference of this organization is to provide the benefits and service to the general publics. The organization has managed the economic activity of the AIHO. The organization has monitored the service quality of the health care organizations (BBC News, 2016). The organization has identified the issues of the health care organizations and solved the issues by using the knowledge. It has been found that the organization improved the knowledge available to staffs in the work place (Hargroves and Smith, 2013). On the other hand AIHO has assigned the staffs to improve and develop management structure. AIHO has develop a centrally management service for identifying the information skills training required for the health care organization. As stated by Beaumont et al. (2013), AIHO has maintained the unique exercise in collaboration to increase the efficiency of the health care service. As argued by Laguna and Marklund (2013), NHS has maintained communication with local doctors, hospitals and councils for working together. Apart from that NHS also prepared to provide the health care service in any extreme condition or accidental situation.
a) some positive andnegative impacts of the macro environment on the business operations
Werbach (2013) opined that there are some external factors of the organization which have indirectly impact on the business operation of the organization. However, environmental change also affected the organization and the managers have no control on the environment (Boons and Lüdeke-Freund, 2013, p.10). Six different external factors are related with the organization such as social, legal, economic, political, technological and international.
As stated by Bharadwajet al. (2013, p.473), both the health care regulatory organization such as NHS and AIHO face the major changes in the macro-environment. Basically both organizations provide the voluntary service to the people. It has been observed that the managers of both organizations have anticipated the impact of those changes (Bar-Isaac and Shapiro, 2013, p.63). Therefore both regulatory organizations can manage their service.
The organizations have faced the credit risk assessment during the environmental changes. Those organizations have been financed by the government directly. Therefore financial risk of those organizations has been raised only for the political change (Bar-Isaac and Shapiro, 2013, p.63).
Conduct an internal and external analysis to identify its core strengths and weaknesses
As stated by Bargiela-Chiappiniet al.(2013, p.4), the internal analysis of strength and weakness focuses on internal factors which gives an organization certain advantage and disadvantage to fulfill the requirements of their target market. On the other hand the external analysis examines the opportunities and threats in the organization (Österle, 2013).
It has been observed that those two organizations are non-profitable organizations. Therefore the financial profit is not primary concern for them. They have collected funds from government and provide the health treatment related service to the people (Boonset al.2013, p.5). Therefore the financial resource is the strength of those organizations. On the other hand the organizations have regulated the operations of the hospitals. Therefore, the good communication system is their strength of the organization.
It has been found that the NHS and AIHO have implemented some skill development program of the hospital staffs and recruitment staffs so that the patients get the right treatment from the hospitals (Bockenet al. 2013, p.485). Therefore, the reliability is strength of those organizations.
As argued by Isiket al.(2013, p.15), the NHO and AIHO have faced some difficulties in the UK during the social and political issues. The organizations have limited resource to spend in the health improvement.
Explain how these strengths and weaknesses are linked to the external macro factors
It has been noticed that there are some external forces which may not immediately affect the relationship that the health and social organizations have with the patients (Vahlne and Johanson, 2013, p.192). It has been observed that the environmental changes will alter the nature of the relationship between organization and patients.
The external micro factors are depending on six different factors such as social, legal, economic, political, technological and international. It has been observed that business organizations collect the revenue from the cash flow come from the foreign sources. However this voluntary organization does not need to collect from the foreign resources. They have collected the cash flow from the government.
The PESTLE analysis covers generally six different factors like political, economic, social, technology, technology, ecological, legal.
- Political: It has been observed that heal care NGO have faced political issues and legislation issues while dealing with the international health care organization (Trkman, 2013, p.52). Therefore the organizations have considered the government policies, plans and attitudes towards the economic development.
- Economical: It has been noticedthat the environmental factors have changed the business of the organization. However the organization has developed the sudden and significant economic shocks from the external sources. As stated by Bockenet al.(2013, p.485), the services of those organization can be affected by the external resources. On the other hand the business can be affected directly by some economic changes of the country.
- Social: It has been observed that the customer and their changes attitude and the values nad the general trends affect the organizations. Therefore, rejected attitude of the people affected the operation of the organization in new country
- Technology: As stated by Trkman(2013, p.52), now a days technology has become more influential for communicating with the stake holders. However, both organizations have implemented the technological changes. Therefore, both organizations have implemented advanced communication system to communicate with the health care organizations. However, the organization has spent good amount of money to acquire the changes.
- Ecological: It has been observed that the negative feedback of the organization has created a negative impact among the service renders.
- Legal: It has been noticed that the political environment affected the operation of the organization. The organization has followed the legislation of the countries where they have provided the halth care service.
- Strength: NHS is a self-operated government financed organization in UK. Therefore there are no market competitors in UK. NHS and AIHO have a strong bond with private health care organizations of UK. Therefore, those organizations can handle any kind of accidental situation and provides the emergency services to the patients. It has been observed that there are continual patient list that proves those organizations are reliable to the people. NHS is the oldest organization UK and continuous serving people about health care organization.
- Weakness: This organization is unable to manage the higher demand due to the increasing population. It has been observed that the management of the organization is failed to maintain the link between the patient and hospital during rush hours.
- Opportunities: The organization has planned to implement to use the marketing strategy to raise the profit. It has been observed that the organization has planned to increase the private organization donation process to increase the fund.
- Threats: It has been found that the image of the organization has been affected for the unconsciousness of the contractors. The turnover of the staffs of the organization is high.
b) Reflective statement
As a researcher, I have critically observed the activities of NHS and AIHO. I have observed that both organizations have affected by the macro and micro environment. In many cases I have observed that business organization s have faced different types of issues such as financial issues in recession period, customer rejection in the tough competition market and manufacturing issues. That would cause the fall of national economy. However, I have saw that NHS and AIHO both are the non-profitable and government aided organization. Therefore the organizations are economically supported directly from UK government. On the other hand those organizations do not provide health treatment service directly. They regulated the private hospitals and help the patients to take the treatment from those hospitals.
I have observed that the “pestle” analysis to understand the effect of the external environment on the business of the organization. I have observed that the political, technological and social factor affects the activities of the organization. The health and safety related legislation become the threat to the organization. However, the organizations have to improve the technological aspects. I have noticed that both organizations have not much technological support to handle any accidental situation. I am impressed with the social activities of both organizations. I have noticed that both organization have implemented the awareness program in then society. This campaigning will grow the awareness among the people.
I have found that main financial resource has been donated by UK government. However, NHS has planned to contact with the private firm for collecting more donation to increase fund. Therefore, AIHO has no such plans to increase their funds. This really upset me because AIHO has not sufficient financial resource to defend any accidental situation. On the other hand the training session of the AIHO is good for skill development of the nurses.
I have critically observed “SWOT” analysis to understand the existing condition of both organizations. I have observed that both organizations have communicated with the private health care organizations. Therefore the organizations can handle any kind of accidental situation and provides the emergency services to the patients. On the other hand I have observed that the people have a strong reliability on those organization and they have provided good feedback about the health care organizations. However the ability of those organizations disappoints me. I am worried about the high risk situation and health hazard in UK. In that case both organizations have to increase the number of the private hospitals.
This report is based on the two different non profitable two different types organization such as public and private. Those organizations are Association of Independent Healthcare Organization (AIHO) and National Health Service (NHS). It has been observed that operations of both organizations are almost same. Even AIHO works along with the assistance of NHS because AIHO collected the patients’ claimed Funds from NHS. On the other hand NHS looks after the insurance status of the citizen and provides the medical assistance to them. It has been found that both organizations have been affected by the macro micro factors such as political, economic and legal. Therefore NHS has implemented the substitute way to collect the funds but AIHO has no such plan to collect money from market.
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