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The objective of report is to provide knowledge of business and wider business environment in which organisation operates. Business environment includes macro and micro environmental factors which affects organisation’s purpose, structure and functions. This report provides a brief summary of macro environment factors and there analysis which is required for strategic and tactical decision making of the organisation which are necessary in shaping organisation’s future.
In slide 1 Introduction is given as it include discussion over two businesses where NHS is an non-profit organization on the other hand John Lewis is an profit organization. There is effective level of differences among their size, objectives, structure and many more.
In slide 2 discussion is made over NHS, It is an public funded National Healthcare System. In the whole world it is the only oldest and largest single payer healthcare system. They provide free healthcare services including emergency treatment, infectious diseases treatment for free for everyone.
In slide 3 discussion is made over John Lewis, It is an chain of up market department store. The first store was open in 1864. Around England, Scotland and Wales there are 46 stores including 12 stores of “At Home” and “Flexible stores”.
In slide 4 Comparison is made on the basis of type of business, that NHS is rendering health and safety services. They provide free treatment to the patients. Their motive is to serve the society. Whereas John Lewis is They deal in different products. They provide quality products at reasonable rates. Their motive is to earn the profit
In slide 5 Comparison is made on the basis of purpose and objective, that NHS purpose is to serve the society. Their objective is everyone get adequate treatment. They provide free treatment. Whereas John Lewis objective is to capture the market share and increase profit ratio. Their purpose is to deliver reasonable but quality products.
In slide 6 Comparison is made on the basis of business size, that NHS are oldest and largest single payer healthcare system in whole world. They are rendering their services at large scale. Whereas John Lewis is performing at large scale. They have 46 stores and 12 “At home” Stores and Flexible format stores in UK.
In slide 7 Comparison is made on the basis of Business values, that NHS business values is to serve the society. In order to render adequate services to everyone they are giving free treatments to everyone. Whereas John Lewis business values is to render quality products to their respective users. The prices of their products are also reasonable.
In slide 8 Comparison is made on the basis of products and services, that NHS services and products include all the items included in healthcare services. They render them free of cost in order to provide treatment to everyone. Whereas John Lewis is dealing in numerous products related to the fashions (Men & women both), etc. They provide reasonable cost products to their customers.
In slide 9 Comparison is made on the basis of business structure, that NHS is publically funded national healthcare system. They get charities, governmental support in order to run their activities. Whereas John Lewis business structure is partnership basis. The partnership is between John Lewis and Waitrose
In slide 10 It is concluded that both the organizations having different functionality. There is adequate set of difference among them on the basis of their market share, their objectives, their business structure and many more. NHS is running their business activities in order to serve society whereas John Lewis is running their business in order to earn adequate profits.
An organisation can be designed in many ways. An organisation’s structure is designed on the basis of organisational objectives and functions. “John Lewis” is a chain of departmental store operates in retail industry in UK. It’s objectives are provide different products of higher brands to the customers and create value of their money and improve profitability to take advantages of commercial opportunities expand area of business. Purchase , sales, marketing, human resources management and arrangement of finance etc are the functions performed by retail sector organisation. Organisational structure is designed by the organisation to perform these functions (Henttonen & Kettunen, 2011). Organisational structures are of different type where powers and duties are distributed in a different way. Organisational structures include:
ohn Lewis has an independent organisation structure which allow staff members to pass their and provide management certain reliable visions. There is decentralisation of powers and authority. The organisation structure consist different committees along with management team. They all work for achievement organisational objectives. Organisation performs functions in order to achieve objectives and follow suitable organisation structure.
A business organisation is working under micro environment factors and macro environment factors. Micro environmental factors are under the control of organisation but controlling macro environmental factors is a difficult task for the organisation. Macro environmental factors refer to all external uncontrollable forces that affect positively and negatively the decision making, strategies and performance of organisation. It includes:
Every organisation has some strength and weakness on the basis of which it faces opportunities and threats from external environment. To identify strength and weaknesses organisations must have to conduct internal and external analysis. Internal analysis includes analysis of micro environmental factors which influence the operation of business organisation. Micro environmental factors include:
SWOT and PESTEL tools are used to conduct external analysis. External forces are also affecting the organisation. External analysis helps to identify the strength and weaknesses of the organisation. External analysis includes analysis of external factors like:
On the basis of external and internal analysis helps “John Lewis” in identifying strength and weakness. Strength includes strong brand image, strong online presence, effective employment relationships and extensive product range while weakness may includes absence of overseas business experience, recent slump in profit, lack of good marketing strategy and competitive advantage (Nugent, and Hawkes, 2012).
Strength and weaknesses are directly related with the external environment factors of the organisation. On the basis of strength and weakness organisation can face its external forces and take strategic and tactical decisions regarding organisational activities. Interrelationship between strength and weakness and external macro factors are as follows:
SWOT and PESTEL analysis are the business tools use by the organisation to analyse external macro factors, internal strength and weakness and external opportunities and threats for the effective decision making.
SWOT is the powerful technique which helps the organisation in identifying strength and weakness of the company on the basis of company which company take new opportunities and faces external threats. SWOT analysis includes:
PESTEL analysis is an analysis of macro level elements which impact business and the decisions that they make:
Macro and Micro factors of the company are having the impact on objectives and decision making of the organisation. Micro environment is the nearby environment in which organisation operates. Micro factors include internal factors like customer, supplier, investor, competitors, workers and employees of the organisation and they make their contribution in creating organisation’s economic value and achieving aims of the organisation. These factors are under the control of management. These factors influence the objectives and decisions of the company regularly and directly. On the other hand Macro environment is the general environment that can affect all the business organisations. Macro environment includes political forces, economic forces, technological forces, environment forces and social forces of external environment. Internal and external analyses are conducted by the organisation to know the impact of these factors on organisational decision making and objectives. SWOT and PESTEL are the business tools used for analysis. These factors affect indirectly and distantly to the organisation and are not controllable by the management (Arnold, 2012).
Analysis of macro and micro business environment of the company helps to identify strength and weakness of the organisation on the basis of which organisation is capable to adopt opportunities and faces threats of external environment. With the help of Strength it can adopts various chances available in the commercial world and due to weakness it faces multiple problems or threats from the market. If organisation is successful in taking advantages of these opportunities than it met ultimately with its objectives and attain a competitive advantage in the economic environment (Arnold, 2012).
This report explains that internal and external analysis is required to carry out by the management of the organisation before strategic decision making so that organisation formulates plan which met ultimately to the objectives of the organisation. This report shows an interrelationship between micro and macro factors and objective and functions of the organisation.
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