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Unit 1 Business Macro Environment Assignment
Diploma in Business
Unit Number and Title
Unit 1 Business Macro Environment
The business environment contains micro and macro environment that affects the business from inside and outside the organization. McLaren Automotive is a multinational organization of UK that design world class cars for the people of UK. The main aim of the organization is to design that kind of cars attracts the new clients. The current study identifies different organizational functions, objectives and structures. It will define interrelationships between organizational functions and also explain the advantages and disadvantages of this interconnectivity among the organizational functions. The report identifies the positive and negative impacts if macro environment on the business and conduct the internal and external analysis to evaluate the strength and weakness of the McLaren that are linked with external macro factors. The study applies the model like PESTEL and SWOT in order to assess the impact of the macro environment .
Figure 1 McLaren automotive
Section: 1 Organization objective and functions
Different organization have various liabilities towards the customers, government, society and various other profits and non- profit institutions. All the organization has the responsibility to fulfil the demand of the clients with the help of setting the objective according to the demand of clients. Fulfilling the demand of clients is the first and foremost objective of McLaren. The interconnection between objective and function help the management to achieve the management goals. It is the foremost duty of management identifies the demand of clients thus they are able to meet the expectation of the customers. In the present era, management has the liability to innovate the design of the cars thus they can easily gain the competitive advantage. Promotion is another strategy that helps the organization to gain the profits and set the benchmark for the service quality. To promote the participation of new clients management has to deliver the economic cares for the clients thus they are able to meet the set goals. Interconnectivity between objective and function facilitates business to get the desired output from the employees it also helps the management to increase the efficiency of employees towards the objective (Cummings and Worley, 2014). Organizational objective and functions help the organization to meet the political, cultural, social objective and organization can meet the strategy that is set by the top management to meet the objectives.
The Foremost duty of management is to gain the profits out of functions this can be achieved with the help of interconnection between objectives and functions. Various functions of management depend on the objective of marketing, production, financing etc. The different department set different objectives for instance marketing set the objective for the effective promotion for the newly designed car and its foremost task is to increase the sale of the car and achieve the objective of management. So this kind of objective helps the organization and its sub-departments to operate the business to achieve the organizational goals. Organization has the liability to set that kind of objective that gives benefit to the employees and clients too. In the case of any wrong or irrelevant objective, it may affect the growth of business and also hamper the efficiency of the employees thus it can be said that management has to check the pros and cons of objective what are the outcome of the objective if they are negative then management should try to improve it. Objective and functions are linked with each other like first management will set the objective than try to implement that objective so it can be said that both the terms are interlinked in McLaren (Eliasson, 2012). Another term is both the terms are dependent on each other like without objective management is not able to do the functions. So it is the foremost duty of management to set the objective than move ahead.
So it can be identified that interlink between objective is beneficial for the McLaren without management is not able to achieve the management goals. The foremost objective of McLaren is to design the car as per the demand of clients and identify their needs and wants.
Section: 1 Identify the positive and negative impacts of macro environment on the operations of McLaren
Macro environment factors affect the business from outside the organization they affect the efficiency of employees in different ways. It can be said that this kind factors may affect the organization on the large level like the decrease in sales, competitive advantage, international rivalry etc. This kind of factors may discourage the employees by offering the high amount if salary etc. This kind of factors may reduce the overall efficiency of the organization and affects the strength of the employees. At the global platform, management has no chance to retain the clients if they are delivering the cars as per the demand of clients. The major changes in the organization can happen due to macro environment factors. It is the way under which management can identify the global factors and also identifies the pros and cons of the policy. The macro environment also affects the pricing policy of the organization and also changes the promotion strategy of McLaren. The promotion of the product always depends on the product but at the time of macro environmental factors, management has to set the strategy as per the competitor (Slade and Bauen, 2013). It depicts the current market position of the organization if management is not getting the proper response from the market than organization should emphasize on the marketing policy of the organization.
Section: 2 Internal and external analysis to identify the strength and weaknesses
Internal and external assessment helps the management to identify the pros and cons of the organization. It is the duty of management to evaluate the current working environment of the organization and this can be analyzed with the help of internal and external environment of the organization. McLaren can easily identify the strength and weakness of the organization with the help of internal and external analysis. This kind of analysis facilitates the management to hurdles that can bind to employees to achieve the desired organizational goals. This is the most effective analysis that can be done with the help of SWOT analysis. The analysis helps the management to identify the pros and cons of the new strategy and also find the alternative to improve the strategy. Top management binds the hr department to collect the timely feedback of the policies that they are working properly or not if they are not working properly then try to improve them or implement the new policy in different departments. The head of each department must identify the drawback of the new policy that can be possible with the help of internal and external analysis (Kajanus.et.al.2012). Under internal analysis management consider the internal factors like employees, production unit, engineers etc that help the management to assess the current internal situation of the organization whereas external factors contain suppliers, retailers etc.
Section: 3 Strength and weakness that are linked to the external macro factors
Strength and weakness of the McLaren are attached with the external and internal factors of the organization thus it can be identified with the help of SWOT analysis . Sometimes organization is not able to identify various factors like competitor policy, pricing strategy, customer perception etc. Management can easily identify the pros and cons of plans and strategy of the organization. Macro factors can be identified with help of SWOT analysis thus it can be said that assessing strength and weakness of organization help the hr department to the overall assessment of the performance of the organization. Strengths and weaknesses are the opposite factors that are a symbol of power and drawback of the organization in different sectors. SWOT analysis assist management to identify the strength, weakness, threat and opportunity for the organization it also facilitates management to overcome the unnecessary burden from the departments. Both the factors are interrelated because they help the organization to overcome the risk factor and provide growth opportunity to the organization. Macro factors may affect the business from the outside boundaries of the organization and can be analyzed with the help of SWOT analysis. The risk is always associated with the business and also helps the management to get the return in the form of profit (Nijssen and Frambach, 2013). Due to overburden management is not able to identify the pros and cons of policy but with the SWOT analysis management can easily identify the drawbacks.
Section: 4 SWOT and PESTEL analysis in order to identify the impact of macro environment on the decision making process of McLaren
SWOT and PESTEL analysis help the management to identify the current market position of McLaren. These tools help the management to assess the competitor’s policy regarding price, product and various other factors. SWOT analysis affects the decision of top management is various ways like the requirement of manpower in the particular project, management policy regarding price, opportunity in the market, the threat of substitute of the product etc. If these factors provide a positive result to the organization then management adopt the current strategy and this all factors are analyzed with the help of SWOT analysis. PESTEL analysis facilitates management to identify the technological, political, social, environmental, legal factors that affect the management decision in various ways. These two analyses facilitate management to identify the advantages of market analysis and also help the hr department to overcome the threats in the market. It is the foremost duty of organization to conduct the SWOT and PESTEL analysis to identify the advantages and disadvantages of new marketing strategy if analysis shows the positive response then management should implement the policy otherwise ignore the same (Yüksel, 2012). The decision of all the departments in McLaren is taken on the basis of these two analyses. The hr manager of McLaren is affected with this kind of analysis due to the pressure of top management. For instance, McLaren designs new car and want to launch it in the market than management has to do SWOT and PESTEL analysis of the new car.
Figure 2 SWOT analysis
Figure 3 PESTEL analysis
B Reflective statement
As per my experience in McLaren, I have identified that working culture of the organization is good and all the employees help each other to complete the task. Top management designs the employee welfare policy that facilitates the entire department to perform well. I personally fell that sometimes decisions of all the departments are based on the SWOT and PESTEL analysis and that assist the management in taking the correct decision. Leaders in the team try to motivate the employees and also help the new employees and motivate them to learn fast. To keep the employee’s motivated management give monetary and non-monetary benefits to the employees. It is the best way to keep the employees motivated and give the positive response to the problems of the employees. I have experienced that management is facing the problem of communication with the employees thus they are not able to convey the strategy to them. Lack of coordination among the employees thus they are not able to achieve the management goals. SWOT and PESTEL analysis aid the management to take the correct decisions and gain the competitive advantage in the market. PESTEL analysis is the major factor that helps the management to adopt the latest technology in the organization thus they are able to achieve the desired output. Another that makes the organization unique as per my view that employees in McLaren are more satisfied with the pay scale of organization.
The current study helps the management to identify the importance of SWOT and PESTEL analysis in the organization. It helps management to design the policy that benefits the organization and employees. The major objective of the organization is to design the innovative car as per the desire of the clients. The link between function and objective aids the organization to achieve the specific goals and also inform the employees to increase the efficiency for the pre-defined objective. Macro and micro factors affect the organization from the outside the organization because they are not in control of the management. Macro factors affect the organization while taking the decision and bind the management to take the suitable decisions that don not hamper the efficiency of the employees.
Books and Journals
Cummings, T.G. and Worley, C.G., 2014. Organization development and change. Cengage learning.
Eliasson, G., 2012. Firm objectives, controls and organization: the use of information and the transfer of knowledge within the firm (Vol. 8). Springer Science & Business Media.
Kajanus, M., Leskinen, P., Kurttila, M. and Kangas, J., 2012. Making use of MCDS methods in SWOT analysis—Lessons learnt in strategic natural resources management. Forest Policy and Economics, 20, pp.1-9.
Nijssen, E.J. and Frambach, R.T., 2013. Creating customer value through strategic marketing planning: A management approach. Springer Science & Business Media.
Slade, R. and Bauen, A., 2013. Micro-algae cultivation for biofuels: cost, energy balance, environmental impacts and future prospects. Biomass and Bioenergy, 53, pp.29-38.
Yüksel, I., 2012. Developing a multi-criteria decision making model for PESTEL analysis. International Journal of Business and Management, 7(24), p.52.