Introduction
Business
Environment implies the surroundings that enfold the operation of a business
organisation. That includes various internal and external factors that are
already present and are outside the control of the organisation but definitely
affects the performance and survival potentiality. A business has to operate in
response to the changes in these factors; hence the primary feature of a
business environment is the non-static behavior, unpredictability about the
exact changes in the environment or future happenings. It is multifaceted and
has far reaching impacts, such that a single change in the behavior of one
organisation leads to an entire change in the whole market. A business
environment consists of the internal environment that exists within the
company, the external environment including the micro environment. In this
study the student has talked about the different type and scope of an
organisation, the various purpose that it serves, the relationships between
different organizations and its nexus to the organizational objectives, the
advantages and disadvantages of macro environment on the business operation and
the analysis of the internal and external factors of an organisation that helps
to identify its strength and weakness. The study focuses on two of the
organizations, BMW (Bavarian Motor works) and Amnesty International.
Part 1
P1 Explaining different types of organisation and its legal
structures
An organisation is a formal setup
with a definite objective. It is a hierarchical representation of authority,
whereby each of its members works together to achieve one common goal. The
various types of organisation can be understood with the different purposes that
they serve. There are Private and public sector enterprise; voluntary, formal
and informal organisation.
Private organizations- These are
owned and controlled by private individuals with the motive of profit
maximization.
Public sector organizations- These
are controlled by the government with the sole objective of the welfare of the
people
Voluntary organisation- Group of
individuals come together to form an organisation and work towards a common
goal. These sectors perform social duty, towards the betterment of the
community, and are non-profit and non-governmental. These are the third sector,
in contrast to the private and the public sector having a direct relation to
the civic society (Guay, 2016, p156)
Amnesty International is a
non-governmental voluntary organisation that works in the field of human
rights, work on issues of human rights and comply with the international legal
regulations to curb human rights violations. It mobilizes public opinion and
pressurizes the government to prevent further abuse of human rights. The six
main target areas have been women, children and minority; torture; death
penalty; rights of refugee and prisoners of conscience and protection of human
dignity. Amnesty is against capital punishment, and hence it campaigns against
death penalty, ensure free and fair trial and proper food and living conditions
for the prisoners, free and compulsory education for children, preventing
abortion and recruitment of children in hazardous work including child
soldiers, preventing illegal killing and torture, promote social and cultural
rights for the marginalized community and LGBT and uphold the rights of the
refugees. It is a global organisation employing more than 2400 staff in over 70
countries. It is financed by donations from worldwide members only and not from
any governmental organizations to remain free from any political influence.
The organisation has paid
professionals along with worldwide voluntary members. In countries having a
strong influence, the members are divided into sections which coordinate the
activities. In countries where the presence is not much strong, people can
become voluntary members. International Secretariat is responsible for setting
a global agenda and carries out the daily work of Amnesty under the direction
of the International Board. It consists of 500 staff under the Secretary
General. The International Board takes decision for the organisation,
implements the strategy laid down by the International Council and ensures that
the daily working complies with the relevant laws. It has 8 members and an
international treasurer. The International Council, the senior most
decision-making body, consists of a Chairperson and representatives from
International Board and country sections. It elects the members of
International Board, set the strategic goal and the policies of the
organisation and amend the Amnesty law. Apart from this hierarchical division,
in 2013, Amnesty launched the global council, which is a forum that brings
people from various other fields to work towards the common cause of human
rights. There are more than 80 country sections that provide the funding and
membership to Amnesty. These sections consist of local groups like university
students).
The Bavarian Motor works is the
leading German automobile company founded in 1916. It is the parent company of
Rolls-Royce Motor Cars and it produces motorcars under the ‘BMW Motorsport
Division,’ Motorcycles under ‘BMW Motorrad’, and plug-in electric cars. It
offers efficient and dynamic luxurious cars with efficient engine emitting less
pollution. The most innovative model is the BMW iPerformance providing the most
efficient and smooth driving, having the three components of electric motor,
lithium-ion high durable battery and an intelligent energy management. It has
followed the three main objectives of Sustainability, Efficiency and
Environmental Responsibility that has made it unique from the rest companies.
The Supervisory Board is the highest authorized body, with 20 members under it
divided into four committees of Personal, Nomination, Audit and Mediation. Next
is the Board of Management that controls the BMW Group Compliance Committee
consisting of six more departments. According to the 2016 report, BMW has
around 124,729 employees.
Figure
3: The number of employees (2006 to 2016)
(Source: Bmw.co.uk.2017)
According to the Wall Street Journal,
the annual revenue has been 94,163 in 2016, 92175 in 2015 and 80,401 in 2014.
The gross annual income is 22,663 in 2016, 24,467 in 2015 and 22,639 in 2014.
In 2014, BMW was ranked the second most valuable brand globally reaching the
brand value of 25.7 billion U.S Dollars. The global market share grew from 2%
in 2000 to 3% in 2014 (Bmw.co.uk, 2017)
Figure 4.BMW global market share from (2000 to 2014)
(Source: Bmw.co.uk. 2017)
P2 Explaining size and scope of different types of
enterprises
According to Becker (2017, p.2), every business venture need to expand their
business overseas in order to earn huge profit in long run of their businesses.
BMW and Amnesty International are two different types of organisation that
serve different purposes of society. Both these organisations have been serving
people for a large number of years. Amnesty International fights for human
rights of people and provides them with justice for betterment of this society.
On the other hand, BMW is a manufacturer of world’s best quality cars and is
very popular across globe. Size and scope of both these ventures are immensely
high that is why; they are working day and night to meet expectations of
people. Ostos et al. (2017, p.62) mentioned that size of organisations can be
determined by examining its numbers of employees, market share and gross annual
turnover. Scope includes coverage of products in both national and
international market. Besides, service provisions are also included in scope of
an organisation.
Size of BMW
Number of employees: This Company has provided employment to huge
section of people in society. Large section of people eagerly desires to work
with this company because it has made sustainable profit from its years of
origin. It has been serving in this sector for over 100 years. Employee number
has crossed billions in this sector. It has made glorifying performance in
manufacturing cars and selling them in market. Different innovation is being
made in its quality of products for successful execution of business.
Market Share: Schaper (2017, p.1085) commented that
companies that have maintained high margin of profit for its years of origin,
is bound to earn great range of share from market. Similarly, BMW too has
attained success in field of car manufacturing. It manufactures luxury
vehicles, motorcycles and engines of cars. Business execution is being done in
a smooth manner therefore; it has succeeded in gaining approx 6915 billions of
profit in recent years.
Gross annual turnover: Decock and Spiessens (2017, p.77) mentioned that
annual turnover of organisations needs to be strong for ensuring huge profit in
business environment. BMW try to maintain great margin of annual turnover in
order to conduct its business properly. As a result, it has succeeded in
maintaining a paramount position in international market.
Scope of BMW
Coverage in national and international market: This enterprise has very
strong control over both national and international market. It has started to
expand its business in foreign market since 1920s. As a result, it could manage
to keep a strong hold in international market and maintain huge competition in
market.
Service provision: BMW has provided quality services to people,
which cannot be provided by other companies. This company has given warranty of
one year in its accessories of products. In addition to this, products of this
venture provide immense mileage that can never be given by other competitors.
In this way, scope of this entity is large in business environment.
Size of Amnesty International
Number of employees: It is a non-governmental venture that serves
people for protecting their human rights. More than 7.5 million employees work
under this organisation along with several supporters. This makes them more
active and they try to deliver their best services for people.
Market Share: This enterprise has worked in this field
for about 55 years. It has supported rights of people at every step thereby,
gaining huge popularity in market. Several investors and supporters willingly
support in this noble deed of this entity. As a result, it has succeeded in
maintaining good amount of market share in both national and international
markets.
Gross Annual Turnover: This Company can be able
to fight for large sections of people in society that has led to gain pioneer
position in non-profit sector. That is why; gross annual turnover has been
increased greatly. Baumane-Vītoliņa et al. (2017,
p.48) opined that non-governmental organisations attain success when they can
involve more people under their support. This company has achieved such
position in market.
Scope of Amnesty International
Coverage in widespread arena: This enterprise has
expanded their area of work in several countries across globe. It tries to
provide justice to people in such a way that peace in world can be spread
suitably. This company has also provided funds to various organisations that
are working for welfare of society. As a result, successful expansion of
business is being noticed in this entity.
Service provision: As per Artto et al. (2017, p.150), service provision
in non-profit ventures leads to attain their business goals and objectives.
Since this firm fights for human rights of people, it can be able to remove
conflicts of people. This helps them to build a healthy impression regarding
their company among masses.
P3 Describing linkage between functions of entities and in
what way, they link up with objectives as well as structure of organisation
Kuznetsova and Markova (2017, p.450) explained that organisations have different
types of functions like HR functions, finance, sales as well as manufacturing,
which needs to performed accurately for ensuring beneficial outcomes. Every
venture sets their objectives before starting their business. This helps them
to plan events of suitably and develop proper structure in order to conduct
work. In BMW, HR functions need to be conducted properly for gaining advantages
in business. HR department needs to be very effective because based on their functions,
profit can be ensured in business environment of BMW. HR of this company is
inclined towards attaining organisational profit. This helps them to conduct
their work properly for successful running of business. Finance department of
BMW looks after market revenue and profits accurately. This department develops
plan in what way, amount of profit can be increased by investing fewer amounts.
As a result, finance
needs to function properly in this entity as it guides this venture towards its
victory. Sales and production unit of every entity need to be very active so
that company can reach numerous people with innovative items (Lampadarios et al. 2017, p.200). This company has set
an objective to earn more by satisfying demands of people. Sales department of
this enterprise promotes their products conveniently. Moreover, manufacturing
department does not keep a flaw in their work for betterment in quality of
products generated. Organisational structure has been kept in such a way that
it would lead to bring success for this venture. Functions of this business
house are interrelated on each other. This lets them to shape structure of
venture properly in order to bring creativity in services provided to people.
However, sometimes interrelations create huge confusion in organisation
thereby, developing weak structure of work in enterprise.
That is why functioning
of this enterprise has to be very operated duly so that profit margin can be
increased greatly. Kiyak
and Pranckevičiūtė (2017, p.65) stated that
non-profit ventures maintain smooth structure in their workplace as it aids
them to support people properly. HR department of amnesty International works
with other departments accurately for proving beneficial for this entity.
Finance part of this entity looks after in what way, funds can be arranged for
providing services to large number of people. It is important to understand
that employees of this venture need to work collectively for guaranteeing
excellence in work environment. Since it has to provide service to people, it
needs to work properly for gaining more success in business of this company.
Promotion of services of non-profit ventures is done by people, who use their
services. As a result, providing service to people is main area that is focused
on mainly by these organisations.
Being a service provider
business house, every department of this entity works collectively so that high
quality services are provided to distressed people. Therefore, structure of
this enterprise will also be reformed when such activities occur. Apart from
this, complexities in structures of business can be removed when interrelation
among every function of enterprises occurs. Objectives of a public sector are
that it provides services to people for enhancing their living standards (Brunet-Thornton and Brunet-Thornton,
2017, p.2). This organisation too serves people for
such noble cause and has set their objectives accordingly. When interrelation
occurs, it helps in adding victory to this venture thereby, leading to growth.
Part 2
P4 Identifying positive and negative influence that macro environment leave upon operations of business
Yang et al. (2017,
p.256) informed that macro environment of business is done by PESTLE analysis,
which helps to know in what way; it has affected operations of business.
PESTLE
analysis for BMW
|
Political
|
·
Several
rules and regulations have been set for car industry for stopping pollution (Lauring and Bjerregaard, 2017,
p.106). This company had to
comply with such rules for better execution of business.
·
Initiation
of new scheme in UK has led to manufacture large number of high mileage car
thereby, increasing in sales of BMW.
|
|
Economical
|
·
Extra
capacity of cars was being produced, which give rise to increased revenue in
marketing.
·
There
was great enhancement in GDP of country that affected business of BMW.
·
Exchange
rate has been reduced that led to trouble.
|
|
Social
|
·
Pattern
of purchasing of products has been changed.
·
Awareness
related to emission of harmful gases has increased enormously.
·
Customers
wanted to buy fuel-efficient cars, which changed arena of business
environment for BMW.
|
|
Technological
|
·
BMW
has used latest technology for gaining extra advantage in competition.
·
Sophisticated
designs have been incorporated in cars for increasing rate of sale of cars.
·
This
company has made changes in its car designs so that less pollution occurs.
|
|
Legal
|
·
Several
laws related to pollution and contamination of air has affected business of
BMW.
·
Strict
laws have been made in norms of EURO so that better operation of business can
be done.
·
This
company had to follow such laws for its betterment in business environment.
|
|
Environmental
|
·
Production
of this company has been changed as awareness related to global warming has
been increased greatly.
·
Customers
have showed interest in using eco-friendly cars, which is considered by this
venture properly.
|
Table
1: PESTLE Analysis
(Source: Influenced by the view of Rosile, 2016, p.236)
PESTLE
Analysis of Amnesty International
|
Political
|
·
Taxation
policies of UK government affect business of this venture.
·
Community
development services need to be done for bringing growth among people (Charles et al. 2017, p.110).
This entity conducts its business accordingly for better outcomes.
|
|
Economical
|
·
Tightening
economy has influenced business practices of this entity.
·
Yang and Gabrielsson (2017, p.245) opined that huge
unemployment in people impacts directly upon businesses of non-profit
ventures. This enterprise is also affected due to such economic change.
|
|
Social
|
·
Change
in life styles of people is impacting business environment of this company.
·
Attitudes
of people towards helping people selfless have been increased. As a result,
this entity can serve more people with passing days.
|
|
Technological
|
·
Obsolescence
rate and transfer speed have been improved with rapid growth in technology (Aversa et al. 2017, p.790).
This company can attain success with use of such technology.
·
Recording
of data regarding people is kept suitably by using current technology.
|
|
Legal
|
·
Several
laws like health and safety laws and employments laws help in changing work
practices of non-governmental entities.
·
These
laws help this venture to continue to work properly in their work zone for
ensuring profitable aftermaths.
|
|
Environmental
|
·
Environment
protection laws are being made so that any ill-conduct of people toward
environment can be recorded and suitable steps can be taken (Graffeo, 2017, p.8).
·
This
company has executed their business by maintaining balance with environmental
effects.
|
Table
2: PESTLE Analysis of Amnesty International
(Source: In the perspective of Cai et al. 2016, p.50)
P5 Conducting internal as well as external analysis
As mentioned by Kowal (2017, p.770), SWOT analysis helps in identifying strengths,
weaknesses, opportunities and threats for every business enterprises so that
they can conduct their business accurately. For BMW and Amnesty International,
SWOT analysis will help in improving their decision-making process accordingly.
This is so because they can understand their strength and weaknesses
appropriately, which will let them to take proper decisions regarding their
work processes. As a result, they can get an opportunity to add more triumph in
their business environment. This shows that SWOT analysis is very important in
gaining advantage in processes of business.
SWOT Analysis of
BMW
|
Strengths
·
This company
has successfully maintained in business processes correctly thereby,
enhancing brand value more.
·
It can sustain
its leading position in market by manufacturing exclusive quality cars.
·
It has
maintained a firm relationship with its suppliers.
·
Use of
advanced technology is a big strength of this company.
|
Weaknesses
·
Foss and Saebi (2017,
p.210) demonstrated that weaknesses need to analysed with serious concern for
converting weaknesses into strengths. This company manufactures high cost
products thereby, not affordable to every section of people in society.
·
Extra
independence in market of UK and US.
·
This company
possess high image of its brand that is impacting directly upon customers’
demands.
|
|
Opportunities
·
Large numbers
of products though there has been an economic downfall in UK.
·
Usage of
current technology.
·
Rate of
interest is very less.
·
There is
immense flexibility in development as well as manufacturing of products.
·
As stated by Velliaris and Pierce (2017, p.62), popularity of every venture need to be very high
so that execution of business can be done profitably.
|
Threats
·
Immense
competition in market.
·
Economic
downfall might affect business of this car manufacturing company.
·
Enhancement in
rate of fuel has provided great threat to this company.
·
Supply cost
need to be very low so that it cannot pose any threat on companies (Zhou, 2017, p.170). However, supply cost is high.
|
Table 3: SWOT Analysis of BMW
(Source: Bmw.co.uk, 2017)
SWOT Analysis of
Amnesty International
|
Strengths
·
There is
exemption of tax for this venture. As a result, they serve people selflessly
without any hindrance.
·
This company
has expanded its arena of business over large part. Therefore, many people
can encounter with their work and donate them without any issues.
·
Madonsela et al. (2017, p.278) commented that
for public ventures, funding have to be gathered in proper time in order to
execute their work properly. This company continues to work in such manner
for ensuring profitable results.
|
Weaknesses
·
Competitors
have been increased in great numbers in market. They are also providing
services to people.
·
Expenses
cannot be covered up sometimes, as it works in global area.
·
Fund
arrangements become tough, sometimes, because unemployment is leading people
to donate less.
·
Deficit of
budget has created huge problem in service providing of this company.
|
|
Opportunities
·
Prajogo (2016, p.245)
described that working for charity is a big opportunity for every
non-profitable enterprise. Similarly, this company uses this opportunity for
conducting its business smoothly.
·
Promotion of
services is done properly because people are satisfied after getting such
services.
·
This shows
that it can work in global sector gloriously and attain more success.
|
Threats
·
Economic
crisis is a major threat for non-profitable ventures (Sohi and Malshe, 2016, p.152). This company has to undergo such threat.
·
Charity can be
done properly if funds are organized suitably.
·
Several
complications regarding services provided are faced when business is being
conducted in global context.
·
Poor scandal
might ruin image of this entity. Such blunders can pose serious threats upon
businesses.
|
Table 4: SWOT
Analysis of Amnesty International
(Source: Amnesty.org.uk,
2017)
P6 Explaining in what way, strength and weakness correlate with macro factors that are external
In the opinion of Huhtala et al. (2016, p.75), strengths and
weakness analysis helps in understanding macro environment of business
suitably. This will help in bringing changes in business sectors. It is
essential that both these organisations need to compare their performance with
macro factors. Micro and macro factors directly impact business objectives as
well as decision-making of business. Business aims for these business houses
are to reach a great height where no other venture can be able to match up with
them. Strength of BMW lies in its brand awareness among people. It is required
that every macro factor needs to be considered for sustaining competition in
market. Decision-making process regarding business of this venture will also be
moulded if such factors are taken into consideration.
However, weaknesses show
that this company had to make some changes in their methods of business
execution so that more customers can be inclined towards their services.
Advancement in process of business can be seen when such factors are dealt with
proper care. Wu et al. (2016,
220) argued that this company had to use its opportunity for making a strong
hold over business. This will help in dealing with every political, economical
and social factor suitably. In addition to this, it is required that work
environment has to comply with rules and regulation of government. This will
assist this venture to continue to function gloriously in arena of work. Strengths
of Amnesty International show that services that are provided by them are
tax-free. This can be considered as a great help by government for such service
provider sectors.
Schaper (2017,
p.1082) claimed that political factors and economical factors help to align
work of every business sector accurately. This will support this venture to
continue to work in such a manner that can bring more profit. However, it is
significant that analysis of entire functioning of business environment needs
to be done. This brings proper result in workplace. Services provided for
people by this enterprise are very unique and they need to support more people,
who are being separated from using their human rights. Weakness is to stop ways
of success. That is why; important measures need to be adopted so that no
limitation can restrict path of victory. This entity has maintained proper
business tactics and tried to improve their work processes suitably. As a
result, fruitful results can be ensured in coming years of business. Doh et al. (2016,
p.4) mentioned that macro factors need to be considered seriously because it
leaves a deep impact in business operation. Environmental factors and legal
factors aids in successful conduction of business. No issues can be faced by
this business sector if they follow every rules and regulation that are set by
ruling authorities.
Conclusion
The two organizations have excelled
in their individual field, yet it has its own weaknesses. The BMW, in spite of
manufacturing economical and environment-friendly cars, the fact remains that
it is too expensive to be afforded by all customers, especially the third world
countries where the maximum of the population lives below the poverty line. BMW
can have the possibility of greater market profit and geographical expansion if
it is able to shift their focus from the manufacturing of only luxurious cars
to some more of cheaper rate models. Moreover, such companies act as a source
of status symbol, which brings in greater cultural differences and wider
disparity between the rich and the poor nations.
Amnesty
International has been an active organisation in preventing the instances of
human rights violation globally, but its major problem is the funding. Because
of its worldwide applicability, it becomes difficult to maintain a proper fund,
which is the only source of income. People by nature have will issue when it
comes to donating to such organizations, which definitely affects their working
worldwide. The problem can lessen if there is one common fund box where
donations from all over the world can get deposited. In this digitalized era,
it is much more efficient and handy to operate digitally, opening an eAccount
or mobile application to keep a record of the fund that is received from all
over the world.
