Unit 1
Unit 1
Unit 1
To:
Unit:
Unit Name: Business and the Business Environment
Submission Date:
Business and Business Environment
Business: An organization or economic system where goods and services are exchanged for
one another or for money. It is also an institution organized and operated to provide goods and
services to society under the incentives of private gain.
There are two types of Business Environment, Internal and External Business Environment.
Factors that influence internal environment are that which are under the control of the
organization, but can influence business strategy and other decisions are termed as internal. It
includes:
Value System
Vision, Mission and Objectives
Organizational Structure
Corporate Culture
`Human Resources
Physical Resources and Technological Capabilities
External Business Environment: External environment is composed of all the outside
factors or influences that impact the operation of business. The business must act or react to
keep up its flow of operations. The external environment can be broken down into two types:
the micro and the macro environment.
Micro Environment: consists of the factors that directly impact the operation of a company.
Macro Environment: consists of general factors that a business typically has no control
over. The success of the company depends on its ability to adapt.
KFC
KFC is a fast food restaurant chain that specializes in fried chicken and the major headquarters
are in United States. It is the world's second largest restaurant chain after McDonald's and the
company is a subsidiary of Yum Brands which is also a restaurant company that owns Pizza Hut
and Taco Bell chains. The main purpose of KFC is to deliver quality and different variety of
chicken to the customers so that they can enjoy fast food. It was one of the first fast food
chains to expand internationally and it has opened outlets in different parts of USA (Xiao and
Fu, 2009).
Learning Outcomes
LO1: Explain the different types of organizations, including their size and scope?
Different between for profit and not for profit and Non Government organizations (NGOs)
Micro, small, medium sized enterprises (SMEs). Different business purposes, objectives and
supply of goods and services. The range of legal structures associated with different forms of
business: sole traders, partnership and private limited companies.
LO2: Demonstrate the interrelationship of the various functions within an organization and
how they link to organizational structure.
The role of marketing, finance, human resource management and operations within an
organizational context and the interrelationships.
Organizational structure: Different structures depending upon the size and scope of the
organization, including bureaucratic and post-bureaucratic, parent, strategic business units
(SBUs), matrix and functional levels.
LO3: Use contemporary examples to demonstrate both the positive and negative
influence/impact the macro environment has on business operations.
The application of the PESTLE framework and how organizations need to monitor and forecast
the external influences.
The impact of the digital revolution on production and consumption; the impact of the social
technologies; cyber space security; emerging BRICKS markets, the global shift in economic and
social power and ethical and sustainable growth.
LO4: Determine the internal strengths and weaknesses of specific businesses and explain their
interrelationship with external macro factors.
Introduction to SWOT and/or TOWS analysis and how can they assist in the decision making
process within organizations.
Key external macro factors including the competitive environment and government
intervention that influence organizations and business.
Profit Organization: Any business entity, whose primary aim is to generate profit from the
regular operations, with a view to maximizing the wealth of owners, is called as a profit
organization. The profit earned by such entities is either retained in business, for future of
reserves or distributed to the owners as the dividend.
Profit:
A profit organization is defined as a legal organization, which is operated with the sole
of aim of earning profit from the business activities.
A profit organization, as its name suggest, works for profit maximization of the concern.
A profit organization can be a sole proprietorship, partnership or a body corporate.
The management of a profit organization is overlooked by a sole proprietor in the case
of sole proprietorship, partners in case of partnership and directors in case of company.
The major source of income, for a profit organization, is from the sale of goods and
services.
Money earned over and above by the profit organization, i.e. profit, is transferred to the
capital account.
Non Profit:
Non-profit organization is one that is operated with the primary objective of
benefiting the society as a whole.
Non-profit organization work for providing service, for the well being of the
society.
Non-profit organization is an association of a person, which can be club, trust,
public hospitals, cooperative society, etc.
There is a board of directors, trustees, committees or governing bodies who look
after the management of a non-profit organization.
The non-profit organization, derive a considerable part of their income from
donation, subscription, membership fee, charity and so on.
The excess of income over expenses results in the surplus which is transferred to
the capital fund.
The organization that I choose was KFC and it’s a large organization and it’s a second biggest
food chain in the world. The total revenue of KFC was 23 billion in 2013.
Structure, size, and extent of any organization are connecting with the goal of the business
organization. It is seen that any organization set a huge target as their objective only when they
have a good organizational structure. If the organization have few people in their organizational
structure and no one has knowledge regarding their role and subordinate then it is not possible
for them to reach the target because then it is impossible to achieve this because of less clarity
in the role. On the other hand any business organization set their objective based on their size.
If the size of organization is enormous and invests huge money, then they set the big target as
their business objective.
Organization set their business objective by reviewing their business scope. If the scope of any
organization is to serve national customers, then they will set business objective accordingly.
On the other hand if they see that they serve international customers then they will set their
business objective accordingly. According to the product and service, an organization set their
structure, size and scope. If any business organization sees that, their product does not require
massive organizational structure, then they do not set that. On the other hand, if the scope of
business of any product or services is vast only then an organization creates massive
organization size and creates a scope, otherwise, they create small sized organization.
The three stakeholders of my organization is Shaheen Chemist, Gloria Jeans and The City
School. The responsibilities that a company has on them is that the KFC have to sell their food
in less amount so more people come and more profit will be earned. The organization should
be neat and clean. The organization should have a good staff member who knows very well
how to talk and fulfill the customer demand. The organization should have a proper sitting
system and the order should be given on time to the customer.
The influence that the stakeholders have on the company is that if the brushier of the company
is given to the stakeholder then the people coming to the stakeholders sees the brushier and
will come to the company. The company must have a good relationship with the stakeholders
so the people who go the stakeholders they refer to our company. In this way both organization
have a profit in it.
Operations: Everything that happens within a company to keep it running and earning money
is referred to collectively as business operations. Business plans often include a section
dedicated to operations so that company founders understand the systems, equipment,
people, and processes need to make the organization function.
The major external and uncontrollable factors that influence and organizations decision making
and affects its performance and strategies. These factors include the economic factors;
demographics; legal, political, and social conditions; technological changes; and natural forces.
A pestle analysis is a framework to analyze the key factors Political, Economic, Sociological,
Technological, Legal and Environmental influencing an organization from the outside. It offers
HR practitioners insight into the external factors impacting their organization.
In May, KFC became the accomplish of a political dispute. Tennessee Democrat, Rep. Steve
Cohen, attempted to mock Attorney General William Barr by busting out a giant bucket of
Kentucky Fried Chicken during a hearing. This was Cohens attempt at calling Barr a ‘’Chicken.’’
In the press images, KFCs logo was clearly displayed. This wasn’t a publicity stunt with KFCs
permission (that we know of) and it could’ve easily tarnished KFCs reputation.
Economical Factors of KFC: KFC is creating vegan items to compensate for vegan and
dieting consumers. As of a few days ago, KFC started experimenting with fried chicken
sandwiches; instead of buns, doughnuts will house the fried chicken. And they’ve created two
vegan fried ‘’chicken’’ options, which are essentially boneless wings and vegan nuggets. Hordes
of people came running to the nearest KFC location just to try these new creations. Clearly,
these experiments were successful for the company, both economically and socially.
Social Factors of KFC: Fast food restaurants struggle with social issues that associate
negative feelings from consumers to the brands. Many people worry about the mistreatment of
minimum wage food workers. They also worry about how the animals used for the menu live;
many are injected with hormones, kept in cramped compartments for the entirety of their lives,
and forced to carry more fate than normal. Organizations like PETA gave raged against the
mistreatment of these animals, boycotting the companies who follow this unethical practice.
Another issue is, of course, the high calorie food. KFCs menu is filled with these foods, and with
the obesity crisis thriving in Western countries, restaurants like KFC are often blamed for the
epidemic. Offering vegan options is one way to appease people desiring healthier options; it
also introduces consumers, who otherwise wouldn’t look twice at KFCs offerings, into the
restaurants.
Technological Factors of KFC: Unlike many other fast food restaurants, KFC are adopting
the newest technology for workers. They believe that by improving the environment for
employees, customer service may improve too. It’s rather normal move considering how tech-
savvy many of the younger workers are. They’re more likely to accept and understand new
forms of technology in the workplace, such as voice activated tests for trainees.
Beyond the workplace, KFC is also offering advanced technology for deliveries, kiosks, and
easier ordering. You can now order your meal before reaching the cash register, making the
entire process much quicker for customers. This is a ‘’click-and-collect’’ feature and it’s already
beneficial for KFC restaurants in Australia; approximately 98% of locations offering click-and-
collect have witnessed a 20% profit increase.
Environmental Factors of KFC: A complicated history with KFC’s paper supplier has
affected the personal opinion of the brand. The paper company is linked to deforestation,
which negatively impacts the health of the planet. It also contributes to the endangerment of
wildlife and similar species who are already on the brink of extinction.
Legal Factors of KFC: At the moment, KFC operates in more than 120 questions around the
world. To remain operational, the company must follow the laws in each location. This includes
filing the proper amount of taxes, adhering to labor laws, and ensuring all restaurants are up-
to-code. If they fail to follow any of the legalities, they may find themselves in court or even
shutdown.
In Conclusion: KFC remains a staple fast food restaurant in today’s world. Despite the latest
political stunts and debacles, the company is focusing on adopting new menu items and
technology to improve customer satisfaction. And it’s working; profits in set locations are
already on the rise. If the company can step away from questionable corporate relationships
and adhere to laws and regulations, it’ll likely continue to flourish in the fast food industry.
Decision making process totally depends on SWOT analysis without finding exact facts and
figure. Its impossible to make decision in other words we can say that future planning of an
organization totally depends on SWOT analysis. Future planning belongs to making strategies.
All of strategies are being perform or design on the basis of exact fact an figure strategies are
main part of planning.
Strength:
Conclusion
The current report explains the current trend of market and various ways to
identify the strength and weakness of organization. The study identifies
different objectives of organization and tries to fulfill the demand of
customers in the organization and evaluate the overall performances of
organization with the help of PESTLE and SWOT analysis. It explains different
tools to identify the factors that affect the business internally and externally
and report explains the strategies that help the business to sustain in the
market.
References
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