1

Business
Environment
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Contents
Introduction......................................................................................................................................3
LO1 – Know the range of different businesses and their ownership...........................................4
P1..............................................................................................................................................4
P2..............................................................................................................................................6
LO2 – Understand how businesses are organized to achieve their purposes...............................8
P3..............................................................................................................................................8
P4............................................................................................................................................10
LO3 – Know the impact of the economic environment on business.........................................12
P5............................................................................................................................................12
LO4 – Know how political, legal and social factors impact on business..................................14
P6............................................................................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
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Introduction
Business organizations set based on the business environment. If the business environment is not
suite with the business goal and its objective then the business organization will not sustain itself
in the market for a long time. To handle the business environment an organization first sets the
organizational goals, aims, and objectives. Then business organization makes plans to implement
the business strategy which will help to gripe the market. In this aspect, an organisation makes
those types of organizational structure which will easy to operate and help to work actively.
Besides, organizations must understand the economical, political, legal, and social factors
influences in the business. All those things will discuss in this journal.
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LO1 – Know the range of different businesses and their ownership

P1

Unilever
Types of Business:
Unilever was founded in 1929 in England and Dutch. This company was a merger between
Margarine Unie and a British soapmaker firm Lever Brothers. Thus Unilever is a British-Dutch
multinational consumer goods company. Unilever is a public limited company that follows all
the laws of the British. Thus, this company is registered on the British Stock Exchange. Unilever
has lots of product diversification. This company operates around 190 countries.
Purpose:
Their main purpose is to create sustainable living commonplace and they believed that this is the
best way in the long-term for growing the business. Based on this purpose they established their
mission is to adjust vitality to life. By branding, Unilever wants to help people feel good, look
good, and get more out of life by providing needs for nutrition, hygiene, and personal care.
What do they do?
Unilever is a huge diversification product branding company that has almost 400 brands. They
produce food, ice cream, beauty products, personal care, coffee, pet food, soap, home care, etc.
Among all of this product soap is so much revenue generated product caused Unilever is the
world's largest soap producer company.
How do they do?
Unilever has 400 brands which are selling over 190 countries. Unilever has 1,55,000 employees
in all over the world. Those employees operate the Unilever business activity. Unilever
organized all the products in four areas such as Home Care, Foods, Refreshments, Personal Care.
Ownership Type: Public Limited Company

Public Limited Company consists of at least seven and the minimum range is bound by the
number of shareholders. 50,000 pounds of share capital is needed to establish a public limited
company (Choi and Dow, 2008). This company has a legal entity that allows them to act like a
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person. As a result, they can sue or be sued. The company is led by the Board of Directors where
a minimum of two peoples and a maximum of 12 peoples stay.
Advantages
This type of company can easily collect lots of capital from the general peoples. Shareholder's
liabilities only limited by their only investing amount, not in the personal property. Transfer of
the share can easily possible.
Disadvantages
This type of company needs a huge legal procedure to establish. Besides, this type of company
creates in the big area. As a result, company controlling and administration is so much hard.
Besides, this type of company does not provide any type of power to the shareholders.
Non-Profit Organisation:

Oxfam

Oxfam is the world's biggest multinational voluntary organization. They are mainly NGOs (Non-
Governmental Organisations) whose main concern reduces property, provides relief, food,
medicine, and so on.

Purpose:

This organization established in 1942 to establish human rights such as sustainable livelihood,
basic social services, life, and security, to be heard and identity.

What do they do?

Oxfam supports almost 2,70,000 peoples so that they can develop their goods, services, and
corps. Besides, they also promoting health care for 4.3 million peoples. They have operated in
many countries such as Nepal, North Korea, East Africa, Israeli-Palestine conflict.

How do they do?

They collect the funds from various countries through campaign, web, selling their goods, and by
direct approach. Besides, they also collect the used cloths. After collecting those donations from
all over the world they donate and distribute it to their operative area to achieve their six
missions.
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Ownership type: Charity

This type of organization is free from profit. This type of ownership has so little ownership and
also they have so much flexibility to exchange the ownership (Connell and Teo, 2010).

Advantages

In this organization owners do not go in any clash caused this type of organization is a totally
non-profit organization. As like public limited company owners personal property is not liable in
this organization. They can expand their operation all over the world easily.

Disadvantages

Here employee wages are so small which make the de-motivate. Besides, this type of
organization handles many types of complexity to collect the money, and also there are lots of
government influences as the people are government control. Thus in any work government
legalization is necessary.

P2
Stakeholders of Unilever

 Unilever's mission will be achieved when its profit and its revenue will rise. Profit will
come from customer satisfaction. Thus stakeholders must be concern about customer
satisfaction (Tavidze, 2015).
 Besides, relation with investors is another vital aspect. Without this Unilever cannot
expand its operation all over the country. Besides, bad relations of investors will low
down the company's goodwill which will de-motivate the other investors.

Stakeholders of Oxfam

 In this organization, volunteers come for self-satisfaction. Thus there are no wages need
for employees. But some organizations there need a small amount to pay the employees.
This thing can influence directly to achieve the organization's vision.
 Oxfam operates its work by collecting the donation and contribution. Thus Oxfam needs
a model to make good relations and influences the contributor to donate their
organization so that they can work faster to achieve their vision.
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8

LO2 – Understand how businesses are organized to achieve their purposes

P3
Unilever

In every organization, there are lots of departments. To coordinate all those departments together
organisation need an organization structure. But every organization structure is not the same. The
public limited and voluntary organization has differences in an organisational chart.

Unilever's organization chart is divisional. In this structure, Unilever has a board of directors
where CEO, chairman of the board, vice chairman of the board, and 8 persons are directors.
Under the CEO all the operation is operated.
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Figure1: Unilever organizational Chart (growth,

2020).

COO, Digital & Marketing, HR, Legal & Secretary, R&D, Supply Chain, Beauty & personal
care, Foods& Refreshment, Home Care, and South Asia all the managers directly report to the
CEO (growth, 2020).

Oxfam:

Oxfam is a charity organization whose aim is to reduce the poverty line of the world and also the
other 5 aims. Thus Oxfam creates its structure based on its mission. Thus they use a hierarchy
structure. Oxfam makes his structure where he operates.
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Figure2: Oxfam Organisational Structure (Oxfam International, 2020).

P4
Unilever

Unilever's main purpose is to make a profit from a hugely competitive market. Unilever has lots
of business objectives and has the main aim for the future. In the previous section, it states that
Unilever's vision is to established a sustainable living commonplace. Based on the vision
Unilever set the objectives. These objectives are SMART objectives. To gain those objectives
Unilever should maintain a process and use proper resources. Besides, when Unilever make
strategic plans to gain the business objectives in that time Unilever should concern about their
strengths and weakness. Unilever should follow some steps to gain the objectives-

 Set the business goal and make plans.

 Motivate the employees so that Unilever's performance can give a better outcome.
 Implement the business plan and monitor the activity of the organization's work.
 Collect feedback and evaluate the feedback.

By doing those things Unilever can achieve the business goal and also they can gain their vision
gradually.
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Oxfam

Oxfam is a charitable organization that is operated by Non-Government funding (Oxfam

International, 2020). This type of organization has lots of aims which will enrich society.
Oxfam's main goal is to ensure human rights such as reduce poverty, provide relief, foods,
medicine, and so on. Besides, they also ensure human development. In this aspect, they arrange
many types of training programs. But to do all of those things Oxfam must tackle some political,
economical, environmental, technological, legal issues. To handle those things Unilever should
use strategies.

In this aspect, it also comes that every organization's strategic plans are not the same. The
organization's strategic plan is set upon the organization's vision, mission, goals, and objectives.
From this side, Oxfam's organizational strategy is different from the Unilever. Caused Unilever's
vision, the mission is not like Oxfam. Moreover, a strategic plan helps to set a SMART objective
which will helps the Oxfam to set the overall business objective.

Oxfam is a charitable organization whose objective is to reduce the poverty line from the world.
Thus they collect donations from richer and distribute those collections among the poor peoples
or they make job opportunities by training them. Oxfam also focuses on medicine and secure
life. When those things will achieve, Oxfam can go to the business purpose. In this aspect, they
also set the business. Oxfam has shops in its name.
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LO3 – Know the impact of the economic environment on business

P5
The economic aspect is one of the most vital issues for any business organization. Caused based
on the economic situation customers will buy the products. If the customer cannot buy the
products then Unilever should reduce the product price. As a result, Unilever cannot gain the
profit as they set. The economic situation includes inflation, GDP, interest rate, employment rate.
From the beginning, it will show how GDP can affect the business.
GDP's full meaning is Gross Domestic Product. This is one of the major important issues to
sustain in the market. This GDP indicates the monetary measure of market goods and service
value. The more GDP will help to maintain the supply at a low price (Tennant, 2015). Besides,
GDP also helps to low the product price. UK's overall production is indicated by the GDP. If the
GDP increase then the UK production rate also increases. As a result, in the market, there are lots
of supply. In this aspect, product price will low which help customers to buy more products.

Figure 3: GDP of the UK (Tennant, 2015).

The inflation rate refers to the product price of a certain country at a certain time or period. The
inflation rate is one of the vital issues. But discuss the inflation rate impact in the business it
must understand how inflation increase. When the government thinks that they need money to
finance the government project at that time they print the money and supply in the market. As a
result, in the market money is more than previous which increases the product price. Thus if the
inflation rate increase day by day then it is clear that Unilever or other organization should
13

increase their product price. If they do not do it then they will not be able to sustain in the market
for a long time.

The unemployment rate is another factor. When the unemployment rate of any country indicates
that low. That means there are huge jobs for general people. As a result, it indicates that an
organization can able to hire people more. Besides, employment can also increase business
organization profit. When people get jobs at that time people have money and they can spend
their money on buying the products.
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LO4 – Know how political, legal and social factors impact on business

P6
A business organization has an impact both internally and externally. Organizations can control
the internal aspects but they cannot control the external elements. To tackle the external elements
business must follow the strategy. But first, it must be understood how political, legal, and social
factors impact on the business.
Political factor means a country political condition, government influence in the market,
government policy, etc (Tebloyeva, 2010). the political condition of the country can destroy the
business. If the political condition is unstable then customers will not want to buy the product
caused they will earn a small amount of money which will need to fulfill the basic needs.
Besides, the worse political condition also can destroy the business industry and its
infrastructure. Syria is one of the best examples.
Legal factor means government law and regulations which must follow an organization. If any
organization cannot follow any laws of the country then the organization will not sustain itself in
the market to operate. Legal laws are- Employment wages act, employment security Act,
company act law, and so on. By concerning those laws organisation must work.
Social factors include the customers' age, society culture, tradition, religious beliefs, etc. Based
on this social factor Unilever can segment the market and target the market. For social factors in
Muslim countries, Unilever cannot sell the wine and other alcohol drinks massively. Rather they
have to sell the beauty products to the customer. Again for the country tradition, Unilever takes
marketing strategies.
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Conclusion
From the above discussion, it states that business organization should concern about the business
environment. To sustain in the market Unilever should understand the make good relation with
the stakeholders and also Unilever should make those types of structure which can help to
perform easily. Besides, Unilever should make a strategy to tackle the economy, political, legal,
and social issues.
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References
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Chappell, P., 1986. Why ownership matters. Long Range Planning, 19(6), pp.130-136.

Choi, J., and Dow, S., 2008. Institutional Approach To Global Corporate Governance. United
Kingdom: Emerald JAI.

Connell, J., and Teo, S., 2010. Strategic HRM. Prahran, Vic: Tilde University Press.

growth, O., 2020. About Our Strategy. [online] Unilever global company website. Available at:
<https://www.unilever.com/sustainable-living/our-strategy/about-our-strategy/> [Accessed
15 July 2020].

Mudrick, P., 2007. Individual Personality Factors That Affect Normative Beliefs About the
Rightness of Corporate Social Responsibility. Business & Society, 46(1), pp.33-62.

Oxfam International. 2020. Oxfam International. [online] Available at:

<https://www.oxfam.org/en> [Accessed 15 July 2020].

David, A., 2015. Progress In Economics Research. Volume 31. Nova Science Publishers, Inc.

Tebloyeva, V., 2010. BUSINESS ENVIRONMENT FEATURES AND SMALL BUSINESS

PROBLEMS IN THE NORTH OSSETIA-ALANIA. The economy of Region, pp.192-196.

Tennant, W., 2015. Improving initial condition perturbations for MOGREPS-UK. Quarterly

Journal of the Royal Meteorological Society, 141(691), pp.2324-2336.