BUSINESS AND THE BUSINESS EnVIRONMENT

Table of Contents

Introduction

Task 1,Task2,Task3,Task4

Scenario 1 (LO1 and LO2)

P1. Explaining the different types purposes of the organisations.

1. Cancer Research UK (Voluntary Sector)

2. Background information of three organisations

3.  Explanation of functions of Cancer Research UK

Scenario 2 (LO 3 and LO 4)

1. Identification of negative and positive effects of the macro environment on Ryanair

2. Conducting external and internal analysis

3. Explanation of weaknesses and strengths that can interrelate with the macro environment of Ryanair

Conclusion

Reference …………………………………………………………………………………………………………………..16

Organisational behaviour is important for understanding the reasons for the certain behaviour of the people and the ways they react to situations. This study focuses on the purposes of Cancer Research UK, Ryanair, and Tesco plc while evaluating their background information. The functions of Cancer Research UK have been evaluated in this context. In addition, the negative and positive effects of the macro environment on Ryanair have been evaluated. SWOT has also been conducted for assessing its microenvironment in its operations. The positive and negative effects on the macro environment of Ryanair have been evaluated in this context. Further, weaknesses and strengths that can interrelate with the macro environment of Ryanair have been explained.

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The main purpose of this company is to reduce the number of deaths by cancer and create awareness among people to lead a healthy lifestyle. It aims in doing effective research in tackling cancers in low-income countries and promote a sustainable living (cancerresearchuk.org, 2017). The organisation is dependent on public government expenditure and its researchers and doctors continuously work for helping people to get rid of cancers.

2. Ryanair (Private sector)

The main purpose of Ryanair is to provide low-cost fare services to passengers for increased passenger traffic while maintaining efficiency in its operations. It aims to explore the remote areas so that a lower middle class can afford travel services. Its revenue is 7.15 billion in 2018 as it operates in new passenger routes. We expect to grow their fleet to almost 460 aircraft by 2019 that will allow them to grow traffic to 139 million guests (Ryanair, 2015).

3. Tesco Plc (Public sector)

The purpose of Tesco plc is to give high-quality products to customers in order to ensure healthy and sustainable living. It aims to promote well being and health of customers by giving more healthy products in the varied range of groceries that they supply. Its sales have amounted to 51.0 billion pounds that show its progressive growth in this year (Tesco, 2018). 

Features

Cancer Research UK

Ryanair

Tesco Plc

Background information

Cancer Research UK is the cancer and awareness research charity that aims at reducing the number of deaths from cancer. It is the largest independent cancer research charity that conducts research regarding treatment, diagnosis, and prevention of disease.

Ryanair is the low-cost airline that carries 130 million passengers on more than 2000 daily flights from its 86 bases. It has connections of more than 25 countries.

Tesco plc is the British general and multinational retailer in groceries, giving an effective environment for growth and development of its team.

Products and services

It provides services by finding ways of curing all types of cancers all around the world.

It has launched Always Getting. The program so that the effective flight services are given to their passengers. 

It is a multinational

corporation that is involved in the selling of personal care, consumer goods, cleaning agents and foods.

Size and scope

Its total income is 634 million pounds while its expenditure on research is 423 million pounds. 12000 patients have enrolled in these clinical trials.

The company has been able to carry 2.25 million passengers and has a team of more than 14500 highly skilled employees who deliver effective performances on time.

It is a public limited company which is having a sale of 51 billion pounds and its operating profits is 1837 million pounds.

Vision

Its vision is to create awareness among three-quarters of the UK people regarding their lifestyle for reducing their risks of getting cancer (Cancer Research, UK, 2018.

Its vision is to give effective airline services to its passengers at low cost so that passengers from remote areas can avail their services (Ryanair, 2018).

Its vision is to be the most highly valued business for the customers that they serve and the communities in which they operate (Tesco, 2018).

Mission

To do world-class research for improving the understanding of cancer and finding out the ways of preventing, diagnosing and treating various kinds of cancer

Its mission is to give low fare which can generate increased passenger traffic while stressing on its efficient operational services and reducing unnecessary costs.

Its mission is to ensure healthy and sustainable living by meeting everyday needs for personal care, hygiene, and nutrition with brands that enable people to feel and look good.

Objectives

Objective is to give information regarding cancer and making campaigns to influence public policy of the disease.

Its objective is to establish itself as the leading low fare airlines in Europe.

Its objective is to be the leading retail business by providing high-quality products and services at a rate cheaper from its competitors.

The organisation and legal structure

It is having a matrix structure where the staffs know of their responsibilities.

It abides by Companies Act 2006

and Charities and Trustee Investment (Scotland) Act 2005

of Secttion  44(1).

It is having a hierarchical organisational structure in which there are 37 executives. It consists of 11 persons on board, including the ceo.cfo, pilots, chairman and customer, and marketing services. it abides by the legal and rules of the European Union in order to ensure the safety and health of passengers.

It is having a hierarchical structure which helps in effective communication flow from top executives to lower the level.

It follows a legal structure of corporate governance in which the shareholders’ concerns are taken into account while making decisions.

Information regarding stakeholders

The stakeholders are required to take part in cancer research and spread awareness of healthy habits for reducing cancer. 

It ensures that its stakeholders abide by the laws and regulations of the company and make effective decisions in its operations.

Shareholders in this company are required to abide by its rules and regulations and cannot exchange or convert shares of others.

Table 1: Background information on three organisations

(Source: created by the learner)

Cancer Research UK

It is a charity organisation that has been established as a result of the merger of the Imperial Cancer Research Fund and Cancer Research Campaign on 4th February 2002. The aim of this organisation is to control increased deaths that are occurring due to cancer.  With the help of conducting research for the prevention of disease through early diagnosis and effective treatment, the organisation focuses on reducing cancerous deaths.

Functions

A hierarchical business structure is the chain of command that looks like a pyramid, having a large base of workers, who is supervised by the smaller level above them, who are in turn supervised by higher level employees. It continues on to the top ranking officer such as the company President or CEO. The marketing department monitors and reviews all the marketing activities from promotion to selling while the finance department monitors all financial activities of the company (Hair et al. 2015:10)). The HR is involved in recruitment, selection and training while supervisors monitor the functions of team leaders. They in turn monitor and review the activities of staffs.

. Figure 1: The organisational chart of Cancer Research UK

(Source: cancerresearchuk.org, 2017)

The organisational structure of Cancer Research UK

                                    Cancer Research UK Organisationl Structure

            (Accessed from:https//www.cruk.manchester.ac.uk/About/Organisational-Structure)

The above figure shows the hierarchical structure of Cancer Research UK that ensures that communication flows from the top level to a low level in order to provide effective health care services. The department of the organisation interacts and coordinates with one another so that they can monitor and review their health care services. Reznikov, Shahar & Weiner (2014:3820) is of the view that the main advantage of this structure is that it helps the employees to be aware of their roles and responsibilities. As for example, the HR department in Cancer Research UK coordinates with the accounts and sales department for recruiting and selecting talented employees. The CEO communicates with the range of departments so as to review and progress of the organisation. The main advantage of this structure is that it helps the employees to recognise the levels of leadership in the organisation and enable them to make effective decisions (Foss & Saebi, 2017:223).

Political

UK is on the verge of leaving EU so political uncertainty can create unimaginable chaos that can result in a reduction in flight services. The current corporation tax rate for profits will be 17%. UK’s GDP is 1.2% in the quarter of 2018 though demand and household consumption have fallen in recent times. The annual average growth rate of the UK is 2.45%. The standard tax rate in the UK is 20% (David, 2016:10).

Positive

It can help in increasing its flight operations in the UK and get necessary funds from the government and investors.

Negative

In this case, Ryanair faces sluggish growth and reduction in its passengers due to fluctuation in airline sector.

Economic

UK is considered to be the 5th largest economy in the world in relation to nominal GDP. The current minimum wage of people from age groups 25 and above is 7.50 pounds per hour. Though the Bank of England has set an inflation target of 2%, the inflation rate has risen to 3.1% in 2017.

Positive

This company has the prospect of giving good salaries, wages and perks to employees so that they can contribute to increased productivity.

Negative

In this case, the high attrition rate by Ryanair has increased the unemployment rate in the UK and reduces its operational efficiencies.

Social

The UK has a population of about 65.6 million as per Office of National Statistics, which shows that the airline companies can get a huge number of passengers. Its population will reach by 74 million in 2030 as an increased number of births have been recorded. In 2018, 20% of individuals are 65 that have created a burden on labour and health sector (David, 2016:10).

Positive

It has been able to get the good workforce for its operations. Increase in talented and skilled employees has helped it in innovation and developmental activities and maintain diversified workforce.

Negative

In this case, the company has not been able to manage its costs though it has recorded a high number of passengers. It has not been able to manage and control its operations that have resulted in recent damage to its reputation in the airline sector.

Technological

Being the hub of technological and financial organisations, the UK is the most advanced countries in the context of R&D activities. The UK has attracted 11 billion pounds that is more than most other countries across the world (Bush, 2016:11).

Positive

Advanced technological infrastructure in Ryanair can help the employees to bring in new innovative solutions for easing traffic and ensuring best travelling experiences.

Negative

However, due to its low cost and revenue, it has not been able to invest appropriately in its innovative technology.

Legal

The Equality Act 2010 ensures that no discrimination and harassment are practiced in the workplace and all employees are treated equally. In addition, the Employment Act 1996 protects the rights of employees through giving of the minimum wage, paternity and maternity leaves, holiday packages and sick pay (legislation.gov.uk, 2016).

Positive

In this case, Ryanair ensures that proper working environment is provided so that the employees can make innovative solutions to its technological problems.

Negative

The company has not been able to prevent harassment and discrimination in its workplace.

Environmental

The companies in UK need to abide by the Environmental Protection Act 1990 so as to reduce environmental pollution..

Positive

In this case, Ryanair has ensured that it has effective waste treatment procedures for treating airlines, wastes and chemicals. It has improved reduced its environmental pollution through minimal use of harmful substances.

Negative

The company needs to discard its faulty types of equipment and machines effectively so as to prevent environmental degradation. (Refer to appendix 1)

Strengths

It has the lowest unit costs of European airline and is the lowest cost airlines in the world.

It provides low fares on the basis of its profits, which helps it to outweigh its competitors.

It has a number of flights and an increased number of passengers.

It has a strong focus on keeping fares and costs in low prices.

Weaknesses

Recently, it has performed very poorly that has resulted in its low brand loyalty.

The high attrition rate has hampered its operational efficiencies

Its profits are highly seasonal, which has resulted in its losses in recent times    

Opportunities

Improvement, in customer services by enhancing the quality of interactions with its passengers

Launching of its business traveller product can help it to attract new passengers

Increasing the number of new aircraft can help it to ensure the safety and health of passengers

Threats

Accidents are the major threat for this company

Increasing the number of competitors who are providing low-cost services

Additional charges and excessive costs incurred from the passengers.

Table 2: SWOT analysis of Ryanair

(Source: businessteacher.org.uk, 2017)

(Refer to appendix 2)

3. Explanation of weaknesses and strengths that can interrelate with the macro environment of Ryanair

The company, in recent times, has reported of high attrition rate due to its excessive costs and ineffective work culture. This can result in the increasing unemployment rate in the UK and poor relationship with its customers. Christina et al. (2015:170) is of the view that analysing internal and external weaknesses can help in making effective strategies for enhancing business. In this case, Ryanair has accumulated hidden taxes and deceiving advertisements leading to poor customer services and damaging its image in the airline sector. It has failed to take into account the local needs that have led poor responses from passengers. In recent times, it has done fairly poor in surveys and polls that have resulted in poor brand perception. However, Wiggins (2018:10) argued that its low cost and fare services have helped it to get a number of passengers for its flights. It has slashed its unnecessary expenses in order to raise its production. As for example, it has reduced its advertising budget for making adequate investments in developing effective nod advanced infrastructure. This can help in enhancing growth in the airline sector and providing effective customer services.

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The airline needs to maintain its branding strategy in order to get good responses from its passengers. It needs to have an effective complaint and feedback mechanism so as to assess the needs of customers. In addition, it should move from its international strategy to transnational strategy that will help in getting local responses. The airline needs to make adequate investments in its R&D activities in order to give the best travelling experiences to its passengers. It should take into consideration customer services so as to increase customer loyalty. Low advertising costs need to be made so as to reduce unnecessary expenditures.

It can be concluded that organisations need to make effective strategies so that they can assess the needs of employees and customers. It can help them to provide high-quality products and services to its customers. In this case, Cancer Research UK and Ryanair have a similar objective of providing effective services to its customers in different ways. However, for giving effective services it is required to reduce unnecessary expenditure, building good infrastructure and develop innovative solutions for critical problems. In addition, the organisations have to ensure the good working culture and cooperative atmosphere so as to empower employees in making effective decisions. 

Reference list

Book

Hair Jr, J.F., Wolfinbarger, M., Money, A.H., Samouel, P. & Page, M.J. Essentials of business research methods.(2015) Abingdon: Routledge.

Journals

Christina, S., Dainty, A., Daniels, K., & Waterson, P. (2014). How organisational behaviour and attitudes can impact building energy use in the UK retail environment: a theoretical framework. Architectural Engineering and Design Management, 10(1-2), 164-179.

Foss, N.J.& Saebi, T., (2017). Fifteen years of research on business model innovation: How far have we come, and where should we go?. Journal of Management, 43(1), 200-227.

Reznikov, N., Shahar, R., & Weiner, S. (2014). Bone hierarchical structure in three dimensions. Acta biomaterialia, 10(9), 3815-3826.

Websites

businessteacher.org.uk. (2017) Ryanair SWOT Analysis Available at: https://businessteacher.org.uk/swot/ryanair.php [accessed 11 Jan 2018]

Cancer Research UK, (2018). Annual report 2017/18. [Online]. Available at: https://www.cancerresearchuk.org/sites/default/files/cruk_annual_report_2017_18_final.pdf [accessed 11 Jan 2018]

cancerresearchuk.org. (2017) The importance of Gifts in Wills Available at: https://www.cancerresearchuk.org/get-involved/donate/leave-a-legacy-gift-in-your-will/how-legacies-make-a-difference/the-importance-of-gifts-in-wills [accessed 11 Jan 2018]

legislation.gov.uk. (2016) Equality Act 2010 Available at: https://www.legislation.gov.uk/ukpga/2010/15/contents [Accessed on 11 Jan 2018]

Ryanair, (2015) Ryanair Holdings [Online]. Available at: https://robins.richmond.edu/documents/Ryanair.pdf [accessed 11 Jan 2018]

Ryanair, (2018) Annual report 2017-18 [Online]. Available at: https://investor.ryanair.com/wp-content/uploads/2018/07/Ryanair-FY-2018-Annual-Report.pdf [accessed 11 Jan 2018]

Tesco, (2018) Annual report 2017-18 [Online]. Available at: https://www.tescoplc.com/media/474793/tesco_ar_2018.pdf accessed 11 Jan 2018]

Cancer Research UK (2018)  Organisationl Structure: [accesed 24 Jan 2018]

(Online Accessed from:https//www.cruk.manchester.ac.uk/About/Organisational-Structure)

Online articles

Bush, T. (2016) An Example PEST Analysis of The UK Available at: https://pestleanalysis.com/pest-analysis-of-the-uk/ [Accessed on 11 Jan 2018]

David, J. (2016) PESTEL analysis of the UK Available at: https://www.howandwhat.net/pestel-analysis-uk/ [Accessed on 11 Jan 2018]

Wiggins, K. (2018) Ryanair’s Strike Problem, Explained Available at: https://skift.com/2018/08/10/ryanairs-strike-problem-explained/ [Accessed on 11 Jan 2018]

Appendices

Appendix 1: PESTLE

(Source: https://www.pinterest.com/pin/368943394467210362/)

Appendix 2: SWOT

(Source: https://www.visual-paradigm.com/guide/strategic-analysis/what-is-swot-analysis/)