Unit 21 Business Environment Assignment L/616/1805


Various macro environment factor has affect organisation performance at market place. It is a management responsibility to analyse these elements on in order to reduce their negative impact on business activities in long period of time. Some external factors are political, economical, technology, social cultural, governmental, legal and many more. So that, all these elements has affect organisation positively as well as negatively. In this report choose Unilever firm to know the impact of macro environmental factor on their performance. It is British intentional firm which are run their business activities approx 190 nations. Unilever has established in the year of 1930 and provide around 400 brand like knorr, lipton, lux, rama, magnum, hellmann's and many more (Al-Swidi and Al-Hosam, 2012). In this company 169000 employees are work and earn 6.486 billion net income in the year of 2017. In this assignment covers types and purpose of company public, private and voluntary with their scope of different organisation. It also covers relationship between various firm function and internal as well as external analysis of business.

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P3 Relationship between various organisation function

The firms structure can be define as hierarchy which are includes all business activities with in organisation (Dibrell, Craig and Hansen, 2011). It covers all rule, policies, duty and responsibilities of each one employees according to their role at work place. It also explain how information communication has been done or processed in company. It create uncertainty risk which are effect institutes decision as well as performance in long period of time. Various kind of department with in companies are finance, human resources management, operations, marketing, sales, production, research and development or many more. It relationship and advantages are explain as follows:

(Sources: Organisation chart, 2016)

  1. Design and production: It is a preliminary section of Unilever where workers are used resources in order to produce product and services according to customer's needs, preferences, perception, demand and many more (Welter and Smallbone, 2011). The manufacturing work want to monitoring correctly so that all available resources are used in a appropriate manner to achieve set target. Some time manufacturing team are also divided into two kinds first is quality assurance and second is analyst but the main objectives of whole group are increase outputs in limited inputs in an effective manner in limited period of time.
  2. Finance department: - Balancing budget in a Unilever is very important as without the right budget the quality of the product can be compromised. The finance department includes accounting, controlling, and producing company’s financial statements. Finance department affects all other departments as HR cannot recruit new people and production cannot innovate in their product without the right budget.
  3. Sales and marketing: - Company has marketing and promoting their product as well as services to increase customer's awareness about goods (Gharajedaghi, 2011). Through this activities, Unilever are able to sell commodities to large number of clients which help to gain high profitability, sustainable and market position. They are create right advertisement for target consumers to provide information like feature, size, price, colour, technology etc. It help to achieve goals and objectives in given time frame effectively.
  4. Research and development: - Management of Unilever has conducting market research to know clients needs, preferences, perception, attitude, motivational factors and many more to produce goods accordingly. Research and develop department has continuously improve their quality, feature and technology of goods which help to gain higher customer's satisfaction and market position.
  5. Human resource: - Human resources manager has play vital role with in Unilever. They are organising training program for their employees to enhance skills, knowledge etc. Through this, HR executive of Unilever are able to improve workers performance and productivity which help to achieve goals, objectives in specific time period. Some other work are Boots moral of staff members and hire talented candidate according to their requirement, provide compensation plan, appraisals, promotion, transfer and many more.

Relationship of these departments and their functions with each other:

With in firm, every section has depend on each other because with this they are not able to achieve their target on time. For example, it production department can not produce good on time then marketing department of Unilever can not sell that product on time in resulted finance department can not receive income on time (Kolk, 2016). Some another example, marketing department has organising market research to know needs of clients and provide all relative information to research and development department to produce goods according. So that both section of institutes has inter depended on each others and can not able to play their role with out another sector. We all know that, with out skilled workers Unilever can not able to run business activities in an effective manner so that human resources manager has conducting training event to enhance staff members knowledge which help to increase productivity in their work.


P4 Positive as well as negative impact of external environmental factors on companies operations activities

Various macro environmental elements has affect business operations activities positively as well as negatively. So that, it is a management responsibilities to analyse it impact in remove negative one in order to run whole business activities in a appropriate manner (Li and et. al., 2011). Some external environmental factors are political, social cultural, economical, legal, environmental and many more. Here are explain PESTEL analyse with it impact on enterprises operations has explain as follows:

Political: Unilever co – headquarter is located in Amsterdam as well as London both have face British and Dutch political interference in time of flux. So that it create negative impact on their performance. Company has also run business activities in global level so that they want to follow other nation political rule when they are run their business at that location. Political impact on business operations has two type positive and negative which are explain below:

  • Positive: Through political action, one nation has build positive relationship with others nation so that Unilever may easily sell their product and services at global level that help to increase market share as well as customers portfolio.
  • Negative: Each one nation has their own rule and policies of international trade so that some time Unilever can not able to full fill their requirement which negatively effective their performance. For example, US. Also their home country where their headquarter is located has faces dual political environment which are negatively effect organisation.

Economical: Unilever has operating business at international level and all country has their own economical growth which help organisation to grow in long period of time (López-Gamero, Molina-Azorín and Claver-Cortés, 2011). In UK, GDP rate is very low 5.2 so that recession time may effect selling volume of Unilever. Economical factors like rate of interest, inflation, GDP growth, exchange rate, taxation policies and many more can create positive as well as negative impact on firm operations performance that are explain as follows:

  • Positive: Management of Unilever has run their business at Latin America, china and India which are booming in current market environment. They have higher GDP rate 7.6 India, 7.5 china and many more (Teece, 2012). So that firm are capable to gain higher market position and profitability in long period of time.
  • Negative: Low purchasing power, high interest charges, high unemployment, falling wages, devalued household consumption and less GDP rate may negatively influence Unilever operational activities. So that, Unilever sell their product in new country where high growth opportunities like India.

Social cultural: In current environment, social cultural habits has change with change in nation. So that, Unilever has produce product according to full fill needs and wants of potential customers effectively. Market trends has modify very fast so that management of the company has continuously watch industrial scenario to gain sustainable for long period of time. Some social cultural factors are lifestyle, spending habits, education level, perception, attitude, motivational factors, moral, value and many more. All these elements has create positive as well as negative impact on operational work (Meiners, Ringleb and Edwards, 2014). That are explain as follows:

  • Positive: Through diversify cultural Unilever are capable to achieve goals by offering product to different nation so that if one goods can not sell in one nation then it may possible that same commodities has needs of customers on other nation.
  • Negative: Diversify cultural has create issues like change in demand, preferences, perception etc. very fast so that Unilever can not able to gain profits and sustainability in long period of time.

Technology: Through latest technology institutes has capable to achieve competitive advantage as compare to their competitors at market place. It help to enhance market position and gain higher customer's satisfaction effectively.

  • Positive: Through this, firm are produce high quality of goods which help to gain high profitability in long period of time with higher brand value. Some other benefits are fast communication, reduce operational cost, needs fewer employees, new material development, monitor and control quality of product etc.
  • Negative: Technology has change very fast so that it create negative impact on Unilever operations activities because it copy by other companies so that it create negative impact on business operations work.

Environment: Many firms has implementing green corporate policies which has state various kind of specific commitment in order to effective utilisation of available resources and their responsibilities related to natural environment. Government of United Kingdom has make rule, regulation and each one of organisation want to execute that into work place which help to maintain environment condition healthier (Onetti, Zucchella, Jones, and McDougall-Covin, 2012).

  • Positive: Contribution of institutes into environment has build positive brand image of Unilever in client's mind which help firm to provide high worth and value at market place.
  • Negative: Through this operational activities should be affect so that overall Margin of production may reduce. Low ethical practices avoid pollution water, air and area.

Legal: It refers to regulation that can be national or international. Some important law which affect enterprises are discrimination act., healthy and safety regulation, employment law, reduce global emissions, minimum salary act. and many more. These all rule has develop by government of United Kingdom and compulsory to implementing by all firms in order to run whole business effectively.

  • Positive: It help employees to save their rights and provide equal opportunities to all candidate according to their education and capabilities.
  • Negative: Some time employees misuse their right which create negative impact on Unilever performance.


P5 Strength and weaknesses of an organisation

Management of the institutes has assigned responsibilities to all workers according to their capabilities and professional skills. For example, Unilever is a clear goals and objectives and each one employees at every department has work together in order to achieve common aim according to business hierarchy. Due to firm global presence, Unilever is categorises as MNC(Multi national company) with out the development of well define enterprises structure where the all labour can not know whom to report in whole firm. SWOT analysis of Unilever are explain as follow:



  • Global footprint with run business activities around 190 nations (Palo and Tähtinen, 2011).
  • Top of mind brand recall of Unilever product between potential customers.
  • High brand portfolio with diversified goods range.
  • High investment in research and development.
  • Expertise into distribution channel.
  • Price flexibility has provide benefits of attracting large number of customers.
  • Imitable commodities has reduce profitability.
  • Limited business diversification has create negative impact on sustainability of Unilever.
  • Unilever has Highly depended on their retailers which are effect performance.
  • Low switching cost and high availability of substitute product.



  • Growing economic demand provide higher opportunities of sales to Unilever at market place.
  • Demand of health conscious goods.
  • Higher lifestyle needs which increase selling.
  • Cheap advertisement like social media marketing etc. save money.
  • Improve popularity of private brand in current market environment.
  • Commodities limitability has create negative impact of research and development of new product of Unilever.
  • High competition has reduce profits and market share.
  • Increase popularity of Ayurveda goods create negative impact of sales of Unilever product.

P6 Interlinked advantages and disadvantages with external factors

In organisation, manager require that framework practices are accurately framed through which they have delivered services and goods as per the customer requirements (Pham, Segers and Gijselaers, 2013). Through coordinating proper market survey to acknowledge buyer need along with the competitor knowledge growth can be managed. In Unilever, the enterprise's management need to consider the components that are discussed company's external. Thus, some of demerits and merits of framework through for which company organise PESTLE analysis. Henceforth, computing correlating organisation operation to undertake the place as per the market condition. There are few extrinsic components that are discussed beneath in brief:

Political factors: This is fundamental for every function of organisation, as this is needed to comply the government taxation and policies. Manager should opt more unique and advanced technologies in regard of managing the tactics and operated enterprise in more significant manner.

  • Strengthen: Unilever take benefits for competing their organisation with others in comparison to increased market share through making laws of government as per the state requirement.
  • Weaknesses: If the company will not function their operations, this can damage the company's reputation.

Economic factors: As enterprise's practices rely over country's inflation rate, exchange rate and other economical factors, this is paramount components that a company should manage. As manager of Unilever are able to increase their company's sales and desire as per the income of individual.

  • Strengthen: When overall economical condition is good and brand are reduce their loan rates than manager of Unilever has emphasising the financial loans and institution of company's operations. Through this, they are easily run their business activities in long period of time.
  • Weaknesses: Due to the fluctuation in exchange rate, Unilever has can not able to run their business in different nations effectively.

Social factors: Organisation require to deliver goods and services to their consumer demands. As the referred enterprise provide personal and home care, food and refreshments to their service user. As Unilever, this is essential for manager to opt the promotional practices for rendering consumer information (Pikka, Iskanius and Page, 2011). It can assist in grabbing attention of consumer and refraining client's attention for a longer period. Management require to make development within their company's offering so this can assist within services so this can help in competing with the trade. As if organisation will not gain benefits of product innovation within their services. Then this can impact over the sales and revenues of organisation.

  • Strengthen: By knowing client needs and wants, Unilever are able to offer product accordingly and diversify demand create opportunity for then to gain higher profitability in long run.
  • Weaknesses: Consumer are price sensitive so that low switching cost has reduce profits of Unilever. There are lots of substitutes are available and clients are easily change their brand thus effected Unilever performance negatively.

Technological factors: Administration requiem to use accurate tool and techniques as this can deliver more productive services and consumer. It can aid in improving the strategies which can help in development of organisation and emphasising the entire sales impact that can affect their market sales (Scheer, 2012).

  • Strengthen: Higher quality product help Unilever to sell their good at different nation effectively and get high market share as well as long run sustainability at the same industry.
  • Weaknesses: Continuous change in technology has affected Unilever has commodities sales as compare to their competitors effectively.

Hence, this can be claimed that external environmental factors such as economical, environmental and political etc. which are included through the design management. In this market survey, market evaluation in regard of demands and ned of services user can be evaluated in more efficient manner.

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From the above report it is concluded that macro business environment has create negative impact on organisation performance as well as productivity in industry. There are many different type of enterprises like private, public, non profits with different kind of working structure like sole proprietorship, partnership, limited company etc. Several external factor like political, technical, economical, legal, environmental etc. has create positive and negative impact so that it is a management responsibilities to reduce it impact and run whole business activities effectively. Through this, they are manage their work and achieve goals and objectives in limited period of time.
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