Student Name: Iustina

Lacatusu
Course: HNC
Student ID: 18143
Assessor: Dr John Davies
 Business and the
Business Environment
 Table of Contents
INTRODUCTION....................................................................................1
TASK 1.....................................................................................................1
Organisation and its various types.....................................................1
Different types, size and scope of organisation.................................2
TASK 2.....................................................................................................7
Organisation structure........................................................................7
Different organisational function.......................................................9
TASK 3...................................................................................................10
Macro environmental factors by mentioning PESTLE analysis......10
TASK 4...................................................................................................12
SWOT Analysis of JP Morgan Finance and Investment..................12
CONCLUSION.......................................................................................14
REFERENCES.......................................................................................15
INTRODUCTION
All internal and external factors that can affect or influence the
organizational environmental condition in a positive or negative manner
come under business environment. Every business can be established
easily but it needs various types of resources, finance, proper market
conditions etc. (Bah and Fang, 2015). This report is based on JP Morgan
Finance and Investment company that has around 4400 offices across the
world. The firm is of the leading investment companies in the UK. This
report will cover different types, sizes, and scope of organizations. It will
also cover two types of organization's structures. Further, it will cover
the positive and negative impact of the macro environment. Lastly, it
will include the internal strengths and weaknesses of JP Morgan Finance
and Investment.
TASK 1
The organization and its various types.
The organization consists of several people in a structured form and
operate or run any business activities by earning money for the
fulfillment of various objectives and targets. It is created by a person or
group of individuals which carry any business and make it a structured
body (Botha, Kourie, and Snyman, 2014). They are managed and
controlled by the board of directors so that their roles and all
responsibilities divide into the managers and leaders so that they can
perform better in their job.

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 All organizations establish or exist for a special purpose that has a
strong sense of the target market. The management team needs to fulfill
the purpose so that they make a clear vision & mission and do their
business effectively. Every company has different kinds of purposes,
goals, and objectives. In this context, it provides clothes, shelter, food,
education, entertainment, transport and many other requirements to their
potential clients in the competitive environment. All those organizations
exist because earning money or profits by providing various products
and services (Bryman and Bell, 2015). They must require different types
of resources and funds to accomplish its all organizational activities.
In the United Kingdom, there are many types of sectors exist i.e.
tertiary, primary and secondary. These are described as follows:
Primary Sector – It is concerned through the extraction of raw
materials for developing many other products and it contains farming
business, mining, forestry & logging, oil extraction, diamond mining,
fishing and many more fields (Business, 2014). It plays a great part in
the economy and increased labor productivity that enables workers to
work better.
Secondary Sector – It is known as the systematic process of
transformation of raw materials in its goods and services. It includes the
production, manufacturing, and industry of various sectors. The
secondary sector often classifies into the light & heavy industry and it
forms a substantial part of gross domestic products. In this sector, certain

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types of organizations exist, for example, electrical, chemical,
metallurgical, energy (according to some sources, it is on the border of
the tertiary sector), construction, food, textile & clothing, consumer
goods, glass and many more. Products and services that are produced in
such type of organizations are sold directly to the end consumers.
Tertiary Sector – It refers to those industries which provide intangible
goods like insurance, retail, traveling, tourism, banking, entertainment,
financing, etc. These organizations use manufactured goods as the raw
material and offer many services to customers (Carroll and Buchholtz,
2014). In the tertiary sector, it includes such type of organizations
computer & information technology, hotels & tourism, communication
service, insurance service, banking service, postal service, restaurants &
cafes, pension service, food & beverage service and transport services
like – rail, bus, air, sea etc.

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Different types, size and scope of organization.
Organisations have different types and it owns and control by
several types of persons or groups.

It may be owned and run by private and public or by both sector and it is
also known as mix ownership. In this context, different types of

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organizations are discussed as below:

Sole trader – It is a special type of business that is also known as a

proprietorship. It has a general structure that an individual operates the
whole organizational work. In this context, in such businesses, the only
trader is responsible for all dues such as financially as personally
(Chang, 2016). He or she will keep a record for all transactions, for

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example, revenue and expenses. In this context, its major advantages and
disadvantages are as follows:
Advantages
The sole trader is a boss who keeps all earnings or profits.
Sole trader business offers more personal services with local ties
and roots so that it can achieve requirements of its potential clients.
There is no need of recording and keeping any annual accounts so
that it has no further expenses (Charter, 2017).
Its businesses are started with low cost and maximum privacy in
data keeping and it also winds up the organisation easily.
Disadvantages
In these businesses, there are all liability and responsibility of debt
and creditors are laid down on that particular owner.
It is complicated to expand the business due to the huge
requirements of resources and finance.
It has a small size so; a sole trader cannot leverage the buying
power of its customers.
In these businesses, the owner has difficult to take holidays and
complete income is taxed under law.
It has limited business life.
Partnership – It is referring as to any business entity, that is run or
operates by two or more persons and they fix a ratio for profits and
losses, is called partnership. It is a special type of organization and its

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business activities are dependent on the partnership deed, which is made
by all the partners and they also give their signature on it (Erasmus,
Strydom and Rudansky-Kloppers, 2016). It has two main types that are a
general and limited partnership. In the general type of partnership, all
partners conduct and manage the organization with an assumption that
they are responsible for all debts and work. On the other hand, partners
have limited liability and they operate their organization according to it.
In this context, its major advantages and disadvantages are as follows:
Advantages
The main advantage is that it can be formed easily and there are no more
legal formalities needed for starting the organization.
In such an organization, its capital requirements are fulfilled by all
partners and it can handle their business-related expenses without any
hurdle.
All liabilities and dues are divided among all partners so responsibilities
are reduced.
Profits and all earnings are distributed among the partners according to
their partnership deed (Hair and et.al., 2015).

Disadvantages
All partners have unlimited liabilities and the organization has a limited
life.
In such businesses, it is complicated to withdraw any amount.

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All members of the organization have their own views and thoughts so,
there are chances of occurrence of dispute.
In such organizations, each resource is used by all partners jointly so that
all resources can be misused by any partners.
Limited company – It is a form of company that has limited liability and
at the end of its name, it is compulsory to apply the word "limited". It is
generally known as a public limited company. Its members have limited
liability and it can measure their responsibilities and dues.
Legal entity and responsibility – Limited company incorporate with all
legal formalities so that it is the legal entity. It consists of a minimum
seven members and a number of directors cannot be less than two
(Hilton and Platt, 2013). Management have conducts different that are
used in the success of the business that is run or operate the whole
business, in order to achieve all desired objectives and targets. It is also
seen as a separate legal body and it has a right to own assets, equipment
as well as it can sue on another person or entity. In this context, its major
advantages and disadvantages are as follows:

Advantages
The main benefit is limited liabilities of its members.
According to its nature, it is deemed to be a separate legal entity and
exists beyond from the life of its members.
It has a tax benefit because the tax liability is only dues on its profits.

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Management creates and maintains several reserves so that it can use
these reserves in many critical situations that may arise in achieving
desired targets (Kaplan and et.al., 2001).
Disadvantages
There is a huge amount required in the formation and incorporation
process of a company.
It is the duty of the management team to maintain all accounts and
records in the prescribed format.
The whole power is distributed among the equity shareholders so that
decision-making process takes a lot of time and overall profitability can
reduce.
In such organizations, a lot of paperwork is required and norms and
regulations are also strict for this function.
The requirement of the huge cost of capital and different types of
resources.

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Public limited company – In the public limited company, management
offers limited responsibilities to its owners and directors. It also
allows its members to transfer their share to another shareholder or
any other person (Kolk, 2016). It has more rights compared to a
private company. In London, there are many public limited
companies, for example, John Laing Group.
Legal structure – Every PLC has to liability to publish its annual
accounts with all final statement. There is an additional duty of its
management team and directors to commence an annual general
meeting after the end of every financial year to check and provide a
full record of its annual revenues and expenses in front of its
shareholders. For its incorporation process, many legal formalities
are required and compulsory. In this context, its major advantages
and disadvantages are as follows:
Advantages
The main advantage is that it can raise its capital through the public
issue of shares.
It is also achievable by these organizations that the public limited
organization listed on one or more than one stock exchange and able
to attract investment from mutual funds, hedge funds, and other
institutional or financial traders.
There are many plans for growth and expansion opportunities are
available for this type of organization (Noe and et.al., 2006).

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It operates its business through new strategies towards the
accomplishment of all goals and targets.
Disadvantages

The public limited company needs to top-level transparency for ensuring

its stakeholders that the company carries on its business activities for
growth and development.
It also requires a higher level of authority to control and manage its
functions.
For making the public limited company, there are huge financial
expenses to meet all its objectives.

Government and charity organization – It is existing for public welfare

and for charity purpose. It runs or operates its business activities in
the growth or development of citizens. The management cannot
distribute its profits to its members and use all profits for the business
purpose so it is also known as a non-profit organization (Sekaran and
Bougie, 2016). Its main purpose is the development of a particular
community, state, and nation. In this context, the International
Finance Facility for Immunisation Company is one of the main
charitable trust in the UK. In this context, its major advantages and
disadvantages are as follows:
Advantages

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There is no liability of any tax, for example, manufacturing tax, excise
duty, income tax, etc.
Such organizations receive a huge amount from a donation from several
persons or entities and this amount is free from every tax.
In such organizations, there are many other benefits such as gift aid
relief, stamp duty on land and other premises.
Disadvantages
Its management team is known as trustees and they are an unpaid
worker.
In these types of organizations, management cannot raise any equity
investment through its charity amount.
TASK 2
Organization structure
The organizational structure is defined as the critical hierarchical
arrangement of authorities. It is the roles, characteristics, power, and
duties of every person in an organization. It is a system that is used for
determining its hierarchy inside the company and also identifies
functions and job of every authentic person such as employees, staff
members, leaders, managers, departmental head and board of directors
(Smith, 2016). It is useful for every company so that, this must be
followed by every business in order to achieve all desired targets and
goals. In this context, there are different kinds of organizational
structures that are the divisional structure, traditional functional

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structure, the matrix structure and the flat organizational structure. There
are many merits and demerits of each organizational structure and a
company can follow any type of structure (Solomon and et.al., 2016).
The JP Morgan Finance and Investment in the United States based
company and offers financial service in more than 100 countries. It has a
branch at the London, UK and in its management, it follows two types of
organizational structure that are a helping to assigning the hierarchy of
roles, duties, and supervision. In this context, these are described below:
Divisional organizational structure – It provides the ability to
segregate big departments into the small sections in a very big company.
It is too much useful for every company to enjoy some degree of
autonomy and able to completes all functions, operations and research &
development in order to achieve organizational goals and objectives.

A divisional organizational structure normally includes several collateral

teams that focus on the each and every product or service line. For
example, the JP Morgan Finance and Investment offers different types of
financial services and in this company, the functional organizational
structure may play an essential role towards gaining competitive
advantages (Bah and Fang, 2015). By using such method, all

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departments work well because they allow several teams or groups to
focus on the single service or products.

Functional organizational structure – In this hierarchical structure,

each person is being grouped as per their capabilities or specialization.
All those people are supervising by the senior manager or departmental
head in this structure. All leaders, managers are perfect and expertise in
their job so that this thing is useful in the development of skill, the talent
of all team members. In such an organizational structure, employees are
divided according to their functions, performance, capabilities, and
achievement.

In JP Morgan Finance and Investment Company, employees and whole

staff departments are organized according to their work and functions.

Different organizational function.

Functions of an organization are the main elements and essentials for
achieving its desired targets and goals. It is classified into various
departments, for example, marketing, financing, budgeting, production,
selling, accounting, designing, human resource, administration, research
& development and many more departments in order to increase the
growth and development of that particular business (Botha, Kourie, and

17
Snyman, 2014). All the functions will require that employees must work
together so that the company's activities has accomplished according to
the goals and aims. To achieve those targets that are different from the
several functions are the main part of every business. In this context, all
such functions are described below:
Human Resource – It is the main function of each company because
every organization requires a huge workforce with the help of which
human resource manager is able to conduct all activities related to
fulfillment of this requirement. In this context, it is the duty of the whole
department of human resource officers to recruit and select candidates
and provide them with a better training facility in order to expand their
work performance. Human resource always adopts an important role that
contains the development of their staff members.
Marketing – This refers to the promotion and advertisement of the
company's products and services to gain competitive advantages. The
marketing manager must introduce several policies and plans to stable
its product and services (Bryman and Bell, 2015). The management also
conducts research and development towards its growth and
accomplished all needs and wants of its potential customers.
Finance – This function is most essential because every company
needs a huge amount for investment in the production process. In this
context, the finance manager conducts several functions and maintain

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contact with a different financial institution. This function also helps to
the company's other tasks in order to achieve all targets.
Information Technology – This function is used for the
enhancement of digital technology and internet for the organizational
work (Business, 2014). The JP Morgan Finance and Investment
company's whole work depends on their customer satisfaction and
internet because it provides financial services. It is useful in providing
better services to its clients.
Operation – This is the main essential function of every company to
increase its productivity and employee's performance. It will modify and
enable the company to reduce costs, increase work performance,
profitability and remain ahead of the target market's competition.

TASK 3
Macro-environmental factors by mentioning PESTLE analysis.
Every organization may influence from its external environment so it is
essential to describe all external factors to prevent from it. Management
of this organization can use the special model that is discussed from
PESTLE analysis. It provides too much information and detail about
productions and operating challenges to JP Morgan Finance and
Investment organization. In this context, the PESTLE analysis for this
company describes as below:

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 Political Factors – It plays a significant role in demonstrating major
rules and regulations applied by government. This organization provides
various types of services in several countries so management must
consider all rules and many aspects (Carroll and Buchholtz, 2014). It
contains a level of corruption especially, levels of rules and regulation in
the Financial industry, Legal framework, and formalities, Bureaucracy &
interference in this industry by government, Intellectual property act,
protection act etc.
Economic Factors – This organization may be influenced by
population growth, financial crisis, the rate of urbanization and
unemployment so that the management team must focus on these
elements. It is useful in creating different pricing and economic policy.
This company is influencing in its business activities from several
elements, for example, inflation, discretionary income, unemployment
rate, growth and development of the industry's economic measurements.
In this context, this organization has to deal with all such factors and
contribute to economic growth and gross domestic product.
Social Factors – It is also influenced by the company's work
positively and negatively in both manner. It includes culture of society,
attitudes of the population demographics and skill level of the whole
population, class structure, hierarchy & power structure in the society,
education level of people and & living standard in the JP Morgan &
Company may impact on the organizational environment.

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 Technological Factors – It includes the impacts of technical
elements on cost structure, value chain structure and also the production
department. It may be affected in positive and negative both manner to
the company so that the management team must consider all such
aspects in order to achieve organizational goals and targets (Chang,
2016). There are many recent technological developments made by the
company for operating its business. Management of this organization
must aware of a rate of technological diffusion.
Legal Factors – The JP Morgan company operates its business
activities in many countries and there are several rules and separate
regulations for each nation. So for this reason, management should
carefully evaluate all legal elements and laws & regulations before
entering new markets for leading the organization's new strategy for the
overall competitive environment. In this context, legal elements such as
discrimination rules, copyright & patents law, intellectual property act,
e-commerce & consumer protection, employment law, health & safety
regulations, data protection act.
Environmental Factors – Management must pay attention to all
environmental effects that can raise in the ecological aspects of the
organization (Charter, 2017). In this context, there are many
environmental factors such as weather condition, climate change, laws
regulating environment pollution, air & water impurity, recycling of
different products, endangered species, waste management in the

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financial sector, attitudes toward "green" or ecological products and
many more. It is the duty of a company to fulfill the corporate social
responsibilities.

TASK 4
SWOT Analysis of JP Morgan Finance and Investment.
Every company must have several internal environmental factors
that may affect the organization and influence its organizational
functions. In JP Morgan Finance and Investment, there are many factors
and these factors demonstrates the strengths and weaknesses of its
business. In this context, the SWOT analysis of this company is as
under:
Strengths Weaknesses
Leading player – It operates Limited success – This is one
a business and organisational of the main leading company
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 activities in more than 100 in its segment market but it
countries and provides its faces many challenges in the
financial services to several movement of another product
businesses, government and services so that the
clients, institutions etc. so for company gained limited
this reason, JPMC leads the success outside its business
whole market in commercial (Erasmus, Strydom and
banking, financial banking Rudansky-Kloppers, 2016).
and investment banking. Competitors – The
Huge capital and strong management makes critical
liquidity position – It has strategies for its inventory
also a huge capital fund and it system so that there is delay
keeps and maintains its in the production of goods
strong position in its target and services compare to its
market segment. competitors.
Diversified revenue streams – Change customer's
Its target and diversified revenue preferences - Delay in its
classified into five different financial services and actuary
sectors that are asset numbers due to lagging internet
management, community & so that investments may not be
consumer banking, further timely.
investment banking, corporate Over dependency on the
entity and commercial banking market in the United States

23
(Hair and et.al., 2015).
Opportunities
Low inflation rate – For its
business, there is a low
inflation rate so that it can
bring more stability in the
target market. It also enables
credits and loans facility at a
lower interest rate to its
potential clients.
In present days, there are
using advanced technology in
every sector so it provides a
great opportunity for
increasing its profits and
earnings.
Several environmental
policies – In its target market,
there are many opportunities
that will make the top level
for it (Hilton and Platt, 2013).
It also drives many
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will result in instability in
organisational functions.
Threats
Financial Crisis – In the whole
world, there are many financial
institutions so that it has been a
challenging environment
continuously. It also increases
operational and compliance cost.
Different Regulatory
Challenges – During the
recession period, management
of this company also affected in
its business activities.
The organisation operates its
business in many countries so
that their governmental rules
and regulations must be
follow by this company.
 advantages for the
organisation.
In the UK market, there are
new trends often comes and it
provides many new markets
to create new revenue
streams and modify into new
services and product
categories.

CONCLUSION
In this presented report, it includes different types of organization
with its size and scope in each sector. It also covered two organizational
structure and its major organizational functions. Further, it included the
impact of macro environmental factors that may affect to the internal
and external business environment using PESTLE analysis and lastly, it
contained major strengths & weaknesses and its relationship with the
opportunities and threats of JP Morgan Finance and Investment.

25
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