Business and the business environment organizational types functions and structures PDF

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UNIT 1: BUSINESS AND THE BUSINESS ENVIRONMENT
ORGANISATIONAL TYPES, FUNCTIONS AND STRUCTURES
The Business Environment has many different types of organisations within it and have differing legal
structures, influencing there day to day operations of a business. To determine what type of
structure they fall into, companies will look at the size, their turnover and other factors.
Organisations can be described as structures that are set up with the purpose of achieving goals or
objectives. The Business environment has many different types of organisations which are set up for
a purpose and to meet various needs within the locations that they operate. Many organisations
operate for generating profits however others operate to promote a social cause or to promote
information for the well being of society.
The Private Sector are companies that are owned and run by private individuals with the main
objective to earn profit for their organisation. Within this, there is little to no involvement from the
government. An example of this is Boohoo who sell a range of fashion products to consumers all
around the world. Within the private sector there are legal structures that they follow;
Sole Trader: A sole trader is a business owned by a singular person who may employ people on a full
time or part time basis. The start up to a business like this is usually funded by the owners
themselves, meaning that all the profits that they accrue will belong to them. However it is common
for the owners to re-invest a proportion of the profits back into the business. These businesses tend
to be specialist service providers such as plumbers, hairdressers and electricians. The core purpose
of being a sole trader is to have complete control of the business and to maximus their profits with
the amount of resources that they have. Sole traders make up for 59% of businesses within the
private sector (Gov, 2019)1.
Private Limited Company: A Private Limited Company (LTD) is an organisation that is established and
has the purpose of earning maximum profits by offering certain products or services to the market
that they are in. They are directly set up through registering at Companies House and operates as a
distinct legal entity to the directors and shareholders. There are two types of Private Limited
Companies; one is limited by their shares whereby members of the public are not able to buy shares
within the business; an example of this is Virgin Atlantic. The other type is limited by guarantee,
these are usually non-for profit organisations or charities.
Public Limited Company (PLC): A PLC purpose is to engage with the public by offering the shares of
the company and then use the funds to further its development and growth. For a company to be a
PLC, they must have a minimum of 1 shareholder; at least 2 directors; a minimum of £50,000 of
issued share capitals and has the right to offer shares for sale to the general public. An example of a
PLC is McDonalds, which also allows the franchising of their product and services which includes the
use of their brand name, logo and any other resources that they may need.
The Public Sector are government companies that are for the people, providing essential public
services and utilising their resources in the best way that they can to benefit the country/local
communities. These involve not-for-profit government owned organisations. Some examples of
organisations within this sector includes the BBC, the NHS and social care.
Lastly, the voluntary sector has the primary objective to create social impact rather than make a
profit. These are independent and work for the welfare of the state for example Mind, who provide
advice and support for those struggling with Mental Health problems and promote awareness.
Within the rest of this report I will be looking at three different types of organisations, Boohoo, the
British Broadcasting Company and Mind charity. These will include details on the size, scope and
other factors of the organisations I have chosen.
1 GOV.UK. 2021. Business population estimates for the UK and regions: 2019 statistical release (HTML). [online] Available
at: https://www.gov.uk/government/statistics/business-population-estimates-2019/business-population-estimates-for-
the-uk-and-regions-2019-statistical-release-html

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UNIT 1: BUSINESS AND THE BUSINESS ENVIRONMENT
ORGANISATIONAL TYPES, FUNCTIONS AND STRUCTURES
Boohoo. Is a Public Limited Company within the Private Sector, the company was found in 2006 by
Mahmud Kamani and Carole Kane who started up their online fashion store with the aim of selling
on-trend clothes directly and cheaply to their shoppers. Since launching, the company have had
many corporate affairs and acquired a number of brands and websites from high street chains such
as Dorothy Parkins in February 2021 and have expanded their business internationally.
The products that the company as a whole offer, according to Boohoo’s PLC group, are innovative
fashion brands targeting style and quality conscious consumers with up-to-date and inspirational
fashion (Boohoo Group PLC, nd)2. From 2019-2020, BooHoo PLC had a average of 2,619 employees a
month worldwide (Statista, 2021)3, this included directors of the company in comparison to the 210
they had 8 years prior. BooHoo PLC had a Revenue of £816.5 million as of the 31st of August 2020
and a gross profit of £449.2. With there turnover being greater than £25.9M and exceeding 250
employees, they a Large Company due to this as they meet the correct criteria.
The company has incorporated their vision and mission statements together, this consists of
“lead[ing] the fashion e-commerce market globally, in a way that delivers for our customers, people,
suppliers and stakeholders. Our brands operate along the same principles today as when BooHoo
was founded in 2006” (Boohoo Group PLC, nd)4. This clearly shows the main purpose for the
existence of the company and there main focuses for the future. As stated previously, Boohoo is a
Public Limited Company as the company is owned by multiple shareholders and is run by a board of
directors, which consists of 8 members. As of July the 13th 2020, only 24.8% of shares were not in
the public hands, with over 1 billion of shares being issued. Due to the legal structure of the
company, this allows the company to have more financial potential to pursue in new projects,
products and possibly new markets. With Boohoo being a PLC, this has allowed them to join
partnerships and expand into the US, Europe and Australia. The stakeholders of Boohoo are parties
that have an interest within the company and can either affect or be affected by the business. These
would be Employees, who would be concerned with wage levels, working conditions and the
personal developments within the company. The shareholders will also have a direct interest within
the company due to the market value of the investment and the security of the investment.
BBC stands for the British Broadcasting Corporation, is apart of the Public sector due to their main
aim being to provide a public service through radio, television and other media outlets. The BBC was
formed in 1922, as a limited company, airing broadcasts to various cities around the United Kingdom
from 1922 to 1924. The company was granted with a Royal Charter at the beginning of 1927,
thereby changing their sector from a Private one to a Public. The BBC provide services on various
media platforms, with a wide range of programmes and content available. The content found on the
Television spans over 8 channels, all tailored for different genres of programmes. An example of the
range of channels is BBC 3 broadcasting comedy, entertainment and documentaries and BBC
Parliament airing live debates and up-to-date politics across the UK. They also provide a range of
Radio Stations, various digital Services for example BBC iPlayer and BBC Education. The Corporation
has 22,749 employee’s at present (BBC, 2020)5 and estimated revenue of £4.943Billion. The mission
statement of the corporation states “to act in the public interest, serving all audiences through the
provision of impartial, high-quality and distinctive output and services which inform, educate and
2 Boohoo Group PLC, Our Business Available from https://www.boohooplc.com/group
3 Sabanoglu, T., 2021. Boohoo.com Plc. group: number of employees worldwide 2012-2020 | Statista. [online] Statista.
Available from https://www.statista.com/statistics/794916/boohoo-plc-group-number-of-employees-worldwide/
4 boohooplc.com. 2021. Our Vision & Strategy. [online] Available at: https://www.boohooplc.com/group/our-vision-and-
strategy
5 BBC, 2020. [online] Downloads.bbc.co.uk. Available at:
http://downloads.bbc.co.uk/aboutthebbc/reports/annualreport/2019-20.pdf

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UNIT 1: BUSINESS AND THE BUSINESS ENVIRONMENT
ORGANISATIONAL TYPES, FUNCTIONS AND STRUCTURES
entertain”. They also have to consider the Public Purposes that have been set out by The Charter,
which also sets out their objective and mission. The Stakeholders for the BBC will be the public that
watch, listen or use their resources to access information for various reasons such as education.
Another is the Secretary of State for Digital, Culture Media and Sport as the operate under an
agreement with the Corporation.
Mind. This charity is within the Voluntary Sector, after being founded in 1946 as the National
Association for Mental Health (NAMH) from three voluntary organisations that provided services for
a variety of mental health factors. They provide advice and support to empower anyone
experiencing a mental health problem and campaign to improve services, raise awareness and
promote understanding (Mind, nd)6. In order to access these services, they use a variety of ways to
make themselves accessible, for examples helplines and texting services. At present the company
have 775 employees, 14 trustee(s) and 4589 Volunteers (Charity Commission, nd)7, with a small
percentage of employees being paid over £60k a year. For the Voluntary Sector the size of the
organisation is based on the income band, in 2018/2019, the organisations income, including there
net profit, came to £42.5 million, making them a Major sized establishment (NCVO, 2020)8. However
these profits go back into the communities that they help by improving their services and support,
helping people to stay well and allow people to take part in society equally.
The Organisation has a vision of not giving up until everyone experiencing a mental health problem
gets both support and respect. There mission statement tries to help accomplish their vision for the
future by “provid[ing] advice and support to empower anyone experiencing a mental health
problem” and their goals coincide with both these statements. Mind’s internal stakeholders include
the Trustees, employees and those that have invested money into the organisation to keep to going.
There external stakeholders would include those struggling with mental health problems, their close
families and government regulators like the Charity Commission.
Every company has different functions within it to help them be a successful business and run
smooth operations running when it come to expediting their product or service. Some of these
major functions interrelate to one another in order for that area to complete their specific function,
for example Human Resources will liaise with the financial department over salaries and bonuses.
Next, I will talk about a few of the main key functions of Boohoo and show how some will interrelate
with one another.
Human Resources (HR) is a function that is in charge of finding, screening, recruiting and training
new applicants, as well as dealing with employee matters such as firing (Investopedia, 2020)9. This
department at Boohoo, have a dedicated recruitment team resourcing for all areas of the business
to ensure that they are recruiting the best people for the jobs. Also they provide a Learning and
Development function that covers all aspects of training and support across all functions of the
business delivering an efficient and effective plan to give their employees the best opportunities to
develop within their career.
6 Mind.org.uk. 2014. What we do. [online] Available at: https://www.mind.org.uk/about-us/what-we-do/
7 Charity Commission For England and Wales. 2021. MIND (THE NATIONAL ASSOCIATION FOR MENTAL HEALTH). [online]
Available at: https://register-of-charities.charity
commission.gov.uk/sector-data/top-10-charities/-/charity-details/219830/charity-overview
8 NCVO. 2021. How many voluntary organisations are there?. [online] Available at: https://data.ncvo.org.uk/profile/size-
and-scope/
9 Kenton, W., 2020. Human Resources (HR). [online] Investopedia. Available at:
https://www.investopedia.com/terms/h/humanresources.asp#:~:text=Human%20resources%20(HR)%20is%20the,as
%20administering%20employee%2Dbenefit%20programs.

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UNIT 1: BUSINESS AND THE BUSINESS ENVIRONMENT
ORGANISATIONAL TYPES, FUNCTIONS AND STRUCTURES
Finance is the function concerned with the control and planning of financial resources, acquiring and
utilising the funds that are necessary for an efficient operation within the business. Within the
company, the financial function ensures targets are met, strategies are understood and have the
responsibility at dealing with the profit and loss of the global business. They build relationships and
engage with people across the busines to help them understand and interpret complex financial
data, so that they can make the right commercial decisions can be made for the business, customers
and shareholders.
Marketing involves researching, packaging and presenting the products and services to the
consumers. At Boohoo Marketing is split into six core functions; Digital, Brand, PR, Social Media,
International and Creative, in order to make the brand touch every point within the business. Within
this department they look at new ways to deliver campaigns that will inspire and engage those
within the target audience.
IT/Technology is a vital part to every business as they have the responsibility of the running of
websites and other technical features a company may have and fixing problems when they occur.
Due to Boohoo being a global business, they need an outstanding infrastructure to support the
needs of the business. Within this function they ensure that all operating websites are running
coherently as well installing and implementing systems that run through the business.
Ecommerce deals with the buying and selling of goods, products or services over the internet, this
includes the transaction of money, funds and data. This function looks at the digital shop and getting
to know what the customers wants and needs. Through understanding the customers by using
testing programmes and interpreting analytical data, ecommerce helps to deliver a good customer
experience.
Merchandising is the promotion of goods and/or services that are available for retail sale. This
includes the determination of quantities, setting prices for goods and services, creating display
designs and developing marketing strategies (Investopedia, 2021)10. Within the organisation,
merchandising drives the trading strategy, working closely with Buying and design to ensure that
they deliver the right product at the right time.
Customer Service is the service to for customer before, during and after the purchase of any
product. This is to meet customers expectation so that they are satisfied with the outcome of their
purchase. Within Boohoo the customer service team cover various social media platforms that
ensure that they are always first port of call for the customers. They listen to what the customers are
saying and fix a problem straight away to give excellent customer satisfaction.
Within the company, many functional areas interrelate in one way or another, for example the
Finance department will connect with all other departments as they monitor their spending and
monitor the achieving of targets. E-commerce will interrelate with the technology and IT department
as the company operates exclusively online and the IT department will implement systems that E-
commerce will need to sell the brand. The Customer Service department will interrelate to the
marketing department, as they will pass on customer feedback and satisfaction rate that could affect
future products and developments.
Boohoo Organisational Chart
10 Hayes, A., 2021. How Merchandising Works. [online] Investopedia. Available at:
https://www.investopedia.com/terms/m/merchandising.asp#:~:text=Merchandising%20is%20the%20promotion
%20of,and%20establishing%20discounts%20or%20coupons.

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UNIT 1: BUSINESS AND THE BUSINESS ENVIRONMENT
ORGANISATIONAL TYPES, FUNCTIONS AND STRUCTURES
Boohoo is a company that produces clothing and accessories with a big structured hierarchy system
with different levels of management. All decisions are made by the Board of Directors, this will be
regarding plans for the future, technology, marketing and operations within the company. Many
functions interrelate as shown in chart above which allows for a clear flow of communication
between the board of directors and the heads of departments.
References
BBC, 2020. [online] Downloads.bbc.co.uk. Available at:
http://downloads.bbc.co.uk/aboutthebbc/reports/annualreport/2019-20.pdf
Boohoo Group PLC, Our Business Available from https://www.boohooplc.com/group
boohooplc.com. 2021. Our Vision & Strategy. [online] Available from
https://www.boohooplc.com/group/our-vision-and-strategy

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UNIT 1: BUSINESS AND THE BUSINESS ENVIRONMENT
ORGANISATIONAL TYPES, FUNCTIONS AND STRUCTURES
Charity Commission For England and Wales. 2021. MIND (THE NATIONAL ASSOCIATION FOR MENTAL
HEALTH). [online] Available at: https://register-of-charities.charity
commission.gov.uk/sector-data/top-10-charities/-/charity-details/219830/charity-overview
GOV.UK. 2021. Business population estimates for the UK and regions: 2019 statistical release (HTML).
[online] Available at: https://www.gov.uk/government/statistics/business-population-estimates-
2019/business-population-estimates-for-the-uk-and-regions-2019-statistical-release-html
Hayes, A., 2021. How Merchandising Works. [online] Investopedia. Available at:
https://www.investopedia.com/terms/m/merchandising.asp#:~:text=Merchandising%20is%20the
%20promotion%20of,and%20establishing%20discounts%20or%20coupons.
Kenton, W., 2020. Human Resources (HR). [online] Investopedia. Available at:
https://www.investopedia.com/terms/h/humanresources.asp#:~:text=Human%20resources%20(HR)
%20is%20the,as%20administering%20employee%2Dbenefit%20programs.
Mind.org.uk. 2014. What we do. [online] Available at: https://www.mind.org.uk/about-us/what-we-
do/
NCVO. 2021. How many voluntary organisations are there?. [online] Available at:
https://data.ncvo.org.uk/profile/size-and-scope/
Sabanoglu, T., 2021. Boohoo.com Plc. group: number of employees worldwide 2012-2020 | Statista.
[online] Statista. Available at: https://www.statista.com/statistics/794916/boohoo-plc-group-
number-of-employees-worldwide/