Types and Purposes of Organizations: A Comprehensive Overview

This article provides a comprehensive overview of the types and purposes of organizations, including for-profit and not-for-profit organizations. It explores the relationship between organizational functions and discusses the advantages and disadvantages of their interrelationships. Additionally, it examines the positive and negative impacts of the macro environment on business operations, using Fulton's Food as a case study. The article concludes with an internal and external analysis of the organization.

Businesses & Businesses
Environment

INTRODUCTION
Environment of business can be described as to the surroundings and the external as well
as internal elements which may affects the organization. The business environment considers the
diverse micro and macro factors which influences the decisions of an establishment and the
activities to run the business (Fjeldstad and Snow, 2018). Business environment can affect the
organization in positive and negative way.
This report is being prepared for better understanding of different types, purpose, size,
scope and objectives of the organizations. This file also includes the interrelation between
various organizational functions and an evaluation of impacts that micro and macro
environmental factors has upon the strengths and weaknesses of an organisation. For this
purpose, Fulton's Food has been chosen which is a retailer which deals in Frozen food items. It
was founded in the year 1960.
TASK 1
Types and purposes of organisations:
Every organisation has the duty to accomplish the supply and demand of its customers. In
context of customer, different establishments have different functions. On the basis of their
purpose, organizations can be classified into two categories which are described as follows:
For Profit Organizations: The main purpose of these kind of organizations is to gain
maximum profit or revenue by providing products or services to their customers. Most of the
entities are considered as for profit organizations. This may include any establishment from
restaurants to retail stores, real estate companies to insurance companies, etc. Following are the
types of for profit organizations:
Private Organisation: These are the type of organizations which governed by the private
owners or partners. The overall objective of these private organization is to earn money and
profit by fulfilling the expectations and needs of customers (Salvato and et.al.,2019). The goal of
the private organization is to make optimum exercise of resources to improve performance. The
types of private organizations are: E.g. of private organisation include retail organisations like
Tesco, Sainsbury etc.
Sole Proprietorship: A sole proprietor is a type of organization which has an individual
owner who has all the liabilities ans risks of the business and all the profit as well. This kind of
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organization easily adapts the changes in market and does not need any legal procedure to be
started.
Partnership: In these type of organizations, business is owned by two or more partners
who are legally accountable for share all profits and pay the business debts accordingly. In case
of failure, creditors may acquire their personal assets.
Private Companies: Private companies are generally owned by a small family or group
of investors and managed by a team of professional board members as the company has a legally
separate entity from its owners. The liabilities of the shareholders are limited to the extend of
their share values.
Public Organization: The establishments which are owned and governed by the
government of the nation are known as public organizations. These organisations have limited
liabilities to their managers and owners. The government has 51% share of Public organisation
and other 49% shares are in the hand of share holders. The examples of public organisation are
national banks, schools, hospitals, etc.
Not-For-Profit Organizations: These organizations operates to serve the society in
various aspects and rely on their members or stakeholders for their capital needs and continuity.
These organizations do not seek for any profit and only try to earn for operating their activities.
Some of these type of organizations are described below:
Charity Organization: These are the non-profit organization which operates for the
benefit of the society. This type of organizations depend on the amount provided by government
and the donations from people. The aim of this kind of companies is the social welfare.
Volunteering Organizations: These organizations are the group of the people who linked
together for a common motive related to serve or contribute to the community for which they do
not paid (Kreutzer, Neugebauer. and Pattloch, 2017). For capital requirements, they only
depends on their members and stakeholders.
Size and scope of organisations:
Organizations can be differentiate on the basis of their capital and size. There are four
major type of organizations according to their size. These major types are:
Micro Enterprises: Micro enterprises can be defined as an organization which has less
than 10 employees working within it. As per the European Union definition, the annual turnover
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of the business does not exceed 2 million Euros. These very small undertaking are progressively
being acknowledged as a chiselled concern with their personal needs (Scott and Davis, 2015).
Small Enterprises: According to the UK's Companies Act,2006 an organization that
have employed less then 50 employees and whose annual turnover does not exceed 6.5 million
(10 million according to EU) Euros can be recognized as a small enterprise. However, this
definition is not inclusive and private sector organizations and bodies choose to device their own
definitions. Small size businesses have to face difficulties to continue in the competitive market
with large enterprises. On the other hand, there are lesser scopes for the administrations to
change their governance strategies (Small and Medium Enterprises (SMEs), 2019). Entry of
competitors may harm their concern. However, the establishments have less resource to defend
themselves from new entrants in the market.
Medium-Size Enterprises: European Union has defined a medium-size business as an
organization which has fewer than 250 employees working in its premises and has either an
annual turnover of up to 50 million Euros. However, the EU lately organised a consultation to
possibly changing its definition. Medium sized organizations have gotten better place than small
size entities (Snihur and Tarzijan and White, 2017). They have function a larger platform and
can alter their strategies twice in a year and can spread out their enterprise and products in new
market. These entities have more opportunities and resources to save themselves from new debut
in the industry. However, these medium size businesses have to face risk because of the
competition with large organisation (Hall, 2016).
Large Enterprises: The organization or business that goes beyond the above mentioned
SME's definitions can be described as a large enterprise. These kind of establishments employed
250 or more employees. In this enterprise they are engaged in keeping up large amount of profit.
They are also involved in hiring large number of people. This can support in achieving their
goals and objectives.
Link of the structure, size and scope to the business objectives:
Structure and size of the organization are connected with the objectives and aims of the
business. It has been seen that organizations set a immense target only when they have a well
established structure but if organizations have few personnels in their premises and have not
knowledge related to their roles then it is impossible to reach the target because of less clarity.
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Business scope is also an important factor in deciding organizational goals. For example,
If an organization is serving to domestic customers, they will set lower business objective and
target but if the opportunity is to serve worldwide then they will set their business objective
accordingly (Martínez, Galván and Alam, 2017).
TASK 2
Relationship between different organisational functions:
An organization has to operate various functions in order to run the business in an
effective and progressive manner. The performance of the organization depends upon various
functions such as marketing and sales, human resources, finance and accounting, research and
development, etc. All these functions are interrelated with each other and help to manage
business operations smoothly. How these functions assist each other, can be understand with
below mentioned points:
Sales and marketing: Marketing is one of the most important function in organization
and it also inter-links with sales department. The marketing render information’s to R&D
department for developing new products which will support the quality life of the customers. It
helps the management to develop a competitive environment through competitive pricing
policies (Zeller, Elder, Heinz., 2016). The marketing strategies and functions provides crucial
data and information regarding finance and investments which helps in attaining borrowings.
Human Resources: Man power is an important factor in process of production and
rendering services. It provides talented, skilled and professional personnels to the each
department of the establishment which provides their expertise in production, developing
effective strategies, maintaining financial records, conducting informations and making
impressive decisions.
Finance and Accounting: Funds are the most important elements to run a business. It is
essential for an organization to maintain a proper accounting related to the finance. It helps in
hiring qualified human resources, providing informations and funds for development of products,
developing strategies related to the production, sales and marketing and perform day to day
transactions.
Research and Development: The main function of this department is to analyse and
examine the performance of the product and services. The management of the respective firm is
able to develop effective marketing strategies, decrease the cost of production, improve the
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potential of personnels, quality of the products and estimating the utilization of funds with the
help of data and informations provided by the R&D function.
Advantages and disadvantages of interrelationships between organisational functions:
There are some advantages and disadvantages of the interrelation of these functions
which can be understand with the help of below mentioned points:
Advantages:
 It helps in improving inter employee relationship amongst different organizational
departments.
 It intensify the earnings level because every worker involved in various departments
communicate their information.
Disadvantages:
 Employees from different branches know the information of other branches so they can
use those information unethically.
It invites the competition among various structural branches (Maclean, Harvey and Clegg, 2017).
TASK 3
Positive and negative impacts of the macro environment upon business operations:
Fulton's Food is a food retailer chain dealing in the production and sell of frozen food to
the customers in UK. There are numerous external components which affects the functions of the
business. These macro environmental elements may impact the functions of the business
positively as well as negatively. The different macro environmental components that influence
the company are presented below:
Political factors: There are various factors which can affect working of organization.
There are various laws which has been implemented by government that can impact firm. Like
for example if there exist tax on import and export, then this impact profitability of company.
The optimistic impact of these political components on the organizational functions of Fulton's
Food are that they provide the control the activities of the organization and limitation and
regulations on the biased trade practices. The counter impact of these political policies are that
they intervene in the operational activities which creates the obstructions to independent practice
of the functions.
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Economic factors: The economic factors are those which are related to the different
economic changes in the economy and demand and supply in the economy that has impact on
business functions (Küpers, 2016). The positive impact of these economic elements on the
business functions of selected firm are that they helps the management in analysing the economic
changes and the changes in customer requirements which helps to operate according the needs
whereas the adverse effect of these elements on the business is that it develops economic cycles
which influence the profitability of the company.
Social factors: These are the factors which are related to the wealth, religion, lifestyle
and culture of the population of a particular economy which affects the marketing strategy of an
organization. These social factor has positively impact the business functions because the
religion and the culture of the society adapt the innovation and changes which increase the
quality of functions of the company. The social factors impact the functions of the selected firm
negatively by bringing the limitation and obligations to production and operate according to the
culture and the religion of the different communities as to attain the benefits of the sales.
Technological factors: These factors are affiliated with the changes in the techniques
and the technology to operating the activities in an establishment. Impact of technological factor
is positive and negative. If firm is making use of advancing technology, then this can help them
in achieving their goals and objectives. They can make use of artificial intelligence which can
support company in completing their work fast and effectively.
Environmental factors: These factors include following laws related to environment.
Like for example Corporate social responsibility in which firm has to give 2% of profit to all
charitable related activity. This has the huge impact on the business functions (Oscarsson, 2019).
The positive impact of these environmental factors on the Fulton's Food is that it provides the
help in creating the risk hindering actions, to meet the natural miss happening of the
surroundings and also aids the company to develop strategies according to the environmental
elements. The negative impact of this factor is that if company is not engaged in following CSR
activities then this can hamper goodwill of firm.
Legal factors’ Legal components are the various laws related to the tax, labour, human
rights, health and safety and other laws which influence the organizational functions such as
manufacturing, sales, transporting, purchasing, etc. The favourable impact of these legal
components on the functions of Fulton's Food are that it helps in avoiding the inordinate
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corruption and biased transactions of the cash, cash equivalents and operational trading whereas
the negative impact of these factors on the organizational functions is that it increases the cost of
production to the selected firm and continuous changes in laws and regulations interrupt the
fluency and effectiveness of business operations and functions.
TASK 4
Internal and external analysis of the organisations:
The SWOT analysis of the Fulton's Food company are discussed:
Strength- Strengths are referred as to the elements which may provide the favourable
aspects to the firm which helps the to adapt different methods to improve its strategies.
Weakness- Weakness are the features of the establishment which are deficient behind
and has the scope of rising up them so the effectiveness and efficiency can be achieved.
Opportunities- The opportunities are the characteristic of the company which consider
the advantages that can be attained by the organisation with a correct analysis.
Threats- Company has threat from huge amount of competitors. This can affect working
of organization. So that they might come up with new and innovative goods and services.
An analysis of micro and macro environmental factors for the respective company
in the form of SWOT analysis is presented below:
Strengths Weakness
 The company uses tremendous innovation in
its food products.
 The company is having and still working on
the incorporate supply chain.
 The organization has goodwill and brand
image to create and sustain huge customer
base.
 The quality of the products providing by the
company has been discovered depreciating
which is distracting the customers of the
company.
 The organization is providing high standard
products and using heavy technology to freeze
the food which is increasing the cost of the
products.
Opportunities Threats
 The firm is planning to expending its
business line all over the world.
 The establishment is facing huge competition
due to the new and existing competitors.
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 It is also trying to increase its business line
by entering into the new products
manufacturing industry.
 Continuous business cycles and low income
of customers is affecting the business
adversely.
Interrelation of strengths and weaknesses with external factors:
The Fulton's Food a growing enterprise which is being expending its business to the
various countries and markets which is increasing the position of the organization in the markets
and improving the stability of the company. The firm provides the quality and the class in
production of its products with the help of newly innovative technologies which alternatively
helps in attracting the customers. The effective marketing strategy of the company also increases
the ability to meet the supreme satisfaction of the customers. It trades in heterogeneous product
range which assist the establishment to increase the competitive benefits and to betterment of the
brand image of the organization (Buckley, Burton and Mirza eds., 2016). The firm is also using
the incorporate supply chain which assist the company to reach to the requirements of the
customers on time with increased efficiency in its functions of the organization.
However, there are some weakness of Fulton's Food also exist which indicate the areas
of the company to improve its business operations and functions. The establishments is
producing the low quality products than before which is decreasing the customer satisfaction.
The company is also providing its products on higher prices which is decreasing the demand of
the products which is helping the competitors in taking the advantage.
CONCLUSION
With the above mentioned facts and case study, it can be conclude that according to their
structure, size and scope, there may be various types of the organization. The objectives and
goals of an organization are decided according to the scope and size. In order to achieve
organizational goals, there are various functions has to be performed such as administration and
IT, R&D, finance, marketing, production, etc. These functions help each other to work
effectively. Beside these functions and factors, there are various internal and external factors
exist in the economy which influence the business operations as well. These factors can be
evaluate and analysed by the use of PESTEL, SWOT and other analysis methods. These micro
and macro environmental factors provides some strengths and weaknesses as well to the
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establishments. The Fulton's Food needs to convert the opportunities into its strengths and work
on its weaknesses by analysing these influencing factors.
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