Analyzing Public & Private Sector Operations

This assignment delves into the distinctions between public and private sector organizations. It examines their operational structures, governance models, and respective roles in society. The analysis considers factors such as accountability, profit motives, decision-making processes, and the broader impact on stakeholders. Students are expected to critically evaluate the unique characteristics and challenges faced by each sector.

Business and Business
Environment

Table of Contents
INTRODCUTION...........................................................................................................................1
P1 Explain different types and purpose of organization..............................................................1
P2 Explain size and scope of different types or organization......................................................4
LO 2.................................................................................................................................................5
P3 Explain relationship between different organization function and their structure.................5
LO 3.................................................................................................................................................7
P4 Positive and negative impacts the macro environment has upon business............................7
LO 4...............................................................................................................................................10
P5 Internal and external analysis of Lego..................................................................................10
P6 Explain how strength and weakness interrelate with macro factors.....................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODCUTION
Business environment is basically total sum of all the internal and external factors that
influence an organizations business for maintaining successful relationship with customers. Both
internal and external factors together influence the organization. Set of activities or core
processes which are carried out in different areas or department of a company is called
organizational functions. Every organization has many functions like finance, customer service,
operations, marketing, warehousing, information technology and many more which completely
depend upon the type of organization or business it is. There are many types of organizations and
each organization has different legal structure, purpose, objective, goal, aim, size and scope. In
this assignment three different types of organizations like public (Bank of England), private
(Lego), voluntary organization (UNICEF) are discussed. Apart from this, interrelation between
different functions, SWOT analysis and and their macro environmental factors are defined in this
report.
LO 1
P1 Explain different types and purpose of organization
Every business function varies from each other. This depends on their nature and type
and the sector in which they operate. Generally, there are three basic types of organization that
exist that are public, voluntary and private (Preuss., 2017). According to type of organization its
goals and objectives are developed. Moreover, as per type legal structure also varies. The
structure is formed accordingly so that mission and vision can be attained. It can be identified
that there exists huge difference between all types of business which is described as below :-
(Difference between public and private organisation. 2017)
Bank of England – it is a public sector bank in UK which provide different types of financial
services to people. Its main purpose is to ensure economic growth of UK.
Lego- it is a completely private firm which operate in UK. the company manufacture branded
toys and is expanded in different countries as well. Lego is expanded in 55 countries.
UNICEF- it is an international children fund created by United Nation in 1946. Its aim is to
provide food and health care to children in different countries that are not able to afford it. the
organization serves around 190 countries.
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Parameter Public (Bank of
England)
Private (Lego) Voluntary (UNICEF)
Types  A public
organization is
fully operated
and controlled
by government
(Oedewald and
et.al., 2015). It
is formed to
serve citizens of
nation by
providing them
basic products
and services.
 The money is
raised by
collecting tax,
penalty, etc. and
is used for
social welfare of
people.
 No private
companies are
allowed to take
stake in
government
organizations
(Green and
Peloza., 2014).
 The areas are
 A private
company is
controlled and
operated by
private firms
and individual.
They are
formed with
aim of earning
profits by
providing
innovative
products and
services to
people (Wicker
and et.al.,
2014).
 Here, money is
raised by
issuing of share
or debentures
in market and
profits are used
for growth and
development of
company.
 In private
company
government
 They are
formed by
group of
volunteers. The
main aim of
voluntary
organization is
the social
welfare for
human being.
 The money is
raised by
collecting funds
and charities
and is used in
providing basic
necessities to
people
(Cooper.,
2014).
 There is no
stake of
companies in
voluntary
organization.
They can only
provide with
funds or
charities.
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army, health,
mining,
education, etc.
can also take
stake of 49%
then it is
known as semi
government.
 The areas are
education,
finance, health
care, etc.
 There are no
specific areas in
this. It can be
operated at
national or state
level.
Legal structure There is BOD at top,
below them are
shareholders, general
manager and at last
staff, supervisor, etc.
In this structure is
formed and design by
government and is
generally simple and
easy to understand.
Bank of England
structure is formed as
per act of parliament.
At top management,
BOD is there, middle
level directors, CFO,
CTO, etc. are there
and at low level
employees.
The structure is
formed accordingly to
laws and regulations of
different countries. it
varies from country to
country.
Lego structure is
formed as per rules
and regulation formed
by government.
At top level CEO,
chairman is there, at
middle level manager
and at last volunteers
are there.
The structure can be
either a trust, an
unincorporated
association in other
countries. it depends on
its purpose.
UNICEF structure is
designed by United
Nations.
Purpose The main purpose of
public organization is
to serve citizens of
nation (De Sousa
Jabbour and et.al.,
Its main purpose is to
earn higher profit and
fulfilling needs of
people by offering
different types of
Its main purpose is to
provide basic needs
like food, shelter, etc.
to society (Storey.,
2016).
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2018).
Earning profits does not
matter for public
companies. Public
firms work not only for
earning profits, but for
social welfare also.
goods and services.
Their main aim is to
earn profits.
Main aim is to
contribute towards
society. Voluntary
organizations work for
society welfare and
improving living
standard of people by
fulfilling their basic
needs.
P2 Explain size and scope of different types or organization
A business size and scope also differ with their type and purpose. Its purpose depends on
its size. Moreover, in some organization size and scope are similar as they operate in same
industry. With regard to three companies the size and scope are as follows :-
Basis Public (Bank of
England)
Private (Lego) Voluntary (UNICEF)
Size The size of public
organization depends
on its purpose.
Basically, they
operate within a
country for welfare of
people. Bank of
England size is large
as they function in
entire UK.
Its size depends on
goal and objectives to
be attained. They are
many categories of it
like small, medium
and large. Lego is
large company and
globally expanded in
many countries. they
can exist at national or
international level.
Voluntary
organization size also
depends on its
purpose. They can
operate at large or
small level. UNICEF
purpose is to serve
children at worldwide
so it is expanded at
global level.
Scope Organization scope is
decided by its size.
This is because scope
In private
organization scope
differs with their size.
In this similar concept
is followed as private
firms (Cho and Chan,
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varies with size (Choi,
Chan and Yue,
2017). The public
organization scope is
bigger as they serve
entire nation.
The goods and
services offered can
be in area of finance,
education, healthcare,
etc.
The number of
employees are in large
numbers.
It operates in UK.
Lego is large size
company so its scope
is bigger as compared
to other firms.
Private firms can also
offer goods and
services in same areas
as of public.
Number of employees
depends on size of
private firm. it can
vary from 2 to
thousand.
It operates in many
countries like UK,
India, US, etc.
2015). The scope
depends on size.
UNICEF provides
services worldwide so
their scope is spread at
international level.
They usually offer
services in healthcare,
education and food.
Number of employees
are in small number as
compared to private
company.
It also operates in
many countries such
as UK, US, etc.
Thus, it can be stated that scope and size are interrelated to each other. A business
working at large level will have high scope as compared to low ones. However, it is necessary to
determine scope by comparing size. There are many things which is taken into consideration as
well.
LO 2
P3 Explain relationship between different organization function and their structure
In every organization there are different types of department which performs various
types of business functions and operations. they all are interrelated to each other so that overall
goals and objectives are attained. Furthermore, the structure is designed according to functions to
create smooth flow of operations (Oedewald and et.al., 2015). also, structure depends on its size,
geographical location and other factors. there are three types of organization which is described
as below :-
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Bank of England – as it belongs to public sector the organizational structure followed is
different which is developed by act of parliament. There are only specific functions and
department in bank which are as follows :-
HR- this function in related to managing human resource. It includes hiring, making
payroll, recruiting, etc. of skilled people. They analyze need of employees by developing job
description. Moreover, certain function like training and development, etc. are performed as
well. By performing activities goals are achieved by employees. HR is connected to every
division as they identify needs of employees and provide skilled manpower to departments.
Finance- this is the core function performed in bank. in includes managing overall financial
transaction like credit, debit, cash transfer, issue of currency, etc. As it is operated at very large
there are sub division formed. They all perform different function but is related to finance. The
goals are set by evaluating financial performance of bank. Finance department provide funds to
all other departments to carry out activities smoothly and efficiently.
 Budgetary control - here, budget is developed by bank for various industries. it monitors
inflow and outflow of cash, credit, debit, etc.
 Treasury – in this function related to forex exchange, treasury, etc. are operated. They
are responsible to maintain statutory liabilities, bonds, shares, etc.
 Risk management- the main function is to analyze the risk related to finance sector. it is
because economic growth is dependent on banking industry (Green and Peloza., 2014).
The risk is identified and monitored and strategies are developed to mitigate it. in this
way goals are attained.
Lego – it belongs to private sector and its structure is developed by BOD. The structure is
complex as there are many departments in company. Also, a department is further divided into
sub division as well. There are many functions performed in Lego which is as follows :-
 Operations – this function manages overall operations in Lego. it includes developing
procedure, method, etc. for performing operations. its main aim is to ensure smooth flow
of operations to attain goals and objectives. Operations department of company is
interlinked with marketing department as it provides information to operations manager
regarding taste and preferences of customers.
 HR- the function performed in this are same in every company. It includes hiring,
making payroll, recruiting, etc. and managing people. They also provide training to
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employees to perform task in effective way by using tools and equipment’s. HR
communicate with each division to identify needs of employees.
 Research and development – the function performed is to evaluate market condition to
identify needs of people so that products can be developed. Also, data and information is
collected. they coordinate with marketing department and deliver accurate data so that
product can be developed accordingly.
 Marketing – the main function performed is marketing of products and services to
increase sales and profits. it involves developing strategies, organizing campaigns, etc.
(Wicker and et.al., 2014) they interact with R&D to gather data on different market
conditions. So, by advertising goods goals are attained.
 Sales – it is related to selling of product in market. they are responsible for
communicating with people and influencing them to buy products. Also, they build
relationship with customer and maintain CRM. It is directly connected to marketing
function as information is shared regarding markets. Targets are set according to goals.
 Finance – the function performed in this are same in every company. It regulates and
manage overall finance related operations. in includes allocation of resources, developing
budget, auditing, analyzing financial performance, etc. they coordinate with all
department to identify needs of funds and resources.
 Supply chain- there are different activities performed such as planning, controlling the
flow of materials and finished goods. They distribute products in market and ensures that
demand and supply are met. They ensure that raw materials are delivered at right time
and goods are delivered to right customers.
UNICEF – it is voluntary organization and the structure formed is according to agreement
signed by different countries and United Nations. As its purpose is only social welfare of people,
there are specific function performed (Cooper., 2014). Moreover, there are departments in
UNICEF which is discussed as below :-
 Finance – As it is voluntary organization the function of finance department is to
regulate collected funds . there are several activities performed like maintaining inflow,
outflow of funds, distribution, etc. it also manages invoices, payrolls, etc. of their staff
worldwide.
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 HR- the function performed in this are same in every company. It includes hiring,
making payroll, recruiting, etc. and managing people.
 Control and evaluation – the main function performed is to ensure supply of goods in
different countries. also, the performance is evaluated with set goals. this is done to
achieve mission and vision.
 Supply chain – it performs different functions such as purchasing and suppling of goods.
They are responsible in delivering of necessary items in different countries and ensuring
proper supply of goods.
In each organization its function depends on nature and type. So, on basis of goals
functions are performed. In some there might be many functions but core function like HR,
finance, etc. perform similar types of activities.
LO 3
P4 Positive and negative impacts the macro environment has upon business
Pestle Model is a framework to have an overview of macro-environmental factors that
affect the entire business environment of organisations and their operations. With respect to this,
the following analysis has been done with respect to the following three organizations from
different sectors.
LEGO: Political- This is a neutral political company which never entertained any government
interventions. It is a family owned business and never participated in any political events or
controversies. There is also support from Danish government for promoting employment at
regional level. Their operations are independent of any political events. Economic- This factor is imperative as this company's finance has been struggling with
economic crisis in continuous order due to 2008 recession and 2016 Brexit. Moreover, the
fluctuations in inflation rate also affect its manufacturing units all around the world
(Andersen and Ross, 2016). Their sales were affected due to Brexit. Social-They have always stood for safeguarding the children rights and have contributed
immensely for their overall development, especially kids who suffer from any disability or
survived the war zones. Moreover, they donated money along with have pledged to foster
intellectual growth through their toys by emotionally connecting with them. However, they
are still using plastic based bricks which might considered as harmful. With rise of video
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games, kids were disoriented from their brick toys and thus affected their manufacturing
operation. Technological-This brand needs to be technological savvy by using the advanced version
of the robotics and making their toys based on several technologies prevalent in the
marketplaces. Along with, they focus on creating animated series based on their famous
Ninjago characters and have tied up with Texas company to construct robots. With onset of
digitalization, it has also affected their business as kids are more inclined towards gadgets
and video games. Along with, they initiated collaborations for expanding their business
operations in all the locations. Legal- They are plagued by examples where other smaller companies imitate their toys
and counterfeit it in illegal manner. Along with, their sales have been adversely affected due
to this and has filed many lawsuits. Moreover, they have strong legal framework that
protects them from any mis happenings. Any change in law or regulation will affect their
operations.
 Environmental-They are actively participating in the carbon footprint by using organic
and environmentally friendly products. Here, the sources of energy used are 100 percent
renewable with sustainable packaging and printing materials for their products. Also, they
have become responsible and complied with environmental policies properly. Whereas their
aim is to become plastic free by the year 2030 to support their operations in sustainable
manner. BANK OF ENGLAND: Political-This factor emphasis mainly on entire working operations since it is a
government-based organization and is completely under their control and supervision. In
this regard, its structure is formed with political interventions. Moreover, the stability of
operations is proportional to current positioning of government in the global market. Economic- Banking and economy are intertwined together and is based on factors like
GDP, inflation rate, FDI etc. Here, the money comes from various sources of government-
based activities or other public enterprises (Yudha, Tjahjono and Kolios, 2018). However,
this money has been raised from taxation laws and regulations and other charitable events
which affects the procedures at bank. Due to Brexit, it affected their operations.
9

 Social- This factor affects the entire setup of this bank due to large diversities seen in the
cultural component and traditional values. Along with, the buying behaviour also matters
which influence in opening or joining the bank or other related operations. Bank of England
has the commitment to do public welfare and thus have established its name in this sector.
Moreover, people do not have knowledge about operations in terms of finance and thus
needs proper guidance and this bank do not address the queries. Technological- This factor has significant role as banking procedures have become
synonym to use of computers. However, there have been questions that are raised with
respect to credibility and reliability. There were few instances of data leakage for their
customers but now they have made a strong framework. Online banking will affect
positively on their operations. Legal- They follow strict adherence to laws for protecting the privacy and their
organizational confidential data. Along with, they shed light on the need of donations and
charities and have raised several fundraisers to do welfare and developmental work in
effective manner (Ruayruay and et.al, 2016). Thus, if these laws' and policies are not
followed properly, then strict actions are taken and overall operations will be affected.
 Environmental- This have become paperless and have used mobile application along with
minimum usage of manual labour and thus led to efficient operational activities. However,
UK government is trying to implement stringent measures for reduction of footprint by
employing environmental policies like EPA in appropriate manner. UNICEF: Political- It is the international level organization which is consistently working towards
welfare of children in educational and health promotion programs. Their work is related to
governments from all the member countries. Thus, those countries political scenarios might
restrict UNICEF operations adversely. Economic- Mostly all the donations and monetary funds' comes from UNO and private
donors. In addition to this, all the programs are funded for community development services
to promote the health awareness and importance of education. Any illegal transactions
would affect their aim of welfare projects. Social- This is formed from all the nationalities and the governing executives and
members who have one outlook to provide services for the upliftment of children in terms of
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secure future. Along with, the social factor keeps fluctuating due to different parameters like
tradition, culture, value system etc. the needs children are ever-growing and affect their use
of operations effectively Technological- UNICEF has begun to propagate about its programmes through social
networking sites and other platforms available on internet to bring the attention of the world
to fulfil the demands and needs of the poor countries and combating the situational crisis
(World Health Organization and Unicef, 2014) however, sometimes it gets difficult when
this organization works in remote or poverty-stricken regions in the world. Legal-They work under the legal framework and guidelines of the United Nations
Organization. However, their ideologies get clashed with the specific country's law system
leading to unpleasant atmosphere while organizing any event. Any illegal donations or
charities would affect their aim of welfare projects.
 Environmental- They are the flag bearers of this factor on global podium. Along with,
they are making global populace conscious with the sense of social responsibility to
continue with their aim of eliminating poverty or else the purpose of conducting operations
worldwide would be hindered. However, there is still some lack of commitment in attending
these concerns in proper manner.
LO 4
P5 Internal and external analysis of Lego
 SWOT Analysis is the strategic tool to assist in complete assessment of Lego
company. It is defined below:

STRENGTHS
 Emphasis on educational learning for
development of young minds in
cohesive manner
 Strong product portfolio since it’s been
in the market as the leading toy maker
in the world for more than 67 years
 Consistent good performance in the
market by providing quality and high
WEAKNESSES
 USP (Unique selling proposition) is not
appealing as their marketing strategies
are not defined properly in terms of
technological aspects
 Low variety of products as these are
mainly selling the interlocked colourful
bricks made up of plastic
 Weak financial planning that resulted in
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standards products
 Dedicated workforce which have been
serving this company from longer
duration and have specialized expertise
to sustain by self motivation (Gourdeau
and et.al., 2016)
 Lego based theme park has become one
of the attractive destinations for tourism
losses and gave them small gap for
expansion plans
 Lack of accessibility towards the
technological tools and techniques with
regard to their conceptual design of
toys
 Need to invest more in advancing the
research and development to combat
the innovation and creativity challenge
OPPORTUNITIES
 Differentiated pricing tactic can prove
beneficial through incorporation of new
technologies in their production
 Formulation of new policies can be
outlined to understand the growing
opportunities in terms of environmental
regulations
 Use of technological aspects to expand
their marketplaces and enhancing their
competitive advantages
 Inflation Rate must be low so that
stability must prevail and ensuring the
value of credit in low rate of interests to
their customers
 Using various online platforms and
improving their marketing tactics
THREATS
 Emergence of video games and robots
that occupy the attention of kids these
days
 Imitation of their products at affordable
range due to low quality standards has
become a serious concern
 Unstable political fluctuations that
affect the economic rates and legal
framework
 Low PPP (purchase power parity)
because of existing competition in the
markets
 Shortage of skilled labour and inclusion
of online platforms and technologies
might hamper their business (Zalengera
and et.al., 2014)
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P6 Explain how strength and weakness interrelate with macro factors
An organization operate in internal and external environment. Any change in them
impacts on its growth and development to great extent. It is important to analyze macro and
micro factors so that effective strategies can be developed to minimize its impact (De Sousa
Jabbour and et.al., 2018). so, it is necessary to identify threat so that it can be overcome. If
proper analysis is not done it impact on expansion. The strengths and weakness are related to
macro factors in several ways as described below :-
 Lego strength is it is having a large customer base in different countries and a strong
brand name. besides this, they are having a strong product portfolio. So, if there occurs
any change in taste and preference of people it will led to social factor. Thus, it will be
beneficial for company to expand in other countries.
 The government of country can allow FDI investment. This refers to political change. So,
Lego can be benefited by it. by having a strong brand name and products portfolio
company can easily enter in market. It will help in attracting more customer and
generating sales and profits. but on other hand local competition might be factor that can
affect Lego operations.
 If there is advancement in technology, then it can benefit Lego in positive way. they can
strengthen its online gaming technology and develop more games to attract large number
of people. Hence, it can build strong customer base in developing countries.
 Another strength of Lego is that it has diversified into areas of video games, theme parks,
etc. but change in political or technological factor will negatively impact on its strengths
this is because they will have to modify technology to develop new games. Also, some
countries might not allow them to establish theme park which is a threat for firm.
 Its weakness is high competition from other companies and loss of market due to online
gaming. But on other hand advancement in technology will provide a platform for Lego
to enter in developing countries (Choi, Chan and Yue, 2017). this will lead to economic
growth by sharing of technology. Use of advanced technology in business processes
provides an opportunity to company to gain competitive advantage and lead the market.
 The imitation of products is a major weakness for Lego. Thus, other companies can easily
enter in market by developing duplicate toys. It can occur when government changes
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laws and regulation to allow industries to emerge and develop low cost toys. This will be
a threat for Lego that may impact on its profitability.
 If there is change in legal factor like government might restrict children below age of 5 to
play with plastic toys and video games, this will create negative impact on strength of
Lego. Due to this their growth will be affected. Furthermore, it will affect on social factor
as well because poor image of firm will be created in people’s mind. their needs will be
changed resulting in decline in sales and profits.
Therefore, from above it can be said that company can eliminate its weakness if change
in macro factor is positive. But if it is negative this can highly impact on its strengths as well. It
may lead to converting strength into weakness. All the above mentioned points depicts that
strengths and weaknesses are highly interlinked with opportunities and threats of macro factors.
CONCLUSION
From the above assignment it has been concluded that each organization is of different
type like Lego is a private organization, UNICEF is a voluntary organization and Bank of
England is a public organization and according to their type their legal structure is defined.
Similarly, purpose of each organization is different according to their business type. Each
organization's scope and size are different according to their growth in that sector. each
organization has different structure which is completely based upon the strategy, size,
geographical operations etc. Furthermore, the impact of macro environment on business can
affect the it in various ways depending upon the factors.
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