Types and Purposes of Organisations: Explained and Described

This document provides an in-depth analysis of the various types and purposes of organisations. It explains the size and scope of different types of organisations and how they relate to their objectives and structure. It also discusses the positive and negative impact of the macro environment on business operations, using specific examples. The document is relevant for students studying business and business environment.

Business
And
Business Environment

Table of Contents
INTRODUCTION......................................................................................................................3
TASK 1......................................................................................................................................3
P1. Explain various types and purposes of organisations.......................................................3
P2. Describe the size and scope for range of different types of organisations.......................4
P3. Interpret the relationship between different organisational functions with their
objectives and structure..........................................................................................................6
TASK 2......................................................................................................................................7
P4. Identify the positive and negative impact of macro environment has upon business
operations, supported by specific examples...........................................................................7
P5. Determine the internal and external analysis of specific organisation in order to
determine the strength and weaknesses..................................................................................9
P6. Explain how strength and weakness interrelate with external macro factors..................9
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................11

INTRODUCTION
Business environment refers as the combination of internal and external surroundings
which develops intrinsic strength over weakness and extrinsic opportunities to overcome
threats. The project is based upon Tesla which is an American electronic vehicle and clean
Energy Company introduced by Nikola Tesla in 1856. The Elon Reeve Musk is an engineer
and technology entrepreneur which is the current CEO of Tesla organisation. This project
analyse the various types of organisation with description of its size and scope
(AGBOLADE, 2014). It further interprets the relationship between different organisational
functions through their objectives and structure. Additionally, this identifies the positive and
negative impact of macro environment on business by determining its internal and external
analysis for examining its strength and weakness.
TASK 1
P1. Explain various types and purposes of organisations
Business environment is classified on the basis of internal surroundings which include
suppliers, customers, competitors, public, market intermediaries and external surroundings
that involve political, economical, social, technological, legal and environmental factors.
There are various types of organisations which are running for profit, not for profit and non-
government business sector which are classified as under:-
Public Sector:- This refers as the enterprise which is most probably governed and
controlled by government through political leaders by focusing on public transportation,
education, infrastructure, health care, military services, etc. It focus on not-profit organisation
which are small business such as BBC, Automatic Weapons Establishment (AWE), British
Army, Environment Agency, NHS, etc., which produce products and supply services. From
the above prescribed UK public companies National Health Service (NHS) is selected as it
provide medicines for health and safety measures to help public. This organisation follows
rules and regulations of UK government through hospitality and medical centres by supplying
treatment facilities and healthy living which create opportunity for growth and stability of
business.
 Purpose:- The main purpose of public sector is to develop infrastructure for
delivering goods and services, acknowledging with education, distributing income
and welfare, etc. The purpose of NHS is to provide funds for healthcare facilities to
mainly dependent patients through keeping them healthy and fit.
 Legal Structures:- This sector mainly focus on legal and lawful structure that
involves local, state and central government which helps to run business socially. The
NHS is considered as Public Health England with directly commissioned services for
legally providing funds to social care (Aydiner and et.al., 2019).
Private Sector:- It is defined as the sector which does not involve the legal
regulations of government are mostly operated two or more entrepreneurs for maximisation

of profits. The aim of this sector is to fulfil the requirement of target market by producing
goods and services through least-cost effectiveness for enlarging customers. It focuses on
profit organisations which are large business such as Tesco, Tesla, Sainsbury, JCB, Mark and
Spencer, Morrison, Greenergy, etc. From the above mentioned companies Tesla is selected
for popularly known for its American electronic vehicle and clean energy company.
 Purpose:- The main purpose of this is to maximise wealth and profits by providing
employment more than the public sector. The main aim of Tesla is to accelerate the
world’s transition to sustainable energy (Bah and Fang, 2015). The goal of
organisation is to drive electric vehicles through proper quality, quicker actions and
more fun to drive for clients through luxurious and comfortable cars.
 Legal Structures:- This sector mainly focus on providing tax benefits for owners,
minimise liability which includes sole proprietorship, partnerships, joint ventures, etc.
The legal structure of Tesla is described in U-form which consist structural group of
employees for engineering, sales and services (Legal Structure of Tesla, 2019).
Voluntary Sectors:- This sector is also known as non-governmental business which
is non-profit making company running their business effectively. The main aim of
organisation is to perform their functions for providing services to social welfare. It focuses
on non-government organisations perform as medium-sized businesses that are National trust,
Oxfam, National council for voluntary organisation (NCVO), etc., works for social welfare
and charity. From the above prescribed UK public companies NGO is selected for its various
charities, child protection and social investment act in 1945.
 Purpose:- The main purpose of this is to provide benefit and enrich society while not
focusing on the motive of profit maximising without government intervention. The
main aim of NGO is to support public with human rights, environmental and health
protection.
 Legal Structures:- This sector mainly focus on unincorporated association, trust and
guarantee for public sector. It is most probably classified as small group with short-
term goals and low incomes. The legal structure of NGO usually practices charities
with hugely varied goals and motivation for wide variation in lawful activities
(Bardauskaite, 2014).
P2. Describe the size and scope for range of different types of organisations
The size and scope for different types of organisation which are classified as public,
private and voluntary sector have been mentioned below:
Public Sector (NHS):-
On the basis Explanation
Vision The vision of NHS is to deliver better facilities for health care
services and experience for patients.
Mission The mission of NHS is to improve health, well-being and
people’s experience to value excellence by clinical practice,
service improvements and innovation.

Objectives NHS provides comprehensive services which have highest
standards of excellence and professionalism.
Background The NHS was introduced on 5th July, 1948. It consists of
hospitals, doctors, nurses and dentists collectively performing
under one service.
Size Size of NHS is described with 106,430 doctors, 285,893 nurses
and health visitors, 132,673 scientific, therapeutic and technical
staff, 19,772 ambulance, 21139 managers, etc.
Scope The NHS Constitution gives patients rights to make choices for
their healthcare facilities.
Product The national demand is aggregated to purchase products of NHS
to optimise value and support high quality for care of patient.
Services NHS includes primary care, mental health, ambulance, social
care and hospital services.
Market Share The industry of NHS exhibits high level of concentration with
94.6 % of its market share.
Shareholders The NHS does not have any shareholder as it don’t seek for
profit and provides universal service.
Private Sector (Tesla):-
On the basis Explanation
Vision The vision of Tesla is to manufacture most compelling car
company of the 21st century by developing the world’s
transition to electric vehicles.
Mission Mission of Tesla is to accelerate the world’s transformation
towards the sustainable energy for its better, quicker and
more fun to drive electric vehicles.
Objectives The objective of Tesla is to build sports car and provide
zero emission of electric power generation (Dahles and
Susilowati, 2015).
Background The Tesla was introduced in 2003, with the idea to create
effective electric cars for its mass selling.
Size Size of Tesla is described with wheelbase of 2960 mm,
length of 4980 mm, width of 2189 mm and height of 1,440
mm, etc.
Scope Tesla have delivered more than 70,000 electric cars and
recently expanded its scope for solar power batteries.
Product The Tesla products are described as electric vehicles with
its energy.
Services Tesla strategy for direct customer sales and owning store
centres are different from the standard dealership model in
the global vehicle market place.
Market Share Tesla’s share of the U.S. automotive market gradually rose
to roughly 1.3 percent.
Profit Share The Tesla share 21% as surprise profit by showing its
increase cash balance to $ 5.3 billion and reported profit of
$1.86 per share, shattering analyst of expectations for loss
of 42% shares.

Shareholders The CEO of Tesla is the top shareholder of the company
with 38.6 million shares.
Voluntary sector (NGO):-
On the basis Explanation
Vision The vision of NGO is to inspire people to engage with
organisation and deserve a well-thought-out place on
website.
Mission Mission is to unite NGOs worldwide for advancing peace,
as well-being at all levels such as individual, family, tribal,
national and world.
Objectives The objective of NGO is non-government working as not-
for-profit, voluntary, citizen group, heterogeneous with
hugely varied goals.
Background The NGO was introduced in United Nations at 1945
working as not-for-profit organisation without rules and
regulations of government.
Size There are estimated 10 million NGOs with large number of
people donating money which has increased from 1.2
billion to 1.4 billion.
Scope The scope of NGO registration with regulator is mandatory
to gain charitable status for developing social welfare in
both government and academic circles.
Product The product of NGO is to provide healthy, safe, and the
purest products available in market at affordable price.
Services The NGO activities include environmental, social, advocacy
and human rights work.
Market Share The NGO is significantly growing at CAGR of 7.8% during
the forecast period.
Shareholders It is non-profit organisation that not deals in stakeholders as
it literally doesn’t have owners.
P3. Interpret the relationship between different organisational functions with their objectives
and structure
Organisation structure is defined as the systematic procedure that describes the
activities performed in particular direction in order to achieve organisation goals and
objective to sustain in global market through its competitive strategies. The managers of
Tesla implement this to determine the rules, roles and responsibilities.
Functional structure:- It refers as the most common structure of organisation which
leads to discriminate employees in accordance with their specialisation and similar set of
roles or task. The managers of Tesla can use this structure as to diversify members in respect
to their activities that improve efficiency to remain stable in global market (Fabuš, 2017).
Divisional structure:- It is described as grouping the organisational functions into
division which consists of necessary resources and functions. The managers of Tesla can use

this structure to analyse the divisions for finance, information technology, marketing,
research and development, etc.
Tesla is adopting the divisional organisational structure being the large enterprises
which produce differentiated products and services for segmented target market at various
areas. This structure helps to allocate the roles and responsibilities for each department such
as Finance, human resource management, marketing, sales, research and development. It
further provides opportunity to attain success for business by competing with its rivalries.
The relationships between different functions in relation to Tesla are mentioned below:-
 Department of Finance and Human Resource:- Finance is broadly explained as the
system of money, investments and other financial instruments. Human Resource
involves developing programmes to increase effectiveness of an organisation. These
both functions and departments are interrelated with each other in reference to
managers of Tesla which leads to perform activities by investing money for capital
generation which takes high risk to earn high return in future which increase
efficiency to sustain in global market. The managers of Tesla focus on managing their
expected budget with the actual budget through its revenue and expenditure by
directing and controlling the performance of employees through reducing of wastage.
 Department of Sales and Marketing:- Sales is defined as the activity to sale the
finished goods which result in maximisation for volume of output. Marketing is
considered as the procedure to promote and position the finished goods in the mind of
target market which increase sale (Huang-Horowitz, 2015). These both functions and
departments are interrelated with each other in reference to managers of Tesla as
marketing enlarge customers by promoting its commodities to end-users which result
in maximisation of revenue and profitability ratios. The managers of Tesla focus on
individuals to set up businesses and firms to trade locally, nationally and globally
which includes specific support for international trade.
TASK 2
P4. Identify the positive and negative impact of macro environment has upon business
operations, supported by specific examples
Macro environment: – This is described as the component of extrinsic environment.
It determines the opportunity and threats from its external factors which affects growth and
stability of business in competitive market. The managers of Tesla implement this to analyse
the competitive advantage of organisation as compared to its competitors.
PESTLE analysis:- It is the framework which analyse most important factors of
external environment that influence stability of an organisation. This is further explained with
the PESTLE analysis to analyse the positive and negative impact of these elements on
business environment. These are mentioned with reference to Tesla is as follows:-

Political factor – This factor involves tax rates, political system, government
regulations and stability which impacts growth of business. The political system is mostly
stable in United Kingdom which helps to achieve organisation goals efficiently. The
managers of Tesla implement rules and regulated which are governed by political leaders for
planning in strategic decision making (Likoko and Kini, 2017).
 Positive:- The impact of the digital revolution on production and consumption
favourably impact the business of Tesla as it create opportunity to fulfil the
requirement of customers by producing qualitative products.
 Negative:- Change in taxation policy affects the stability of business as it create threat
for business by increasing pricing strategy for electric vehicles of Tesla which reduce
its customers.
Economic factor –It is the element which involves inflation rates, interest rates, GDP
rates, population growth etc. The United Kingdom focus on this factor as it describes the
fluctuation for inflation and deflation of money as compared to other countries.
 Positive:- This factor positively impacts the business of Tesla as it determine the
foreign exchange rate for inflation which leads to earn more money and maximise
wealth.
 Negative:- The negative impact of economic factor on Tesla is to analyse the annual
birth and death rate of population which may impact on its sale of electric vehicles
and profitability ratios (Niemann-Struweg, 2014).
Social factor – It includes the determinant such as demographic conditions,
population growth, age and income distribution, health consciousness, etc. The managers of
Tesla focus on emerging trends of customers which are to be fulfilled by providing superior
products and services.
 Positive:- The roles of managers in Tesla are favourably affected as they provide
employment opportunities to society who are literate that increase efficiency in goal
achievement.
 Negative:- The uncontrollable risk for managers of Tesla is to perform their actions
for society welfare instead of profit maximisation.
Technological factor – This factor includes new technology, automation, innovating ideas,
etc. This is important for organisation to update their products and services by using latest
techniques which create opportunity to compete with rivalries.
 Positive:- The managers of Tesla are favourably affected in positioning products to its
target market that result in maximisation of revenue and profitability ratios.
 Negative:- Tesla is negatively impacted by the continuous use of latest technologies
which are implemented to increase efficiency that are considered as obsolete in future.
Legal factor:- It is the element which consists of legal and lawful obligations, health
and safety measures, consumer protection rights, product labelling and packaging, etc. The

Tesla implements this as to perform its actions legally which creates opportunity to remain
stable in global market.
 Positive:- Tesla managers are positively impacted by focusing on consumer
protection rights by manufacturing the electric vehicle as prescribed before to meet
their requirements for which they are ready to pay high amount.
 Negative:- The managers of Tesla are unfavourably affected by this factor as they are
bound to pay minimum wages for its employees with payments of bonus as rewards to
motivate them (Prajogo, 2016).
Environmental factor – This factor consists of environmental pollution targets,
stability and instability of business, full utilisation of scarce resources, etc. In UK, people are
highly concerned about environmental protection, changing weathers and climates.
 Positive:- The managers of Tesla are taking imitative for green environment and
optimum utilisation of scarce resources which helps to build good relations and
increase customer support and loyalty.
 Negative:- Tesla managers are negatively impacted by the uncontrollable risk of
carbon emission which impact the air pollution from its electric vehicles.
P5. Determine the internal and external analysis of specific organisation in order to determine
the strength and weaknesses
SWOT Analysis:- This framework is considered as the strategic decision making for
planning functions to determine the competitive strategies of business through strength,
weakness, opportunities and threats. It is further explained with reference to managers of
Tesla that focus to compete with its rivalries to sustain in global market (Saleem, 2017).
Strength (S) Weakness (W)
 Tesla is the leading automated brand
for 2019 by delivering 367, 500
electric vehicles.
 It is innovative company by
diversifying its products through
cross-selling services.
 The Tesla lacks in high volume
production being the shortage for
specialised battery implied in it.
 It is not usually able to meet the
demand of its customers which
affects its brand value adversely.
Opportunities (O) Threats (T)
 The Tesla manufactures battery of its
electric car which creates opportunity
for business to keep its price in least-
cost effectiveness.
 It is going to introduce the pick-up
trucks which accounts for 17.6% of
US automotive market.
 The Tesla faces large number of
competition in global market which
impact threats for the stability of
business.
 The change in taste and preference of
customers by consuming the same
product again and again.
P6. Explain how strength and weakness interrelate with external macro factors
The strength and weakness which interrelate with external macro factors are classified
with reference to Tesla are as follows:-
Basis Strength Weakness

Political The political stability in UK
creates opportunity for growth
and sustainability of Tesla.
Change in taxation policy affects the
purchasing criteria of its customers
as it cost high prices on product due
to inflation which decrease the value
of money (Weiss, 2014).
Economical This factor positively impacts the
business of Tesla by analysing the
foreign exchange rate for inflation
which leads to earn more money
and maximise wealth.
Its weakness is described as to
determine the population rate with
birth and death rate which increase
or decrease the demand for electric
vehicle of Tesla.
Social The strength of Tesla in social
factor as it enlarges the number of
workers by providing them job
opportunity which improves
efficiency.
The weakness of Tesla is to perform
their activities mostly for social
welfare as compared to maximise
profitability ratios.
Technological Tesla focuses on technological
factor as to adopt new technology
for meeting the change in taste
and preference of its customers.
The weakness of technological
factor for Tesla is the new adopted
technology or software will become
obsolete in future which cost high.
Legal The Tesla concentrates on legal
and lawful objectives of
government for the customer
welfare through their protection
rights by producing good quality
electric cars for their luxurious
and comfort life.
Tesla is negatively impacted by
legal factor as government have
imposed rule to pay minimum
wages to their workers for survival
which meet basic needs for food,
shelter and cloth.
Environmental The managers of Tesla have
internal strength for taking
initiatives towards the green
environment by full utilisation of
scarce resources.
The weakness for Tesla through
environmental factor is to reduce the
usage of carbon which impact air
pollution from its electric vehicles
(Wood and Logsdon, 2017).
CONCLUSION
From the above discussion it have been concluded that business environment plays
the most important role in analysing the internal and external surroundings which impact on
the growth and stability of organisation to compete with rivalries. This project explains the
various types of organisation that are public, private, voluntary sectors with description of its
size and scope. It further interprets the relationship between different organisational
functions through their objectives and structure. Additionally, this identifies the positive and
negative impact of macro environment on business through PESTLE and SWOT analysis by
determining its internal and external analysis for examining its strength over weakness.

REFERENCES
Books and journal
AGBOLADE, O. K., 2014. The impact of business environment on the survival of small
scale businesses in Nigeria.
Aydiner, A. S., and et.al., 2019. Business analytics and firm performance: The mediating role
of business process performance. Journal of business research. 96. pp.228-237.
Bah, E. H. and Fang, L., 2015. Impact of the business environment on output and
productivity in Africa. Journal of Development Economics. 114. pp.159-171.
Bardauskaite, I., 2014. Loyalty in the business-to-business service context: A literature
review and proposed framework. Journal of Relationship Marketing. 13(1). pp.28-69.
Dahles, H. and Susilowati, T. P., 2015. Business resilience in times of growth and
crisis. Annals of Tourism Research. 51. pp.34-50.
Fabuš, M., 2017. Current development of business environment in Slovakia and Czech
Republic.
Huang-Horowitz, N. C., 2015. Public relations in the small business environment: Creating
identity and building reputation. Public Relations Review. 41(3). pp.345-353.
Likoko, E. and Kini, J., 2017. Inclusive business—a business approach to
development. Current opinion in environmental sustainability. 24. pp.84-88.
Niemann-Struweg, I., 2014. An integrated communication implementation model for the
post-2000 business environment. Public Relations Review. 40(2). pp.184-192.
Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment
in delivering business performance. International journal of production Economics. 171.
pp.241-249.
Saleem, M. A., 2017. The impact of socio-economic factors on small business
success. Geografia-Malaysian Journal of society and space. 8(1).
Weiss, J. W., 2014. Business ethics: A stakeholder and issues management approach.
Berrett-Koehler Publishers.
Wood, D. J. and Logsdon, J. M., 2017. Theorising business citizenship. In Perspectives on
corporate citizenship. (pp. 83-103). Routledge.
Legal Structure of Tesla, 2019. { Online } Available through
< https://research-methodology.net/tesla-organizational-structure-divisional-and-flexible/ >