Business and Business Environment

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BUSINESS AND BUSINESS ENVIRONMENTdivya.j

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
Presenting three different types and purpose of organization....................................................3
Presenting size and scope of business organization....................................................................4
LO 2.................................................................................................................................................5
Presenting relationship between different organizational structures..........................................5
LO 3.................................................................................................................................................8
Positive and negative factors of macro environment factors ....................................................8
LO 4.................................................................................................................................................9
Internal and external analysis of IKEA to identify strengths and weaknesses..........................9
Strengths and weaknesses interrelate with external macro environmental factors..................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment plays an important and crucial role in every firm. The present
report helps to understand the meaning of business environment and how it affects the
environment of IKEA. It is a furniture company which offer different varieties of furniture and
sell it online. It also explains different types of organizations such as private, public and
voluntary with its size and scope. The report also explains the relationship between different
organizational functions and how they are interrelated with each other. It also emphasizes
company's positives as well as negative aspects by using PESTLE Analysis. With the help of
SWOT analysis, the report also helps to determine its strengths and weaknesses and describing
how these micro factors are directly interrelated with macro factors.
TASK 1
Presenting three different types and purpose of organization
There are many different types of business organizations; some of them are mentioned
below:
 Private Organization: This type of organization is owned by individual and is not
controlled by state or central government. The main aim is to earn money and generates
revenue that helps to maximize its profit. Under private sector, there are two types of
different sectors such as joint stock companies and partnerships. As compared to public
sectors, private companies should not follow legal formalities which are assign by
government and these are so easy to run (Calabrese and et.al., 2018). The latest example
of private companies are IKEA, Sainsbury's, TESCO etc. are top leading private
companies of UK.
 Public Organization: this type of organization runs with the support of government and
their main aim is to serve public. They did not work to generate revenue as they are non-
profit sector. The latest examples are charitable trust, trade unions etc. The legal structure
of this organization is quite difficult to explain because there is lot of formalities, which
should be completed by the government itself(Saleem, 2017 ).
 Voluntary Sectors: it is the third type of sector as it does not count in public sector or
private sector but it always takes care and fulfills all the needs of market economy
(Mbaye and Gueye, 2018). Now a days it is the most growing sector and it include

services such as technical research, medical service, agriculture etc. The purpose of this
sector is to benefit and enrich the entire society with no government intervention. The
latest example are foundations, some social welfare organizations, faith based
organization such as church, temples etc (Beatty, Samuelson and Abril, 2021).
 Sole trader: It is the simplest form of business structure which is quite easy and
inexpensive for set up. It is legally responsible for all the aspect of their business and
even the owner is also liable for all the losses and profit (Gerner, 2018).
 Partnership: It is a formal arrangement in which more than two parties are mutually
agreed to manage and operate the business by sharing equal ratio of losses and profit
(Ronald, 2019).
 Private limited company: This type of companies are run individually and business
entities also limits the owner liability . The maximum limit for their shareholders are up
to 50 and also restrict shareholders from the publicly trading shares (Giles, 2018). The
aim is to achieve high profits by dealing in competitive industries in order to increase
efficiency.
 Public limited company : These type of companies have 7 minimum members and have
only 3 directors but there is no limit of minimum members. Apart from this, the public
company is not authorized to start its business operation just because of grant of
certificate if incorporation (Zeiger, 2019). The main purpose of these organizations is not
only to earn profits but also providing welfare to community people.
Presenting size and scope of business organization
Private: The size of private companies in UK is quite large because and these are
operating in large business firms as well (Lepeley, 2021). In private firm, there are minimum 2
members and 2 directors with 200 maximum members or workers. Also the main objectives is
to earn profit and maximizes their business. (Eisenack, and et.al). Private firm have large scope
as compared to public.
Public: The public listed company occupy one of the biggest area and these are operated
in large size (Ansell and Torfing, 2021. In public firms, there are 7 minimum members and 3