P2 Size and scope of different organisations

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
Task 1...............................................................................................................................................3
P1 Types and Purpose of private, public and voluntary organisation and their legal structure. .3
P2 Size and scope of different organisations..............................................................................7
TASK 2............................................................................................................................................8
P3 Interrelation between different organisational departments and their link to objectives.......8
TASK 3..........................................................................................................................................10
P4 Impact of macro-environmental factors...............................................................................10
TASK 4..........................................................................................................................................12
P5 Internal analysis of organisation for identification of strength and weaknesses.................12
P6 Interrelation of macro environmental factors with strength and weakness.........................14
CONCLUSION..............................................................................................................................15
REFRENCES.................................................................................................................................16

INTRODUCTION
In a economy each and every organisation is established to getting desired growth and to
achieve target objectives easily. For this manager of business requires to make impactful strategy
to attain higher growth. In this procedure they faces various challenges and strong competition
from market. Business environment is also a element that affect operational and functional
activities as well as decision making process of firm. This environment factor is classify in two
different elements as internal and external (Reed, 2013). These both factors has direct impact on
decision making process and profitability of firm. For this manager of organisation requires to
make effective impactful strategy to reduce its negative impact easily. Internal environmental
factors are controllable while as external environmental factors are beyond the control, so for
them management needs to manage their business activities properly. This report is based on
Nestle which is world's largest food and drink organisation. This organisation was established in
the year of 1866 by Henri Nestle. This report represent types of different organisation, size and
scope of such businesses. It also include impact of internal and external business environment.
At last it include interrelation between external environmental factor and its strength as well as
weaknesses.
Task 1
(Covered in PPT)
P1 Types and Purpose of private, public and voluntary organisation and their legal structure
In an economy, different type of organisation are established to provide their effective
services to target customers. These organisations are different to each other. For them, it is
require to analyse their purpose for specific services. Government of a country also has direct
control on such organisation to manage their operational and functional activities effectively.
There are different Types, Purpose and their legal structure as -
Private company – These are the privately owned organisations which are established to
making money and income from target market. Main objective of this firms is to provide quality
services to customers on the bases of their requirement and need. Such organisation are get legal
license from government of the country but implement their own rules and policy in it. Their
main objective is to getting maximum profit and competitive advantages easily. For this manager
of such organisation create impactful strategy and planning to build their own image in target

market. For example Nestle is a well known private sector organisation that render their quality
services according to customer's demand.
Purpose of Nestle – This is a Privately owned organisation which is established to
provide their effective and quality products to several customers. For them it is require to analyse
needs and desire of services user to manufacturing quality products easily. Through this they can
easily provide higher satisfaction to them. Main purpose of this organisation is get higher
competitive advantages from target market. For nestle, different firms can be their rivalry who
also provide similar services to their customers. So for them it is require to maximize quality of
their services and products to getting higher growth and profitability as well.
Legal structure of private company – These are the privately owned firms who manage
their organisational activities on the bases of their future demand and requirement. Legal
structure of private sector organisation are very different to voluntary and public sector
organisations. Owner of such business firms build their own control on such company.
Government of the country also regulate different type of regulation that they require to
implement in their business organisation. Nestle is one of the largest firm that provide food and
drink products in several countries. For them, it is important maximise legality in their business
services to build effective relation to different customers in several countries.
Advantages and Disadvantages of private organisation
Advantages -
 In private sector organisation, number of direction are very minimum.
 One most important advantages in private limited company that it has limited liability
that provide several facilities to employees.
 In private sector organisation, employees are better known to each other, so owner can
easily make proper control on them.
Disadvantages -
 In private limited organisation, numbers of employees are very limited, so that they can
not maximise their strength easily.
 Private limited organisation never issues their shares in publicly, their shares are only
valid for employees and investors as well.
 They can hold number of shares for public organisations

Public organisation- The main aim of these organisations is to develop the community through
providence of better facilities and products which cater their diversified needs. On the working
of these companies government of country has significant control. The main function which is
provide by government in this regard is about direction to the organisation in performance of
functions most appropriate manner to accomplish their desired goals. The functions which are
provided by these organisations normally related to healthcare facilities, military, education etc.
These organisations have huge contribution in development of society and economy of nations as
they generates large number of job opportunities which contributes in improvement of their
standard of living.
Purpose of NHS – Public sector organisation organisations are basically established to
provide appropriate services to different people. NHS is health care organisation that render
efficacious service to needy people. Their main objective is to resolve issues and disease of
different candidates to maximise their health level easily. For them, it is required to created ideal
and good health regardless of wealth and money making activities. To improve productivity and
effectiveness of employees, NHS requires maximise their effective services easily. Main purpose
of this firm is to provide effective services to individual with proper dignity and respect. By this
method they can resolve their issues and problems as well.
Legal structure of public company – NHS is a well known organisation which is
properly controlled by government of the country. These organisation provide legality and
effectiveness to make proper control of its business activities.
 Central government: Central government of the country analyse each and every
business activities to resolve issues and problems of governmental bodies.
 State government: These authorised bodies provide their effective contribution in funds
ans resources allocation methods. Through this, they manager organisational activities of
firm.
 Local government: These government all bodies analyse services of organisation that
requires to provide to each and every individual who needs this.
Advantages and Disadvantages of Public organisation -
Advantages -
 These organisations provide low change services to needy people for resolving their
issues and problems easily.

 These organisations provided further facilities to individuals as electricity, water,
education and hospital.
 Public sector organisations are basically provide expert administrative services to several
candidates in appropriate manner.
Disadvantages -
 Governmental organisations bear higher losses by providing such services at lowest cost.
 Low tax policies also reduce effectiveness of governmental funds and services that can
implement in public facilities.
 Some of the public sector organisation faces lots of higher competition from privately
owned organisation.
 Sometimes foreign investment policies discourage services of public sector firms.
Voluntary organisation – These firms provide their quality services in public care activities.
They are basically provide several facilities and services for society development. Main
objective of voluntary sector firm is to provide several services to those who has requirement,
they are not create business procedure for money making activities. For them it is required to get
proper licence from governmental authorities before establishing their business criteria in
services sector. These companies are basically star up by group of individuals and several
authorities by their own choice. For example Oxfam is also a Voluntary sector firm that provide
different services to remove poverty easily.
Purpose of Oxfam - Oxfam is a voluntary sector organisation which was established in
the year of 1942. main objective of this firm is to remove poverty by using different methods and
techniques. For this they provide helps to needy and poor people by food, clothes and shelters to
make their life in better condition. Some governmental authorities provide funds to these
organisation to manage their activities in effective manner. This is a most specific initiative that
is started by owner of Oxfam. Different individuals also get connected with this firm to provide
contribution on the bases of their capacity.
Advantages and disadvantages of voluntary organisation
Advantages-
 Voluntary organisation do not have to pay any taxation because government allow them
fro these services.

 These organisations can gain specific funds from government, individual and from
society as well.
 These organisation getting proper help and advised from individuals and governmental
owned organisations.
Disadvantages -
 These organisations never can do any kind of activities that private and public sector
organisations achieve.
 Government apply strict rules on such organisations to manage their activities in effective
manner.
 Sometimes it is hard for them to getting specific fund from individuals and governmental
authorities, so in this case owner and trustee needs to provide their services by their own.
P2 Size and scope of different organisations
For a business organisation, it is require to manage their operational and functional
activities in effective manner. These organisation can be public, private and voluntary sector that
establish to provide their effective services to customers on the bases of their own objectives,
vision as well as mission. Size and scope of such business firms are also based on their future
targets. Size of firm is based on employees of firm, available resources and funds while as scope
of firm is based operation activities and different locations on which they provide several
services. Size and scope of different organisations are given below -
Nestle
 Size: Nestle is a multinational food and drink organisation which was established in the
year of 1866. This firm has more than 447 factories and they operating their functional
and operational activities in 194 countries to provide quality services to several
customers. In these store and factories approx.339000 employee’s are working to produce
quality product and services for several consumers.
 Shareholders: This organisation getting proper funds and investments from Capital
Research & Management Co. (World Investors), Third Point LLC, The Vanguard Group,
Inc., Norges Bank Investment Management, UBS AG (Investment Management),
BlackRock Fund Advisors, Credit Suisse Asset Management (Schweiz) AG and
Massachusetts Financial Services Co.

 Vision and mission: This organisation basically established to provide their effective and
quality services to several users. Vision and mission of this firm is to become world's
largest and leading firm.
NHS
 Size: NHS is a healthcare organisation in which was established in the year of 1948.
this organisation provide their effective and quality services to approx. 1.5 million
people with the help of approx. 150273 qualified doctors.
 Vision: Main objective and vision of this organisation is to provide healthier and
independent services to individual on the base of their requirement and need.
Oxfam
 Size: Oxfam is a voluntary sector organisation which was established in the year of
1942. This firm is working with approx. 20 charitable organisations to provide their
quality services to poor people.
 Vision: Main objective and vision of this organisation is to manage their effective
services to remove poverty from world wide. For this they manage their services in
several countries.
TASK 2
P3 Interrelation between different organisational departments and their link to objectives
Every organisations wants to achieve competitive advantage and become successful
which depends on the several organisational functions. There are many companies who are deals
in international market and focus on increasing goodwill as well maximise wealth in more
efficient manner. Nestle is leading in the global market so they requires to understand about
importance of interrelation between different departments and functions so that appropriate goals
or can be achieved in more effective manner (Reinhardt, 2010). It is very beneficial for the
organisation because they can garb opportunities for improving internal strengths and effectively
satisfaction to internal as well as external customers so that predetermined goals or objectives
can be achieved in more effective manner. In this consider various department such as
operational and production, marketing, finances, human resources and Informations
Technologies which play an important role in getting best possible outcomes in more efficient
manner. These are very supportive in attaining set goals or targets with the help of performing

several tasks within Nestle firm as well. There are defined some functions and department with
their interrelation such as:
 Human resource department: There are defined number of activities or functions which
must be performed in well manner. HR manager performs different tasks such as
workforce planning, performance appraisals, training and development programs,
determination and remuneration, recruitment and selection and many more (Stavins,
2010). It can be helpful in creating effective workforce and achieve predetermined goals
by performing entire task or work with efficient manner. They motivate to every
employees for increasing productivity and profitability of firm.
 Marketing department: This department is linked with production functions as they
provide proper informations and appropriate data regarding market trends, situations,
customer's choices or preferences so that company can make favourable decisions
regarding producing of goods or services to meet with customers desired expectations in
well manner.
 Finance department: They have responsibility to analyse budgets and prepare financial
statements where requires adequate funds for running business functions or activities in
smooth manner. This department play an important role in allocating funds and utilise all
these for achieving targets or goals in an effective ways (Shigang, 2010). Marketing
department consider this for using better tools or techniques as well as adoption of
promotional strategies so that more customers can be aware regarding company's goods
and services.
 Production department: This is most important department which play crucial role in
manufacturing of new goods and services as per the customers needs or demands so that
maximum sales can be increased. Nestle always conducts such survey as marketing
department provide appropriate informations to the production department so that they
can try to satisfy customers demands or needs.
Organisational structure
there are defined several structure of organisations which are divided among followings
such as:

 Functions based: In this, company decide the structure regarding business functions
which must be performed within the firm. In this included human resource, marketing,
production and operational, finance and accounting and many more. Geography based: In this structures, organisation undertake several regions as well as
locations as per the countries where they are providing their goods or services
(Karagiorgos, 2011). therefore, Nestle determine the customer's requirements and their
choices for serving best quality of goods and services. Products based: in this, company make decisions regarding products based structures and
diversified business in various products line so that customer can reach and get for
fulfilling their requirements.
 Consumer based: It is generally based on customers behaviours and their attitudes
towards goods or services so that company make decision regarding serving such
products and adopt new innovative ideas as per the requirements.
TASK 3
P4 Impact of macro-environmental factors
Every organisation wants to achieve competitive advantages and make better positions in
the marketplace so they are focusing on adopting various strategies and actions plan for
increasing growth and profitability in more efficient manner. Nestle is dealing in international
market so they are requires to consider such macro-environmental factors while running business
in the tough competition at global market (Drogalas, 2011). It included political, technological,
legal, social, economical and environmental that have major impacts on the business operations
as positive or negatives. Therefore, there must be required to formulate better strategies and
policies for implementing that plans so that employees can achieve set targets or goals in more
effective manner. There are defined various positive and negative factors such as: Political factors: Nestle is dealing various countries which have different policies, rules
and regulation and government that can affects on the business and its operations in
various ways. Nestle have to consider these factors in which consists following things
such as dynamism, taxation, various duties as import or export, excise duties, government
permission and stability of government etc.

◦ Positive impacts: If these rules or regulations are in the favourable of organisations
then these can be beneficial for firm. For example, Nestle is providing better quality
of goods or services to the customers.
◦ Negative impacts: There have major impacts due to restricted rules or regulations on
the business procedures. Economical Impacts: In this consider various factors that can affects on the company's
profits or productivity of the Nestle (Giovanis, 2011). It includes economic fluctuations,
inflations, deflation, growth rates, GDP, income level of people and many more that can
change as per the environmental factors.
◦ Positive impacts: in this requires proper report or analysis by gathering informations
and knowledges regarding these fluctuations so that company can formulate the
strategies in an effective manner.
◦ Negative impacts: It can affects on the business profitability due to changes in
economical conditions within country. Social factors: In this defined several social factors that can affects on the producing of
goods or services including people's culture, values, beliefs, gender, age, languages,
religion and many others.
◦ Positive impacts: In this requires proper analysis of customers behaviours regarding
the products or services so that Nestle can maximise its sales volume in well manner.
◦ Negative impacts: There can be negative factors due to lack of knowledges about
customers tastes or preferences. Technological factors: This is generally related with various new technologies or
advanced techniques which launches day by day in present era (Kolk, 2016). It provide
various opportunities to the firm in developing business and improve its productivity in
well manner.
◦ Positive impacts: It is very beneficial in making work easy and smooth. It also less
time consuming techniques as company adopt e-commerce, mobile applications, and
internet solutions for reaching at customers desired needs or wants.
◦ Negative factors: This can be responsible in increasing costs factors or various
expenses during business operations. It can affects on the reputations of firm.

 Legal factors: There are different legal regulations defined which formulated by the
government of country (Nishitani, 2012). Therefore, Nestle has to follow such
legislations so that they can run their organisational functions or activities in well
manner.
◦ Positive impacts: Nestle is following country's health and safety legislation and
employment acts and many others for customers satisfaction.
◦ Negative impacts: If Nestle avoid such legal rules or regulations then they may have
face various penalties which has major impacts on company's profits. Environmental factors: This the main responsibility of every firms is that to keep
environment green and clean as well as care about its safety and security while running
business organisation. They also undertake CSR activities for social welfare.
◦ Positive impacts: It is helpful aspects as company should provide various facilities
and consider environmental factors to run business.
◦ Negative impacts: This has major impacts on the company's brand image if they do
not undertake.
TASK 4
P5 Internal analysis of organisation for identification of strength and weaknesses
Internal analysis is helpful component that support in identifying company's strengths or
weaknesses for finding best opportunities to develop the business in well manner. Therefore,
Nestle generally conduct SWOT analysis which will provide internal informations regrading
business operations (Osterwalder and Pigneur, 2010). It is an essential to identify strengths,
weaknesses, opportunities and threats for formulating effective plans and strategies in well
manner. There are defined SWOT analysis of Nestle such as:
Strengths: World's famous brand: Nestle have good reputations and strong brand image in food
and beverage sector in the international market so they are generating more revenues or
profits. They focus on creating brand awareness among customers by undertaking
several promotional tools or techniques in more efficient manner. Strong market network and distribution channel: Nestle has strong market reputation
because they use better distribution channels for reaching at target audiences such as

wholesaler, retailers, distributors and agents so that more sales can be increased in an
effective manner.
 Large workforces: Nestle have large workforces sizes in various countries so they are
focusing on achieving potential growth in more effective manner (Osterwalder and
Pigneur, 2010). There are around 340000 employees working who are contributing
more to achieve growth.
Weaknesses Brand structure: There are number of products manufacturing and delivering by the
Nestle firm at global level so it is difficult to set an appropriate structure as well as
manage individual brands. These can create conflicts while running business operations
or functions.
 Legal and consumer issues: There are various issues defined that can be occur while
running business which are related with legal and consumers tastes or preferences as
well. They may have face any penalties and disputes regarding this.
Opportunities Market expansions: Nestle has various opportunities to develop business and achieve
growth from expanding business at different countries (PikkaIskanius amd Page, 2011).
They focus on covering large market areas or locations and consider supply chains,
distributors and agents. Increase profitability and size: Nestle can grab this opportunities to increase their size or
growth in more effective manner.
 Products quality: This is another ways for attracting number of customers towards firm
as Nestle can increase its sales volume through developing the products such as add
ingredients in chocolates, Maggie, oats and cereals etc.
Threats: Tough competition: there are very strong competition in the market so Nestle may have
face such challenges that can affects on the sales of products and its brand image.
 Price commodities: it is necessary to set prices as per the capability of customers as
increasing costs or price factors can decrease the sales and impacts on customers
behaviours.

P6 Interrelation of macro environmental factors with strength and weakness
Macro-environmental factors are such which are present in business environment and having
positive and negative impact upon the working of organisation. It has direct link with the
strength and weakness of organisation (Pulver, 2012). It is responsibility upon the management
of organisation is to use their situations of strength to gather the positive impact from such
different factors and sometimes positiveness of the external factor helps in removal of their
weaknesses. Understanding of such relation effectively provides the opportunity regarding
formulation of appropriate strategies and plans to gram the opportunities which are present in
market. The interrelation between both these aspect is understood from the points defined below:
Political: Nestle has major working in many developed nations where governments are
stable in nature. But due to having operations in many countries, difficult for them to change in
policies in regular manner.
Strength: Major operations from developed nations where government policies are
favourable with provides opportunity to earn profits.
Weakness: Difficult to change policies and some nation where tax policies are strict
which impacts their profit margins.
Economical: It has major impacts on the business profitability as it includes inflations,
deflations, growth rates and GDP of country that can change as per requirements.
 Strengths: Nestle can increase its profits and productivity because they deals in Asian
market.
 Weaknesses: Higher tax rates can create barriers while selling goods and services.
Social: It is also affects on the business because consumer have different tastes,
preferences and behaviours. Nestle have to consider this for producing goods or services
(Avramenko, 2012).
 Strengths: There is requires proper study so that large audiences can be targeted and
make them loyal.
 Weaknesses: Improper knowledge and changing environment as well as tastes, and
choices so it can affects on business operations.
CONCLUSION
As per the above report it has been summarised that business environment has dynamic
impact on several organisations. In this process management and manager of organisation

requires to analyse impact of these factors to make effective strategy on its bases. Internal
environmental factors are controllable while as external environmental factors are beyond the
control, so for them management needs to manage their business activities properly. In an
economy, different type of organisation are established to provide their effective services to
target customers. So for them, it is required to manage their operational and functional activities
effectively to getting higher competitive advantages and business growth.

REFRENCES
Books and Journals
Reed, O. L. and et. al., 2013. The legal and regulatory environment of business (p. 328).
McGraw-Hill/Irwin.
Reinhardt, F. L. and Stavins, R. N., 2010. Corporate social responsibility, business strategy, and
the environment. Oxford Review of Economic Policy. 26(2). pp.164-181.
Shigang, Y., 2010. Competitive strategy and business environment: The case of small enterprises
in China. Asian Social Science. 6(11). p.64.
Karagiorgos, T., Drogalas, G. and Giovanis, N., 2011. Evaluation of the effectiveness of internal
audit in Greek Hotel Business.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Nishitani, K. and et. al., 2012. Are firms' voluntary environmental management activities
beneficial for the environment and business? An empirical study focusing on Japanese
manufacturing firms. Journal of environmental management. 105. pp.121-130.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Pikka, V., Iskanius, P. and Page, T., 2011. The business enabling network–a tool for regional
development.International Journal of Innovation and Regional Development. 3(3-4).
pp.324-344.
Pulver, S., 2012. Business and the Environment.
Avramenko, A., 2012. Enhancing students' employability through business simulation.
Education+ Training. 54(5). pp.355-367.
Bovee, C. L., Thill, J. V. and Raina, R. L., 2016. Business communication today. Pearson
Education India.
Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision. 49(8). pp.1327-1342.
Hair, J. F., 2015. Essentials of business research methods. ME Sharpe.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.