Types and Purposes of Organizational Structures in Business

This report provides an overview of different types of organizations, including public, private, and voluntary sectors, and their legal structures. It explains the size and scope of these organizations and analyzes how their structure, size, and scope link to business objectives and products/services. The report also explores the relationship between different organizational functions and their impact on organizational structure. It highlights the advantages and disadvantages of interrelationships between functions. The growth of the international business environment is discussed, along with the opportunities it presents. The report concludes with a comparison of Tesco, NHS, and National Trust, highlighting their aims, products/services, market share, and size.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION.......................................................................................................................................3
LO1.............................................................................................................................................................3
P1 Explain different types and purposes of organisation public, private and voluntary sectors and legal
structures.................................................................................................................................................3
P2 Explain size and scope of range of different types of organisation.....................................................6
M1Analyse how structure, size and scope of different organizations link to business objectives and
products and services...............................................................................................................................8
LO2.............................................................................................................................................................9
P3 Explain relationship between different organizational functions and link to organizational objectives
and structure............................................................................................................................................9
M2 Analyse advantage and disadvantage of interrelationship between organizational functions and
impact on organizational structure.........................................................................................................11
CONCLUSION.........................................................................................................................................11
REFERENCES..........................................................................................................................................13

INTRODUCTION
Business refers to an activity that making the life and money by selling and
manufacturing the goods and services in the market place. It simply means to enter into the
enterpriser for earning higher profits. Business environment refers to the combination of internal
and external factors like employees, customers, investors; governments etc. and make their
products as per the market trends, economic change and social trends. This report is based on the
different types of the organization with their purpose and legal structure. It helps in giving the
knowledge related to the market and efficiency of work to increase the profits. It also helps in
understanding about the size and scope of the different types of business organization with their
stakeholders to determine their capabilities. Although, it can also involves the relationship
between the different organizational function and their linkage with the business objectives and
structure. This analyzes the pros and cons of interrelations so that firm can do their work with
more efficient and effective way(Papilaya, Soisa and Akib, 2015).
LO1
P1 Explain different types and purposes of organisation public, private and voluntary sectors and
legal structures
Private organisation – It refers to that organization that is run or operates by an individual
person or a group of individuals without involvement of the government is called private
organisation. One of the famous examples of private organisation in UK is Tesco plc(Aithal,
2016).
Purpose of business – The major purpose of the private sector organization is to earn high
amount of profits by offering the products and services as per the customer’s demands. In this
they mainly focus on producing the innovative products or modifying the existing one so that
they will create the monopoly in the market place. For example- Tesco is the private organisation
that is set their business to earn high amount of profit at the same time satisfying the customer
demands.
Legal structure – It refers to that structure that shows the category of business in which they
operate to earn the profit it can be shown below.

 Sole proprietorship – It refers to a simplest form of business that is operated by a single
person to earn a limited amount of profits. It is not a legal entity. In this a person is sole
responsible for all the profits they earn and all the debts and liabilities that means risk can
be beard by only one person and in this there is a full control over the assets and
investments.
 Partnership – It refers to a form of business in which two or more than two members
can share the profits, loss, ownership and whole responsibility of managing the business.
In this partnership deed is made and their set rules and guidelines show the ratio of
sharing the loss and profits.
 Company – It refers to a legal entity that is generate by a group of individual people who
can formed a business and all the profit can be divided among all the shareholders
according to their investments. It is regulated by the several laws that is made by the
legislation. It can be of two types that is public limited company and a private limited
company where in public company funds are invested by the general public or in private
company funds are generated privately.
In this legal structure Tesco Plc is captured under the company under the public limited company
that means here funds are invested by the general public and the profit and loss can be divided
among all shareholders of the company.
Public organisation – It refers to that business that is managed and monitored by the
government of country with the purpose of benefitting the society and its people are called public
organization. Example of public organisation is NHS i.e. National Health services(Dahles and
Susilowati, 2015).
Purpose of business – The major of the public sector organisation is that work for the society
welfare as they are managed and monitor by the government of the nation. Due to this they prime
motive is to save the society and give all the benefits to them. In this NHS can care about the
health of the UK people by providing medical service to them who are needed. In this if a person
is not able to pay the amount then they are treated free of cost.
Legal structure – The legal structure of the public organization are shown below-

 Central – It refers to the central body of authority who manages and monitor all the
departments and also provided the authorities to the various departments according to the
needs and wants of the society and the economy of the country.
 State - It refers to that in which particular state is accountable to the central authority.
They can hold some level of authority that is passed by the central governments.
 Local - It is that authority that is accountable and responsible for controlling the local
communal to perform s societal welfare activities.
Voluntary organisation- It refer to a group of people who combined together to do a business
for achieving a common goal and they enter into the business voluntary there is no boundation of
other people. It can be made to accomplish a com on purpose.
Purpose of business – This type of organisation are not managed and monitored by the
government of the country but they are non-profit organisation who work for the welfare of the
society and solve the problem related to the society and that will causing fear to the environment.
The best example of voluntary organisation is National Trust that is working for preserving the
cultural heritage of the country.
Legal structure
 Charitable trust- It refers to that trust that is made for a charitable purpose also they
enjoy the tax benefits and this will enjoys the more goodwill. The main purpose is to
accomplish the social benefits and they generate the funds from public by their own
choice.
 Unincorporated association – this type of organizations are framed within a groups to
achieve a common goal that benefits the society people.
Growth of the international business environment
The growth of the international business has been increasing day by day as the regular
change in then environment. It is possible due to various types of facilities i.e. communication,.
Confidence, free transfer of goods and services in foreign countries etc. it includes some aspects
due to which growth of global business environment has been increasing. It can be explained
below(Belas and et. al., 2018).

 More opportunities in foreign markets- In many countries home markets are saturated
but on international level it has blooming. In this business firms has a great opportunity to
increase their sales and profits by expanding their business in that country or selling their
products and services by exports. It also enhances the economic growth of the countries.
 Availability of low cost labor – When an enterprise can compare the labor cost of
developed and developing countries it can find the major difference. In business
environment is very effective as it helps in expanding their plant in the country where
labor cost is low it will helps in earning high profits at low cost of production.
 Increasing in demands- It helps in enhancing the demands of the products and services
in the home country people are not much spend their money to buy the products but due
to globalization organisation can enhance their market in the foreign countries and
increasing the demand of the goods and services they offered. This helps in earning more
and more profits.
 Development in communication and technology – In the recent years there are
tremendous change can be seeing as people are searching the different world demands
and their products and services from their home and it all can be done through advanced
technology and effective communication. It also helps in reducing the cost and increasing
the efficiency of expanding the business enterprise into the global market.
P2 Explain size and scope of range of different types of organisation
Basis Tesco NHS National Trust, UK
Overview Tesco plc is one of the
largest multinational
superstore in
Hertfordshire,
England. They deals
in number of products
to enhance their
market share and
earns a high
It is an umbrella term
that is funded by the
public and run by the
government of the
UK. In this they
provided the services
related to the health
care and in 1948 it is
funded by general
It is a voluntary
enterprise that is
working with a
purpose of generating
awareness in the
people of society by
proving the
knowledge about the
cultural heritage for a

profits(Gorla,
Chiravuri and Chinta,
2017).
taxation. particular
demographic region.
Aim of business The main aim of the
business is to provide
the groceries,
electronic and other
goods through online
media.
The main aim of this
organization is to
provide the health
care services to the
needy people who do
not have to pay
money but need
serious help. This
helps the society
people to live their
life safely.
The main aim of this
organisation is to
examine the
techniques that is
helpful in preserving
the national heritage
and maintains its life.
Products and
services
They offer a huge and
wide range of
products like
groceries, clothing,
furniture, household
and beverages.
Offers a health care,
social care services to
the people of the
society it is run by the
government of the
country)(Georgescu
and Popescul, 2015)
The will be recognize
for the practices and
techniques that is
significant to preserve
the cultural of the
heritage in the
demographic region.
Market and profits
share & size
In this there are
300000 workforces
working in the firm in
UK and that gave a
market share around
28.4% and revenues
of 6391.1 crores in the
year 2019.
They are managed
and run by the
government of the
country with a largest
number of members
as there are five
percent of the UK
population are
working.
As they do not work
for the profit and
work for the society
welfare. To this they
has approx 12000
members and more
than 61000 volunteers
are working in that
business.
Vision The main vision of the The main vision is to The vision is clear as

company it is work on
the customer
satisfaction to
enhance their profits
and sales.
save the society and
their health related
issues.
to prevent the society
from the problem that
was occur related to
the cultural heritage.
Mission The mission of the
Tesco plc is based on
the message “ we
make what make the
better.
They work for society
people by providing
the health and social
care to the number of
needy people.
Mission is to find and
identify the
techniques to solve
and preserve the
cultural heritage of
the nation.
Scope There scope is to sell
their products and
services to the high
extent and plan to
expand their business
in US. As they
already as the market
in the Europe and
asia.
There scope is longer
survival of business
unit by caring the
people of the country.
There scope is limited
as they only work for
a demographic region
and to preserve the
cultural heritage of
the country. And safe
the society for whole
life(Fabuš, 2017).
M1Analyse how structure, size and scope of different organizations link to business objectives
and products and services
By using the above data and facts it is to be analyzed that various business organisation
are working for their set vision and for accomplishing their goals for longer survival of the
business. In this their products and services are very helpful to create a demand between the
people and due to the scope and size is to be increased. It is very essential to work according to
the set vision and mission top achiev the overall objectives and in this offered products plays an
important role as they attracts a large number of customer base and some firm work for
providing the save cultural and society for the public(Akhmetshin and et. al., 2017).

LO2
P3 Explain relationship between different organizational functions and link to organizational
objectives and structure
Organisational structure
It refers to that structure which helps in creating a outline that shows how various
activities are directed and organized to accomplish the common goals of the business enterprise.
It includes all the set rules, responsibilities and roles that help in maintain the flow between the
different departments and different levels in the organisation. It is very helpful to pass and
transfer the important information without any hurdle created. With the reference of Tesco this
structure is very helpful to maintain the work and give the quality and effective outcomes. This
structure are adopted and used according to the nature and demand of the company. In this some
of the organisational structure is to be explained below(Eruemegbe, 2015).
Hierarchical structure - It refers to that structure in which there are number of departments on
each level that holds the responsibility and also they are delegated within the different
designation. This structure helps in creating the flow and easiness to in the task because it is to
be allocated in smaller sections and into the various departments. In Tesco this type of structure
is very useful as it gives the clear understanding of task and also helps in achieving the goals of
the organisation. Maintain the structure in the organization helps in enhancing the profit market
with fulfilling all the objectives like retaining the employees for a longer period. Attracting the
number of people towards the company, because of clear and understandable functioning of
activities etc(Groşanu and et. al., 2015).

Flat structure – It refers to that structure that is used to describe the organized way of the
company. In this all the staff members can brought on the same level and perform the task by
establishing the effective communication between the top to bottom level. It helps in maintain
the culture and utilized the resources in an optimum manner so that task can be achieved in an
appropriate manner.
Interrelation among different function areas
In the organisation it is very significant to manage and maintain the entire department
with their effective communication. Because if they cannot perform well and cannot connect
well than they affect the business enterprise in a negative way. To maintain the success of the
business enterprise this interrelation between the departments plays an important role. Some of
the interrelation can be shown below in context of the Tesco plc(Moroni, Arruda and Araujo,
2015).
 Finance and sales departments – It is the important interconnection in the organisation
as sales department can focus on expanding the sales by increasing the large customer
base and on the other hand finance department maintains the profitability of the business
enterprise. In the Tesco plc there sales department generate the revenues and cash by
increasing the large customer base and selling their products and services to the
customers and the finance department can arrange the profits to invest in healthy deal and
make a budget for future transactions and this all will be done by maintaining the healthy
relationship between these two departments(Grigore and Drăgan, 2015).

 Marketing and Research departments - In this it is very important to continuously
communicate is done within this two department. In this research department can
research the whole market and customer needs and wants and than forward this
information to the marketing department. This helps in promoting attracting the customer
and creating the awareness in the customer mind about the product before launching it
into the market. This helps in innovating the goods and services according to the
customer demands and enhance the sales by using various promotional tools. So that
they run a business very smoothly in the competitive market.
M2 Analyse advantage and disadvantage of interrelationship between organizational functions
and impact on organizational structure
By using the research that is above explained on interrelation between the departments it
is very useful to create a positive impact on the organisation structure. As because of proper
structure is followed by the business organization it helps in maintain the interrelationship
between the departments and due to this company enhance its profits and sales within a very
short period of time. It also helps in enhancing the brand image of the company in the
competitive marketplace. At the same time it will create a disadvantage for the company as they
will create conflicts if it not followed the set rules and regulations. Due to this they face the loss
in the marketplace. And also increase the employee turnover in the company. Then it will create
a negative impact on the company whole functional departments(Huang-Horowitz, 2015).
CONCLUSION
From the above research it is to be concluded that every enterprise can required to know
their motive of doing their business activities so that they can sell their products and goods to the
people of the society as per their nature, needs and wants. It can shows the various types of
organizations with their legal structure those helps in understanding their way of doing business
and their survival. It also shows the range of size and structure of business so that one can
understand the physical presence and what products and services they dealing. It helps in
generating the knowledge related to interrelation between different departments and how they

work to enhance the profits and longer sustainability and also achieve the objectives(Koišová
and et. al., 2017).

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