Types and Purposes of Enterprises in Business Environment | Desklib

This study material covers the types and purposes of enterprises in the business environment. It explains the interrelation between different organizational functions and their link to organizational objectives and structure. It also discusses the positive and negative impacts of the macro environment on business operations. Find comprehensive study material and solved assignments on Desklib.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P1. Types and Purposes of enterprises........................................................................................1
P2. Size and scope of organisations ...........................................................................................2
P3. Relationship Between Different Organisational Functions and Link to Organisational
Objectives and Structure.............................................................................................................4
LO3..................................................................................................................................................6
P4. Positive and negative impacts the macro environment has upon business operations.........6
LO4..................................................................................................................................................8
P5. Internal and external analysis of chosen organisations.........................................................8
P6. Explantation how strengths and weakness interrelate with external macro factors..............9
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is defined as a combination and mixture of internal and external
forces which has influence upon the overall functioning and productivity of an organisation. It
includes all those factors such as customers, suppliers, competitors, etc. that has an influence
upon overall business activities (Anolfatto and MacDonald, 2019). This report is based upon an
enterprise named Travelodge which is a UK based business enterprise that deals with hospitality
and hotel industry and is the second largest hotel in UK. This report covers various types of
organisations such as private, public and voluntary and their purposes and legal structure. It also
covers the size and scope of different types of business enterprises. Further, it covers
interrelation between various organisational structure and their link with organisational structure.
It also includes both negative and positive impact of macro environment upon business
operations. Further, internal and external analysation of enterprise is done for identifying
strengths and weaknesses.
LO1
P1. Types and Purposes of enterprises
Organisation refers to group of organised people which has common responsibilities and
purposes towards achieving business goals. Enterprises are categorises on the basis of their
purposes as follows-
Private Organisation- It is an association, individual, corporation, partnership, agency, which is
not a public corporation and it carry out its activities for earning profit. Here, the example that is
taken for private enterprise is Travelodge which is an United Kingdom based business entity that
deals with hospitality and hotel industry.
Purpose- The basic purpose of Travelodge is to provide best services to its customers for the
purpose of earning maximum level of profits (Birru and et. al., 2019).
Legal Structure- It is the private limited company under the company's act 2013. The legal
structure of private organisation as a whole is defined as follows-
Sole Proprietorship- In this, an individual operates the complete business entity and is
the solo owner of a specific enterprise.
Partnership- It is defined as a contract or agreement which exist between more than one
person which work together in order to achieve business goals.
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Limited Liability Companies- These enterprises has several owners and the profit which
is generated from this enterprise is shared among them.
Public Organisation- These organisations are owned and operated by government with a
objective to provide services to society. The example of public enterprise is BBC which is a
broadcasting channel at UK (Crane and et. al., 2019).
Purpose- Its purpose is to give necessary and relevant information to people in the form of news.
Legal Structure- These companies follows all regulations and rules which are imposed by
government upon it. The legal structure of Public companies are elaborated as follows-
State Government- In this, all the business activities and processes are owned are
operated by state government.
Central Government- In this legal structure, the activities are incorporated by Central
government of UK.
Local Government- These organisations are incorporated and owned by nation or by
municipality's government structure.
Voluntary Organisation- Such enterprises operates its business activities for a social cause and
not to earn profits. British Red Cross can be considered as an example of this enterprise.
Purpose- The purpose of this enterprise is to help people which are in crisis all over UK and
overseas.
Legal Structure- The legal structure followed by voluntary enterprise are-
Charitable company limited by guarantee: It is a limited liability enterprise that is
registered under the company house.
Trust: This legal entity is incorporated by trust deed and no these businesses do not have
any kind of statutory framework (Cyphert and et. al., 2019).
P2. Size and scope of organisations
Basis Travelodge BBC British Red Cross
Introduction It is a private
company that
provides hospitality
services to its
customers.
It is a British based
oldest broadcasting
channel which
provides its services
at international level.
It is a British based
voluntary organisation
that works for the
benefits of society by
helping those needy
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people who are in crisis.
Background It is first launched in
UK and opened its
first hotel at Barton.
It was formed on 18th
October,1922 by a
leading wireless
manufacturers.
It was introduced in 1870
with a aim to help sick
people that were
wounded in War.
Products and
Services
It deals with
hospitality and hotel
services around the
world.
It provides
broadcasting services
at international level
(Zhou and Wen,
2019).
It provides various
services such as to
provide support at home,
donation, volunteer,
foundations and funds,
help to refuzees, financial
solutions, child first aid,
help in finding missing
families, and provide
help at time of
emergencies.
Size It is a large size firm
and operates its
services worldwide. It
has around 11,000
employees working
under it.
It is large scale
organisation and have
around 22,401
employees all over
the world.
It is a large voluntary
enterprise and has around
3500 staff members and
32500 volunteers.
Scope It has a wide scope as
the number of people
who travel is
increasing day by day
whether for business
purposes or personal
reason.
It has a broad scope
as it is the oldest and
most trustworthy
broadcasting channel.
It has a wide scope as it
provides various services
to people and work for
humanity, integrity,
neutrality, in
dependency, unity, and
universality, and so on.
Vision Its vision is to Its vision is to Its long term vision is to
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become world's best
hospitality industry
that meet customer's
expectations.
become the number
one broadcasting
channel and be ahead
of its competitors.
mobilise humanity power
so that communities and
individuals can deal with
and recover from crisis.
(Xu and Koivumäki,
2019).
Mission Its mission is to
attract large number
of customers by
providing them
quality services.
Its mission is to act in
public interest by
educating, informing
and entertaining
them.
Its mission is help
individuals so that they
can prepare themselves at
the time of crisis.
Business Objectives Its objective is to
increase its
profitability by 10%
in upcoming year.
Its objective is to
enhance market share
by 15% in upcoming
year.
Its objective is to expand
its market in other areas
within next year.
Legal Structure This enterprise is
private limited
company under the
company's act 2013.
BBC's royal charter is
determined as a
constitutional basis
that explains its
purposes, mission and
objects. It also serves
in determining the
governance and
regulatory
arrangement of
corporation that
includes role and
composition of BBC
Board.
This organisation is a
registered charity and in
1905, it was reconstituted
as an British Red Cross
society. It has been
granted its first Royal
Charter in the year 1908.
Stakeholders Its stakeholders Its stakeholders are It includes donators,
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includes its
customers,
employees, managers,
employers, and so on.
its workers,
broadcasting team,
reporters, viewers and
all other employees.
needy people, staff,
volunteers, managers,
and so on.
P3. Relationship Between Different Organisational Functions and Link to Organisational
Objectives and Structure
It is important for every organisation such as Travelodge Hotels to have good
interrelation in between different organisational functions with the help of which the goals and
objectives of the organisation could be easily achieved with effectiveness and efficiency. So the
description of the interrelated in between different organisational functions of different
organisations is being provided as under;
Marketing With Operations Department: Marketing Department is the department which is
directly in contact with customers and have proper knowledge about needs and demands of
customers of the company. So this interrelation plays an important role because marketing
department of Travelodge provides an estimation about the needs and demands of their
customers so that the operations department will be able to function in an effective manner.
When marketing department will identify the needs of customers than the operation department
will operate its business activities in the same direction.
Finance and Human Resource Department: The relationship in between these two
departments is also important as there is a requirements of personnel in Finance Department of
Travelodge Hotel as well. So HR Department is the one which is concerned with filling up the
vacant posts in an organisation and is also clear about the qualities, skills and knowledge
required in an individual to fill that post. So this department also plays an important role because
the decision made by HR Department for Finance Department will impact upon the overall
performance of the Hotel as right candidates will provide right results and vice versa.
Finance and Marketing Department: These two departments are interlinked with each other as
there are different activities which are carried out by marketing department and in order to carry
out these activities, finance is required which is provided to Marketing Department by the
Finance Department. This helps in proper functioning of Marketing Department of Travelodge
Hotel and will make the work done within time with effectiveness as well. In case of non
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availability of proper finance, the tasks will not be performed easily and this will impact
negatively on the performance of the Department and organisation as well (Gaganis, Pasiouras
and Voulgari, 2019).
The following interrelationship in between the different departments is Travelodge Hotel
helps in the achievement of organisational goals and objectives because proper functioning of
every department will help in timely completion of work as such marketing department provides
timely information about the current demand of products and services in an organisation. With
the help of this information, it will be possible for Production Department to carry out the
production process in an accurate manner. This will also help in proper and timely completion of
tasks of different departments. Efficiency in work will be achieved and this will lead to
achievements of organisational goals and objectives also in an effective and efficient manner. In
this way, the positive relation in between the departments of Travelodge Hotel will provide the
organisation with positive results and the impact will be negative in case of negative interrelation
(Huang, Ran and Liu, 2019).
Organisational Chart of Travelodge
This organisational chart helps in identifying the organisational structure of Travelodge.
As per this chart, the CEO transfers important information to the chairman of the board and than
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this information is transferred towards CFO, COO, CTO, legal & Secretary, international and
Development. After this, under the COO, information is transferred towards digital marketing
team, brand marketing team, commercial analytical and customers service team. This way the
information is transferred in all the departments.
LO3
P4. Positive and negative impacts the macro environment has upon business operations
Macro environment indicates to external analysis of political, economical, social,
technological, environmental and legal factors of a company which affect the business tools &
techniques and determination devising. PESTEL analysis of Travelodge is defined as beneath:
Political- This factor consist trade tariffs, tax policies, fiscal policy, price policy etc. which the
national authorities may charge around the financial year and it may influence the business
situation to a high level. For example, great extent taxation would demotivate organisation like
Travelodge from increasing their profitability. Respective company operate its business
international so it affected by the political stability of UK unfavourably in term of decrement in
business growth.
Positive- In the situation of stability, administration of Travelodge does not make change
in its organisational policies so it concentrate on developing the organisation's business.
Negative- This company operate its business at different geographical locations so the
government make change in their legislations and rules. This negatively affect the operation and
activities of the company.
Economical- It consider inflation, deflation, foreign exchange rate and others that impact the
business activities of the company. For instant, UK is suffering high recession so the business of
Travelodge are the slowing of economic growth. Currency fluctuation is also affect tourism
which affect the business of respective company (Lu, Wang and Xu, 2019).For example, in UK,
due to Brexit, there are the situation of inflation occurred in currency. It affect the rate of
currency unfavourably in term of making increment within it.
Positive- In UK, the national authorities trying to make reduction tax rate which can be
positively affect the economic constitution of the in different location where it operating its
business.
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Negative- Due to suffering economical recession situation in UK, the profit and gross
income of the company affect in negative manner.
Social- This factor of macro environment analysis consist value, culture, beliefs, taste &
preferences, consumer needs etc. For example, people are belong from different regions and
follow different culture so they have separate needs and demands. For example, Travelodge
offering the long lasting products which assists travellers to books their room at a very cheap
rate. In UK, most of the people book their room through online mode as per their needs and
preferences (Quinlan and et. al., 2019). Due to change in customers need cause of demographic
change people prefer online booking. For instant in UK, people highly use technology so they
prefer online booking of the room this favourably affect the business of the company.
Positive- The management of the company also provide services according to consumer's
taste and preferences such as proving online room booking app and providing offers because in
UK mostly people prefer online services so this help in maximising the profit margins of the
firm.
Negative- If company provide service of booking rooms at cheap rate then it can be affect
the company in unfavourable manners in term of decreasing profitability of the company.
Technological- Now theses days, there are various organisation which use great technology and
it also create impact upon the business of the companies. Technology indicates to research &
development, advance technology, automation and others. For instant, Travelodge can use
technology in the booking system by launching an application thorough which target audience
can book their room, pay and view all the services which re provided by it. It can also use
automation in its business in various aspects like self check in and check out. It favourably affect
the company because the management will focus on other activities of the company.
Positive- By using technology and offering application to its customers, the
administration of the company can maximize the sales and customer base.
Negative- In Travelodge, high utilization of technology can influence unfavourably to the
company in terms of maximizing production cost of the company.
Environmental- This factor include weather, geographical location, climate, global change in
climate, environmental rule and legislations etc. In Travelodge, the company properly follow the
environmental laws in its business operations and activities. For example, if the management of
the company properly follow the legislation of cyber security and put their eyes on the data of
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the company the it can favourable affect the environment nt of the company in term of retention
of their customers. Because if the personal information of target audience will be safe and secure
then it help in business growth of the firm.
Positive- If the company properly follow environmental law in its operation so that they
do not harm or negatively affect the environment. It help in maximising productivity and
profitability of the company (Rofiq and Pramono, 2019).
Negative- If the company will not follow environmental law then they affect atmosphere
and society also because a firm is established in a society. This affect the sales and gross income
of the organsiation.
Legal- It consist rule, regulation, legislations and policies which are formed by the government
of the nation so that organisations can run and operate their business in structured and systematic
manner. The management of Trvelodge effectively follow equality and anti discrimination act
and provide equal rights its employees who are working in the company. For examinable, if the
management of respective company follow employment law and offer equal rights and pay to its
all employees who are working on same position then it favourable affect the business of the
company in term of growth and success.
Positive- The administration of Travelodge effectively follow all equality law which
affect positively in term of maintaining efficacious business environment and provide a
discrimination free workplace.
Negative- Government make change in its rules and regulations frequently which affect
unfavourably business of the organisation (Sewchurran, Dekker and McDonogh, 2019).
LO4
P5. Internal and external analysis of chosen organisations
SWOT analysis
It is an important provision method which is utilised to assist an individual or company to
find out strengths, weaknesses, opportunities and threats affiliated to business competition or
project planning. SWOT analysis of Travelodge and BBC is as following:
SWOT analysis of Travelodge
Strengths Weaknesses
 Travelodge offer number of quality  This company does not offer room
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services at affordable prices,
considering rates for family rooms and
double rooms with predominant
exceptional deal like early booking on
specific occasions (Travelodge's SWOT
analysis, 2019).
 This organisation runs programs for its
premium customers like Travelodge
Business Account Card.
service, porter service or concierge
service.
 Travellers have expectations of higher
value on experience and more choices
but Travelodge do not provide
satisfaction because it does not live up
to their hopefulness.
Opportunities Threats
 By making innovation in customer
services the company can gain various
growth opportunities.
 To use better interiors and by doing
well renovations, it can also make
development in customer base.
 There are number of competitors in the
market and they offer similar products
and services which increase high
competition.
 Change in government rule, regulation
and policies also create barriers and
affect the organisation's business.
SWOT analysis of BBC
Strengths Weaknesses
 BBC established in 1922 and operating
good services to its target audiences so
it has a good or old reputation in the
market.
 It has a strong brand images and use
high technical web design, software
design and graphic design which assist
them to maintain the number one place
in the market.
 The news components on BBC contact
the excitable issues in the world and
increase disturbance by excavation
those disputable problems further.
 The main weakness of BBC is high
operating cost (SWOT analysis of BBC,
2019).
Opportunities Threats
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 By making innovation in its services
such as stepped in to entertainment
zone, fashion, technology and kids
channels.
 It can get business opportunity through
joint partnership with other satellite
channels.
 There are high competition in this
sector because there numerous growing
channels like CNN and others.
 There are various domestic channels
which are emerging to give competition
to this company and may decline the
overview of BBBC.
P6. Explantation how strengths and weakness interrelate with external macro factors
Investigation of macro environmental factor will assist a company in rising its image and
execution at market by analysing various possibility and threats present in extraneous
surroundings (Shukla and Pattnaik, 2019). In order to accomplish maximum advantages
Travelodge and BBC must monitor the strengths and weakness of specific macro environmental
component for strategies accordingly:
Interrelation between internal and external factors of Travelodge-
Political- Travelodge run its business in different nations of the world so when the
government make change in its policies then it affect the company. In the situation of political
stability, the management of the company does not make change in its business and work for
making improvement in it. It has positive impact upon decision making procedure as it makes the
business activities to conduct in a smooth manner.
Economical- If the government make reduction in taxation rate then it positively affect
the business of the company. This will also facilitate the decision making of the company . But
due to recession in UK, the economics growth of the company is affected (Sousa and Rocha,
2019).
Social- By providing fulling consumer neds of higher value and experience, the company
can provide satisfaction. But there are higher level of competition due to number of organisation
which offer substitute products to fulfil customers need. This create negative impact upon profit
margins of the company.
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Technological- By using online booking app, the management of Travelodge can
maximize its sales and profitability. But if the company use extent use of it, then it increase the
production cost of the firm.
Environmental- If the company will not consider environmental la such as pollution and
other it affect the company unfavourably. But if effectively work according to them then it help
in maximizing the sales of the company.
Legal- Travelodge operate its business at different locations and government make
fluctuation in their laws and regulation s which affect the operations and activities of this
company. But by following equality and discrimination act it provide a health and friendly
working environment to its employees where they can work to the growth of the company.
Interrelation between internal and external factors of BBC-
Political- Political fluctuation and political government system can create influence in
the business of BBC unfavourably. But the national authorities of both national and local level
are operating shortage budgets which is rising maturation of the company in short term.
Economical- Foreign exchange rate have incurred loses cause of forex risk which can
affect BBC during the time of entering in a new market (Xu and Koivumäki, 2019).
Social- By making innovation in its business through operating business in entertainment,
fashion and others filed the management of the company can positively affect the business of
BBC. This company has good power structure in society which affect the business of the
organisation positively.
Technological- BBC offer mobile payment and Fintech services in China which
positively affect the business of this company. This company use higher level of technology in
its business which maximised the production cost of the firm.
Environmental- Change in Climate and geographical location can affect the business of
this company negatively. This company properly follow the environmental regulation which
impacting absolute cost advantage dynamics in this organisation.
Legal- This company properly follow data protection act of its clients and customer
during the time of interview and others. But due to changes in laws affect the business process
and operation of the company (Zhou and Wen, 2019).
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CONCLUSION
From the above defined information, it can be analysed that business environment is an
essential aspect of the growth of the business of a company. There are different different types
and purposes of companies like public, private, voluntary in a business concern. The interrelation
of these organisation's functions create favourable impact upon the business of a company
because each function of the companies are interrelate with each other. PESTEL analysis is
helpful for determining the impact of external environment on the business of the company.
SWOT analysis is help in monitoring the strengths, weaknesses, opportunities and threats of the
company. Interrelation between internal and external macro environment is also beneficial to
identify the favourable and unfavourable influence of the business of a company.
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Online
Travelodge's SWOT analysis. 2019. [Online]. Available Through:
<https://toughnickel.com/industries/Travelodge-Comprehensive-Business-Analysis-and-
International-Expansion-Plan>.
SWOT analysis of BBC. 2019. [Online]. Available Through:
<https://www.marketing91.com/swot-analysis-bbc/>.
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