Different Types and Purpose of Organisations: Public, Private, and Voluntary

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This document provides an overview of the different types of organisations - public, private, and voluntary. It explains their purpose and legal structure, and how the size and scope of organisations are linked to their business objectives and the products and services they offer. The document also discusses the various organisational functions and their connection to the overall objective and structure of an organisation.

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Business and Business
Environment

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Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Explain different types and purpose of organisation public, private and voluntary along
with legal structure......................................................................................................................1
P2 Explain the size and scope of a range of different organisations...........................................4
M1 Analyse how the structure, size and scope of different organisation link to business
objectives and products and services offered by the organisation..............................................5
P3 Explain different organisational functions and how they link to organisational objective
and structure................................................................................................................................6
M2 Analyse the advantage and disadvantage of interrelationship between organisational
functions and its impact upon organisational structure...............................................................7
D1 Critical analyses of complexities of different types of business structures and
interrelationship of different organisational functions. ..............................................................7
P4 Identify the positive and negative impact macro environment has upon operations of
business with suitable example. .................................................................................................8
M3 Apply appropriately PESTLE model to support a detailed analysis of macro environment
within an organisation. ...............................................................................................................9
P5 Conduct internal and external analysis in order to find out strength and weakness of a
specific business..........................................................................................................................9
P6 How strength and weakness interrelate with macro factors.................................................10
M4 Apply appropriate SWOT and TWOS analysis and how they influence decision-making11
D2 Critically evaluate the impact that both macro and micro factors have upon business
objectives and decision making................................................................................................12
CONCLUSION..............................................................................................................................12
References:.....................................................................................................................................12
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INTRODUCTION
Business environment can be defined as a aggregation of internal and external forces that
might or not be in control of a organisation but affects organisation's overall prosperity,
performance, profitability and survival. These factors are changes in supply and demand,
customers need and demands, government policies, technological innovations, social and market
trends, employees and economical factors. Sum of all these factors assist in organisational
planning, identifying further opportunities and threats and identifying available resources. Lidl
Stiftung & Co., founded in 1973, is a international discount supermarket chain with its operation
across Europe and United States (Vo and et. al., 2020). British Hearth Foundation (BHF) is a
British philanthropic organisation founded in 1961 by a group of medical professionals,
established for addressing the increased death rate and cardiovascular disease. Whereas, British
Broadcasting Corporation (BBC) was founded in 1922, whose prime objective is to broadcast a
news and current affairs to the public. They give service in 50 different languages with 250
correspondents around the world. The main objective of this report is conduct a detailed analysis
of the factors which affect organisation's ability to grow, prosper and survive .
Task 1
P1 Explain different types and purpose of organisation public, private and voluntary along with
legal structure
Organisations can be defined as business entity, formed by a individual or group of a
people with a specified objective.
Private Sectors
Private Sectors of an economy is formed by those business entities which are owned,
governed and operated by an individual or group of people along with a objective of profit
generation without the intervention of state government(Gani and Clemes, 2020). Under this
sector, organisations can be formed by creating a new business entity or by privatising the public
undertakings. Lidl Stiftung is a private company operating in a private sector which is largest and
discounted supermarket chain in Europe and United States. The company laid the foundation in
the year 1973 with a objective to share a part of their savings with customers, thus offering a
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discounted products. In other words Company has simply reduced its profit margin and passed
on to customer by means of discounted price
Purpose of Private Sectors
Purpose of these private sectors organisation are not limited to the profit maximization
rather they also work on developing and maintaining the infrastructures and other services.
Private sectors businesses are well known for their contribution in economic development and
promotes and small and micro enterprises. Additionally, they also focus on expanding its
existing businesses.
Legal structure of Private Sectors
Legal structure of private sectors constitutes sole-proprietorship, partnerships and private
limited companies. Sole-proprietorship:- Sole-proprietorship are also refereed as sole traders, where
business is owned, managed and controlled by a individual and is only responsible for all
the aspects of business including finances. Profits and losses are shared by himself and
there is no legal distinction between a business entity and owner as compared to other
structures. Partnerships:- Partnerships is a form of business entity where agreement between two or
more individual, who share a common interest, is created and governed by a deed of
partnership which states each partners roles and responsibilities, share of profits & losses
and amount of investment(Kramarova and Valaskova, 2020). Corporations:- An organisation which is created and formed by a group of people or
companies, individual and shareholders with an objective to make profit. Unlike, sole-
proprietorship they are distinct and separated from its owners. Lidl Stiftung Co. is a
perfect example having this type of legal structure. Like individuals, corporations too
enter into a contract, hire employees, pay taxes, own assets, sue and be sued.
Public sectors
Public sector in an economy consist of all the government owned organisations which
provide services to the society rather than a individual (Massihi, Abdolvand and Harandi, 2021)
. These include services like infrastructure, public transportation, health care, military, police and
education. Public sector is divided into three distinct level i.e. Federal or National, Regional
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(State or Provincial), and local (Municipal). The objective and operational related activities are
determined by considering the needs and demands of these three levels.
Purpose of Public Sector
One of the most important objective of public sector organisation is to reduce regional
imbalance within a country by developing a efficient industry policy. These sectors also aims at
development of socio-economic infrastructures. Public sector serves whole community which
ensures that service could reach to a each and every citizen, and distribution of income and
wealth is done fairly to eliminate the social differences in the society.
Legal Structure Federal or National :- Organisations with a central governance functions with for the
development of a nationals economy(Jiang and et. al., 2020). These organisation have a
direct control of central government over them and offers services like defence, law
enforcements, infrastructures (national highways, tunnels, bridges etc.), health care and
public education. BBC with a central governance is designed to communicate and
increase awareness among people of a country by means of broadcasting news. Regional or State :- These are the state-owned enterprises, in which regional government
plays a major role in operation of these business units. They aim to provide a products
and services for the common masses, and ensures that the social needs and demands are
met and fulfilled. Local or Municipal :- Organisation with a local government work closely with a
particular community and focus on developing the basic infrastructure in the region and
ensures that everyone gets a employment, education and health services(Ncube,
Soonawalla, and Hausken, 2020).
Voluntary sectors
Voluntary sector consists of a organisations which are independent from local and
regional governments whose prime objective to make a difference in a society. They are
sometime referred as non-government or non profit organisations who focus on issue that need a
attention and solution such as climate change, discrimination against women, child labour and
health issue.
Purpose of Voluntary sectors
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Non profit organisations works for addressing the social issues and work towards them ,
thus create a positive impact in society and contribute in positive environment.
Legal structure of voluntary sectors
Trusts :- Charitable trusts are established for the purpose of philanthropic activities and
social well being(Tóth, Nieroda and Koles, 2020) . It is a fiduciary relationship between
the two parties in which one (trustor) gives a another person (trustee) a right to hold and
manage the given assets over a period of time for charitable activities.
Unincorporated organisation :- These organisations are formed by a mutual agreement
between a group of people who shares a common interest and work closely for a
particular cause rather than making a profit. British Heart Foundation is a perfect
example of unincorporated organisation, where a group of medial professionals have
come together to address cardiovascular disease.
P2 Explain the size and scope of a range of different organisations.
Lidl Stiftung & Co. :- Lidl Stiftung & corporation is a subsidiary of Schwarz group,
founded in a year 1973. With a span of time company have extended its area of operation to
Hong Kong, United States and European countries. Company is serving its customers across
these regions with the help of 11,200 physical stores along with a work force of 315,000. Lidl
Stiftung was established with a focus area of marketing and public relation. Their objective is to
benefit both customer and employees at the same time.
British Broadcasting Corporation :- BBC was founded on 18 October 1922, with its
headquarter in Westminster, London. It's one of the oldest and largest public broadcaster in
world. BBC constitutes a total number of 35,402 employees, of whom 16,000 work in public
sector broadcasting, rest of which are part-time workers. BBC deliver its services globally and
broadcasts news and current affairs in 28 languages and provides comprehensive service on
Television, radio and online with addition of two distinct language i.e. Persian and Arabic.
British Heart Foundation :- British heart foundation is a charitable organisation working
towards the prevention and curing of heart and circulatory disease. It was founded in 1961, by a
group of medical professional to address the increasing death rate from cardiovascular disease in
UK. Through their extensive research they want to address the various elements like causes,
diagnosis, treatment and prevention to the heart disease. There are 935 active BHF heath care
professional in UK working for this cause.
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Basis Small Medium Large
Meaning Small business are
those who have a
limited customers to
serve
As compared to small,
medium business have
a broader customer
base(Trigkas and et. al.,
2020).
Large business who
serves the customers on a
large scale as compared to
small and medium.
Objectives The prime objective of
small business is to
make profit.
Their objective is to
meet the demands of a
market along with
profit.
Core of large scale
business is further growth
and expansion keeping a
profit margin low.
Goals The goals of small
business is short term.
Medium-sized business
works for the medium
and long term goals.
These business direct the
activities for the
attainment of long term
goals.
Market
share
Small business have a
low market share and
cater the needs of a
local people.
Scope of operational
activities of medium-
sized business is larger
and offers products at a
regional level.
Unlike small and medium
enterprises these business
operate in overseas
market along with a
national market.
Growth
and
sustainabil
ity
Small business focus on
profit generation rather
than a growth and
sustainability(Rimita,
Hoon and Levasseur,
2020) .
Medium sized business
aims at expanding its
operational activities at
regional level.
Large business focus on
establishing its brand at a
larger scale,thus
contribute in growth and
sustainability.
Profit Small business make a
huge profit.
The share of profit is
relatively low and aims
at satisfying the needs
of market.
large business direct their
activities for growth and
expansion rather than a
profit making.
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M1 Analyse how the structure, size and scope of different organisation link to business
objectives and products and services offered by the organisation
From the above mentioned information, it has been derived that objectives and offering
of a company is equally proportionate to the organisational structure(Gogokhia and Berulava,
2020). The structure of business entity is decided considering various factors like, type of
products or services, market share, objectives, (to make a profit or to work for the betterment of
society), target market etc. The objective of British Heart Foundation and services of the
organisation have contributed in forming the organisation under a charitable organisational
framework. Like BBC, whose national owned organisational structure have allowed them to
operate in overseas market.
P3 Explain different organisational functions and how they link to organisational objective and
structure
Organisation functions determines the size and scope of a business. Work force in an
organisation is divided on the basis of their roles and responsibilities along with their work
related to each function. The main function are : Production, Research and development,
marketing, sales, human resource and finance. Proper coordination among these departments
ensures the success and growth an organisation and clearly states the power of authority at each
level(Borojo and Yushi, 2020).
R&D and Production :- These two departments in Lidl Stiftung plays a significant role
as the efficient production of products and services need a meticulous report on the current
demand in a market, resources available, economic growth of a nation, availability of work force
etc. On the basis of extensive report on such factors company determines the level of production
and quality of good to be produced.
Marketing and Sales :- Marketing of a product and services include launching of
companies offering to targeted market through means of promotions and advertisement. Efficient
marketing plans augments the companies sales revenue. They are equally proportionate to each
other as the ultimate goal of a marketing is to increase its customer base and sales.
Human resource and finance :- Finance sector is responsible for allocation of funds to
each departments by preparing a budget and gives company a insight into the future income and
expenses. Lidl human resource is concerned with managing a people efficiently and paying them
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a remuneration and rewards within a organisation. Improper allocation of funds to the HR
department may lead to the dissatisfaction among the employees of Lidl Stiftung.
Organisational structure defines how the roles and responsibilities within an organisation
are divided. It gives a picture of how the activities are flowed within each department to achieve
a common goal and objectives(Belas and et. al., 2020). With the help of these structure a
hierarchy within an organisation is clearly stated which defines who will report to whom.
Functional Structure :- As the names suggests, Organisation adopt this method to divide
the workforce on the basis of their specialisation. These are also known as bureaucratic
organisational structure. Lidl have segregated its workforce by adopting this technique
which helps in getting best out of their workforce and increase in employees satisfaction. Divisional Structure :- This structure is generally adopted by a organisations which have
a large scale-operations in which business units are divided on the basis of its subsidiaries
or its market. BBC have a large scaled operations which have adopted a divisional
structure as their operations are worldwide. For smooth functioning in each country
divisional structure is ideal which ensures coordination among the different units and
helps in working towards the common objective.
Matrix Structure :- This a hybrid structure which is a mix of functional and divisional
organisational structures. Generally voluntary organisation are formed by this structure
in which skills and knowledge of individual are used at different functions of the
organisation. Since charitable organisations works in different aspects, which make it a
suitable approach to adopt(Wanke and et. al., 2020).
M2 Analyse the advantage and disadvantage of interrelationship between organisational
functions and its impact upon organisational structure
Organisational function works together in a harmony for the attainment of defined
objectives. Their coordination with each other determines the overall productivity and
performance of the organisation. One of the benefit from these interrelation is that it increases
efficiency and accountability. Like in functional structure of Lidl, employees are divided on the
basis of their task to be performed along with desired skills and knowledge which ensures
smooth functioning of a organisation. On the other hand, functional structures may result in
complexities as sometimes there may be two bosses which can create confusion among
employees.
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D1 Critical analyses of complexities of different types of business structures and
interrelationship of different organisational functions.
Each organisation design and form its structure on the basis of its objective, size and long
term goals. Formation of these structure involves different challenges to deal with regarding
resources to be allocated, hiring of work force and formation of different department(Newman
and et. al., 2020). Lidl Stiftung, with the help of functional structure clearly defines
responsibilities of employees within each department along with distribution of power at each
level. Functional structure promotes specialisation, efficiency, flexibility and reduces burden at
top level by delegating authority. Whereas sometimes this may lead in conflict and lack of
coordination. To avoid this, Lidl must avoid duplication of work through proper allocation of
work within each department.
P4 Identify the positive and negative impact macro environment has upon operations of business
with suitable example.
PESTLE analysis is a framework used by the business in screening and analysing the
macro external factors which directly or indirectly affect the company's performance. Political factor :- Political factors are concerned with governments rules and regulations,
taxation policies, international trade policies and restrictions, labour and employment
policies, and environmental policies. Overseas operation of Lidl have a significant impact
due to these factors as the different government policies and new reforms create a chaos
for the business. It also restricts Lidl's future expansion also gets affected as few
countries have rigid foreign trade policies and high taxes. Economical factors :- These factors take in account inflation rate, Gross domestic
product, economic growth rate and current interest rates. Countries with a recession or
high inflated rates directly affect the purchasing power of a customers thus reduces Lidl's
sales revenue(Nudurupati, Garnego and Bititci, 2020). Whereas countries with low
interest and exchange rate encourages the investment form outside and leads to a
economic growth. Social factors :- Social factors takes into consideration cultural and demographic features
of a market. It includes, age, gender, income level, taste and preferences, current trends in
social behaviour etc. People in developed countries are becoming health conscious and
following a healthy dietary habits which may increase the sale of vegetables, fruits and
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organic products offered by Lidl. As the Lidl main objective is to offer a discounted
products to its customers, can reach to a large customers. Technological factors :-Technological factors include recent technological advancements
and innovations. Due to the pandemic people are adopting a online method to get their
foods and groceries delivered at home without stepping out of their home(Betti and
Sarens, 2020) . It has significantly reduced the sales at stores and encouraged the Lidl to
develop a application, “Lidl Plus” with a list of products and services along with a
loyalty card. Legal factors :- These factors includes law and legislation by the government related
with business operations like health and safety guidelines, consumer protection act, safety
of employees, child protection and women safety etc. By abiding these laws Lidl ensure
that the business activities are carried in a ethical way and promoting equality among the
citizens of a country. However company had been in news for exploitation of labour
rights.
Environmental factors :- These factors are concerned with the protection and conserving
an environment. Organisations are becoming aware of the impact their production and
manufacturing units have on environment. Big supermarkets chains are working towards
reducing carbon emission, adopting a recyclable packaging material and shortening a
distribution channel.
M3 Apply appropriately PESTLE model to support a detailed analysis of macro environment
within an organisation.
Above mentioned PESTLE model describes the distinct factors which supports the
business of Lidl. Political stability and its policies supports the further growth and expansion of a
business. With the liberal foreign trade policies Lidl can operate efficiently in different parts of
the world competing with its rivalries(Oyewobi and et. al., 2020). Social factors gives a insight
into the changing habits and behaviour of a target market, according to which Lidl can introduce
new products and services, satisfying the current trend in market. In technological aspect, Lidl
have done very well as it has developed an application namely “Lidl plus” to provide an ease to
customers in shopping. Abiding its business operational activities with environmental and legal
factors, Lidl ensures that the business operates in ethical manner.
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P5 Conduct internal and external analysis in order to find out strength and weakness of a specific
business
Strengths Weakness
Lidl work on low pricing policy for its
customers which is considered to be a
great strength(Contractor, and et. al,
2020).
Satisfaction among customers by
offering a discounted products. Faster
checkout points, small queues, and
wide range of products have attracted
more customers.
Being a price leader, Lidl have gained a
competitive advantage in the market.
Lidl pricing strategy is designed to
serve a local people and their inability
to enter into a foreign market have
restricted their area of operation.
Lidl have been a part of some ethical
issue in the past regarding exploitation
of employee rights which have severely
damaged the companies image.
Apparently, Lidl is using unethical
pricing strategy to uncut the
competition in market.
Opportunities Threats
With the technological advancements,
retail across the world is on its pinnacle
,online services have opened up a new
segment for the business.
Lidl have the opportunity to expand its
business in ASIA, as these countries
have liberal and flexible trade and tax
policies.
Easy availability of resources that too
at a low cost have promoted Lidl to
operate in developing countries.
Increased in the number of competitors
in the market have posed a huge
challenge for Lidl. To overcome this,
company need to adopt a strategic
planning.
Low price bring the image of low
quality of product in the mind of
customers which deteriorate the image
of company.
The target market of Lidl is a low-
income group who seek a product
certainly at a lower price(Möller,
Nenonen and Storbacka, 2020).
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P6 How strength and weakness interrelate with macro factors
Basis Strength Weakness
Political Political factor such as
restrictions on trade is under
favourable for Lidl because
there are no restrictions on
trade for UK companies.
Hence, they can conduct their
business easily in terms of
trade. (Mutalimov and et. Al,
2020).
Corruption level is high in UK.
Hence, it impact upon business
too. Secondly, UK has high
corporate tax which is 19%.
This impact upon reducing
their revenues after paying the
tax.
Economical UK is the country which is
having low interest rates which
is 0.1%. This is beneficial for
Lidl because they can take
loan from banks in case they
need and they can repay in
with less interest rates.
Due to Covid-19 pandemic,
UK’s inflation rate changes
and goes up which did not
consider good for any
company including Lidl. Their
customer will show less
interest in purchasing their
product even the habit of
purchasing of customers
decline due to inflation
Social UK people are ready to pay
anything to increase their
standard of living. They have
high purchasing power which
is beneficial for company to
earn more profit by
influencing people that their
products are offering good
UK is the country where the
rate of happening of strikes is
high. The strikes on skin
colour or discrimination
related to religion takes place.
Increase in the rate of strikes is
hazardous for company.
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quality.
Technological Technological factor of Lidl is
highly beneficial because UK
is the country which is having
most advanced and modern
technology. Hence, Lidl have
option to use advanced
technology in manufacturing
their products.
UK has high standard of
technology and due to excess
use of technology, Lidl
employees get more depend on
their technology to get things
done. The task which is done
manually in this also they take
they use of technology.(Belas
and et. al., 2020).
Environmental UK is considered as good
climatic environment. It is
having good tourist attraction
spot. Hence, more tourists
mean more opportunity of
sales because tourists went for
shopping too. This will
increase their profitability.
UK is the area where the
people are facing issue by their
air pollution and almost 8.1%
population of UK die with
their hazardous air pollution.
Due to this reason fewer
customers went outside and try
new products of companies.
Legal The legal factor of UK is
beneficial because UK has
implemented some strict rules
and regulations in the favour
of employees. These rules help
to create discipline in business
and it further created good
reputation of Lidl.
Lidl are unable to understand
the legal laws quickly. Some
kind of misunderstanding or
irresponsibility impacts this
company to avoid some legal
laws and due to this they have
to pay fines too. Secondly,
strict legal factors are creating
obstacles for Lidl to work with
full flexibility.
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M4 Apply appropriate SWOT and TWOS analysis and how they influence decision-making
SWOT analysis of Lidl Stiftung & Co. helps in analysing the company's strength,
weakness, opportunity and threats, which gives company an overlook of possible opportunities
based on its strength and helps in predict future threats to a organisation based on its
weakness(Betti and Sarens, 2020). The analysis helps Lidl in making strategic decision
concerned with the operational activities which will determine the success of the company. Few
of the above stated situation of Lidl have revealed that company is not adhering with the working
conditions, consumer and labour right. If not dealt timely this can prove to a tough challenge for
a company to prosper. Whereas, in few aspects Lidl can gain a competitive advantage the way it
has done in technological aspect. It has developed an Lidl plus app for promoting its sales on
internet. Likewise country's political stability and its easy foreign trade and tax policy can
encourage Lidl to expand its business and market share.
D2 Critically evaluate the impact that both macro and micro factors have upon business
objectives and decision making.
Macro and micro factors of a business environment are those factor which affect the
business performance. Though these factors are not in a direct control of organisation but still
influence the managerial decisions. Customers, suppliers, general public and competitors are
considered as micro factors whereas economical, technological, political and legal factors are
considered as a macro factors(Borojo and Yushi, 2020). These factors defines the overall market
conditions and on the basis of these factors organisation looks out for a possible opportunities to
prosper and expand its business operations. Organisation like Lidl continuously examines these
factors to know their positions in the market and whether the organisational activities are going
in a right direction or not. These factors provide an opportunity to reframe the strategies and
plans and make sure that they are align with organisational objective.
CONCLUSION
From the above mentioned report it has been concluded that organisation in a business
environment are formed majorly in three sectors which are private, public and voluntary sectors.
Depending on the size and objective of a organisation, legal structure under these sectors are
formed. Furthermore, organisational structures are formed by keeping in mind the size and area
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of operation of business. There are various factors that affect the overall profitability of a
company, therefore it is imperative for each business to conduct a analysis of these factors on a
regular basis so as to avoid any unforeseen events.
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