Business and Business Environment

This document discusses the different kinds and purposes of business organizations, the scope and size of businesses, and the interrelationship between organizational functions and their linkage with organizational structure and objectives. It focuses on the case of Ryanair, a low-cost airline company, and provides insights into its legal structure, size, and interrelationship of functions. The document also covers the external and internal analysis of the business environment and its impact on decision making.

Business and Business
Environment

Contents
INTRODUCTION.......................................................................................................................................3
PART 1.......................................................................................................................................................3
P1 Different kinds and purposes of business organizations.....................................................................3
P2 Discuss different scope and size of the businesses.............................................................................5
P3 Discuss the interrelationship between the organizational functions and how their linkage with
organizational structure and the objectives..............................................................................................9
M2. Benefits and disadvantages of inter relationship among organizational functions and its effect on
the organizational structure....................................................................................................................10
D1 Critical analysis different complexities of many kinds of structures and inter-relationship of these
functions................................................................................................................................................11
PART 2......................................................................................................................................................11
P4 Positive and negative impact of external factors on the organization...............................................11
P5 External and internal analysis of the organization in order to identify weakness and strength.........13
P6/ M3 Interrelationship of strength and weakness with the macro factors...........................................14
M4 Application of SWOT analysis and how it influences decision making of company......................15
D2 Critically evaluates the impact of both macro and micro factors on the business decision making
and objectives........................................................................................................................................16
CONCLUSION.........................................................................................................................................17
REFERENCES..........................................................................................................................................18

INTRODUCTION
Business is an important legal entity that helps out to provide and organize and aim in
order to maintain the economic growth of the country. It helps out to get maximum revenue
generation by particular motive through which they can enhance the profitability and also can
upgrade their competitive market segment. They are mainly covers different type of business
organization which is being made differentiated on the basis of their scope, size and function.
The environment used to cover out all the methods through which the company used to operate
their business practice (Kirchmer, 2017). The organization chosen in this report is Ryanair. It is
an airway company which used to deal with all kind of global airlines facilities. This report will
deal with the legal structure in the business organization with its various size, scope and also the
interrelationship that can be raised in the organizational functions. Further it will also cover the
external and the internal analysis of environment with their strength and weakness.
PART 1
P1 Different kinds and purposes of business organizations.
Business organizations used to deal with a proper venture through which all the
commercial methods can be establish through which the profit can be earned and the generation
of revenues can be enhanced. As there are various business practices which helps out to motivate
and enhance the welfare for the individual and the country (Chawinga and Chipeta, 2017). There
are different types of business organization which are mentioned as follows:
Private organization
It is mainly all the business enterprise which helps out to manage and also to control the
important private person used to maintain the business. It covers out all the important functions
and operation through a sole person who used to gain the profit and also provide the benefit
through the stakeholders. There are different kinds of private business which are as follows:
 Partnership: These are mainly the business practices which are being managed, owned
and controlled by two or more persons which are mainly known as partners as they used
to deal with all the mutual responsibilities which are being shared by them and the profit,

loss and the important decision making is being done together by them. They used to deal
with all the contribution in the capital.
 Sole trader: These are mainly a single entity or an individual which used to handle and
manage all the important responsibilities in the business operations and practices. They
used to cover out important areas and expect which are being liable for maintaining the
liabilities and a venture of the business.
 Companies: They are mainly the artificial personality which used to cover out a different
identity from their owner and has their own separate legal entity and their status. It is
being managed by the board of director which are elected by shareholders are being
elected in order to maintain the representation and the interest in the work (Katz and
Green, 2018).
Purpose: The major aim of such companies is to gain the profit and also to generate the revenue
for the growth of the company.
For instance: Ryanair.
Public organization
It is mainly the business practices which are being controlled, owned and also manages
by the government as they try to motive in order to generate the maximum profit for the country
and also for the welfare of the individuals. They used to deal with all the business and their
activities that help out to generation of benefits for the society. It helps out to collect the funds
that are being required by the government from taxes. There are some important legal structures
for the organizations which are mentioned as follows:
 State government: These mainly cover out business entities which used to deal with the
business operations through the central government and their operation is being restricted
by the state. As All the functions but being managed by the central government and no
state government in UK thereby can manage their functions.
 Central government: These are all the important business organizations which are being
managed and controlled with the help of central government in UK and they try to deal
when operate with all the country.
 Local government: they used to provide out the enterprises which are being on, control
and handled by the local government in UK which try to implicate and maintain the
boundaries which are being made in a local area (Becker, 2018).

Purpose: The main aim of all the public company is to maintain the welfare in the society and
also to enhance the standard of living of individuals.
For instance: British Broadcasting Corporation (BBC).
Voluntary organization
All the business enterprise which used to manage and also implement their own people
by making the voluntary processing in business practices which are also known as trustees. The
amount to maintain the society benefit and also they do not focus on earning the profit their
income is being reinvested for the business and also the capital that is being arranged by them
are from charity, donation or that can also be some gifts. Some of the important voluntary
organizations are mentioned below:
 Trust: These are the legal arrangements which are being made by the person entrust in
order to maintain benefit for framing the business and also to gain the benefit for the
community. It has sought to gain the legal protection through which the trust as assets are
being manages and also being distributed by their wish.
 Unincorporated association: It provides out the two or more people when they AIIMS
out to maintain the religious, charitable, educational and social purposes through which
they can deal out with the partnership that will not be an independent enterprise for their
business are being covered in it (Westley and Bird, 2017).
Purpose: It is mainly ping establish in order to make the benefit for the community and for the
welfare of the society. They aim out to maintain the social wealth and also with that to provide
the material wealth.
For example: National Health Service
P2 Discuss different scope and size of the businesses.
Here are different type of business which are being made with different size/scope and
structures. The three important companies that are being chosen in this report are Ryanair, BBC
and National Health Service.
The most important different kind of business organization that depends on the size are as
follows:

 Micro: All such business practices which used to cover of the employment of 0-9
employees being working under them and helps out to generate the annual turnover for
about less than £2 million.
 Small: All such employees which used to deal with the workforce that helps out to
maintain the business practices with the range of employees for about 10-49 and also
provides the annual turnover which will be less than £10 million.
 Medium: This business practices the employees are being framed for about 50-250
employs enter them and they try to gain the annual turnover for less than £50 million.
 Large: All such business practices in which the employees used to deal with more than
250 employees working under them and they used to deal with global matters with an
annual turnover for about more than £50 million per year (Rasche, Morsing and Moon,
2017).
Background of various businesses
Ryanair
 Background: It is the low cost airline organization which was founded in the year 1984.
The organization is headquartered in the city of Swords, Dublin and its primary operation
lies in London Stansted and Dublin airports.
 Product/ service offered: This organization offers low cost and no frills travel to the
European destinations via air. It serves in 40 countries in North Africa, Europe and the
Middle East.
 Vision: The vision statement of Ryanair is to offer low cost travel service via air to
passenger as they value for efficiency and money.
 Mission: The mission statement of Ryanair is to provide low fare airline service to
customers so that it can generate the increased traffic of passenger while it also maintains
the continuous focus on the efficiency operations and cost containment.
 Objectives: The objective of Ryanair is to establish itself firmly as the leading low fare
airline in Europe by expanded offering and continuous improvements in its services.
 Organizational structure: It follows short organizational structure where it all members
and functional heads report directly t the CEO of the company. They follow short
structure so that transparency is maintained and there is less chain of command.

 Size: As Ryanair is low fare passenger airline, it serves in more than 225 destinations,
covering 40 countries. It mainly operates in Europe, Middle East and Northern Africa.
 No. of employees: It has approximately more than 17,500 employees who work to uplift
the values of the organization and contribute in achieving its business objectives by
keeping in mind the values, mission and vision of the company.
 Stakeholders: The key personnel of the company include Michael O’Leary who is the
CEO of the organization, David Bonderman who is Non-Executive chairman and Edward
Wilson who is CEO of Ryanair DAC and many others (Nuñes, 2017).
British Broadcasting Corporation
 Background: The BBC is the national broadcaster in UK which is mainly headquartered
in the city of London at Broadcasting House. It was founded in 1922 and has the statutory
operations which have its own Royal Charter. It was founded by HM government.
 Product/ service offered: BBC serves globally and is one of the oldest broadcasters at the
national level in United Kingdom. It deals in the area of mass media wherein it offers
latest news and updates to the people through its broadcasting.
 Vision: Its vision is to state that nation wants to speak in peace unto nation.
 Mission: The mission statement of organization is to act in public interest and good faith
so that the people are served by impartiality. It offers the public with high quality service
to the public and different output can entertain, educate and inform all the persons.
 Objectives: Its aim is to offer impartial news and information to the people with the main
purpose is to help people in understanding and engaging with world.
 Organizational structure: It follows the hierarchical structure where it comprises of the
long chain of command. The communication line flows from top to bottom.
 Size: The BBC is the large company that has categorozed its operations into different
segments such as BBC music, BBS sports, BBC studio. It serves people in whole of the
world.
 No. of employees: There are approximately 22,750 numbers of people working in BBC
who contributes in achievement of organizational goals by keeping in mind the mission
and vision of organization.

 Stakeholders: The current Director General of BBC is Tim Davie and the first was John
Reith. Its chairman is Richard Sharp (Marks, 2019).
National Health Service
 Background: NHS is the publically funded company which deals in healthcare industry.
It is headquartered in UK and is founded in the year 1948. Its finances are raised by
general taxes of the nation.
 Product/ service offered: It offers the public with healthcare services such as dentist,
emergency services, opticians, urgent services, sexual health services and many others.
 Vision: The vision statement of NHS is to aspire the people to have high standards of
excellence and professionalism. It aspires all patients to put the heart in everything they
do and works in across boundaries of company and also in partnership with various
organizations in order uplift the public interest, local community and population interest.
 Mission: The mission statement is to bring improvement in heath of people and take care
of their well-being. it wants to accomplish everything that can make every person’s life
better.
 Objectives: To decrease the rate of infant and maternal mortality. Another objective is to
provide the access to public services universally which relates to health such as water,
hygiene, child, women, etc.
 Organizational structure: The NHS is organized in regional hospital boards which are
in- charge of administration. It comprises of dentist, opticians and primary care that
works as the independent contractors than the salaried workforce.
 Size: It has around more than 1 lakhs doctors and 3 lakhs nurses and health visitors. It
comprises of other staff members like managers, ambulance, managers, staff, senior
manager, etc.
 No. of employees: It has approximately more than 1.5 million people who work to put on
their efforts in order to accomplish the vision and mission of company (Raut and et. al.,
2018).

P3 Discuss the interrelationship between the organizational functions and how their linkage with
organizational structure and the objectives.
Ryanair is the large company which has various functional units with the assurance that
there is smooth functioning. These functional areas works inter relatively with each other so that
effective outcome can be brought. The interrelationship of departments in Ryanair is narrated
below-
 Marketing and human resource- The marketing department of Ryanair is mainly
involved in promotion of the offering of company and plans such strategies which can
help in beating the competition and taking edge over the competitors. On other side, the
human resource unit has the work to hire such talented and skilful personnel in the
company so that the organizational goals are achieved. They both together work with
each other wherein the HR unit recruits the creative and talented workforce in marketing
unit so that effective strategies of marketing can be framed in order to gain high profits. Finance and Production- The finance unit of Ryanair is entrusted with the task to
allocate the budget to all functional units and manage the finances of the organization so
that its functions are carried on in smooth and effective manner. Whereas the production
department of Ryanair works to produce such products for the passengers which includes
food, beverages etc. for which it requires sufficient funds to manage its operation. The
financial unit allocate sufficient funds to this unit so that it is working can be carried out
smoothly and the production unit also provides the inventory record to this unit so that it
can further manage its budget. Likewise these both work together so that the profitability
and performance of the organization is enhanced (Bendig and et. al., 2018).
 Research and development and IT- The information and technology unit has the main
role to deploy such upgraded and advanced technology in the company so that Ryanair
can provide efficient service to its passengers while the R&D department is engaged in
conducting such research which can bring innovation in working. These both work
together wherein the IT implements the technology researched by R&D so that the
efficiency of the company is increased.
Organizational structure

It is defined as a system which allows the organization to outline its business activities so that
it can be conducted in a smooth manner. It generally provides the direction of guidance to the
business so that its activities are structured in a systematic manner. Different organizational
structures are illustrated thereunder-
 Flat structure- This involves very few or no middle management between the executives
and the employees. The work force are allowed to report to top level management
directly so that the major control is in the hands of top management. It does not believe in
delegating its power and the decision making power rest in their hands only. This
organizational structure is aimed to have direct communication channel between the
employees and the top level management so that the efficiency is enhanced and
performance of the employees is increased.
 Hierarchical structure- This is also known as the pyramid shaped organizational
structure which comprises of the long chain command which works from top to the
bottom. The workforce are accountable to their immediate seniors and supervisors (Smith
and et. al., 2019).
Ryanair follows flat organizational structure where its employees are allowed to report to
directly to their CEO so that the middle management is eliminated and a direct communication
channel is built.
M2. Benefits and disadvantages of inter relationship among organizational functions and its
effect on the organizational structure.
It is very essential for companies to work all together in order to perform their functions
effectively. The main benefit of functioning in inter-relation with each other is that a proper
coordination is build and maintain between different functional units so that a positive
environment of working is created at the workplace while if the functional units does not work
together, there are chances of increased conflict between the departments that can become a
hurdle in order to achieve the organizational objectives of Ryanair on time. These inter-
relationship helps in functioning within the organizational structure so that a clear direction is
followed.

D1 Critical analysis different complexities of many kinds of structures and inter-relationship of
these functions.
Every organization comprises of their own complexities but all these help in
accomplishment of business goals. For instance, the private organizations have single motive to
generate profitability and they are owned and controlled by private people so there are less
interference of government in these enterprises. But the public businesses are mainly established
with the aim of doing welfare for the society and there is high level of interference of the
government which makes its working complex. Ryanair has different functional units that share
inter-relationship between each other so it creates healthy and positive working environment
while if there is high rate of dependency on each other, there may be possibility that the
functions of all departments may be delayed (Bobkov and et. al., 2019).
PART 2
P4 Positive and negative impact of external factors on the organization.
The PESTLE analysis is used to analyze the macro environmental factors so that the
important areas of the business practices can be implemented with the help of competitive
strategy of marketing. The positive and negative aspects of PESTLE factors are narrated
thereunder in respect of Ryanair-
 Political- It is concerned with the level of political interference in the organization.
Positive: Ryanair operates in UK where there is political stability which helps the organization in
its smooth functioning as there is less changes and amendments in the policies of airline industry
working.
Negative: The uncertainty due to Brexit can be a challenge for Ryanair as there may be changes
in the working policies of UK due to its exit from European Union that may affect the working
of Ryanair in whole of the Europe.
 Economic- It consists of the economic factors such as inflation rate, employment rates,
etc.
Positive: Ryanair operates as a low cost airline so it provides the services at low prices which is
affordable by average income people which may result in increased air traffic.

Negative: The impact of COVID-19 on the aviation sector and economy as a whole can put
adverse effect on the profitability of Ryanair as there has been decrease spending power of the
people in leisure activities.
 Social- It includes the socio-cultural factors that can affect the organization.
Positive: As Ryanair is the low cost airline so the consumers are willing to spend on their
ancillary if they get their tickets at low cost.
Negative: As there has been decreased in the business travels due to pandemic of COVID-19,
the airlines mainly generates more profit from business travels so without the resuming of their
traveling the airline cannot recover easily from the present economic setbacks (Lu, Lai and Ma,
2017).
 Technology- It includes the adaptation of technological advancement in the organization.
Positive: By enhancing the digital platforms such as websites and mobile phones application
Ryanair can improve its customer experience as they can avail its services by using online
platforms in order to make their bookings.
Negative: By deploying new technologies in its operations, the profitability of the Ryanair can
be decreased as it is already a low cost airline which has low profit margins. So deployment of
new advancements of technologies can adversely affect its profit.
 Legal- It includes the compliance with laws and regulations of the country where the
organization operates.
Positive: Ryanair make sure that it complies with every legislation in its working so that it does
not face any hardship due to non-compliance.
Negative: Due to post Brexit, Ryanair is required to comply with both the regulations of UK and
EU which can bring difficulty for it to operate in low cost strategy (Walheiser and Schwens,
2017).
 Environmental- It includes the factors which can affect the ecology.
Positive: Ryainair strongly focuses on taking environmental initiatives so that it can produce less
carbon emissions while traveling so that it can minimize the environmental damage through its
services.

Negative: The EU regulations relating to carbon emissions for the airline may create problems
for the airline organizations to conduct it operations. These regulations may result in increased
cost for Ryanair which can affect its profitability.
P5 External and internal analysis of the organization in order to identify weakness and strength.
It is a tool that is used to analyze the micro factors which includes external and internal
factors like opportunity, strength, threats and weakness. In relation to Ryanair, these are
discussed below
Strength Weakness
 Ryanair is established in European
market effectively which covers
approximately more than 200
destinations and comprises of 1800
routes all over the world. Its operation
at global level is its biggest strength as
this helps in attracting more of the
customers.
 The low cost strategy of Ryanair helps
at in taking the competitive advantage
in the market. This works as strength
for the organization as there are
competing airline companies in the
market so the low cost base provides it
a competitive edge over others
(Congdon and et. al., 2019).
 One weakness of Ryanair is the brand
perception in the minds of customers.
Over the few years the brand of
Ryanair has poorly performed in range
of survey, awards and polls.
 Another weakness is its seasonality of
earnings where the earnings of Ryanair
are seasonal. Its profit increases and
also relies on northern hemisphere
summer which is particularly second
quarter and there is loss making winter
for it.
Opportunities Threats
 Ryanair can improve its customer
service by enhancing quality of
customer interaction with the company.
It can redesign its website with
attractive feel and look and few clicks
 The fluctuation in the price of fuels can
affect the business model of the
organization and adversely impact on
profitability of the organization as it
already operates in low cost base.

for booking so that customer service is
enhanced It can also introduce its
mobile application so that enhanced
service and experience is provided to
passengers.
 One such opportunity for it can be to
launch the business traveller product so
that it can attract business travelling by
providing them flexibility in booking,
choice of sitting, single fee, fast lane
security etc.
 Another threat can be the competition
from other low cost companies in the
airline industry such as EasyJet. The
competition poses high level of threat
for Ryanair as there is zero switching
cost for the customers which can affect
the profitability of the organization.
P6/ M3 Interrelationship of strength and weakness with the macro factors.
In order to overcome the external factors which adversely affect the working of business, it is
very important for the business is to conduct internal analysis so that the roadblocks can be
coped up. The inter-relationship of strength and weakness with the external factors are discussed
thereunder-
 Political- It includes the government interference in business.
Strength: The political stability of UK can help Rya air to expand its operation in different
countries across the globe as the political environment of UK supports the organizations.
Weakness: When expanding in various locations, Ryanair is required to comply with different
rules and regulations which can become problematic for it at initial level due to less familiarity
with it.
 Economic- It involves the economic condition of the state where the organization
operates or is planning to expand.
Strength: The low cost strategy of Ryanair can help In attracting more customers even if the
economic condition of the country is not well as with the low spending power, people can avail
its services.

Weakness: The low cost strategy of Ryanair can affect the revenue generation and profitability
of company.
 Social- It includes factors like society values, norms etc.
Strength: As Ryanair operates also at short distance locations, this can help in attracting the
passengers who prefer rail or bus services for covering their short distance as it operates with low
cost strategy (Ansah and Sorooshian, 2017).
Weakness: The customer service experience is poor as compared to other organizations for
Ryanair that can become hurdle for attracting more passengers.
 Technological- It is concerned with adaptation of technologies in business.
Strength: The innovation can help Ryanair to enhance the customer experience.
Weakness: Adopting new technologies can affect the profitability of the firm due to its fewer
profit margins.
 Environmental- It involves the extent to which the organization damages the ecology.
Strength: As Ryanair operates in EU so it complies EU regulations which support its business.
Weakness: While bringing such technology which can produce less carbon emissions can
become hurdle in its high generation of profitability and revenue.
 Legal- It relates to compliance with laws of the country.
Strength: The compliance with laws can help the company to increase its quality of service
which can attract more customers.
Weakness: The difficulty to comply with every countries law can affect its operations.
M4 Application of SWOT analysis and how it influences decision making of company.
By application of SWOT analysis, the company can make such decisions by taking an
insight of its strength and opportunity which can help in overcoming the threats and weakness.
The opportunities can contribute in introducing the innovative services for passengers so that
they are attracted while the optimum utilization of resources can help in retaining them.

D2 Critically evaluates the impact of both macro and micro factors on the business decision
making and objectives.
The macro environment factors have high influence on functioning of business so it is
very essential for Ryanair to identify these before making any decision so that their influence is
reduced while the internal factors helps in identification of inner strength and weakness so that
the opportunities and strength can be used to overcome weaknesses and threat.

CONCLUSION
It is concluded from this report that there are many business organizations such as public,
private and voluntary which comprises of its own structures and has different purposes. The
businesses can be classified on the basis of their size and scope. There are different departments
in the organization which must work inter-relatively so that there is coordination being
maintained between all and positive working environment can be created. Further it is added that
the PESTLE analysis can help in analyzing the macro factors that influences the working of
organization while the SWOT analysis can be used to analyze the micro environmental factors so
that such decisions can be taken which can help the organization to grab opportunities and
mitigate threats.

REFERENCES
Books and Journals
Ansah, R.H. and Sorooshian, S., 2017. Effect of lean tools to control external environment risks
of construction projects. Sustainable cities and society. 32. pp.348-356.
Becker, A., 2018. An experimental study of voluntary nonprofit accountability and effects on
public trust, reputation, perceived quality, and donation behavior. Nonprofit and
Voluntary Sector Quarterly. 47(3). pp.562-582.
Bendig, D., and et. al., 2018. Performance implications of cross-functional coopetition in new
product development: the mediating role of organizational learning. Industrial Marketing
Management. 73. pp.137-153.
Bobkov, A.L., and et. al., 2019. Verification of the organizational structure evolution model of
retail trade organizations using cluster analysis and the method of rotated components.
In Proceedings of the 7th International Conference “Innovation Management,
Entrepreneurship and Sustainability (pp. 30-31).
Chawinga, W.D. and Chipeta, G.T., 2017. A synergy of knowledge management and competitive
intelligence: A key for competitive advantage in small and medium business
enterprises. Business Information Review. 34(1). pp.25-36.
Congdon, B.S., and et. al., 2019. In-field capable loop-mediated isothermal amplification
detection of Turnip yellows virus in plants and its principal aphid vector Myzus
persicae. Journal of virological methods. 265. pp.15-21.
Katz, J.A. and Green, R.P., 2018. Entrepreneurial small business. McGraw-Hill Education,.
Kirchmer, M., 2017. Business process management: what is it and why do you need it?. In High
Performance Through Business Process Management (pp. 1-28). Springer, Cham.
Lu, E.P., Lai, G.C. and Ma, Q., 2017. Organizational structure, risk-based capital requirements,
and the sales of downgraded bonds. Journal of Banking & Finance. 74. pp.51-68.
Marks, J.H., 2019. The perils of partnership: industry influence, institutional integrity, and
public health. Oxford University Press.
Nuñes, S.C., 2017. Public–Private Partnerships and Urban Governance: Towards a New Concept
of Local Government?. New Challenges in Local and Regional Administration.
Rasche, A.N.D.R.E.A.S., Morsing, M.E.T.T.E. and Moon, J.E.R.E.M.Y., 2017. The changing
role of business in global society: CSR and beyond. Corporate social responsibility:
Strategy, communication, governance, pp.1-30.
Raut, R., and et. al., 2018. An ISM approach for the barrier analysis in implementing sustainable
practices. Benchmarking: An International Journal.

Smith, C., and et. al., 2017. Role specialization and service integration in child welfare: Does
organizational structure influence the decision to refer to supportive services?. Children
and Youth Services Review. 82. pp.139-148.
Walheiser, D. and Schwens, C., 2017. Exporters’ Innovativeness and New Product Performance:
Organizational Structure as a Moderator. In Academy of Management Proceedings (Vol.
2017, No. 1, p. 17273). Briarcliff Manor, NY 10510: Academy of Management.
Westley, F. and Bird, F., 2017. Introduction: Leadership and the Voluntary Sector in Canada.
In Voices From the Voluntary Sector (pp. 1-22). University of Toronto Press.