Organizational Chart Analysis for MSMEs

The assignment involves analyzing various types of organizational charts suitable for different scenarios. It also requires understanding the concept of Micro, Small and Medium Enterprises (MSMEs) and their characteristics. References from academic journals, books, and online resources are provided to support the analysis. The task is to summarize and analyze these sources to provide a comprehensive answer.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Types, purpose and legal structure of an organisation...........................................................3
P2 Size and scope of different types of organization ................................................................4
P3 Relationship and link between different organizational functions .......................................7
TASK 2............................................................................................................................................8
P4 Positive and negative impact of macro environment on a business organisation..................8
P5 Internal and external analysis of a business organisation ....................................................9
P6 Interrelation of Strength and Weakness with external macro economic factors..................11
CONCLUSION..............................................................................................................................11
REFERENCE.................................................................................................................................12

INTRODUCTION
Business environment is defined as all the factors that affects a business organisation
internally or externally as a business organisation operates its activities by procuring various
resources from environment, that can have major impact on the ecology, similarly it has many
other factors that affect environment of business negatively or positively. The present study is
based on John Lewis ,it is a retail departmental store that has its outlets in the boundary of UK.
Report will explain purpose and legal structure of public, private and volunteer companies .
Furthermore study will compare these firms on the bases of their size and scope. In addition,
organisational structure and interrelationship between various functional units will be explained.
Assignment will conduct SWOT and PESTLE analysis in order to analyses business
environment of firm.(Becker, Kunze and Vancea, , 2017).
TASK 1
P1 Types, purpose and legal structure of an organisation
Private co. is the company that cannot transfer its shares to public at large and a
company , that should have minimum 2 and maximum 200 members in its organisation , and
should contain the word 'Pvt. Ltd' after its name also a it can be further divided into three
categories – co. limited by share that means member's liability is limited to the amount unpaid
to the co. with respect to share , co. limited by guarantee that means member' liability is
limited to the amount of money , guaranteed to paid by its members in case of co. 's wound up
and co. with unlimited liability . A private company For example John Lewis is a private
company, means it will follow all the norms and condition that a private company has to follow.
The main purpose of John and Lewis company is to earn higher profits and have its
outlets all over the world . Legal structure of a private company is that it has to incorporate itself
and get incorporation certificate within 2 days of commencing its business after submitting
various documents. (Somerfield., Dashfield and Warwick, 2018).
There are many small size companies that works to get profit so that it can sustain in
market for longer duration. Medium size firms such as Aldi has purpose to expand its business
and compete with large companies. Many partnership firms, sole traders also come under the
private companies.
Public co. a public company is the company that can transfer its share to public and trade
freely in stock exchange. A Public co. can be divided into two listed public co. and unlisted

public co. all the public companies that is listed in one or two stock exchange are known as listed
co. and public co. that are not listed in stock exchange are known as unlisted public companies.
Purpose of a public co. is to serve best to the general public For example, BBC,
broadcast its channel in various countries so it needs high amount of regulation(Bonnefoy-
Cudraz, and et.al, 2018). The legal structure of a public Company is that it has to submit
memorandum and article of association, declaration of compliance, information about location of
registered office that should be in the boundaries of UK.
Voluntary co. is an organisation that has a group of voluntary people come together to
form an association. It can be an unincorporated association, a trust, a limited company , a
community interest company etc. For example, Oxfam is a voluntary association, that come up
with group of persons to help needy people.
Purpose of a voluntary organization is to serve society as a whole and do their welfare the
purpose of Oxfam to eradicate poverty and removal of injustice happen with people for that they
run various campaigns. A voluntary co. is generally is an unincorporated association but some
co. have to go through the incorporation process.(Meng, and et.al, 2018).
Micro, small and Medium enterprises
These are mainly private companies because its scale of business is very small and very
low investment is required to run these kinds of organisations, Generally these are situated
within the local boundaries of of the country. Micro businesses need funds of less than £2
million , small businesses need funds of less than £10 million and medium businesses needs
funds of less than £50 million.
P2 Size and scope of different types of organization
Basis Public (BBC) Private (John and
Lewis)
Voluntary (Oxfam)
Background It is a public
broadcasting co. that
broadcast its channel
throughout the world
and is the largest
broadcaster in the
world
It is a private co. , that
has large retail stores
in the boundary of UK
and its headquarters
are situated in London
and South Western
United Kingdom.
It is a voluntary
association and
international
nongovernmental
organisation . Its
headquarters are
Oxfam International,

Oxfam House , John
Smith Drive , situated
in England.
Vision and Mission Its vision is to achieve
deliberate growth for
further success by
challenging
themselves, its
customers and market
Mission- to do little
things for achieving
big goals in future.
Vision- is to maintain
its quality and at the
same time become no.
1 in among all the
retail chain businesses
in the world.
Mission- to maintain
its customer for long
run.
Vision- is to serve
people and work for
well being of people.
Mission- is to do social
service , providing
right to life and
security , right to be
heard and right to an
identity to people
Objective The objective of BBC
is to entertain, educate
and inform , to make
world class content,
and to attract minds of
and create awareness
among younger
audience.
The objective of John
and Lewis co. is to
satisfy and motivate
all its employees for
future sustainable
growth.
The Objective is to
eradicate poverty and
injustice happen with
people.
Legal structure It has to incorporate
itself with the registrar
of company and has to
get certificate of
incorporation within
one or two days of
commencement of
business
It has to file
Memorandum and
Article of association
with the registrar after
mentioning details
about name , address ,
location of the
business
A voluntary
organization is
generally an
unincorporated
organisation that need
not to be incorporated
or go through the
procedure of
registration .
Market size and scope It has 20,950 of total It has 51 stores outlets It runs many

staff , 16,672 of that is
in working sector
broadcasting and total
35,402 including
flexible, part time and
fixed contract and it is
spread throughout the
world , its operating
income is £ 39.3
million , net income is
£ 129.1 million and
total assets are worth £
308.6 million.(Bruhn, ,
Karlan, and Schoar, ,
2018).
in UK . And total of
38,100 employees in
its whole organisation,
its total revenue is £
3.78 billion and has
total operating income
of £ 243.2 million .
campaigns like Make
Trade Fair and has
Oxfam shops all over
the world. Oxfam has
done expenditure of
£336.9m on charitable
activities in 2017/18,
It get £207.0 m
Income from
government
and other public
authorities
.
Stakeholders Government , viewers,
subscribers., media
Owners , customers,
investors, employees ,
directors
Members , donors,
board members,
foundations
Sector Tertiary sector as it
provide direct service
to its customers
Secondary because it
manufactures its own
goods
It is also a Tertiary
sector that provide
direct social service to
its customers
P3 Relationship and link between different organizational functions
John lewis is following line organisational structure that means its supervisors have direct
control over its subordinate and it has vertical structure from top to bottom, supervisor to
subordinate that means if lower level of subordinate has to communicate with senior most
manger then it has to first coordinate with middle level supervisors and then senior manager.
Link between production and marketing function

Proper strategy formation of marketing goods , proper ad campaign planning , effective
media planning , effective channel distribution leads to increase demand of John & Lewis's
product and because of that its production department will be engaged in producing quality and
quantity products and sales of the company will increase. (John, 2019.)
On the other hand if production department will be provide quality products, then it will
help in doing proper marketing of a product and that helps John & Lewis to generate funds. As
John and Lewis is using line structure in which all the decisions are taken by higher authorities.
Top management takes good or expert decision that help both these departments in conducting
operations smoothly. This supports in raising productivity and improving sales volume as well.
That aids the business in accomplishing its goal successfully.
Link between human resource and customer service functions
John & Lewis should hire quality personnel ,experienced and skilled labour in its
organization it will help customer service department to serve best to its customers, then it
can satisfy needs of its customer , that leads to increase in brand value of the company and
boosts revenue of the firm. . For maintaining quality of people in John & Lewis should select
deserving applicants , find a suitable and effective sources of recruitment and also have
training sessions in its organization .
On the other hand John & Lewis will generate funds because of good customer service
then it can use these funds in providing rewards to its employees , that will increase morale and
encourage employees of its organization. Line structure of the company will help in easy flow of
communication and provide complete information between both the departments as line
structure is very organised. Easy flow of communication will help in solving their interrelated
problems that will ultimately help in achieving customer and human resource related objective
of a company(Musa, and Hasan, 2018).
Link Between R&D and Production department
The more effective research done by the research & development department, the more
effective and innovative product a production department can manufacture . Innovative product
can increase brand value of a company and will help John and Lewis to take competitive
advantage in the international market .
On the other hand production department will produce product with innovation because
of depth study done by Research department then it will encourage more research and adding on

new things to product will make John & Lewis's retail products different from others. In single
line structure of John and Lewis will lead R&D department to consult with its senior authorities
who will give various ideas to its lower department , the effective one will be chosen that helps
company in achieving its cost effective objective.
Link between Marketing and Finance functions
Advertising and publicity of products is very necessary to increase sales of a co. and
without sale there will be no profits so there will be no need of any financing function.(Gheibi,
and et.al, 2018).
Similarly for doing effective marketing John & Lewis should have strong base for
finance . That can only be generated by achieving sales target and making strong sales
policy.Line structure leads marketing department to consult with its senior manager to discuss
about marketing strategy for the purpose of implementation, that will help company to fulfil its
marketing objective.
TASK 2
P4 Positive and negative impact of macro environment on a business organisation
Macro environment includes all the factors that affect business environment politically ,
economically, socially, technologically, ecologically and legally..
Political environment
Negative impact : It will have negative impact on the business environment of John and
Lewis , if it is involved with corrupted political parties , as there are chances of fraud and unfair
trade practices conducted by those political parties that can affect its retail business and can
decrease reputation of John and Lewis.(Zahari, and Romli, 2018).
Positive impact : If John and Lewis have good relations with government and good
political parties , also if it is abide by all the rules and regulations imposed by government , than
political environment will have a positive impact on John and Lewis.
Economic Environment
Negative impact : UK economy is facing downfall in prices of goods and services that is
'recession' that can lead John and Lewis to decrease prices of its product that ultimately cause a
plenty of decrease in its revenue . Also it will have a negative impact if there will be increase in
interest rate , means increase in the cost of loan that leads to increase in expenditure of carrying
business operation of John and Lewis.

Positive impact : If the economy of UK is stable means supply is equal to demand , no
inflation and deflation in the economy , interest rate is stable then country has plenty of income
from gross domestic product then John and Lewis can use this income in its retail business and
can increase its sale.(Widya Yudha, Tjahjono, and Kolios, 2018).
Socio-cultural environment
Negative impact : Nowadays consumers are shifting towards new preferences and
lifestyles. If John & Lewis will not consider preferences of consumer and not produce goods as
per the need of the consumer than it will lag behind in terms of competition and cannot grab
market opportunities.
Positive impact : John & Lewis can take market opportunities caused by the society only
when it will introduce more branded and latest fashion product .
Technological Environment
Negative impact : It is the era of new technology and innovation . John & Lewis should
implement new methods of doing its manual work and expand its business . So for carrying
business in long run John & Lewis have to go with these technologies and introduce innovative
products. (Hadermrod, Crowder, and Wills, 2019).
Positive impact : John & Lewis can have positive impact on its business environment if
it carry on IT system , that can be access through strong servers and it can boost its online
business.
Ecological Environment
Negative impact : Use of non renewable material by John &
Lewis in its products that are not environment friendly can have negative impact on the
ecology . For example if John & Lewis provide plastic bag to its customers for carrying
products that can cause harm to animals.
Positive impact : using renewable resources by that can be
reutilized,reduced and recycled can preserve scarce resources in the ecology.(Ervural and et.al,
2018).
Legal Environment
Negative impact : If John & Lewis will not follow various laws
like employment law , consumer law health and safety law , that is must for every organisation ,
then court may impose penalty and the person behind it can be subject to imprisonment.

Positive impact : providing fair wages , creating non
discriminating culture , providing facilities for health and safety can have positive impact on
John & Lewis's legal environment , as it will build good image in front of legal authorities.
(Stavropoulou, De Vuyst, and Leroy, 2018).
P5 Internal and external analysis of a business organisation
Internal analysis of business includes identifying its strength and
weakness and external analysis includes opportunities and threats.
Strengths
John and Lewis is the most growing retail store of UK , various
fashionable brands are offered by it, also there are brands that is owned by John and Lewis
Itself . It has its online shopping website that deliver its product around the globe and 35000
employees are working in its outlets . John and Lewis believe on policy of 'Never Knowingly
Undersold'. It has a recognizable brand and known as market leader in UK also it has good
customer , employees and supplier
relationship. It has a unique alliance with other businesses , It has highly skilled managers in its
organisation, and have a superior industry knowledge.(What are Micro- Small and Medium
Enterprises (MSMEs)?.2016).
Weaknesses
Limited Items are offered by John and Lewis as compare to other
retail supermarkets , so it create less availability of options for consumers also price of its
grocery items are higher than other supermarkets in UK.another weaknesses are that it uses
outdated equipment , and uses inferior technology and has low research and development.
Opportunities
The target of John and Lewis is to increase consumers that are
young professionals , living away from home , that is increasing day by day also it is expanding
its network and market at faster rate to cover large geographic area and strategy related to
flagship stores and subway brands is being pursued . Also it is trying to add new product line and
expanding customer base . John & Lewis also entering in export business also it do not have any
legislation pending.(Bonnefoy-Cudraz, and et.al, 2018.)
Threats

John and Lewis need high security systems to safeguard its
employees that are working in night , lack in concerns for security will leads to robbery also
many other supermarkets in UK are now doing merger to expand its business that can be a threat
for John and Lewis . There are many other competitors of John and Lewis like Marks and
Spencer , ASDA and Tesco.
Also it has an intense competition with other stores. Availability of substitute will decrease its
sale and profit. Also Change in demographics like change in behavior of customer can become
threat for John and Lewis other than that various laws can be imposed by government that can
limit its strength and restict it from expanding its business.(ecker, Kunze, and Vancea, , 2017).
P6 Interrelation of Strength and Weakness with external macro economic factors
As the strength of John & Lewis is that it has its online business to deliver products in
other countries means it has strong base for computer technology , that is helping it in expanding
its business in new market. Also it is the growing retail store in UK that will help it in increasing
its growth rate. Ultimately increase in growth rate and market will help in maintaining its star
position. Organization having star position generate more funds , and that funds will improving
economic position of the country.
Similarly weakness of John and Lewis is increase in prices of its products , that
definitely generate profit for it but at the same time it will decrease purchasing power of the
consumer and because of that economy will suffer from disequilibrium .
Also it is providing various new brands and considering preferences of consumer and
attempting to increase its professional consumers , this leads to strengthen the sociological
environment of John and Lewis. (Bruhn, Karlan, and Schoar, 2018).
CONCLUSION
From the above study it can be concluded that every organisation has its own structure
and method of carrying business operation. From PESTLE analysis , political, legal, social base
of the organisations can be identified , also its technical and economical benefits can be
analysed. SWOT analysis shows negative and positive areas of a company and it also points
those areas that will be improved by the company in future . It is shown how Scope and
market size vary from one organisation to another. Some organisation have small scale business
and some having large scale business it depends on the investment and brand image of the

company .(Types of Organizational Charts (Organizational Structure Types) for Different
Scenarios.2018.)

REFERENCE
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