Organizational Structure and Strategic Analysis

The assignment delves into organizational structures, examining functional and divisional models and their implications. It analyzes a strategic framework focusing on SWOT analysis to understand internal strengths and weaknesses, as well as external opportunities and threats. Students are tasked with identifying appropriate organizational structures based on the analyzed business environment and its impact on strategic success.

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Presenting different types, size and scope of organization...............................................1
TASK 2............................................................................................................................................4
2.1 Presenting interrelationship of various functions and how they link to structure of an
organization............................................................................................................................4
TASK 3............................................................................................................................................8
3.1 Presenting the impact of macro environment on JP Morgan Finance and Investment....8
TASK 4..........................................................................................................................................10
4.1 Presenting internal strength and weaknesses of JP Morgan Finance and Investment and its
interrelationship with external macro factors.......................................................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Business is a process which is performed individually or by a group of people in order to
make money that can be done by selling their products or services into market. Having a good
team and business environment will help to run a business in better direction and as well as to
achieve its goals as well as objectives.
The aim of this report is to understand a meaning of business situation which includes
various external and internal factors that affects its environment. It focusses on business of JP
Morgan Finance and Investment which is one of the leading and respected concern investment
company in UK with around 4400 offices in worldwide. Its business philosophy gives
importance to values and principles in all aspects of everyday life (Luthans and Doh, 2018). The
report describes various types of organizations whose aim is to serve their customers and earn
profit while other non- profit form earns net income to invest in works related to welfare of
society etc. The report also describes a impact of macro factors which affects business
environment of JP Morgan Finance and Investment by using PESTLE analysis. It also presents
company's internal strength as well as weaknesses and how they are interrelated with external
macro factors.
TASK 1
1.1 Presenting different types, size and scope of organization
Organization is a group or structure which are set up with different purpose of achieving
goals or objectives. There are different types of organizations which are established in order to
serve or meet various needs of societies as well as their customers. These can be distinguished by
using their goals as well as purpose. There are various types of organizations and some of them
are mentioned below:
Sole proprietorship: it is also known as sole trader and are set up individually and have
control of single person (Singh, 2017). Only an owner is liable for all aspects of business which
also includes finance. In this type of business, all the decisions and planning are taken by
individual even they can hire employees who can work for the company. Sole proprietorship is
quite easy to establish and requires small amount of initial investment.
Advantages:
 whole profit gained by a company belongs to a single person.
 It is quite easy to change legal structures if circumstances changes.
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 Less expensive and requires low cost to start business at initial cost.
Disadvantages:
 it gives limited capital investment and on the other hand requires unlimited liabilities.
 Not counted as separate entity by law (Pati and Das, 2018).
Example: Kurt Geiger which is a shoe company that runs its business successfully in UK.
Private limited Companies: private sectors are that part of economy which is run by
individual with an aim of earning profit. These companies are not under the control of state and
occupies large market share in UK (Wetherly, 2014). Even there is no minimum capital
requirement to set private companies and all rules and regulations are changed by an owner only.
Advantages:
 it has limited liability that is why each member of a company enjoy this facility.
 The management is quite flexible.
Disadvantages:
 this type of company cannot exceed number of members that is 50.
 it cannot issue prospectus to general public.
Example: JP Morgan Finance and Investment Company which is one of the leading investment
company in UK.
Public limited companies: this type of companies provides their services or products
for the welfare of companies and a main aim of this institution is to serve public and complete
all their demands of people (Luthans and Doh, 2018). These type of companies are able to sell
its shares to public through listing its shares and can be acquired either directly or through
trading. At least 7 members are required and liability of associate are limited in this sectors and it
is counted as separate legal entity Advantages:
 capital can be raised from public sectors.
 Follows many rules and regulations which are required to conduct in AGM
 At least 2 directors must be there.
Disadvantages:
 follows long and lengthy process in order to establish.
 Controlled by government, so has to follow all rules and regulations (Belás and
et.al.,2015).
Example: Rolls- Royce, Burberry etc.
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Voluntary Sector: It is a third type of sector which works for the welfare of societies
and it is also known as community sector or non-profit organization. The voluntary sector mainly
consists of those firms which works for the benefit and wellbeing of society and without motive
of earning profit. This is counted as separate entity (Belás and et.al., 2015).
Advantages:
 works for the welfare of societies and mainly focus on providing safe and secure
environment.
Disadvantages:
 the great challenges faced by this sector is to generate funds which is not so easy.
Example: Wellcome Trust, Cancer Research.
Basis Sole proprietorship Public sector Private sector Voluntary sector
Size The size of sole-
proprietorship is also
large in UK.
Public sectors
company's size is
not as large as
compared to
private sector.
Private sector
companies
occupies big
proportion in UK.
The size of
voluntary sector
is small in UK as
compared to other
sectors.
Market
share
Sole proprietorship has
large market share
because they operates
their business in all
over the world.
The market share
of public sector is
not as large as
others because
they did not get
source of funding.
Private sectors
have large market
share because
their main aim is
to earn profit and
it is only possible
by increasing its
market share.
The market share
of voluntary
sector is small as
compared to
others.
Objective The main objective is
to earn profit and
expand its business.
Main purpose of
public sector is to
serve people and
fulfill their needs.
Objective of
private companies
is to earn profit as
much as possible
by serving best
quality of
Voluntary sector
aim is to work for
the welfare of
society.
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product/ services.
TASK 2
2.1 Presenting interrelationship of various functions and how they link to structure of an
organization
The organizational structure presents a relationship and interaction between different
departments of a company and also determines how a supply chain of command runs at different
level of a company (Organizational Structure, 2018). Organizational construction is that type of
structure which is basically used to define various functions that plays an effective role in JP
Morgan Finance and Investment. There are various types of organizational structures which
company must follow, some of them are as follows:
Functional Structure: in this type of structure, company assigns different work to each
member of a company as per their ability in order to improve functions of a company. For
example, a marketing department of a company generally controls marketing of products/
services while sales department only control sales of company's products or services. Even a
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Illustration 1: Functional Structure
(Source: Functional Structure, 2018)

customer also get bounced from one department to another if their problem is not related to one
particular function of a company.
Divisional Structure: this type of structure is followed by those companies who have
different branches all over world. If a company have various product line for a single product,
then the division for each product line has its own different functional group. Divisional structure
mainly divides companies different firm into many as per their level of functions that they
perform (Pati and Das, 2018).
There are various organizational functions which are directly related to its structure such
as Human Resource (HR) section, Research and development (R&D) department, Sales and
marketing division, production, administration and accounts and finance sector. All these
functions are inter-linked to each other and as a result helps to achieve all defined goals and
objectives. Some of them are mentioned below:
 Human Resource Management (HRM): this is the most important organizational
function which helps in improving overall performance of a firm by recruitment
process. It is a process which helps to select best candidates out of many. For JP
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Illustration 2: Divisional Structure
(Source: Divisional Structure,2018)

Morgan, it also required best employees for its business and for this purpose HRM
helps them to recruit best candidates and also gives them training in order to make
them comfortable in a workplace (Chang, 2016). They also know how to maintain
good relationship with their employees in order to make them comfortable in working
area. Another important task of HR team is that they help to keep orientation of firm
as a result it maintains good working conditions. They also conducts different
training sessions in order to increase their working performance.
 Research and Development Management (R&D): research and development
department helps in processes such as innovations, introduction and improvement of
their existing as well as new products which helps them to deliver their best products
to customers (Solodilova, Malikov and Grishin, 2018). On the other side, an effective
R&D team provides company a chance to enhance its overall performance. In JP
Morgan, it also has R&D team which helps to determine positive as well as negative
impact of strategies before applying them into a business. This will also help them to
generate good revenue and take a business to further level of success.
 Marketing and sales department: Marketing and sales department plays a crucial
role in JP Morgan company (Bull and et.al., 2016). This is mainly responsible for
developing new products packaging, pricing and inform people about new offering.
The department also promotes its new offers by using various promotional activities
and it also helps to provide necessary research to identify target customers in order to
increase production of a company. To promote their offering marketing and sales
department uses various promotional techniques such as advertisement, e- Brochures
etc. Marketing department also uses social media and Facebook, Twitter, Internet.
 Accounts and Finance department: this department also plays an important role in
JP Morgan in order to maintain financial status. The accounts department helps in
evaluating overall financial statements and also allots budgets to various departments
to operate their activities (Deasy and et.al., 2016). The department mainly deals with
planning, organizing, auditing, accounting as well as control complete finance of a
company. It also ensures that all the details are kept as records of cash flows to
analyse overall profit and loss of a company.
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 Production Department: it is a department where products or services are produced
in order to satisfy the need of customers (Wetherly, 2014). This department directly
contact with R&D department and then start producing each unit after analysing
demand of their customers. The production department also maintains inventory of
total amount of units which are to be produced during and after producing it transfers
those to marketing and sales department in order to sell those items in a market.
 Operational Management Department: operational department also plays an
important role in business. The main function of this department is to make strategic
planning in order to increase productivity of an organization. This department also
helps to introduce new products and services which helps to generate more revenue
and enhances their level of production (Operational department, 2018). For JP
Morgan, it also has its separate operational management system which generally work
on planning and scheduling the process. Operational department basically works for
various factors that somehow affects the environment of a business. These are capital,
labour, material, quality etc. The department also monitors and makes possible
changes regarding quality of products or services which are offered to them. This is
also copes with all new advanced technologies and adds those into their existing
products in order to raise the level of production of a company (Smart and Creelman
2017).
 Administration Department: this department looks after all the activities of an
organization and help in dealing with all administrative work such as resolving
complete issues related to employees, taking feedback from customers in order to
improve quality of services or products and ensures the smooth functioning of
information from one department to another. For JP Morgan, an administration
department helps to maintain day to day activity in order to run business in a smooth
way. It is also responsible for all documents work like forms, newsletter etc.
 IT department: it is another department in JP Morgan which plays a crucial role in
the company. IT department helps to manage their daily operations, cost control and
contributes in many working areas such as data management work etc. This
department also helps to protect whole data of a company and makes sure that these
data are not be misled by any person (Racz and et.al., 2018). Overall it copes with all
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new and latest technologies into a working area and help a company to introduce all
innovative products in order to satisfy the needs of their customers.
TASK 3
3.1 Presenting the impact of macro environment on JP Morgan Finance and Investment
To identify external factors that affects business environment, it is necessary to use
PESTLE analysis which includes political, social, economic, environmental, and legal factors.
Being one of the leading brand company in UK, a detailed business environment PESTLE
analysis is required to gain best competitive advantage which is described below:
Political Factors: these are the government factors that affect business functions
externally. JP Morgan basically provides financial services and to operate this successfully, it is
necessary to follow all the rules and regulations which are set by government. Taxes,
employment policies and banking regulations are some of political factors that affects the
operations of a business (Prajogo, 2016). Therefore, these rules and regulations must be analysed
as political factors in order to serve better in their financial services. These factors also create
positive as well as negative impact on the business. From positive point of view, JP Morgan also
bound with many rule, regulations etc. so it is quite difficult for any person to take advantage
from a company by using some wrong tactics. On the negative side, due to so many rules and
regulations, these political factors affects the environment of a institution and as a result it
decreases a services which are provided by a company. To enter or invest in different markets JP
Morgan has to determine its political factors such as level of corruption, pricing regulations,
product labelling, wage legislations etc.
Economic Factors: these are those factors which directly affect the economy of a
business. Economic factors generally include inflation, recession, interest rates etc. . In the
context of JP Morgan, there are also some positive as well as negative impacts on a business of
economic factors (Solodilova, Malikov and Grishin, 2018). Such as interest rates will help to
earn more profit while on the other side, decisions made by owner will also affect the smooth
functioning of a company. The main aim of company should focus and realize on a profit
terminology. In such cases, the company has to deal with all these economic factors in order to
contribute to economic growth. It has been analysed that JP Morgan company follows labour
cost and productivity, unemployment rate, government intervention in free market which are
related to financial status etc.
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Social Factors: it is necessary for JP Morgan to focus on socio- cultural values of the
customers. The company also have competitors such as Bank of America, Citigroup
incorporation etc. but the company always works against these companies in order to approach
current as well as future customers (Smart and Creelman. 2017). Beside this, society's culture
also impacts the civilization of an organization and it also includes population growth, age
distribution, career attitudes etc. For JP Morgan it is necessary to identify positive as well as
negative outcomes which also affects social factors of a company and demand of their
customers. It is necessary for JP Morgan to give great emphasis on all the social cultural values
of customers to survive in these competitive markets and to compete with its rivals. The
company also increases cost of labour and also changes its strategies in order to adapt social
trends caused from these factors.
Technological Factors: It is another factor that affects business environment. It is
necessary for JP Morgan to cope with all latest and advanced technologies as per the changes in
market. It has been analysed that company still cope with new and latest technologies in order to
make its financial status up from other and due to this it also uses different techniques in its
promotional campaign to make people aware regarding their offerings (Singh, 2017). The
positive sides of using these advanced technologies is that it adapts various new techniques for a
convenience of their customers such as introducing credit cards for payment methods etc. But on
the other side, there can be barriers for entry which directly affects a production level and as a
result its overall performance can be affected.
Legal Factors: Legal factors directly affects the overall operations of a company. The
company has to follow rules related to interest rates, financial transaction charges, loan amount
as well as saving interest etc. It is necessary for a company to follow all legal rules for the well,
smooth and better functioning of a company (Pati and Das, 2018). Some legal factors such as
discrimination, consumer law, antitrust and health and safety law. These factors also create
positive as well as negative impact on the performance of a company. Such as due to determinate
policy of fixed rates of interest, JP Morgan can follow long term policies as well as strategies for
the benefit of a company. It is also analyses the government changes in laws which will affect
company's financial status in terms of money as well as time.
Environmental Factors: this factor mainly deals with the environmental as well as
ecological aspect of a business and as a result help to attain good market share in this service
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sector. These environmental factors will affect industries such as tourism, farming etc. it creates
both positive as well as negative impact on a business (Luthans and Doh, 2018). Such as from
positive side, there is a growing awareness regarding climatic changes that affects company's
operations and services which are offered to customers. Beside this, these environmental factors
also create negative impact on business that hinders the growth of a company and even can
destroy its existing market. The company must follow sustainability laws in order to follow all
environmental aspects.
TASK 4
4.1 Presenting internal strength and weaknesses of JP Morgan Finance and Investment and its
interrelationship with external macro factors
To analyse internal and external strength and weaknesses of JP Morgan Finance and
Investment, company uses SWOT analysis. It is a process which is used to identify strength,
weaknesses, opportunities and threat which is quite helpful to understand their business more
absolutely. The factors are described below:
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Illustration 3: SWOT Analysis
(Source: SWOT Analysis, 2018)

Strength: JP Morgan Finance and Investment is one of the leading finance company
which serves its services in more than 60 countries. The company leads a market in investment,
banking and financial services etc. and it also have strong liquidity and capital position, as the
company's deposits increases and loan decreases during 2013 which affects firm's ratio and it
increases up to 174 percent (SWOT Analysis of J P Morgan, 2018). JP Morgan and Finance
Investment company have diversified and balanced revenue stream which are shared by 5
different business section and those segments are related to corporate and investment banking.
The company has strong customers service and also have powerful global presence in all over
world. JP Morgan is also considered as one of the largest bank in terms of sales, market value
and assets (Iguisi, 2018). JP Morgan also have strong financial conditions which can be seen in
its annual reports. Even JP Morgan has strong network in market with wide range of big
investors and it also maintains good relationships with their clients as well as customers too, so
this can be considered as its most important strength. It became one of the most trusted brand
name who enjoys good financial position in business and finance.
Weaknesses: The biggest weakness of JP Morgan is having weak management which
directly affects company's non- interest expenses as well as its operational cost and these
expenditures are increasing year by year. It has been considered that it raises its expenses up to
72 percent from its total net revenue (Deasy and et.al., 2016). The company also faces stiff
competition from its rival competitors and as a result sometimes there is instability in its
financial markets. JP Morgan is also heavily dependent on North America , United States and it
depends up to 65 percent from its revenue and this makes company in danger to any economic
status and also slows down its business in running market. Fluctuation in market is also
considered as another factor for them and as a result it leads to instability of their business.
Opportunities: The huge opportunities for an organization is that, there is a large scope
in expanding their business in other countries and covers all important and de- emerging markets
in order to increase its market share. The asset management of a company is also growing and it
bounds internationally and reaches by $102 trillion in 2020 with a CAGR of about 6 %. it is also
analysed that the company is well equipped to be benefited with a growth of its asset
management (Chang, 2016). The company also starts introducing credit card which is so
convenient for their customers and as a result it is to be benefited by the company’s growth and
development as well.
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Threats: the company has a threat of sudden changing rules and regulations of
government that directly affects company’s operational system and due to those changes,
customers are also starts suffering. On the other side, any recession or financial crisis will also
directly impact JP Morgan’s financial status (Calabrese and et.al., 2018). Even the company has
lots of competitors such as ING Group, Prudential Financial due to which JP Morgan has to
maintain its customers base and provide best services and products at low and reasonable prices.
Both micro and macro factors are considered as an important aspect of business
environment and creates positive as well as negative impacts on JP Morgan Finance and
Investment. These factors are also helpful in decision making process and helps to improve
current business position. Both micro as well as micro factors are interrelated with other such as
the political factor of a company are directly interrelating with its strength. For example, if any
tax or rules and regulation changes by government, it directly affects company's brand image and
as a result its overall performance got affected (Bull and et.al., 2016). Beside this, macro factors
such as economic factors, helps to raise the financial conditions of a company such as the
inflation rate or recession increases it directly impact on JP Morgan’s environment. And on the
other side, technological environment also directly interrelate with its working performance and
even customers are also start preferring to choose their product through online mode.
On the other side, it has been evaluated that these macro factors are also creating negative
as well as positive impact on business such that, if there is any change related to government
rules and regulations then company is pressurised to change the current rates or price of their
products or services and as a result there is a fluctuation on company's financial situation but on
the other side customers enjoy their services because of low and affordable rates. This shows that
both micro and macro factors directly and indirectly creates negative as well as positive impact
on business environment (Belás and et.al., 2015). The social factors also affect JP Morgan by
providing best products and services to their customers. The customer behaviour is the main
theme of business strategy in JPMC and they always try to provide best services to their
customers as compared to their rivals. That is why it is necessary to continuously look after all
these factors that somehow spoil company's brand image.
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CONCLUSION
By summing up above report it has been concluded that business environment plays an
important role in every firm or organization. For smooth functioning of a business it is important
to determine all factors that affects the environment of a company. From this report, it has been
concluded that there are different types of sectors such as private, public, sole trader etc. These
all have their own roles and different objectives which makes them different from each other’s.
Further the report also present various types of organizational structures and how they are
interrelated with its functions. Such as R&D department, marketing and sales, operational
management etc. these organizational functions help to achieve company's objective and helps to
maximize profit. Apart from this, the report also presents JP Morgan Finance and Investment
environment which affect company's overall performance. It describes external as well as
internal factors which help to determine company's strength as well as weaknesses by using
SWOT analysis. The report also explains the interrelationship with this micro factors with macro
factors and help to take a business in further level of success.
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Deasy, S. and et.al., 2016. Controlling use of a business environment on a mobile device. U.S.
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Solodilova, N. Z., Malikov, R. I. and Grishin, K. Y., 2018. Potential for development and
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