Types and Purposes of Organizations in Business Environment

This document provides an overview of different types and purposes of organizations in the business environment. It explains the size and scope of various organizations and the relationship between different organizational functions and objectives. It also discusses the positive and negative impacts of the macro environment on business operations.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
Introduction......................................................................................................................................3
Task1 .............................................................................................................................................3
P1 Explain different types and purposes of organisations; public, private and voluntary
sectors and legal structures..........................................................................................................3
P2 Explain the size and scope of a range of different types of organisations...........................5
Task2................................................................................................................................................6
P3 Explain the relationship between different organisational functions and how they link to...6
organisational objectives and structure......................................................................................6
Task3................................................................................................................................................8
P4: Identify the positive and negative impacts the macro environment has upon business
operations....................................................................................................................................8
Task4................................................................................................................................................9
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses............................................................................................................9
P6 Explain how strengths and weaknesses interrelate with external macro factors.................10
Conclusion.....................................................................................................................................11

Introduction
Bussiness Environment can be referred to as sum of internal as well as external factors
that includes employees, customer needs and expectations, suppliers, owners, technology and
many more (Gebauer, Haldimann, 2017). As, all the companies have a large influence on their
business environment it is critical for them to undertake the same in order to sustain themselves
in long term.
For doing this project, Marks and Spencers(M&S) has been taken as private company,
NHS has been taken as Public company and OXFAM has been taken as Voluntarily company.
Marks and Spencers was founded in the year 1884 is recognized as one of the leading british
retailer company for it's quality as well as great value of food and clothing. NHS is one of
biggest health website of U.K that was founded in july, 1948. Oxfam, that was founded in the
year 1995 by independent non- government Organizations. This report mainly covers different
size, type and scope of the Organization, inter relationship between different functions in the
Organizations, impact of macro as well as micro environment.
Task1
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures.
There are different type of Organization in the business environment that is their purpose
of existance (Groza and et. al. , 2016.). The different types of the Organization can be explained
in detailed below:
Private sector: The private sector are those Organizations that are owned by one or more
individuals. Their main purpose of existance is to enhance their profitablity. In context of M&S,
Their main aim is to inspire and engage the lives of million with the ultimate objective of
enhacing their brand presence and profitablity.
Legal Structure: There are different type of legal structures that come under the private
companies. This can be explained below in more detail:
 Sole propertiership: These type of companies are one's that are owned and managed a
single ownership wherein there are solely liable to bear unlimited liablity as well as liable
solely for profits. In case of excessive debt, they may be required to sell of their debts in
order to settle their liablities.

 Partnership: Partnership is owned as well as managed by two or more people. Other
than this, all it's features are similar to sole propertiership and bear unlimited liablity
(Halbert and Ingulli, 2020Hein and et. al. , 2019.). The agreement between the partners
are mentioned in partnership deed consisting of each partner's contribution, profit share,
their control and every other details. Marks and Spencers is in partnership with number of
franchise firms that includes WHS, MOTO, COMPASS, SSP and B.P. In addition to
this, some of their international partners includes FIBA Group, Reliance Retail, Central
Group and many more.
 Corporations: The corporate exist for profitable as well as non-profitable purpose. They
possess authority with respect to different aspects that includes right and privileges of an
individal, can enter as well as sue by other and also are liable to pay taxes.
Public Company: Public company can simply be referred to as those companies, whose shares
can be subscribed by member of public as per company's act 2013 (Hein and et. al. , 2019.). The
company have to fill a number of document in order to establish themselves. There are number
of legal structure that is required to be followed. This can be explained as under:
Legal Structures:
 Local government: This government can mainly be referred to the government that
somes under national structure and aren't included under any other structure. Apart from
this, it can also be defined as a structure that specifies certain defined characterstics. This
was diversified the people and encourages this governments involvement in the political
processes and have controls in context of their daily lives.
 State government: The state government, can be referred to as countries subdivision
that shares political power with respect of central and state governments. Their main role
is that they have control over the internation affairs of the Organizations. Some of the
main issues, which is limited to the state includes public transports and law
enforcements.
 Central government: This can be referred to as the government that has control with
respect to national environmental policies that majorly contributed to economic
development as well as ensuring health and safety of their people for improving the
quality of it's business environment. This further includes ensuring implementation of
EU regulations.

Voluntary Organizations: These Organization includes mainly those Organizations, whose
primary purpose to create social impact in order to promote welfare for their society instead of
profit.
Legal Structures: There are different legal structures that are included under this heads. Some of
them can be described in detail below:
 A Trust: Trust are set up with the purpose of managing the land and property. The
money received from this are utilized for serving a specific purpose with the commuity of
community welfare (Hillary,ed., 2017.) . They do this, by establishing formal relationship
between donors or trustees, who becomes nominal owner of the trust. This is quite
cheaper and at the same time personally liable for their trust.
 An Unincorporated Associations: There approach mainly includes setting up initial
structure for campaigning with the aim to protect a facility or space. This involves mainly
small group of people that is quite quick as well as easier to set up except the
Organisation is looking forward to registered to earn charitable status.
P2 Explain the size and scope of a range of different types of organisations
BASICS M&S NHS OXFAM
SIZE
No of employees
Presence
No of Stores
more than 80000
62 countries
1519
More than 1,87000
8 + countries
275+ clients
More than 10000
67 countiries
3500+Organizationed(
partnered)
SCOPE It is one of the major
multi national retailer
in U.K. They are
primarily engaged in
clothing, home and
food produces. There
revenue is
approximately 10.2
billion dollars. They
NHS was created with
the aim of taking care
of the health of an
indivual with the focus
on high quality care
for future generations.
They offer activites
that includes Feta
diagnosis of
Oxfam is indulged in
looking for the welfare
of the global people
and support them in
fight against inequality
and justice. They are
mainly involved in
offering services that
mainly includes Water

are present in 68
countries.
cogenitial, Pre natal
care, care fr children
and young people and
care for adults.
and sanitization, Food,
Climate and Natural
resources, Conflict and
disasters, extreme
inequality and
essential services,
gender justic and
Women's right.
Basic of classification of Small, Medium as well as Large Organizations:
Basics Small Medium Large
Meaning This Organisation
mainly refers to
business that are small
in size.(Jeong and
Oh, , 2017.)
Their size that mainly
of medium size
usually between 50 to
100 employees.
This size is quite large
and have more than
100 employees.
Objective Their objectives is to
introduce their new
offering in order to
survive.
Their objects is to
maintain as well as
enhance their quality
for enhance revenue
periodically
Their objective is to
widen their brand
presence at a global
level.
Decision making Small term view
(limited to 6 months)
Medium term view
(6months-2years)
Long term view( 5 or
more years)
Task2
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure
It is important for the company to understand that every functions within the
Organization has a significant among other department and in turn on the performance of the
entire company (Kessler and Buck, 2017). It is critical for each of the different department to

work together as a team in order to be able to sustain their performance in long term. It can be
explained in detail below:
 Marketing: It is one of the most important department of the companies. It is much
wider than selling as for enhancing the revenue as well as profitablity it is important the
company to be utilize effective communication channel to order to show as well as
enhance their brand visiblity (Kukkonen, 2016.). It is important for them to establish the
proper co-ordination between other departments in order to be successful be implement
their marketing plan and strategies. It is important for them to engage with different
functional heads in order to know their finances, level of production required to ensure
that it is at par with that of demand.
 Production: Similarly, the production department needs to work closely with all the
other department in order to spend appropriate and product the goods that are most
demanded. This decision should be undertaken by establishing a proper cordination with
research and development, and it should incorporate changes as per the budgetted amount
allocated to them. Along, with this, it is important for them to delivery products of
enhanced quality by clear communication with marketing department.
 Finance: Finance department needs to work closely with other department. This should
be done by ensuring that clear communicated is follow to them and any discrepencies
between the different department should be identified and immediate actions should be
take to address them in order to align with the goals of the businesses.
 Human Resource: H.R department is one of the critical department as it is responsible
for managing all their people that are considered assets of the company (Kumar and
Yakhlef, 2016). It is important for the department to establish clear communication
among other department in order to hire right people as per the require of the job and
should talk closely with different department with context to employee's salary, operation
tasks, skill and qualification required and also the level of training required that differs in
relations of capablity.
Organisation Structure simply can be referred to as how a particular organization identify
their each jobs, perform it's different function and mainly states a particular way of it's
Operations. They are of different types that highly determines the success of the Organization.
Some of the main structures can be detailed below:

 Functional Structure: These structure are mainly divided into smaller groups with
specific tasks and responsiblities. This can better understand with an example say each
department has a manager who is answerable to higher level manager who oversees
multiple department.
 Divisional Structure: This structure are mainly followed by large Organizations. This
defines the objectives of each divisions and allows more autonomy among different
divisions (Lim, 2017). In context of NHS, it follows a division structure that their
division across U.K includes National bodies, clinical commision groups and health care
providers.
 Matrix Structure: This can be reerred as a blend of functional and division structure. In
this, employee report to more than one bosses that is highly dependant on a particular
organization. Oxfam, follows matrix structure as it is one of multi national company.
Task3
P4: Identify the positive and negative impacts the macro environment has upon business
operations
The macro environment has a large influence on a company throughout the world. They
can have positive as well as negative impacts. In today's dynamic environment, mainly due to
advancement in technology there arises different threat for the company as their competitors
might be more flexible in being up to date with the most recent technology (Lu and et. al. ,
2019.). This can be explained by one of the vital tool for external analysis. It can be explained in
detail below:
 Political: This mainly refers to how a government interfares in an economic or a
particular industry. This can include political instablity, corruption, government policy,
tax policy,etc. Mark and Spencers is one of the reknowned leader in retail industry. Free
trade is one of the positive aspects that includes that they are freely aloud to import
foreign goods and sell at a cheaper price. Brexit, is another impact that could be negative
for the company that could lead to more regulations by the U.k government.
 Economic: This factor mainly refers to the economic performance these factors mainly
includes disposal income, interest rate, disposal income, etc. The company has faced
threat due to increase in retail that has enngaged in similar offerings. The management

has addtress this issue by providing discounts and aid their customer to enjoy their needs
at a much lower prices.
 Social: This aspect represent the social environment of the individual that includes
population, growth rate, age of the distribution, etc (Martins and Nienaber, 2018). One of
the negative social impact the company is currently facing is that they are non-trendy.
This is because, the have existed in the market since 1800s and their brand isn't much
popular among the youth, which might result in decrease in their reputation.
 Technological: These factors simply refer to as innovative that are constantly occurring
in the macro environment. This can further be elaborated as technological incentives,
level of innovations, research and development,etc. Self check-out is one of the
opportunity company has turned into their favour by implementing them.
 Legal: These factors relate to the legislation that are different in every country mainly
dependant on the the local legal factors. The company has been very flexible as they have
conducted training sessions mainly on the health factors and regularly updated them on
the most recent changes on a consistent basis. Still, at one point of time, the brand has
faced legal consequence as they weren't able to protect their employees.
 Environmental: This issue simply refers to factors affecting their business environment.
The management of the company is quiet flexible in protecting their environment . This
can be proved as they have been involved in promoting climatic factors on televisions,
newspaper,etc. In addition to this, they have established them in their own green policcy
and named them as “plan A”.
Task4
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
In this fast paced environment, the company has been regularly involved in undertaking
internal and external analysis that includes their core competencies , their employees, Customers
and Competitors (Rialp-Criado and Komochkova, 2017). This is done, in order to know their
improvement areas and accordingly address them in order to survive themselves in the highly
competatative world. Swot is one of the most effective tool undertaken by the company in order

to identify their Strength, Weakness, Opportunity and Threats. This can detailed below for better
understanding:
STRENGTH WEAKNESS
Marks and Spencers have some unique
strengths that enabled them to become leader
in their industry (Russo and Confente, 2017.).
Some of them are discussed below:
Clear brand image: The company has
positioned itself as a high end product that
mainly target the premium segment mainly in
clothing line that are stylish as well as modern.
Diversity: The company is highly flexible and
encourages diversity and as a result consist of
people of different religions and genders.
Multinational Presence: The company is
engaged in offering their products in bricks,
mortar and well as Online Stores. In context on
U.k, the company operates 300 full lines
stores, 910 stores, 210 owned and 310
franchise stores.
Weakness mainly refers to areas wherein
company's requires improvements. Some of
their weakness can be stated below:
Inability to penetrate Successfully: The
company is present primarily in U.K, Europe
and U.S. Although, they have opened stores in
Asia and Middle east but have been unable to
attract customers in that area.
Customer's Satisfaction:The company's
managers haven't been able to maximize the
satisfaction level of their customers in context
of return policies as well as in store experience.
Thereby, leading to reduction in their brand
loyalty as well brand switching.
OPPORTUNITY THREAT
Oppurtunity mainly refers to be well informed
about the opportunity that are available to the
company in the existing market and evalate the
most favourable opportunity for them . One of
the main opportunity they have utilized is that
fashion is one of the evolving segments in this
dynamic times and witnessed huge demand of
ethnic and traditional wear particularly in Asia.
Threat mainly refers to those factors that are
harmful for growth and sustain their position in
the long term. One of the most detrimental
factor that is company is currently facing is a
higher level of competition from their
immediate competitors that includes Zara and
Uniqlo.


P6 Explain how strengths and weaknesses interrelate with external macro factors.
It is important for the company to have a proper understanding of the inter relation with
their internal as well as external environment (You K., and et. at. 2019). This can be detailed
below:
Basis Strength Weakness
Political This mainly states how the
political factors that enhances
their internal strengths. The
free trade policy has been
favourable for them in
purchasing foreign products at
a cheaper rate and increase
their brand image.
This states how the external
factors can negatively
influences their brand
performance as well as
dominance. This may be
negative for the company and
may even result in higher
dissatisfaction.
Economic The company has been well
informed about their economic
conditions and as result have
been favourable in maintain
their brand reputations.
The company has identified
their improvement areas and
maintain their position by
leading the retail industry.
Social The company has been
witness reduction in their
brand performance due to
becoming non-trendy.
This has enabled the company
to reduce their weakness .
Technological The management has been
flexible and utilized the
advancement of technology in
their favour by incorporating
self checkout system.
This has been favourable to
enhance their image and
sustain their customers.
Legal The legal actions have resulted This has weaknened their

in negative image and decrease
their valuable customers
position and has resulting in
customer's switching to their
competitors.
Environmental Their environmental concerns
has motivated them to adopt
sustainable practices and make
customers communicate that
they care for their society.
This has been aided the society
to contented and care for the
products as well as the natural
environment.
Conclusion
This can be concluded from the above mentioned report, that business environment is
critical for different types of Organization. The classification and scope of different companies
has been detailed above and also different types of structures are explained above. In addition to
this using pestle and swot detail internal and external analysis has been undertaken in order to
sustain their position in long term.
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