Types of Organisations and their Size and Scope

This report discusses the different types of organisations, their size and scope, and the interrelation between organisational functions. It also covers the advantages and disadvantages of interrelationship.

Business and Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................1
LO1..................................................................................................................................................1
P1. Several types of organisations .............................................................................................1
P2. Scope and Size of different enterprises ................................................................................3
M1. Interrelation of size and scope with business objectives ....................................................4
LO2..................................................................................................................................................7
P3. Relationship between organisational functions ..................................................................7
M2. Advantages and Disadvantages of Interrelationship ..........................................................9
D1. Critical Analysation............................................................................................................10
LO3................................................................................................................................................10
P4. Macro Environmental Impacts............................................................................................10
M3. Appropriate application ....................................................................................................12
LO4................................................................................................................................................13
P5. External and Internal Analysation .....................................................................................13
P6. Interrelation between strengths and weakness with external factors .................................14
M4. Appropriate Application....................................................................................................14
D2. Critical Evaluation..............................................................................................................15
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business Environment is determined as a collection of all the internal and external forces
like employees, demand and supply, expectations and needs of customers, suppliers, government
activities, management, technology and innovation, clients, market trends, economic changes,
social trends, etc. It is important for an organisation to pay attention to its business environment
in order to run in an effective manner (Anolfatto and MacDonald, 2019). This report is based
upon United Kingdom based enterprise named, ASDA Stores Ltd, which is a retail organisation
that deals with groceries, home appliances, clothing, mobile phones, financial services and so on.
This report covers various kinds of enterprises and their purposes, size, legal structure,
scope, objectives, goods and services offered by them and organisational structure. It also covers
interrelationship between organisational functions and their relation with structure and
objectives. Further it covers negative and positive impact of macro environment upon business
activities and operations. Further, it covers external and internal analysation of ASDA Stores Ltd
in order to identify the strengths, weaknesses, opportunities and threats of this enterprise by
using SWOT analysis. Also, interrelation of external factors with company's strengths and
weaknesses are also covered in this report.
LO1
P1. Several types of organisations
There are various kinds of business enterprises in market that helps in generating large
amount of revenue for economic growth. Each of these organisations has various purposes and
legal structure on which basis they carry on their business activities. They are categorised as
public, voluntary and private enterprises which are elaborated in detail as follows-
Private Organisation- It is determined as a corporation, association, partnership, individual,
corporation and partnership which is not a public organisation and it carry on business activities
with a purpose of attaining profits (Birru and et. al., 2019). Here, the example of private
organisation is ASDA Stores Ltd, which is a retail business entity and deals with groceries, home
appliances, financial services, and so on.
Purpose- The simple purpose of private organisation is to earn profits by providing quality
goods and services. Purpose of ASDA is to earn high amount of profits by providing quality
customer service.
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Legal Structure- ASDA is private limited company under company's act, 2013 and is listed in
London Stock Exchange. The legal structure of private companies are elaborated as follows-
Sole Proprietorship- In this kind of business entity, a solo person is responsible for
operating all the activities of a business and is the solo owner of the business organisation.
Partnership- In this business entity, an agreement takes place among two or more people
who works together to achieve overall objectives of a business (Crane and et. al., 2019).
Limited Liability Companies- In these kind of business organisations, there are various
owners and the profit which is generated is distributed among them.
Public Organisation- These business organisations are owned by government and its business
operations are operated by the government. Here, the example taken for public organisation is
National Health Service that provides health care services across England, Whales and Scotland.
Purpose- Its purpose is to provide services to society and public. The purpose of National Health
Service is to provide health care services to the public.
Legal Structure- Its legal structure is that it is listed in UK based medical and health
organisations. Public Organisation's legal structure is elaborated as follows-
State Government- In this, all activities and operations of a business are operated by
State Government.
Central Government- In this, all operations and activities related to business are operated
by Central Government.
Local Government- In this all the business activities, operations and processes are
operated and controlled by nation itself or government of municipality.
Voluntary Organisation- These business entities are operated and taken into action for a
particular social cause or problem. These enterprises are also known as the non profit
organisations as these entities do not work for achieving profits. The example taken for such
organisation is Wellcome Trust that is an enterprise based on UK which carry on its activities for
improving animal and human health (Cyphert and et. al., 2019).
Purpose- The main purpose of voluntary organisation is to work for society and people living
there. The basic aim of Wellcome Trust is to provide health and safety to needy people and
animals.
Legal Structure- It is charitable company limited by guarantee under the Company's Act, 2013.
Legal structure of Voluntary Enterprises is elaborated as follows-
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Charitable company limited by guarantee: This kind of voluntary organisation has
limited liability that is registered under company house.
Trust: These enterprises are operated by trust deed and these organisations have not any
kind of statutory framework (Dutta and Dutta, 2019).
P2. Scope and Size of different enterprises
Different kinds of organisations have different sizes and scope which differentiate them
from each other. The size and scope of Private, Public and Voluntary business enterprises are
elaborated as follows-
Basis ASDA National Health
Service
Wellcome Trust
Size ASDA is a large
business global
organisation with a
number of employees
around 165,000. It
generates around
£21,666 million
revenue.
This public sector
enterprise is a global
enterprise which
operates on large scale
and has around
106,430 doctors,
21,597
midwives,technical
and therapeutic staff
of 19,772 , 285,893
nurses and health
visitors 9,974 senior
managers and 21,139
managers
This enterprise
operates its business
activities on a medium
scale and it is
transnational
enterprise. It has
around 20157
employees working
under it.
Scope It has a wide scope as
it is not only limited to
groceries, and home
appliances but it also
deals with financial
It has a broad scope
due to increase in
medicines and medical
technology. It is
utilising innovative
It has a wide scope as
this voluntary business
entity is using latest
innovative tools and
techniques for
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services, which has
large demand in
market.
modes to treat health
of people.
improving the health
of animals and human.
M1. Interrelation of size and scope with business objectives
All the business entities are formed up with a purpose to achieve some objectives such as
to provide high quality customer service. Each enterprise has different objectives and on that
basic it produce goods and services. The organisational structure, objectives and products and
services of different enterprises are elaborated as follows-
ASDA
ASDA is an retail organisation which is based on UK and it provides its services such as
groceries, clothing, home appliances, mobile phones, financial services, and so on.
Organisational Structure
The organisational structure followed by ASDA is functional and hierarchical type and it
has communal culture (Gaganis, Pasiouras and Voulgari, 2019). In this organisational structure,
there are different groups who work separately and the lower part of enterprise do not involve in
any kind of decisions. Below is the organisational chart of ASDA-
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Products and Services
ASDA deals with large number of products services such as home appliances, opticians,
groceries, travel insurance, home insurance, loans, personalised gifts, mobile, pharmacy, gift
cards, and so on (Huang, Ran and Liu, 2019).
Business Objectives
The business objective of ASDA is to generate revenue which is more than its expenses
and increase profitability by providing quality goods and services to its customers.
National Health Service
National Health Service is a public organisation which provides health services across
Whales, Scotland and England.
Organisational Structure
The organisational structure of NHS is divided into four groups, first is department of
health which is responsible to fund the healthcare in UK, second is NHS England, which is an
umbrella body that oversees health care, third is CCG which is responsible for local area
healthcare, and fourth is NHS Foundation Trust provide services like ambulance, hospital,
mental health, and so on (Structure of the NHS, 2019). The organisational structure of this
organisation is as follows-
5

Business objectives
The basic business objective of NHS is to make sure that people are healthy and there is
reduction in health inequalities of people. It aims to respect individual patient's confidentiality
and to provide accessible information about performance, treatment and services.
Products and Services
It provides various services such as GPS, Dentists, Pharmacies, sexual health services,
opticians, pharmacies, emergency and urgent care, mental health services and hospitals (NHS
services, 2019).
Wellcome Trust
This is a research and charity based business organisation that is situated in London.
England and work for improving animal and human health.
Organisational Structure
The organisational structure of Wellcome Trust includes board of directors, deputy
directors, Trustees, Research governance, Education Faculty, Estates, and so on, that work
together to improve health of needy people and animal (Kalitanyi, 2019). Its organisational chart
is elaborated as follows-
6

Business objectives
This voluntary organisation aims to improve the health of people and animals by helping
them and are committed towards biggest challenges faced by the world today.
Products and Services
There are various services which are provided by this enterprise such as mental health
treatment, epidemics, research issues, vaccines, snakebites, and so on (Klepac and Berg, 2019).
LO2
P3. Relationship between organisational functions
There are different types of functions are performed by management which helps to maintain the
profitability by achieve business objectives. The description of organisation structure are as
follows:
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Network structure: This structure associated with internal and external management
which helps to make profits. It maintain relationship with all company and distributor in order to
run their business successfully (Lu, Wang and Xu, 2019). Moreover, it is decentralised and
flexible structure which coordinate with all department to complete the objectives.
Horizontal structure: This is impressive structure which helps to eliminate the middle
management in order to sharing and resolving problems. In this, employees feel freedom to
transact the information and get solution of their issues.
Matrix structure: This refers as traditional method where people communicate in
hierarchy way to sole the problems. In this, employees are of similar skills works collectively
and attain common goals.
Illustration 1: Matrix organization structure, 2019
Source: Matrix organzation structure, 2019
Matrix organisational structure is adopted by ASDA organisation which helps employees
to share the information in a grid structure. It benefits to understand the problems and get
solution in order to attain the business common objectives (Lu, Wang and Xu, 2019). Knowledge
and skills of team members also can be enhance with this structure which gives advantage to
business organisation to complete the target within fixed time.
Interrelation between functional units
Marketing with sale: Both marketing and sale function are interrelated such as to
increase the sale of business marketing function is playing interesting role as it attracts the
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people and change their mind to wards products which helps to perform the sale function. It is
also related with structure and objective of ASDA company such as with the help of matrix
structure management decide the goals and use marketing function to provide information about
products and services which helps to increase the business sale as resulted accomplished of
business objectives (Quinlan and et. al., 2019).
Illustration 2: Organisational chart, 2019)
(Source: Organisational chart, 2019)
HRM with Finance: Finance is the need of every business which helps to attain the
business objectives. This function is interrelated with Matrix structure as it provides finance to
employees for completing their targets by getting resources (Rofiq and Pramono, 2019). In
context to ASDA, HRM department get funds from finance department in order to conduct the
interview programme and other activities as resulted accomplishment of business goals. With the
helps of this HRM department can hire skilled and experienced candidates which is required
within organisation.
M2. Advantages and Disadvantages of Interrelationship
The functions of business organisation such as HRM, Marketing and Finance are interrelated that
gives advantages to achieve the business goals effectively. For instance, marketing department
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helps to increase the selling function of ASDA by using marketing activities which helps to
attracts the people more and sale them products. On the other hand, Finance function understand
the requirement of HRM department and provide finance to run this function which helps to
complete the targets (Sewchurran, Dekker and McDonogh, 2019). Disadvantages is, it become
difficult for organisation to maintain all functions at one time and perform well. It impacts on
Matrix structure, as employees cannot indulge in all business activities at one time which can
reduce the productivity and profitability.
D1. Critical Analysation
There are certain complexities of different organisational structures and the
interrelationship of different structure of a business enterprise within its business operations. The
complexity faced in network structure is that as it is a fluid structure, it can develop more more
relations within a business entity. The complexity of horizontal organisational structure is that by
using this, management can loose control, growth can hinder and it can also reduce the
employees retention. This structure leads to low motivation among workers which can create
confusion among workers regarding their job roles. The complexity which lies with matrix
structure is that it can enhance the complexity in command chain when workers are assigned
towards noth project managers and functional managers. Moreover, blurred authority in this can
also increase conflicts among workers and reduction in decision making (Shukla and Pattnaik,
2019).
LO3
P4. Macro Environmental Impacts
Macro environmental factors are determined as the external forces that has an impact
upon overall business operations and activities. ASDA is a British based retail organisation and it
is affected by these external forces. These external factors has both positive and negative impact
upon overall business operations. The impact of these factors upon operations and functioning of
ASDA can be understandable by using PESTLE analysis as follows-
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PESTLE Analysis- This framework helps in identifying the affect of external factors and forces
upon business organisations. PESTLE analysation of ASDA is done as follows-
Political Factors- It is one of the important factor of the organisation which consists of trade
tariffs, tax policies, fiscal, price policy, and so on. These factors has both positive and negative
impact upon ASDA.
Positive Impact- The political condition of UK is stable due to which ASDA is not
required to make changes in its business activities and operations (Skrynnikova and Grigorieva,
2019).
Negative Impact- Brexit had created certain uncertainties for the retail organisations like
ASDA which had reduced its profitability to a large extent.
Economical Factors- These factors includes inflation rate, economic growth rate, foreign
exchange rate, deflation, and so on that has affect upon overall business activities.
Positive Impact- UK is considered as a 5th largest economy in the world which has
positive impact upon profitability and sales of this organisation. Moreover, it has resulted in
increase in purchasing power of the people by which people are purchasing more.
Negative Impact- ASDA is facing challenges since 2017 as the prices in its shops rose at
very fast rates as weak pound increased the price of importing goods to UK.
Social Factors- It includes the changes in fashion and trends of customers, culture, value, tastes,
habits, and so on.
Positive Impact- This enterprise had recently joined the local authority which is
providing emergency welfare towards some of the poorest people of the country. This is having
positive impact upon sales and profitability of this organisation as it is enhancing its brand image
in society (ASDA welfare cards to be given to Birmigham's poor, 2019).
Negative Impact- Due to increase in ageing population, this enterprise had to appoint old
workforce in its business operations which is resulting in decreased business performance.
Technological Factors- United Kingdom is the advanced country which helps its business
organisations to effectively utilise latest innovation and technology.
Positive Impact- Technological factors has positive impact upon business operations of
ASDA as with the help of innovative ideas, this organisation is developing latest innovative
products and services in the market.
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Negative Impact- The negative impact of technological factors upon ASDA is that it is
increasing the overall cost of an organisation.
Legal Factors- This includes the impact of legal laws, regulations and acts upon the
organisational functions and operations.
Positive Impact- The positive impact of these factors upon an enterprise is that it follows
all the legal laws and regulations such as Health and Safety Act, anti discrimination act, and so
on. By which its workers are happy which results in their performance enhancement (Sousa and
Rocha, 2019).
Negative Impact- As per the minimum wages act, ASDA have to pay minimum wages to
its workers otherwise they will not wok with this firm.
Environmental Factors- It consists of global changes, weather and climatic changes, rules,
regulation of environment, and so on.
Positive Impact- Due to environmental awareness, this organisation had reduced the
weight of packaging by 27%, which is a great initiative. Its aim is to make all its packages
recyclable in coming 2025.
Negative Impact- As the environmental awareness has been increased among people, this
organisation has to reduce its packaging which is having negative impact upon ASDA. As most
of the products of this enterprise required packaging otherwise its food items would not be safe
or have bad taste.
M3. Appropriate application
All the external factors of environment has large impact upon overall functioning,
operations and activities of ASDA. The political stability of UK has positive impact upon this
organisation and Brexit had resulted in creation of uncertainties within an enterprise. Similarly,
economic growth has positive impact upon this enterprise as it enhanced its purchasing power
and high rate of taxation has negatively affected the organisation. It is providing social welfare
benefits to poor people which is enhancing its goodwill and brand image but due to increase in
ageing population, it had to appoint them in its workforce which is decreasing its population.
Innovative techniques has positive impact upon this enterprise but at the same time it is
increasing company's cost of production (Trad and Kalpić, 2019). It follows all the legal laws but
as per minimum wages act, it had to pay minimum wages to its workforce. It had to reduced its
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packaging due to which its food items can destroyed but it is working on it by recycling its
packages.
LO4
P5. External and Internal Analysation
The external and internal factors has large impact overall operations and functioning of a
business enterprise. These factors can be analysed by using SWOT analysis which will highlight
the impact of internal factors, such as, strengths and weaknesses and external factors such as
opportunities and threats. ASDA can use this analysation in order to identify its competitive
advantage. It is elaborated as follows-
Strengths Weaknesses
 The main strength of this enterprise is
that it has a strong brand recognition all
over the world which had increased its
sales and profitability due to country's
strong political stability (Xu and
Koivumäki, 2019).
 This enterprise uses latest innovative
technologies while producing its
products and services.
 It is providing social service to people
such as emergency welfare services by
joining the local authority.
 This enterprise package its food
products which have negative impact
upon environment.
 Due to recession, this enterprise is
facing reduction in its profitability and
sales.
 As per the minimum wages act, this
enterprise has to provide minimum
wages to its workforce which is
slowing down its profitability.
Opportunities Threats
 This enterprise can indulge itself in
online marketing at global level.
 It has large opportunities for growth in
abroad countries due to its high brand
recognition.
 ASDA faces tough competition from
the small growing retailers such as Lidl
and Aldi.
 Price cut off by competitors like
TESCO is also considered threat to this
organisation (Zhou and Wen, 2019).
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P6. Interrelation between strengths and weakness with external factors
Strengths and weakness of an organisation helps the firm in identifying its competitve
advantage and scope of improvement. The manner in which an enterprise is performing largely
dependent upon its external forces which either can be proved to be company's strength or
weakness or both (Anolfatto and MacDonald, 2019). The interrelation of strengths and
weaknesses of ASDA with macro environmental factors are elaborated as follows-
Political: The political stability of UK is company's strength as it has enhanced it facilitates
company's policies and procedures in a smooth manner. This helped the organisation to run its
business activities more smoothly due to simple policies and procedures of government.
Economical: Due to recession, this organisation is facing low profitability and sales which is
negative for the overall processing of the company. This is considered as company's weakness as
it act as a barrier for this company to grow and enhance.
Social: ASDA is working for the society by joining its hands with local authority of UK and by
providing emergency welfare services to local people which helps in making this brand as a
recognisable brand and enhanced its goodwill at the same time.
Technological: This factor had acted as a strength for this organisation as this enterprise is
producing its goods and services by using innovative methods and techniques which has
benefited this organisation. This helped in satisfying needs and requirements of its customers and
in facing the competition in market.
Environmental: Due to increase in environmental awareness in the society, people prefer those
products which do not cause any kind of harm to the environment. This enterprise is producing
packaged food products and this packaging is harming the environment. It is considered as an
weakness for this organisation as it is not able to meet environmental factor requirements.
Legal: This factor has acted as both strengths and weakness for ASDA. As this business entity is
following legal acts such as equality act, anti discrimination act, health and safety act, and so on,
which is in favour of this company. On the other hand, this enterprise has to pay minimum wages
to its workers which is reducing increasing company's cost (Birru and et. al., 2019).
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M4. Appropriate Application
SWOT analysation is done to identify the internal and external factors which can affect
an organisation and to determine the competitive advantage of a business enterprise. These
forces has largely affected the decision making of ASDA. This enterprise has strong brand image
due to which it becomes easy for this enterprise to take quick decisions such as introducing a
new product. Due to its frequent use of technology, it can take quick innovative decisions such as
launching a mobile friendly application. Its social service to people also helps this enterprise in
taking effective decisions (Crane and et. al., 2019). As this enterprise provides packaged food
which is causing harm to environment, it is having negative impact upon company's decision
making as it becomes difficult for this organisation as its food items, if not packed can get
destroyed. Price cut off by its competitor TESCO also have resulted in delay in decision making
by ASDA as it has to keep in mind pricing strategy of its competitors.
D2. Critical Evaluation
Macro and micro environment both has large impact upon decision making and business
objectives of an organisation as a whole. The political stability of United Kingdom helps ASDA
to achieve its business objectives and facilitates in decision making procedure. Due to company's
strong brand recognition it is able to achieve high amount of profitability. Technological factors
helps the business in attaining its goals as it helps in producing innovative goods and services.
As this enterprise follows all the legal laws and regulations, it helps it in smoothly running its
business activities (Cyphert and et. al., 2019). Due to its social welfare practices, this enterprise
is able to achieve business goals and objectives by enhancing its goodwill.
CONCLUSION
From the above elaborated report, it has been concluded that the environment of a
business in which it operates is an important aspect which must be considered for the overall
growth of an organisation. There are different purposes and kinds of business entities like public,
private and voluntary organisations. The interrelationship between these functions can helps in
developing favourable impact upon the overall functioning of company as each of these
functions are related to each other. PESTLE analysation helps an organisation to determine the
way in which macro environmental factors can affect the overall functioning of a business.
Moreover, SWOT analysation helps an enterprise to understand its weakness and threats that
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hinder its growth and the strengths and opportunities which it can use to earn profits. The
interrelation between the internal as well as external forces is significant to identify both positive
as well as negative influence upon an organisation.
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