Organizational Structure Analysis and PESTLE Framework

This assignment requires students to analyze different types of organizational structures, including divisional and matrix structures. It also involves applying the PESTLE framework to understand the business environment of Marks and Spencer. The analysis provides insights into the strengths and weaknesses of each structure and how they can be applied in real-world scenarios.

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Three different types of organizations their size, scope and structure....................................1
TASK 2............................................................................................................................................4
1. Organizations structures..........................................................................................................4
2. Relationship between different organizational functions and departments............................6
TASK 3............................................................................................................................................7
PESTLE Analysis .......................................................................................................................7
TASK 4..........................................................................................................................................10
SWOT Analyses........................................................................................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business is the activity of increasing profit and making money by buying or producing
and selling goods. Partnership, corporation and sole proprietorship are the types of business that
run by individual or group of owners. External and internal environment influence on
organization business and other functions effectively (Prajogo, 2016). Both these factors cannot
be control by any company they affect their work performance, growth, profitability and
survival. The present report will discuss about three different types of organizations and their
size, scope and structure. Moreover, their advantages and disadvantages as well and explain in
which sector they are work.
Furthermore, this study clarifies two types of company’s structures that are the clients of
YORKSHIRE bank. It will also justify the relationship between the various organizational
departments and functions. This study explains macro environmental negative and positive
influence on business operations. This report discussed SWOT analysis to identify strength,
weakness and other things about specific business and impact of micro factors upon decision
making function.
TASK 1
1. Different types of organizations their size, scope and structure
Private organization: Private Company is a non-governmental organization that owned
by many shareholders and other firm members with the aim of making money. Marks and
Spencer is one of the most successful private industry that established there headquarter in
Westminster, London (Wilson and Beard, 2014). M&S is a British multinational retailer that are
specializes in selling home products, clothing and luxury food goods.
Size, scope and legal structure-
They supply their services in many countries and satisfied their consumers by offer good
quality products. Michael Marks and Thomas Spencer both run their business effectively for
increasing profitability and productivity. They established their stores in many locations across
the North West of England. They expand their business into international level which make them
more popular (Beebe and Hemphill, 2017). There are number of employees who give their
effective work performance. M&S is private limited company that run their business privately
and liability within members of their firm. They want to stabilize their business functions and
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spread their branches in all over the world is one of their biggest objective. Organization operate
their business at primary sector that helps them for increasing profits.
Advantages-
Marks and Spencer is the private organization that is very beneficial for them because
they are the owner of each profit (Toms and Zhang, 2016). They are legally entity with the firm
finances which are separate from its owner's finances. The biggest advantage of this company is
that they have legal reliable precedent to direct and guide their stakeholders and managers or
director.
Disadvantages-
The most difficult thing for M&S as Private Limited Company is that they are
responsible for any loss in their business. Set up business at other place is more expensive than
partnership or sole trader.
Public organization: Public organization are operated and owned by the government
which are existing to provide better services for their citizens. TESCO is a Public Limited
Company which is held by thousands of people. It is a British international groceries and general
merchandise retailer that build its headquarter in Hertfordshire, England, UK. Company is placed
at the third largest retailer position in the world by measuring their gross revenues (Reilly, 2015).
TESCO operate their business at tertiary sector which is segment of economy that give services
to its customers.
Size, scope and Legal structure-
TESCO is one of the largest British organization within including number of employees
who support business by hard work performances. They expand their brand with operating in 11
other countries in the world. They diversified into such areas like retailing of books, electronic,
clothing, furniture and internal services. They owned more than 800 shops which make them
more successful and powerful than its competitors. TESCO want to be more successful in future
and their mission is to offer the best services and products to consumers (Dawson and Henley,
2015). The company is a public limited one which means that it is registered under Companies
Act 1980 with having statutory minimum capital requirement and shares offered to public
subjected to conditions of only limited liabilities.
Advantages-
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TESCO have many partners in their business that helps them to manage their financial
conditions and contribute at competitive environment. Raising share capital for new and existing
investor is the better access. Their shareholders have ability to buy and sell their shares, it they
are quoted on a banal exchange.
Disadvantages-
Disadvantage of TESCO is that they need more financial budget for establishing and
maintain business activity. Thus, if their managers and directors are fail to meet with their legal
obligations that create conflict (Prajogo, 2016). They held personally liable for organization's
debts. They need to distribute their income profit to stockholders or shareholders which are more
taxable.
Voluntary organization: Voluntary organization is a union or group of individual who
enter on the base of agreement, basically as volunteers to company. They perform vital functions
for its associate through network of various institutions (Butler and Wilson, 2015.). Cancer
research UK is the voluntary company that provide social service to needy and poor peoples.
They operate their business through charity and organizing health and social care events where
they aware people about health issue and guide them who to stay healthy forever.
Size, scope and Legal structure-
In the organization 3,964 workers are performing and supporting old age people through
give proper treatment. The major part of their services is that they help cancer patients who
survive with this disease since for so long. Cancer research UK give their facilities in many
countries with the aim is to reduce number of deaths from cancer. They raise money through
legacies, donations, events, corporate partnership, community fundraising etc. They run their
business by making partnership with two other organizations such as, UK department of health
and Welcome trust (Wicker and et.al., 2014). The main objective of this charitable company is to
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raise the awareness of disease and influencing public policy and their motto is to beat cancer
with together. Firm legal structure is based on local or central government that help them to
serve the best health care service in many areas.
Advantages-
Cancer research UK is non-profitable organization which is one of their biggest
advantage. Through their facilities they attract more people toward them which help firm by
giving money that they use for cancer patient. They do not need to pay income tax charges on
their services.
Disadvantages-
Organization trustees and members are not permit to receive profit and financial benefits
form charity which they operate unless this was approved by government written document of
OSCR or charity.
Sole trader: Sarah' Bookkeeping services is a successful established Bookkeeping
organization that build up a desirable reputation. They offer bookkeeping suggestion for small
and large businesses and individuals.
Advantage and disadvantage-
Sarah' Bookkeeping services give their solution which make them more popular than the
other organizations. Setting business as sole trader is also the biggest advantage for them. They
get to keep all profits after paying tax on business.
But on the other side sole trader have more unlimited liability for their business which is
one of the point of disadvantages. Thus, to take break is very harder form them that make things
difficult.
Partnerships organization: Dentistry, hospitality, legal service and accounting are
Partnership Company. They run their business on the bases of agreements where both parties are
agreed to cooperate to share their funds and mutual interests.
Advantage and disadvantage-
In the organization two or more people give their better advice which make business
successful. Partnership makes the way easy to build up firm and start it with effective costs. But
these types of company need to share profit with their partners. Thus, if there partner leave the
business firm will probably have to value all partnership resources that be costly for them.
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TASK 2
1. Organizations structures
TESCO organization structure
TESCOis the private organization that run their business successful with the support of
their effective workforce. They sell clothes, luxury food items and home goods in good quality
that attract people. M&S is large firm that manage the entire operations with the help of their
different management departments (Lee, Kozlenkova and Palmatier, 2015). Thus, to operate
business across the world they use Divisional organization structure in its work that managed
their other functions and activity. Company has many various divisions including transportation,
marketing and manufacturing goods etc. that they need to manage for increasing profit. By using
this structure firm organize the activities of their business around market, geographical, goods
and service groups.
This process offers great opportunity for industry that make flexibility in their work with
many other departments. It allows each divisions to operate its company with two or more
individual by reporting to CEO and upper management staff. Through this connection each
section link together by sharing all the information about business function and other activity.
This will make their bond stronger than the other organizations. Company focuses on entire
commercial consumers and their goods development, accounting and marketing, production and
sales workers that develop M&S business more and more. The biggest advantage of Divisional
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Illustration 1: Divisional organizational structure
(Source: Divisional organizational structure, 2017)

organization structure is that firm perform its effective work performance for dealing in
competitive environment with its competitors.
TESCO organization structure
TESCO PLC is a multinational grocery and general merchandise retailer organization
that have many levels of managements (Church and Waclawski, 2017). Firm has different shops
in countries across Europe and Asia which they need to operate effectively for maximize profit
margin.
Thus, by using Matrix organization structure they manage their business easily because it
allows employees for reporting to bosses depending on condition and tasks. Regional manager,
store manager, food and personnel manager give their efforts for making TESCO more
successful, they provide direction to their workers about the role and responsibility of jobs.
According to matrix structure, staff report to two or more superior on the base of situation which
is important for company managers and other store manager (Savrul, Incekara and Sener, 2014).
Through passing information the entire departments of firm make their relationship much
stronger which they use in competitive environment. The whole reporting process resolve
conflict under staff members and in workplace. Therefore, using Matrix function TESCO shops
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Illustration 2: Matrix Structure
(Source: Matrix organizational structure, 2018)

manager describe employees about their roles and duties which they need to perform effectively
for develop growth and success.
2. Relationship between different organizational functions and departments
TESCO is the largest retailer organization in Westminster, London that specialize in
selling clothes and other products which make them popular in market. Firm supply their goods
to consumers by working with many employees and build trust among people through deliver
good quality things. In the organization have many functions that are related with their different
departments who perform their role for achieving objectives and goals of M&S.
Research and manufacturing department- Thus, to attract consumer more and more firm need
to design attractive products and give their packaging different look which is one of the best
advantage for them (Worley and Doolen, 2016). This process has been completed with the help
of research and manufacturing department. In the organization this division conduct market
investigation that help to identify client’s preferences and current trends demands which support
company for designing better goods.
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Marketing and selling department- Promotion is the best function which grab the
attention of people and attract them towards M&S products. Their marketing department help in
this process by creating new and different advertising and promotional strategies and plans
which them business more popular than the others (Kotler and Mindak, 2018). This division will
research consumer need and then develop goods promotion strategy to satisfy consumer demand
and requirement. On the other side sale's department make plans for selling M&S products
within in affordable prices that make their clients happy and satisfied. They create selling
strategy which is very beneficial for business growth and success. Sales department give their
advice to the organization marketing department on the bases of customers feedback which help
them to focuses on their needs that drives sales and other functions effectively.
Thus, TESCO each department will play their hard working performance for achieving
goals and objective of business. All divisions connect with each other and give their support for
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Illustration 3: Marks and Spencer organizational chart
(Source: Marks and Spencer Group, 2017)

increasing profitability and productivity that will make them more powerful and stronger than its
competitions in market. In company structure have different levels which also have their
different style of working that make them unique.
TASK 3
PESTLE Analysis
PESTLE is the best tool that use by different organizations to monitor and analyze macro
environment factors that have influence on their business (Zalengera and et.al., 2014). TESCO
use this technique for identify external marketing conditions which impact on its productivity
and other functions as well. This will help them to understand market growth, business potential
and position etc. that affect firm activities on negative and positive both sides.
 Political factors: Political factors are those elements that are run, made and changed by
the government. These factor reflect the level of expectation by the government in
various business and trades. According to this section government make changes in laws
and create new rules that impact on industry business functions. Due to free trade policy
organization led to substantial reduction in sourcing prices which is very beneficial for
them. But on the other side political factors influence on TESCO business negatively that
decrease their profitability and productivity. Thus, working in retail sector they face huge
losses by changing local government taxation laws.
 Economic factors: Economic factor are determining of economy's action that directly
affect retail industry for long term. Rising inflation rate of economy will impact company
prices their services and products. It will also influence the purchasing power of
customers and change needs for economy. Foreign exchange rates and economic growth
are the factors that impact M&S business. Develop the growth of economy is one of the
biggest opportunity for organization that maximize profit, but sudden changes in fashion
also change people interest that negatively affect firm productivity.
 Social factors: Social factors are fundamental that cannot be control but identify impact
on organization and marketing strategies. Thus, by analyze trends in social factor industry
make their products and deliver good quality services according to it. Satisfied consumers
by offer goods as accordingly with their needs organization increase profit more and
more (Castaño, Méndez and Galindo, 2015). But is they don't research market current
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trend firm cannot get the actual situations and social latest trends which affects its
business and decrease profitability.
 Technological factors: Continual evolution in technology help organization operate
business effectively in competitive market like retail as contemporary IT system that help
to increase productivity and lower prices. TESCO make partnership with Sure Cloud,
which they are using to manage and automate its internal and external regulatory
supervision and compliance procedure. Implementing new technologies in business
functions is much expensive that directly impact on their profitability and financial
budgets.
 Legal factors: Like the other companies, M&S has also dealing with legal problems that
influence on their business growth and success. According to BBC news TESCO was
fined 1 Million GBP over asbestos risk in which they failed to save its staff members and
consumers from risk of that particular things that highly impact on its profitability and
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Illustration 4: PESTLE Analysis
(Source: PESTLE Analysis Framework, 2014)

productivity. Changes in laws need to follow by organization for running business
effectively which maximize their profit margin.
 Environmental factors: TESCOis one of the most sustainable brand in market. They
source its fresh milk and other foods products form RSPCA that assured by dairy farms.
This logo reflect brand image and assure people about the product which is clearly made
by focuses on creating health environment (Abdel-Shafy and Mansour, 2016). They make
environmental friendly goods which are quite popular with the consumers in current trend
where climate get changed at sudden conditions. Thus, if they do not manufacture eco-
friendly products which line with trends firm loss its customers attention that influence
on income sources.
Critical evaluation
Thus, after doing PESTLE analyses M&S make their decision and make plans which help
to increase profitability and productivity. Political, economic, social, environmental, technology
and legal factors impact on business objectives and decision making process. Changes in
government laws and policies and consumers preference according to the latest trends influence
on organization other functions. Thus, to improve and remove all these impacts TESCOmake
change in their structure and management decision making process. They take decisions
according to the situations and conditions of environment.
TASK 4
SWOT Analyses
Strength-
Align their products and offer services link with the latest trends is one of the biggest
advantage for Marks and Spencer. Firm use many technologies that strong its business more than
the others. They have effective workforce which highly perform their work in workplace for
increasing profitability and productivity (Kolk, 2016). They strongly focus on enhancing
consumer experience which implementing new plans and strategies. Identify current trends in
market M&S manufacturing department take their decision according to consumers needs and
requirement that give them proper satisfaction. The entire procedure helps to gain business
objectives and goals of Marks and Spencer.
Weakness-
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Low resource and financial budget they do not perform their work effectively in market
which impact on their income sources. M&S is much dependent on UK market that make them
vulnerable to market situations in local country. Low budget and assets also impact on
TESCOdecision making activity which is directly connected with its business objectives.
Opportunity-
Thus, to increase profit TESCOmodify their business structure and functions that is one
of the biggest opportunity for them. They make their plans to invest their money in some other
country market that helps to raise their position better than the others. Through identify current
business environment M&S take their decisions for changes as per according to the situations.
Modifications helps organization for gain their business goals which make its reputation in
market.
Threat-
Sudden changes in trends impact on their business performance that is one of the biggest
threat for Marks and Spencer. The thing is entering new organization in marketplace influence
on firm policies and other activities. Thus, to analyze competitive environment in business M&S
make different decision that remove their threat and increase profit margin.
SWOT Interrelationship with external macro factors
Organization identify its consumers’ needs and make product according to their
preference is the very beneficial for Firm. Using new technologies for developing good quality
goods help company for beating its competitors in marketplace (Cai and Yang, 2014). This entire
process increase their business growth and profit more and more. M&S follow all the
government rules and policies that support in trading process which they supply across the
world. They make environmental friendly products which safe the environment and make it
healthy. Organization modify their business rules and strategies according to political factor that
influence on business essentially and effectively. TESCO reshape its structure and give
employees better facilities regarding to their job is the best technique for retaining them for
longer time period. Thus, conduct SWOT analyze company make their decision on the bases of
their weakness and take decision for overcome within it.
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CONCLUSION
The present study conclude the business environment that involve external and internal
environment factors which influence on organization business functions. This report explains
different types of organizational structure that helps to identify each levels role and responsibility
in work place (Menychtas and et.al., 2014). Thus, by using various organization model company
manage their work and employees performance effectively that increase business profitability
and productivity. By using PESTLE and SWOT tools firm identify their strength and weakness
and make plans to strengthen their production more and more than the others. In this report has
been concluded that company modify their business structure and functions by analyze Political,
social and other factors.
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