Different Types of Organisation and Their Structures and Functions

This article discusses different types of organisations, including private, public, and voluntary organisations. It explores their legal structures and purposes. It also explains the size and scope of organisations like Tesco Plc, BBC, and Cancer Research UK. Additionally, it covers organisation structures, such as hierarchical and flat structures, and the interrelation among various functional areas. Lastly, it delves into the complexities of transnational, international, and global organisation structures.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
1) Different types of organisation................................................................................................3
2) Size and scope of the organisation..........................................................................................6
3) Organisation structures and functions.....................................................................................7
PART 2..........................................................................................................................................10
1) Critical evaluation of various macro and micro factors on business'....................................10
2) SWOT and TOWS analysis of the organisation....................................................................11
3) Interrelation of various macro factors and internal strengths and weaknesses......................12
CONCLUSION .............................................................................................................................15
REFERENCES................................................................................................................................1

INTRODUCTION
A business can be defined as an activity which is undertaken by a person with the aim of
making money. For a business it is important to analyse various factors in the market which can
have influence on their operation. With this they can formulate various strategies (Hilton and
Platt, 2018). The analysis of business environment enables the businesses to determine various
opportunities and threats which are present in the market. In this report different type of
organisation are taken into consideration along with their scope, size, stakeholders etc. The
organisational structures are discussed which facilitate an understanding of various function that
are performed by organisation. Apart from this, various internal factors, macro and micro factors
that have impact on organisation are taken into consideration.
PART 1
1) Different types of organisation
An organisation is an entity which comprises of various people and resources with a aim
of either making profit or welfare of the society or both. It is designed with basic principles of
labour and span of management. The success of any organisation depends upon their structure,
resources, experience, efforts etc. These organisations are classified on the basis of the nature of
business, their size and goals that they want to achieve. Different type organisations are:
Private organisation: These are those organisations which are established and operated
by the individual or group of individuals with the aim of profits. For example: Tesco Plc.
Purpose of Private organisation : The purpose of the organisation of private sector is to
earn profit by providing a wide variety of offering to the customers. For this they innovate their
products and services on consistent basis and bring changes. Similarly the aim of the Tesco is to
earn profits.
Legal structure: The legal structure of profit organisation is:
 Sole Proprietorship: Sole proprietors are those organisations which are owned and
managed by an individual. The investments are made by them due to which the risk
associated with the business has to be borne by them. They do not much legal
implications.
 Company: Company are the organisation in which the funds are invested by the
investors by way of shares. They profits are divided among the shareholders as per their

share holding in the company. Companies are highly regulated business as in such
organisation funds of general public is invested and such organisation are Public Ltd.
while in the private company the funds are privately procured by the organisation.
(Johnson, 2015).
 Partnership: Partnership are the business organisation in which two or more person
come together to start up the business. They mutually decide various terms and
conditions on the basis of which they operate and distribute their profits and losses.
Public organisation: The public organisation is that organisation which are managed and
regulated by government with the aim of the welfare of the society as a whole. For example:
BBC.
Purpose of Public organisation: Such organisation are owned by the government due to
which they aim the welfare of the society but also they aims to earn profits so that funds can be
used for the similar purpose. Similarly BBC is the organisation which aims to earn profits that
can be used for meeting their expenses. Also they aims to create awareness about various
concerns that are prevailing throughout the world.
Legal structure:
 Centre: It is an apex body that controls and manages the entire territory effectively by
delegating powers to various departments so that each and every segment can be taken
into consideration.
 State: They are held responsible for managing a specific territory that has been allocated
to them by the central authority.
 Local: Local government is responsible for managing the local community by way of
organising various programs for the welfare of the community.
Voluntary organisation: These organisations are those voluntarily take up various
actions to serve the society for a cause. In these organisation people take part voluntarily to
contribute to society. For example: Cancer Research UK.
Purpose of Voluntary organisation: Voluntary organisation are not-for-profit and non-
governmental organisation which works with the aim of social welfare and providing better
services to the society. Similarly the cancer research aims social welfare.
Legal structure:

 Charitable Trust: Trust are those organisations that are responsible for managing and
utilising the property and funds so received for a specific purpose. Such as the funds may
be received by the trust for the purpose of providing scholarship so that funds must be
used for the same purpose.
 Unincorporated Association: Such organisations are formed by group of people to
achieving some specific goals that can provide benefit to the (Preuss, 2017).
Basis Profit organisation Non-government
organisation
Not for profit
Meaning These organisations are
established with the
motive of profits by
providing the products and
services as per the needs
and wants of the target
market. Such companies
provides ownership to the
general public by way of
shares. As in these
companies the funds of
general public are
invested, they have to
meet up with various legal
compliances which are
imposed on them by
various regulatory bodies.
These organisation works
independently from
government for various
social concerns. NGO's
are considered to be the
subgroups of various
organisations that includes
various clubs and
associations that provides
services and benefits to
their members. These
organisations are funded
from the donations and are
primarily run by the
volunteers.
Not for profit organisation
are those organisation
whose aim is to dedicate
their efforts to any social
cause with the help of
shared vision. These
organisation utilises their
surplus of the revenues for
such activities instead of
distributing them among
their shareholders and
investors. The important
aspects related to these
organisations are
trustworthiness, honesty,
openness with all those
who has invested in such
organisation (Hillary,
2017).
Scope Such organisations operate
in various locations with
the aim to enhance their
They aim to deal with the
common concerns on a
large scale by involving
They are established for
the welfare of the society
by dealing with various

profitability. various local, national and
international
organisations.
issues prevailing in the
market.
2) Size and scope of the organisation
Tesco Plc: Tesco Plc is a British multinational private company which offers groceries to
the customers. It is considered to be the ninth-largest retailer in UK by revenue.
Business Purpose: Tesco has positioned themselves as a low cost retailer as their aims to cater a
large number of people belonging to different social group.
Size and scope: Tesco has been operating in many countries other than UK which increase their
scope of further expansion. More than 450000 employees are working in the company which
make them a large company.
Products and Services: They provide a wide range of product in different areas such as books,
grocery, clothing, financial services, furniture etc.
Market share and profit share: They have 28.4% share in the market with the revenue of £63,911
million. The company is a large organisation as they have more than 250 employees working
with them.
BBC: British broadcasting company is a public sector organisation whose headquarters
are in London. It is oldest broadcasting company in the world. It is established under the Royal
charter and is funded by the license fee so collected by the government from the public.
Business Purpose: The main aim of company is to educate, inform and entertain people through
various new channels, entertainment programs etc.
Size and scope: They have been operating worldwide with an employee strength of 22401 which
is highest among all the broadcasting companies. BBC can efficiently expand their market in
various countries where they do not have their roots yet.
Products and Services: The products that are offered by them include the broadcasting, radio,
web portals. While services that BBC provides includes television, radio and online.
Market share and profit share: BBC is world’s largest broadcasting company by number of
employees. The net income of the company is £69 million. They received funds for their
operation from the government. BBC is also a large organisation as they have more than 250
employees working with them.

Cancer Research UK: Cancer research is a voluntary organisation which aims to create
awareness among the people for cancer so that the number of deaths can be reduced in UK as
well as at global level.
Business Purpose: The aim of the company is to identify various techniques and medicines that
can help in making people aware and in reducing the number of patients (Hamilton and Webster,
2018).
Size and scope: They are world’s largest independent charity for research on cancer with a large
number of volunteers that includes students, doctors, researcher etc.
Products and Services: Identifies various techniques to deal with cancer, medicines such as
chemotherapy, radio therapy that can cure the disease.
Market share and profit share: The organisation is a voluntary organisation whose aim is social
welfare. The Cancer research is a medium sized organisation as they do not have more than 205
employees. They have various volunteers working with them which are not employees of the
organisation.
Difference between micro, small and medium enterprises
Micro enterprises Small enterprise Medium enterprise
A micro enterprise is the one
which has less than ten
employees and the turnover is
up to €2 million or a total of
balance sheet is up to €2
million
A small enterprise is the one in
which not more than 50
employees are working and
has a turnover of €10 million
or a total of balance sheet is
up to €10 million (Sarsby,
2016).
A medium enterprise is the one
in which less than 250
employee are working and
total of balance sheet is up to
€43 million or the turnover is
up to €50 million .
3) Organisation structures and functions
Organisation structure: Organisation structure is the system that outlines the activities
which are to be undertaken. On the basis of which various roles and responsibilities are delegated
to the people. It also ensures the flow of the information between various level within the

company (Chattopadhyay and Bhawsar, 2017). There are various organisational structure which
are adopted by the businesses as per their nature. Some of such structure are:
 Hierarchical structure: In this type of structure people are organised in a various level
and on the basis of which the authorities are delegated to the people at different
designations. Also it helps in allocating the roles and responsibility, determining the flow
of information etc.
 Flat structure: Flat structure is the one in which all the employees are taken on same
level due to which their can be direct interaction among the employees and the managers.
Tesco follows the hierarchical structure with which they effectively allocate the roles and
responsibilities among all the employees. Also it leads to system operation in the organisation as
the employees know to whom to respond and to follow. With the help of this structure the
organisation can effectively achieve their objectives as they clearly define the roles and
responsibility of the employees on the basis of their capabilities. This facilitates them in
performing their role effectively. Whereas the hierarchical structure divides the role in functions
with the help of which they perform specific tasks such as finance will perform funds related
tasks, production will do manufacturing related tasks etc. This enable them to achieve
specialisation and to avoid redundancy. This facilitate them in achieving the objectives of the
organisation.
Interrelation among various functional areas
For an organisation it is important to successfully manage their functions for which all the
functions of the organisation must be integrated with each other. This facilitate in achieving the

organisational objectives as they will perform towards the common goals of the organisation.
The interrelation among various functions of Tesco is given below: Interrelationship between marketing and sales department: The marketing department
of the organisation adopts various strategies that create awareness among the customers
and then sales department with various efforts such as building relations with them tries
to increase the sales of Tesco. With this their aim of improving the profitability can
effectively be achieved. Also sales department provides findings of the market and
provides to the marketing department which enables them to takes necessary steps to
improve the products (Springer, Cham.Hillary, 2017).
 Interrelationship between marketing and finance department: Marketing department on
the basis of the research determines the features which they have to introduce in their
products and services. On the basis of which they determine the requirement of funds.
Such funds are provided to them by the finance department after procuring from various
sources. This enables the organisation in achieving efficiency in their operation as their
process does not get interrupted.
Complexities of transnational, international and global organisation structures
Global companies are those who have invested in other country but are managed through
centre place. The complexities that they face include formation of strategies for different market
at one place is not possible. Transnational companies are those who has invested in other country
but the powers to take decisions are given to local managers as well. The major complexity
which is generally faced by a transnational organisation structure is of coordination and
integration at different level which has impact on their corporate decision making. While
international businesses are those which are engaged in the activity of importing and exporting,
for which they have to meet up with various documentation compliance. This makes their
process of importing and exporting a complex one analysis (Talamini and et. al., 2013).
The structure of organisation plays important role in achieving goals and objectives as
with the help of hierarchical structure the link can be established among various functions due to
which understanding can be developed. With this interrelation effective communication, proper
utilisation of the resources etc. can be achieved such as with departments decides that who will
perform which activity so that they redundancy of various activities can be reduced. Also the
structure enables flow of roles and responsibilities among different functions due to which Tesco

can achieve their objectives. The flow of communication can also be determined among different
departments and levels which facilitate decision making.
PART 2
1) Critical evaluation of various macro and micro factors on business'
For analysing the impact of various macro factors the organisation such as Tesco can
conduct PESTLE (Zahari and Romli, 2019). With this they can analyse the influence of various
factors on the operations of Tesco. The analysis of these factors is:
Political factors: Political factors are those factors with which the government can
intervene in the business operations. Such factors include various policies which are imposed by
the ruling party.
 Positive Impact: The political conditions in the organisation are stable due to which the
regulations does not changes and this will have positive impact on Tesco as they will not
have to keep on changing their policies.
 Negative Impact: The increase in the import duty has negative impact on Tesco as due
to this the prices of their inventory increases because they import some goods from China
and East Asia. It increases their ultimate cost of operation.
Economic Factors: Economic factors are those factors that have direct impact on the
profitability of the organisation. Such factors include the rate of inflation, income level of the
people, tax rates etc.
 Positive Impact: They have been operating at international level with diversified
products which offers them an opportunity to expand their roots in other countries.
 Negative Impact: The increase in the minimum wage rate in UK has adverse impact on
Tesco as it will increase cost for the company as they have to pay more to the employees.
Social Factors: Social factors are related with the perception, taste and preference of the
consumers, their attitude etc. As all these factors have direct impact on consumers buying
behaviour so it becomes important for the organisation to analyse such factors.
 Positive Impact: In this fast growing world people expect one stop solution with better
delivery options and Tesco provides so which has positive impact on them.

 Negative Impact: But the growing health concerns has negative impact as due to this
they need to focus upon changing demands of the consumers such as introduction of
various organic foods (Guo-rong, 2018).
Technological factors: Technological factors are related with the innovations and the
changes in the techniques used by the organisation for providing better goods to the customers.
 Positive Impact: The adoption of the technique of RFID has positive impact as with the
in-store experience of the customers can be improved. Payment system has made
innovative as the customers can pay as they want.
 Negative Impact: But all this has adverse impact as frequent changes increase the cost
for the company which affects their profitability.
Legal Factors: Various laws and regulations are imposed which has impact on the
organisation such as equality act, employment contract act etc.
 Positive Impact: Effective imposition of various laws and legislations enables them to
improve customers trust (Chaouk, Pagliari and Moxon, 2020).
 Negative Impact: The implication of such acts increases requirement for Tesco due such
as they have to face legal actions in case they fails to meet with those compliances and
this affect their image.
Environmental Factors: Government imposes various environmental acts to protect the
environment. The companies are expected to comply with such issues so that they can do well
for society.
 Positive Impact: Tesco motivates their van drivers to collect the unwanted plastic bags
that contribute to their positive image among the customers.
 Negative Impact: Due to increasing requirement of investment in various environment
friendly techniques such as utilisation of greenhouse gases etc. the cost of operations of
Tesco increases due to this their profitability decreased.
2) SWOT and TOWS analysis of the organisation
For analysing the internal or macro factors the organisations need to be undertaking SWOT
analysis as it helps them to identify various opportunities and threats in relation to their strengths
and weaknesses.
Strengths Weaknesses
 It is leading grocery retailer in UK  To keep themselves price leader in the

due to which their sales, revenue and
market share has been increasing.
 They offer a wide range of diversified
products with which they provide one
stop solution to the customers.
market they follow low cost strategy
which has adverse impact on their
profit margins.
 The credit card liability and high debts
has impact on the profits of Tesco.
Opportunities Threats
 Tesco has opportunity to expand their
online shopping business and the
delivery services to the customers.
 For expanding their market share they
can enter into various strategic
alliances with other existing brands
(Fernandes, 2017).
 The competition from ASDA and
Sainsburry is so stiff that they have to
consistently observe their moves.
 Price war is the other threat that has
direct impact on their pricing policies.
SWOT analysis of ASDA is given below:
Strengths Weaknesses
 ASDA offers a wide variety of the
products and services including
financial services.
 They operates through offline and
online platform which enables them to
cater a large market segment.
 They have limited presence in various
countries in comparison to other
competitors.
Opportunities Threats
 They have opportunity to expand their
market share in the countries where
they do not have their operations.
 Also they can acquire other smaller
companies as with this they can grow
significantly.
 The level of competition is a major
threat.
 Frequent changes of the policies of
government has impact on ASDA.

3) Interrelation of various macro factors and internal strengths and weaknesses
For the organisations it is important to identify the opportunities and threats that are
prevailing in the market and can be grabbed by combing their strengths. It can be done by
understanding the relation among the internal factors and macro factors which are given below:
PESTLE Effect on strengths Effects on Weaknesses
Political As the political conditions are
stable so this is strength for
Tesco as they do not have to
change their strategies
frequently.
But imposition of import duty
has adverse impact as it will
increase their cost, thus it will
make difficult for them to cope
up with the competition.
Economic Tesco can easily expand their
market as they offer a wide
range of products under one
roof to the customers through
strategic partnerships.
But with the increase in the
minimum wage rate their
strategy of low cost producer
will be affected as it will
increase their cost.
Social The increasing concern for
health of the customers has
direct impact on the cost and
profitability of the
organisation.
Due to increasing concern for
health they need to focus upon
various organic products which
will increase their cost.
Technological With the changing needs of the
customers Tesco can
effectively deal as they adopt
technology frequently so that
they can improve the
customer’s satisfaction. Due to
this only they have become the
market leader.
This leads to have impact on
their strategy of low cost of
operations.
Environmental The adoption of various waste
management and environment
They need to improve it further
by improving the online

concerned activities Tesco has
better image which made them
market leader.
shopping business and the
delivery of the products on
time which will help them in
improving low cost strategy
image.
Legal Fulfilment of various laws and
regulations facilitates an
organisation in gaining trust of
the customers. It enables an
organisation in avoiding any
legal proceedings
Due to various services to
customers such as their credit
card liabilities and debts
affects their profitability.

CONCLUSION
It is concluded from the report that the businesses need to determine the purpose of
establishing the organisation as the basis of which the type of organisation can be identified. The
interrelation of various functions facilitates the organisation in achieving their objectives. Also
the size, scope and nature of the business need to be analysed so that the capabilities to expand
can be analysed. It is important for the organisation to analyse the various macro and micro
factors as they have direct influence on the operations of the business. It can be done with the
help of SWOT and PESTLE analysis.

REFERENCES
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