Business and the Business Environment - Organisational Analysis

This detailed report explores different types of organizations, their structures, and functions. It analyzes the impact of macro environment on business operations using Toyota as a case study. SWOT and PESTLE analyses are applied to understand strengths, weaknesses, opportunities, and threats.

Business and the Business Environment
1

Contents
Introduction................................................................................................................................4
Task 1.........................................................................................................................................5
Introduction................................................................................................................................5
P1. Explain different types and purposes of organisations; public, private and voluntary
sectors and legal structures.....................................................................................................5
P2. Explain the size and scope of a range of different types of organisations.......................8
P3. Explain the relationship between different organisational functions and how they link
to organisational objectives and structure............................................................................15
M1. Analyse how the structure, size and scope of different organisations link to the
business objectives and product and services offered by the organisation..........................17
D1. Provide a critical analysis of the complexities of different types of business structures
and the interrelationships of the different organisational functions.....................................18
Conclusion............................................................................................................................20
Task 2.......................................................................................................................................21
P4. Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.........................................................................21
P5. Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses.....................................................................................................24
P6. Explain how strengths and weaknesses interrelate with external macro factors............26
M2. Analyse the advantages and disadvantages of interrelationships between organisational
functions and the impact that can have upon organisational structure.................................27
M3. Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organisation.....................................................................................28
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M4. Apply appropriately SWOT/TOWS analysis and justify how they influence decision-
making..................................................................................................................................30
D2. Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making...........................................................................................31
Conclusion................................................................................................................................33
References................................................................................................................................34
3

Introduction
In the reported study the various concepts linked to the business atmosphere of various
types of organisation has been explained. Business environment states to factor that
distributes a firm’s ability to build and preserve positive customer relationships. This
report includes various types and purposes of the organisation. Organisational functions
play an important role in fulfilling the organisational objectives and goals in an effective
manner. The macro environment is major and uncontrollable factors that affect the
decision process of organisation. Toyota is a Japanese multinational automotive
manufacturing company which provides a wide range of products to their customer. The
positive, as well as negative impact of macro environment, is discussed in this report.
SWOT analysis is used for identifying the strength and weakness of organisation. The
structure, size, and scope of organisation assist in increasing the profit and productivity
rate of services. PESTLE model is used for analysing the macro environment within the
organisation.
4

Task 1
Introduction
This report introduces the different types and purpose of the organisation along with its
legal structure. The legal structure of organisation helps in determining its behavior and
characteristics in a systematic way.
P1. Explain different types and purposes of organisations; public, private and
voluntary sectors and legal structures.
Various types organisation is as follows:
Public sector- Public sector is that part of a financial system that is measured by national,
state or limited government. The National Health Service (NHS) is the openly sponsored
national healthcare system in London. The services of NHS are growing rapidly in many
regions. NHS is the largest public sector firm in the UK where the number of employees is
approx. 1,400,000.
Legal structure- NHS is a partnership firm in which the employer and government are
responsible for risks as well as investment in the business (Mazzucato, 2015).
(Source: Myhealthlondon, 2018)
Purpose of public sector
 Further development and growth of organisation by using funds.
 Provide a benefit to all of society rather than just the separate person who uses the facility.
Private sector- The private sectors are usually free from the government control. It
includes all for-profit trades that are not maintained by the government bodies. Toyota is
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an automobile manufacturing company headquartered in Japan. Their operating income is
approx. 27.6 trillion (2017). The products and services of Toyota are sold in various
international stores (Toyota, 2017).
Legal structure- Toyota is a sole trader firm in which the owner is responsible for the
overall risk and funds for the organisation.
(Source: Toyota (GB) PLC, 2014)
Purpose of private sector
 The main purpose of the private sector is to continue in the marketplace by making a profit.
 Providing a variety of product and services for market expansion.
Voluntary sector- The voluntary sector includes charitable organisation. It is sometimes
also known as a third-party sector because it exists in neither in the community nor in
private sector. 2Way development is a national volunteer agency which is generally
funded by statutory bodies (2Way Development, 2016).
Legal structure- The legal structure of 2Way development is an unincorporated
association in which an agreement is made between groups of an individual for a reason
other than to make a profit.
(Source: 2Way development, 2013)
Purpose of voluntary sector
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 Expand and develop culture.
 Create communal wealth (2Way Development, 2016).
7

P2. Explain the size and scope of a range of different types of organisations.
Private sector (Toyota)
Background
Toyota is Japan automobile international retailer in Japan. It specializes in selling a variety
of cars to their customers. Toyota was established in 1933 by Kiichiro Toyoda. The
overall income of Toyota is ¥28.40 trillion (2016).
Products and services
Toyota provides a wide range of vehicles to their customer. Toyota also manufactures
luxury cars and engines (Toyota Motor Corporation, 2018).
Size and scope
Size Scope
Millions of customers are using Toyota
products all over the world. 333,500
employees are working within Toyota.
More than 1000 outlets are located all
over the world (Toyota Motor
Corporation, 2018).
The scope of Toyota is to make a relevant,
profitable and truly sustainable retailer.
Vision, mission and business objective
Vision Mission Business objective
The vision of Toyota is to
create outstanding earth-
friendly products for a
Toyota’s mission is to
attract customers with
high-valued products and
The business objective of
Toyota is to build a
sustainable business
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sustainable growth. services. throughout consistent.
Organisational and legal structure
Organisational structure-
(Source: Author)
Legal structure- Toyota follows the independent legal structure in which whole work is
performed by an individual. The employer of Toyota is responsible for the issues and
achievement within the firm.
Stakeholders
The external stakeholders of Toyota are customers, community, government who provides
opinion and funds for the development of the firm.
Public sector (NHS)
Background
9
Chief Executive
Customer and
Communication
Executive
Flight operation
Management
board
Customer
HR manager
Investment

National Health Service the largest public healthcare system in the world. Simon Stevens
is appointed as chief executive of NHS England. NHS was created in the year 1948 by
health secretary Aneurin Bevan (NHS Choices, 2015).
Products and services
NHS in England provides emergency and urgent care to their customers. They also their
patient by providing prescribed drugs at low cost.
Size and scope
Size Scope
NHS directly employees around 1.2
million staff who serve their customer
with a different facility.
The scope of NHS is to offer a range of
service to the disabled individual (NHS
Choices, 2016).
Vision, mission and business objective
Vision Mission Business objective
Enable people to live
healthier through high-
quality continuous care.
To provide care and
services to the disabled
family and patients.
To promote best clinical
practice in the innovative
delivery of framework
(2Way Development,
2016).
Organisational and legal structure
Organisational structure
10

(Source: Rivett, 2017)
Legal structure- The legal structure of NHS is based on the limited liability of members.
Stakeholders
Local government, funders, and trust are the main stakeholders of NHS.
Voluntary sector (2Way development)
Background
2Way development is a UK based social enterprise which offers volunteering placement to
their customers. 2Way development works in Asia, Africa with over 150 partner charities.
Products and services
NHS provides career and coaching services to their customer in the context of education,
human rights, and environmental conservation.
Size and scope
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Size Scope
2Way development has placed over 400
volunteers all over the world (2Way
Development, 2016).
Their scope is to provide services to the
people of the different region.
Vision, mission and business objective
Vision Mission Business objective
Their vision is to adopt
new ideas and methods for
facing the challenge.
2Way development wants
to improve knowledge and
health by helping
innovative ideas to
succeed.
The business objective of
2Way development is to
build the capacity of
partners through skills
sharing, rather than
sharing essential services.
Organisational and legal structure
Organisational structure
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13
Central social
welfare board
Executive
Committee
General body
Secretariat
Executive
director
Economic
program Project division Finance and
account division
Coordination
section

Legal structure- Their legal structure is based on the community benefits in the context
of services and products.
Stakeholders
 Local government
 Advocacy and interest group
 Board members and trustee (Open Learn, 2018).
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P3. Explain the relationship between different organisational functions and how they
link to organisational objectives and structure.
The organisational function is set of business activities carried out within a different
department. The relationships between different organisational functions are as
underneath:
Marketing- Marketing department is responsible for developing strategy and product for
satisfying the needs of the customer. Once the product and services have been designed by
the production department marketing members are responsible for packaging and
promotion of the product. The effective marketing strategy will be helpful in fulfilling the
business objective.
Finance- Financial department produce various financial statements for tax purpose. It
assists in providing suitable resources for the development of another department. The
financial information can be used for production department for reviewing the business
plan (Armstrong and Taylor, 2014).
Human resource management- the Main responsibility of human resource department is
to recruit, select and provide training to the employees. The organisational hierarchy can
also be developed by proper training. The skills and abilities of production team can easily
be enhanced by proper training by the professional experts.
Operations- Operation management is concerned with converting materials and labor cost
into services and products. This helps in maximising the organisational profit and
productivity in an effective way.
Organisational structure
Bureaucratic- This structure is followed by NHS in which most of the important
decisions are taken by the state officials. The bureaucratic structure has a clear hierarchy
which assists in achieving the organisational goal.
Strategic business unit- This structure is used by Toyota which operates as an
independent enterprise. It is a profit center which only focuses on market segment and
product offering. This helps in satisfying the business goal in an effective way.
15

Matrix levels- Matrix level is followed by 2Way development in which some employees
usually work under more than one employer. In this, the resource can be used efficiently
by the management (Study.com. 2018).
16

M1. Analyse how the structure, size, and scope of different organisations link to the
business objectives and product and services offered by the organisation.
The structure, size, and scope of the various organisation are linked to the goals and
mission of the organisation. Organisational structure helps in developing the functions to
make sure that whether they are working in an operative way. Size of the employees plays
an important role in fulfilling the organisational objectives. The production rate of services
and products are totally based on the number of employees. The scope of the organisation
helps in attaining and developing a high range of product (Armstrong and Taylor, 2014).
17

D1. Provide a critical analysis of the complexities of different types of business
structures and the interrelationships of the different organisational functions.
The positive, as well as negative impacts of complexities of different organisational
functions, are as follows:
Positive impact
 Increase in employee’s morale.
 Effective working.
 Better results in the task.
 Proper communication and coordination within the organisation.
Negative impact
 Conflicts can be rise among employees.
 Increase in turnover.
 Hurdles can be faced while completing the task.
 Ignorance of organisational goals and objective (Org Chart, 2016).
Pros and cons of the different business structure are below:
Bureaucratic
Positive impact
 The structure is highly repeatable.
 Provides advantage of specialisation.
Negative impact
 Rigidity and inflexibility within the firm.
 Compartmentalization of Activities (Management study, 2017).
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Strategic business unit
Positive impact
 Funds allocation.
 More independence while managing work.
Negative impact
 Complex process.
 Time-consuming.
Matrix levels
Positive impact
 Information can flow through the organisation (Study.com, 2018).
 Development of teamwork.
Negative impact
 Costly structure.
 Difficult in balance.

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Conclusion
The above discussion explains the purpose and structure of the private, public and
voluntary sector. Positive and negative impact on the business structure of organisation
has been analysed in the above report.
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Task 2
Toyota Motor Corporation is Japan-based automotive manufacturer headquartered in
Aichi, Japan. Various pros and cons of macro environment are also discussed below. The
internal and external investigation of Toyota is conducted by SWOT analysis.
P4. Identify the positive and negative impacts the macro environment has on business
operations, supported by specific examples.
PESTLE analysis- PESTLE analysis is an outline used for understanding the impact of
external factors on the organisation.
Macro factors Positive impact Negative impact
Political factor The political decision can
also be in favor of the
organisation. This will be
helpful in providing a
growth opportunity.
Example- Increase in the
employment rate.
Fluctuation in tax rates
can be responsible for
affecting the
import/export of
organisation.
Example- Shortage of
resources can be faced by
the organisation.
Economic factor The management of
Toyota can attain
sustainability by stability
in the trading cost.
Example- Increase in
purchasing rate.
The rise in inflation rate
can affect the purchasing
power of resources and
raw materials.
Example- Brexit vote
affects the economy rate
(Pratap, 2017).
Social factor Toyota is trying to The environment-friendly
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connect with the
customers for knowing
their needs and behavior
in the context of vehicles.
Example- Toyota is
making hybrid vehicles
for their customer.
behavior of the customer
can affect the previous
products and services.
Example- Difficulty in
providing eco-friendly
cars.
Technological factor The automobile industry is
totally based on
technology. The
organisation can easily
develop their services by
using innovative
technology.
Example- New cars will
be made by effective
technology like self-
service starting and others.
Sudden updates in
technology can affect the
business strategy of the
firm.
Example- Sometimes
technology extreme to
understand the customer.
Legal factor Government rules and
regulation sometimes can
be in favor of the
organisation.
Example- Reduce in fuel
price rate (Pratap, 2017).
There are several areas
where legal issues can
affect the growth and
development of the
organisation.
Example-issues related to
production.
Environmental factor Toyota is investing in
sustainability.
Customers are looking the
brands that are eco-
friendly. This can affect
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Example- Production of
the product as per the
desire of the customer.
the production of cars.
23

P5. Conduct internal and external analysis of specific organisations in order to
identify strengths and weaknesses.
Company- Toyota is a division of Toyoda Automatic Loom Works devoted to the
production of cars. Kiichiro Toyoda founded the organisation in 1937.
(Source: Toyota, 2018)
SWOT analysis- SWOT analysis is a strategic tool which is used by Toyota for analysing
their strength, weakness, opportunity, and threats.
Strength Weakness
 Toyota has a wide range of car
options.
 Global supply chain.
 Toyota has excellent marketing
campaigns via print media, online
advertisement, and others.
 Market presence in international
market.
 World class engineering
capabilities.
 Weak presence in a different region
like China, Hong Kong, and others.
 Negative publicity due to the
recollection of large vehicles.
 High brand switching.
 Huge competition from another
vehicle firm.
 Lack of communication within the
organisation.
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 Toyota has a strong focus on
research and development.
 Approx. 31,000 employees are a
part of Toyota.
 Privacy in organisational culture.
 Stock management of Toyota is very
poor (Business Teacher, 2017).
Opportunity Threats
 Toyota can launch new and innovative
cars on the market.
 Demand of independent vehicle in
marketplace.
 Self-driving technology can be used in
production.
 Market growth in emerging countries
like India and others.
 Toyota can continue with a model
which satisfies the needs of the
customer (Ponce, 2014).
 Impact of fluctuation in foreign
currency.
 Increased competition.
 Rapid innovation of entrants.
 Rising Japanese exchange rate.
 Increase in maintenance cost.
25

P6. Explain how strengths and weaknesses interrelate with external macro factors.
The strength and weaknesses of the organisation are depending on the PESTLE analysis
model. The changes in the external environment need to be used by the organisation either
in production or marketing. Different political factors like foreign trade policy and others
help in trading of resources and raw materials in an effective way. The organisation can
easily be able to develop their decision-making process. This will assist in providing
strength to the firm. The technological changes are getting developed day by day. A large
number of the customer is interested in eco-friendly cars which can affect be a weakness
for the organisation. The previous products can be affected due to a sudden change in
customer’s behavior. The development of services and product can be manufactured by
using new and innovative tools and techniques for further process. On the other hand, it
can be responsible for affecting the financial budget of the organisation. Positive changes
in the macro factor have a great influence on the organisational performance (Rushton, et.
al., 2014).
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M2. Analyse the advantages and disadvantages of interrelationships between
organisational functions and the impact that can have on the organisational
structure.
Advantages Disadvantages
 Proper supply of funds will be done
within the organisation.
 Offers a high level of specialisation.
 High level of efficiency and speed.
 Opportunity to move with their
functional areas.
 Enhancement of skills and abilities
of workers.
 It can pose a challenge for upper
administration to preserve control
over the department.
 Work will get hampered due to job
rotation of employees.
 Conflicts can be arising.
 Morale of employees gets affected.
 Lack of teamwork (Joseph, 2018).
The interrelationship between organisational function assists in the development of
organisational structure whereas the organisational hierarchy needs to implement again.
This can be responsible for affecting the financial rate of the firm in a negative way.
27

M3. Apply appropriately the PESTLE model to support a detailed analysis of the
macro environment within an organisation.
PESTLE model
Factors Description
Political Political factors have positive as well as
negative impact on the development of the
product. Toyota is properly using tax,
fiscal, trade policies while developing
their product and services.
Economic Economic trend influences the
organisational development in an effective
way. GDP plays a vital role in assisting
the success of the firm.
Social A large number of employees are
interested in electric cars which help to
open a new revenue system for the
organisation.
Technological Toyota is using social media for
expanding their business all over the
world (Haseeb, 2017).
Legal Toyota is producing their product as per
the global laws. This will be helpful in
sustaining a positive brand image in the
market.
28

Environmental For a long run of product, Toyota is using
environmental resources for the
manufacturing of the product (Haseeb,
2017).
29

M4. Apply appropriately SWOT/TOWS analysis and justify how they influence
decision-making.
SWOT analysis helps in taking the right decision for the growth and development of the
organisation. The management of Toyota can easily be able to take an effective decision
by knowing their market strength. This will be helpful in setting the reasonable price of
product and services for attracting a large number of customers. By knowing the weakness
and threat company will be able to alter their strategy and other factors in a systematic
way. SWOT analysis helps in evaluating the factors for determining the decision-making
process. Various organisational opportunities can be used as a source for market expansion
(Siqueira, et. al., 2016).
30

D2. Critically evaluate the impacts that both macro and micro factors have upon
business objectives and decision-making.
Macro, as well as micro factors, are used by Toyota for achieving their business goals and
decision-making process. The positive and negative impact of SWOT and PESTLE
analysis is as follows:
SWOT analysis
Positive impact
 SWOT analysis requires neither training nor skills.
 Multi-level analysis
 Identification of internal and external factors.
 Supports a number of project objective.
Negative impact
 No weighting factors.
 Subjective analysis
 Sometimes, it produces lots of irrelevant information.
 Does not offer alternative ideas (Nordmeyer, 2018).
PESTLE analysis
Positive impact
 Helps in making an effective decision.
 Deep understanding.
 Cost-effective.
 It supports in maintaining organisational issues.
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Negative impact
 Standard cannot be attained easily.
 Constant reviewing.
 Need of large resources.
 Subjective analysis (Jain, 2018).
On the basis of above discussion, it has been concluded that SWOT and PESTLE analysis
is used by Toyota for evaluating their strength and weakness. Macro environment has a
direct impact on the development of the organisation.
32

Conclusion
From the above-reported study, it has been concluded that there is a different type of
organisation which are performing their functional activities in an effective manner.
Business environment defines how well customer’s expectations are met by the firm.
Organisational functional plays a vital role in achieving the business goals and objectives.
SWOT and PESTLE analysis of Toyota has also been effectively discussed. Size and
scope of organisation help in targeting high range of customer. PESTLE analysis has
positive as well as negative impact on the organisation environment. SWOT analysis helps
in determining the strength and weakness of organisation while developing product and
services. For achieving each and every level of organisation it is necessary to have the
support of various functions like human resource, marketing, finance and many more. At
the end of the report, complexities of different types of business structure are critically
analysed in an effective and efficient manner.
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