Business Environment: Types of Organizations and Analysis

This report provides a comprehensive analysis of the business environment, encompassing various types of organizations, their scope, and functions. It delves into the characteristics of profit, non-profit, and non-government organizations, providing examples such as Tesco, NHS, and the Heart Foundation. The report further explores organizational structures, including divisional, functional, and matrix structures, and examines the complexities faced by international, transnational, and global organizations. Additionally, the report includes PESTEL and SWOT analyses of Marks & Spencer, along with Porter's Five Forces model, to provide a strategic overview of the business environment. The report concludes with a discussion of organizational objectives and missions, using Tesco, NHS, and the Heart Foundation as examples.

Business and the Business Environment

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1 Types of organisations..............................................................................................................1
2 Scope and size of organizations................................................................................................2
3 Organizations functions and structures.....................................................................................4
TASK 2............................................................................................................................................6
1. PESTEL of Marks & Spencer..................................................................................................6
2. SWOT Analysis of Marks and Spencer...................................................................................7
3. Porter’s five model..................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment define the growth and success of organizations. It refers the
external and internal factors that impact on industry functions or activities including customers,
workers, demand and supply of goods, management departments etc. Trading, productivity and
production are the functions of successful business (Wetherly, 2014). In other words business
environment means the amount of total all individual, group or other force which are outside of
company and control the business activity but the company still depends upon them because they
impact the all over sustainability and performance of business. Many environment impact
businesses and also influence by its activity.
In this report is will be discus about the different organizations functions, size and scopes.
Thus, to know about the company environment PESTEL will include in this present study and as
well as SWOT analysis do get the information about own strength and weaknesses. This report
explain theory which impact on business activity and functions.
TASK 1
1 Types of organisations
In the business world there are many organizations that performed their different types of
work within its various size and scope. Thus, all the companies have different types of function
and strategies to run their businesses productivity and increase its growth as well (Belás, and
et.al., 2015). Therefore, it explains such points to know about the profit, nonprofit and non-
government companies and its purpose of provide products and services.
 Private/ Profit organization: Profit companies make their products just to increase profit
in its businesses, their main aim to gain success and growth by making profitability or
increasing productivity. Tesco is a British international grocery' provide organization, it
was one of the famous retailer business company who make its goods and services for
people within using good quality materials or things. It makes clothes for men, women
and kids; they also supply their products in many other countries as well. Tesco
established their headquarters in UK.
The aim of the company is to make profits, increase its sales production and business growth.
Through its grocery goods and other services they give its customers proper satisfaction. Sole
traders and partnerships both are the important part of private business structure. Sole trader is
the easiest and simplest way to set own businesses that is not much expensive. Profit
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organizations include partners in its businesses usually small companies do this to run its
productivity more and more. McDonald's, KFC and many other industries are added in private
sector. Public/ non- profit organization: Public sector is the part of state's economy which is
effectively operated by government. It includes state, local and central government
structure. It also includes many public organizations, enterprises, entities and services.
National Health Service (NHS) is a public funded healthcare system for England. It is the
biggest individual payer health center in the world. They give their services in many
countries of the UK. 14,00,000 number of employees are working in this organization.
They provide high quality health and care service to everyone in the world (Martello,
Watson, and Fischer, 2016). The main aim of NHS is to offer general education facilities
to people without making any profit in its businesses. Thus, its purpose to give health and
safety policies for people of a country to secure their life's as well as when they are
working in company.
 Non- Government organizations: NGO's and charity trust are included in non-
government companies. Thus, they do not make profit by giving its services and facilities
to people. They performed its work independently just to make people health and safe.
Heart foundation is a non-government and nonprofit organization. It is situated in
Australia, founded in 1959. The vision of this group is to give its best healthcare facilities
to Australians and also help those people who suffer with cardiovascular disease they
need to help them and reduce this pain to their lives. Non-government organizations in
another words it called as voluntary organization. They are located in international,
national and local level. Some NGO's functions are based on charity activity, who
support through making action against crimes like FGM etc. Thus, some are arranged
around specials problems such as environment, human rights and people health.
2 Scope and size of organizations
Thus, all the companies have its different size and scope; they do their business according
to it. Small, medium, micro and large are the types of different size organizations.
1. Micro size enterprise: Micro enterprise means small business company with few
employees within it. They performed its business activity with fewer than 9 people. They
get started its work performance also with low amount or fund of capital. General stores,
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barbers etc. are included in micro-enterprises. Raceway barber is run its small business
by giving services to people. Its profit is based on people service which they used by
them. They operate its business activity by giving good services to public sector.
2. Small enterprise: In this type of organization they invest money more than 20 to 25 lack
for using machinery and make plans according to products need and demands by people.
More than 250 employees are working in these enterprises. Orion is one of the small
enterprises who give their facilities to other companies by recruiting candidates. They
give effective and hardworking labor to other organizations for completing their
construction or other business work. They can take finance related help by stakeholders
and banks. Small business enterprise turnover is 1.5 million or more than it. Their growth
is based on employees and candidates performances. The scope of Orion is spread in
many states; they successfully operate its recruitment process perfectly. It gets increase
10 % in its sales. They make their profit though provide effective workforce to other
companies.
3. Medium enterprise: Medium size enterprises are independent and non-subsidiary
companies which have few employs and employee more than 200. Pharmacy2u is
medium size firm, they supply its online pharmacy goods to public. It increases its
business growth more and more by giving good quality medicines to people. They also
provide confidential private online doctor facilities to people. Their net income is £20.4
million, they give its services in many countries, and thus it will increase its business
growth and profitability more than other companies. Company includes more people in
its business activity to increase its profit margin and growth more than other
organizations.
4. Large enterprise: Large industries spread its work at international level, just to make
profit and success in its businesses. They make the best quality products for people and
give them its better services to increase profitability and growth of productivity. Tesco is
the large size enterprise; it makes their goods within affordable price. They give their
services in many countries. Company makes a grocery product that is quite better than
other organizations. Thus, its employees play their important role in making business
more powerful and successful, 476,000 and more than this number of workers are giving
their high performance contribution in firm. Tesco net income is £54 million. Firm
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supply their goods and services in all over the world. Company operates their business
function in many countries successfully. It included with many business partners and
stakeholder who support to run its business or to make it more successful and powerful
than its competitors in marketplace.
3 Organizations functions and structures
In business world there are many companies that have different structures and functions.
Industries structure is basically two types according to its size and scope: 1) Divisional and 2)
Functional structure 3) Matrix structure.
Types of organizational structures
1. Divisional structure
Divisional structure is basically used in large size organizations that operate its business
activities at global level. Large scope and size companies provide their products and service to
people within good quality which increase its profitability and growth more than its market
competitors. Divisional structure includes many levels which has its different work. Commercial,
retail and international division are the stages of divisional. Thus, each level operates less or
more independently for other divisions in organization. It is very costly because of their scope
and size. In this structure there are many people play there important role and responsibility
according to its job positions. Production, personnel and accounting managers support in making
business more successful and powerful.
2. Functional structure
Functional organizational structure is used for small and medium size companies. It is not
much costly because their size and scope is smaller than other organizations. It doesn't include
many levels in its structure. On the first point headquarter is the base of functional structure, on
second stage research and development, marketing and production activities are taken place.
Employees and group of people run business successfully (Luke, and et.al., 2014). Functional
structure advantage is that it provide a high stage of specialization and allow workers to
developed individual ability quickly within it. Continuously improvement and development of
workers behavior and knowledge will raise the working efficiency and productivity thus to
improve sales.
3. Matrix structure
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Matrix structure is a hybrid of functional and divisional structure. This is the third type of
organizational structure. It is used in large international companies, it allows for profit of
divisional and functional construction to exist in one company (Nadell, and et.al., 2015). Thus, to
having dual management they can make power for struggles in most of the areas. Matrix
Company frequently used its groups of workers to complete work. It was the advantage of its
strength or to overcome for weaknesses of decentralized and functional forms.
Complexions of international, transnational and global organization structure:
Transnational, global and international organization has faced many complexions in its
business structure. International organizations face many problems to run its business operation in
marketplace or to the other countries (Alleyne, 2016). In this process they face many
challenges in managing aggregate goods lines due to division of marketing and
operations in various departments. Finance, HR, and marketing departments are included
in international industry structure. Thus, in they also face many issues in marketing or
advertising its products as well. Environmental factors also make complexion in trading
process. Transnational organizations structure is based on huge level. They run their business in
many countries successfully. The main problem facing by companies is transitional
structure which is biggest complexity in its business success and growth. It is very
difficult to balance the requirements and needs of various functional and goods
stakeholders.
 Global organizations face many complex conditions in its structure. They have much
management level in its business structure because they supply their products in many
countries. They face complexion in trading process as well.
Organizations objectives and mission
1. Tesco (Private organization): Tesco run their business successfully in retail
businesses market. They offer their best quality products and services to people. Their
vision is to give high quality goods and services to public; they also need to increase
its business profitability and growth more than its competitors. Tesco objectives are
to achieve its business goals. They need to make more healthy food products into
wide range of grocery that they supply.
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2. NHS (Private organization): National Health Service is a private enterprise; they
give their services in public sector. The main aim of this organization is to give
support in making people lives more comfortable and healthy. Company gives
education resources as well as health and care sources to people. NHS vision is to
advice people at high level about health policies and other relate with human rights.
3. Heart foundation (NGO’s): heart foundation is a charitable trust. They support
people who suffer through heart and stroke problems. Through collect funds by
arranging charity functions etc. they provide health service to people. HF performed
its work without any government support. Its mission is to motivate and educate
people and build youth more powerful to make healthy revolution in countries. Their
vision is to inspire present and future youth to make a legacy of health and social care
in many states or countries.
TASK 2
1. PESTEL of Marks & Spencer
PESTEL analysis is a tool which is used by marketers to identify and monitor external
environmental factors that effect on organization business and growth (Song, Sun, and Jin,
2017). Basically it helps to determine the factors impact on business activity and performance in
long term.
Political
The reduction in sourcing costs is prevailing in the company in event of free trade policy.
On the other hand, British will exit from EU and have significant implication on company in
firm's business up to major extent. The taxation policy of UK government tends to change and
does not remain stable and as a result, it will have impact on company's operational activities.
Economical
Economy of UK is already decreasing due to the impact of Brexit on it. This means that
company will have more challenges ahead as implications of Brexit will be affect operations of
M&S. Conflict will arise due to small retailers over product rise is already prevailing which will
have material impact on company. Hence, economic impact on company prevails as its
operations are widened.
Social
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The social impact also leads to affect operational activities of M&S up to a major extent.
This means that social trends such as chain of product recalling and creative negative impact on
company leading to affect social trend. It has supported surrounding commodities which has led
to cut down internal costs. Hence, it can be said that social factors have much effect on
organization.
Technical
Technically it is requiring that the business have influences of various software and application
must be implicated by the in order to improve the operations of firm. It will help business with
recording the data, auditing of accounts as well as managing the proper records of potential
consumers of organization Thus; UK is highly developed nation in terms of technologies. Along
with this, the educational level of individual is also appropriate on which they are highly engaged
in online purchasing and selling of any article. M& S has to make plans for effective operational
control and management of operations in the right manner. Initiating the online business through
its sites will be appropriate to the organization in respect with creating higher consumer backup.
Legal
In relation with analyzing the legal aspects in UK where corporation have been liable to make
payment the payment for taxes. These are the taxes which have been regulated by the HMRC to
generate fruitful reserves. There are various direct and indirect taxes which are to be payable by
them such as VAT, Sales tax and duty tax. Therefore, meeting such legal requirement which will
be adequate in terms of meeting the goals at right time.
Environmental
In order to ascertain the environmental consequences of the organization where they are required
to analyze the market conditions which will be helpful to M&S in designing products. The
development of products and services accordingly will be helpful in meeting the consumer
requirement at the right time.
2. SWOT Analysis of Marks and Spencer
SWOT is the best way to know about the strength, weakness, threats and opportunities of
Marks and Spencer Company (Blockeel, and et.al., 2016). It is the most popular retail
accessories and clothing brand situated in London. It has number of products categories like
casual wear, formal wear, part wear, footwear etc. Their main targets are women, men and kids.
SWOT defines its business issues and help to get improve in its weaknesses.
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Strength Weaknesses
 Marks and Spencer has clear brand image.
 They sold high value goods and services to
people.
 Company has their own private label which
make consumer familiar with its name it is
the strength of firm.
 They create innovation in their products
and services.
 Firm has huge range of brands that help
them to increase its business.
 They have 1000+ stores across 40
countries.
 Over 80,000 workers are the part of its
effective workforce internationally.
 Marks and Spencer has its bad scalability
of goods provide chain.
 Consumer satisfaction is it’s another
weakness.
 They try to offer international access to its
merchandise by online store that they are
unable to do so.
 Incapable to infiltrate successfully in
foreign markets.
 Manual working raising the costs.
 Environmental problems make its business
productivity weaker such as pollution.
 They are developing substitute goods and
technologies in market.
Opportunities Threats
 Customer profiling and market
segmentation is the best opportunity for
Marks and Spencer.
 By selling its products in international
business market.
 Its brand name helps business to increase
faster.
 By developing its online website people
can easily get information about its
services and goods.
 Expanding its business into many countries
is the best opportunity for future and
present as well.
 Market Competitors.
 Marks and Spencer has affair by losing its
latitude in business due to its competitors
 New entries in business world.
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3. Porter’s five model
Porter’s five forces model is a tool for identifying competition in business world. This frame
work analyses and classified most essential forces which affect intensity of rivalry in industries
and its profit level (Mathooko, and Ogutu, 2015). It includes five forces from Horizontal rivals.
 Competitive rivalry: Competitive force observes the intense of current competition in
marketplace. Competition is get higher when Marks and Spencer and other company sell
equal products and service to people. They get influence on decision of supermarket.
Consumer can definitely switch to the rival’s offers because they give low cost products.
Therefore, Marks and Spencer need to make changes in its goods making strategies that
help them to beat its competitors in market.
 Bargaining power of supplier: supplier paly their important role in spreading goods and
service in all over the world. Many suppliers make business position better, but on the
other side its bargaining power can increase or might be decrease the Marks and Spencer
goods selling productivity and growth. It influences the supermarket decision on high
level. Company need to make its own suppliers who make its business more successful
and powerful than its competitors.
 Bargaining power of buyers: bargaining power of customer’s effect quality and pricing of
Marks and spencer products and services. When people does not get its goods according
to their needs and requirement the easily switch to other companies goods. Thus, for this
company need to give them best offers which is better than its competitors in market.
 Threats of substitutes: this threat informed by immediate switching costs in long term, so
it is easy for consumer to switch. Marks and Spencer get affair by their substitute
products. It impact on profitability and business growth.
 Threats of new entries: in market place new entrance is the biggest threat of Marks and
Spencer or the other companies. It influences the whole business activity and decision
making process. Competitors have their different plans and strategies that impact on
Mark and Spencer.
CONCLUSION
It has been concluded that business environment is the most important function in business
world. It impact on whole organisations activity and functions. In this present report it will
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discussed about many organisations structure and functions. It also explains the various types of
organisations that play their role in many sectors. This study defines the vision, mission and
objectives of different types of companies. SWOT and PESTEL both explain the position and
impact on business activity. Porter’s five forces explain the competitor’s positions and Help
Company to make its strategies better than it just increase its business profitability and growth
more than competitors.
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