Types and Purposes of Organizations: A Study on Business and the Business Environment

This document provides an in-depth analysis of the different types and purposes of organizations, including public sector organizations, private sector organizations, and voluntary organizations. It also examines the relationship between organizational functions and business objectives, as well as the positive and negative impacts of the macro environment on business operations. Study material and solved assignments on this topic are available on Desklib.

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explain the different types and purposes of an organization............................................1
P2 Define the size and scope of different type of an organization.........................................3
TASK 2............................................................................................................................................5
P3 Examine the relationship between organizational functions and how they link with
business objectives and structure............................................................................................5
TASK 3............................................................................................................................................6
P4 Identify the positive and negative impacts of macro environment on business operations.
................................................................................................................................................6
TASK 4............................................................................................................................................8
P5 Analyse the internal and external environment of an organization by using SWOT
analysis...................................................................................................................................8
P6 Explain how strengths and weaknesses interrelated with external macro factors.............9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business is defined as those economic activities in which people work at collaborative
manner within the process of buying and selling and earning profits. On the other hand
operational activities of the business directly reflect the company and their abilities of earning
profit. These activities lead in developing prominent customer relationship through which market
prominence can be attained. There are various factors which are included in internal and external
environment such as competitor’s position, suppliers, employees and management (Aithal,
2017). These factors lead the organisation to deal with growth of the organisation and to
recognise opportunities through which prominent opportunities can be grabbed in order to get
business succession. Under this report Network Rail is taken as private organisation, Dyson is
taken as private organisation and for voluntary organisation British Red Cross Society is taken.
Under this report discussion regarding size, scope, legal objective are undertaken. Besides this
SWOT and PESTLE analysis is performed along with analysing positive and negative
dimensions as well.
TASK 1
P1 Explain the different types and purposes of an organization.
Organisations are defined as group of people which are working for a common objective.
These are basically of two types, such as one is working to earn profit and other one is working
to serve social cause. Varied types of organisation are elaborated as under: Public sector organization: This is categorised as a business organisation which are
owned and governed by government and provides services to citizens. The major
objective of these organisations is not to gain any profit but to provide welfare to public.
Network rail is one of the best examples of public organisation.
Purpose: The major purpose of public sector organisation is to provide benefits to community
which are associated with public goods and government services.
Legal structure: Central government: These business organisations are controlled by government and all
functionality of this organisation are formed and managed by central governmental
authorities. These are responsible for collecting funds from public and use the same for
providing benefits to population (Viriyasitavat and et. al., 2018).
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 State government: These entities are established over limited area and these are
controlled by central government (Asongu and Odhiambo, 2019). Local government: These kind of institutions are owned by local authorities and
community such as municipal and any other corporate body. In the form of council tax,
money is collected by these organisation.
Private sector organization: These business organisation are not having any intervention of
government in their functions as these entities are owned and regulated by group of individual or
single person with the major objective of earning profits. Dyson is a renowned British
organisation which deals in electronic appliances such as vacuum cleaner, hair dyer and many
more.
Purpose: The goal of these organisation are to earn profit and enhance working capabilities by
hiring skilled and talented workforce.
Legal structure: Sole proprietorship: These businesses are owned and regulated by a single authority for
the major purpose of making high profits. All the risk and reward within these businesses
are borne by single person as they are the only one controlling body. Partnership: These businesses are framed by collaborating two or more person in one
business and they bound with a partnership agreement. All the associated person are
called partners and all the decisions are held with all the partners regarding profit loss and
debts sharing. This agreement is bound with partnership Act and all the provisions are
required to be framed in appropriate manner. Limited company: These are considered as Joint stock venture in which separate legal
entity is being provided to their owner. All the running companies in UK are required to
follow Companies Act in order to run their business in effective manner.
Voluntary organization: This is a group which is formed by number of person for attaining
common purpose and aims. British Red Cross Society is one of the prominent voluntary
organisation which is committed to help people irrespective of their origin and nationality.
Purpose: Purpose of these organisation is to provide societal benefits to people and eradicating
societal problem. These organisation are not focused over earning profits as they are dedicated to
the society (Zakaria, Hashim and Ahmad, 2016).
Legal structure:
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 Trust: Trust is a traditional entity which is working for charities and these are controlled
by trust deeds in order to manage financial needs and other objectives as well.
 Unincorporated Association: These business entities are limited by guarantee and
managed by group of volunteers and communities in manner that they follow
memorandum of association (Barker and et. al., 2016).
Organisation can also be divided in following types on the basis of size: Micro: These are categorised as small sized organisation those are in need of limited
resources and to optimise usage of procured resource. SME: This is defined as small and medium sized organisation which is larger than micro
and these require proper amount of money and resources in order to operate their
business in effective manner.
 Global: These are managed and operated at huge scale and they have business in
intentional market.
P2 Define the size and scope of different type of an organization.
Network Rail: This is a government owned organisation which is having no shareholder and
earned income by this entity is reinvested in railways only. Background: This is a rail management industry which was established in 2002 in
London, UK. The major customer for this entity is private train service providers those
are engaged in managing train services. Size: This is the 12th biggest private employer in UK those are having 34000 employees
and they manage electrified train track. Scope: The scope of Network rail is to bring innovation in security surveillance analytics. Products and services: This company is dealing in public transport. Vision: The company is having vision to provide safety measures to passengers so that
they can reach home safely. Mission: The company is having mission to upgrade railway tracks in order to establish
standards.
Objectives: The primal objective of this organisation is to enhance safety measures so that to
provide economic growth and minimise negative impacts over environment (Bocken, Boons and
Baldassarre, 2019).
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Dyson limited: This is a private organisation which was established 28 years back and they are
manufacturing electronic appliances. Background: This was founded in July 1991 by James Dyson and it's headquarters in
England. It deals in technology industry as well as design and manufacture household
appliances. Size: This is British company which is having more than 12000 employees in their
organisation those are managing business in effective manner. Scope: The scope of Dyson is to enhance their market presence and deal with market
complexities as well. Products and services: The company is offering home electronic appliances such as
cleaners, hand dryers, heaters and lights. Vision: The company is willing to use cost effective strategies in order to support their
customers. Mission: Mission statement for the company is to provide solution to their customer for
their everyday problem. Objectives: To manufacture cost effective equipments and to minimise wastages.
British Red Cross Society: This is a registered charity fund which is working in UK and was
formed in the year of 1870. The company is helping society irrespective of their religion and
nationality. Background: The company was founded in the year of 1870 and they are operating their
functions and operation within UK. Size: The organisation is having staff of 4000 people which are engaged in managing
functions in effective manner. Scope: Scope of the organisation is to render prominent products to customer so that to
provide them easy life. Products and services: They are providing needful electronic item such as dryers,
vacuum cleaners in order to provide easy life to individual. Vision: The vision statement of British Red Cross Society is to develop society
irrespective of their religion and nationality (Crawford and et. al., 2016). Mission: The mission statement of British Red Cross Society is to enable the population
highly independent so that healthy life can be promoted.
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 Objectives: The major aim of British Red Cross Society is to support people and enhance
their lives standard within living society.
TASK 2
P3 Examine the relationship between organizational functions and how they link with business
objectives and structure.
In an organisation there are varied departments which are depending on each other in
direct or indirect manner. Dyson is a private organisation which requires higher coordination and
collaboration in order to perform varied activities and to meet their business objective.
Departmental interrelationships are explained as under: Marketing and HR department: Marketing is defined as an essential activity for the
business which is helpful in attracting customer. Human resource department is
responsible to recruit talented and skilled employees with whom marketing activities can
be carried out in effective manner. These departments are required to be coordinated in
such a way that productivity and profitability can be enhanced. With the help of trained
employees customer base can be enhanced (Grizane and Jurgelane, 2017). Purchase and Research & development department: Purchase department is responsible
to buy raw material as according to the requirement on the other hand research and
development department is responsible to analyse market condition so that correct
estimate of raw material can be analysed. This may help in providing efficacy to the
business in terms of operational factors.
 Finance and informational technology department: Information are required to be
inhaled at right time and place so as to align the product or service with market needs and
demands. IT department is trying to find new IT solutions for the business so as to
provide new insight to the business and finance department fulfil funds requirement in
order to meet those needs in effective manner.
TASK 3
P4 Identify the positive and negative impacts of macro environment on business operations.
Macro environment is having high impact on business and their operations as well. Due
to uncontrollable external factors business may face high challenges and disadvantages which
leads to generation of inefficient business activities. PESTLE analysis is one of the prominent
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tool which can be used by businesses in order to analyse external environmental condition. In the
context of Dyson, PESTLE analysis is elaborated as under:
Political factor: These factors are related with government stability, tax policies, restrictions
over trading and many more. Due to impact of Brexit, this is providing major implication in
managing a business. Positive impact: In local market political rules and regulations are easy to be followed
which may be helpful in growth of the business within local market.
 Negative impact: Due to unstable government condition this may impact over Dyson's
business in such a way that they may face issues like decreased sales, increased
production cost and many more (Hamilton and Webster, 2018).
Economic factor: These factors are related with interest rate, tax policies, inflation rate,
employment rates and other factors. All these factors are having direct and indirect impact over
business functioning of Dyson. Positive impact: Economic factors are providing freeness to organisation in order to run
their business without any government intervention.
 Negative impact: By avoiding these factors Dyson will have to face huge penalties due to
which market image of the company may be decreased.
Social factor: These factors are related with culture, values, taste and preferences of customers.
In this factor Dyson is having role to provide their contribution in development of society. By
making positive image within marketplace brand equity can be enhanced as well. Positive impact: Organisation is emphasised on providing betterment to the society
which are helpful in raising customer base and making more loyal customer in order to
deal with market competition.
 Negative impact: By passage of time licenses are required to be undertaken which
involves high amount of money. This provides direct impact on enhancement of overall
cost of the product or service.
Technological factor: These factors are associated with intense market competition and using
technological advancement in business functions. This is a helpful in dealing with needs and
demands of customer by which market expansion can be attained by the company (Linder and
Williander, 2017)
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 Positive impact: By using advanced technology customer preference can be met in easy
manner due to which positive advantage can be received over market rivals.
 Negative impact: BY using old and outdated technology this becomes tough for the
organisation to deal with market competition and due to which customer prone to get
shifted over other brands. This may lead them to face degrading image at global market.
Legal factor: These factors are associated with applicability of various laws such as health and
safety law, discrimination law and import and export law and others which are incorporated
within business. By adoption of these laws prominent effect can be seen in their market image
and customer capture. For Dyson these laws are highly effective in making their business
activities effective and meeting with all extent of business progress. Positive impact: With the help of these laws business may build loyal customers in a way
that company can deal with market complexities in effective manner. By performing all
the activities in prominent manner sales can be increased in clear way and business
productivity can also be enhanced.
 Negative impact: By not implementing these laws Dyson will have to face various
interference due to which charge of misconduct due to which company cannot serve to
their customer in better way.
Environmental factor: These factors are related with using such practices those do not provide
any harm to environment. This leads the company to provide benefits to environment through
which benefits given to the society can be maximised. For Dyson the company is using
prominent environmental practices in which sustainable practices are used by them. Positive impact: These factors are having high positive impact as in attaining competitive
edge and remain in market competition as well. On the other hand positive results can be
drawn out of all executed efforts.
 Negative impact: This may deplete their market image due to which reasons for licence
cancellation can be given due to which negative market image can be tarnished in short
period of time.
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TASK 4
P5 Analyse the internal and external environment of an organization by using SWOT analysis.
SWOT analysis is helpful for an organisation in order to analyse their strengths and
weaknesses so that opportunities can be admitted in such a way that threats can be handled in
better way (Luiz, Ganson and Wennmann, 2019). For Dyson their SWOT analysis is elaborated
as under:
Strengths Weaknesses
 Main strength for Dyson is their
product innovation.
 Dyson is emphasised over research and
development activities through which
they are producing high quality
products.
 Dyson has employed 12000 employees
and they are contributing in success of
the organisation.
 The products of Dyson can be imitated
by other in very easy manner due to
which image of the organisation get
tarnished.
 As products of Dyson are high in
quality which leads them keeping high
prices of their products, this is
considered as weakness of the company
as same product is being sold by
competitors in low prices.
 The company is continuing its
production for their loss making
product which is washing machine.
Opportunities Threats
 Dyson is having opportunity to expand
their business in global periphery in
order to boost their sales and profit as
well.
 Online presence of Dyson is leading
them to make more profits and attain
market size as well.
 Dyson is engaged in providing
continuous solution to their customer in
 The company is having high
competitors existed in the market which
makes it hard for them to get customer
loyalty.
 Dyson is associated with global market
expansion so currency fluctuation is a
threat for them in earning profits.
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respect of their faced problems and this
enable the company to gain trust of
their customers.
P6 Explain how strengths and weaknesses interrelated with external macro factors.
 Political: The political factors are having huge impact over Dyson as the company is
required to modify their business in such a way that smooth functioning can be
performed by them. Economic: Dyson is examining weak areas within this factor and so that to make
prominent strategies by which they can deal with weaknesses. As economic condition of
varied countries are having major impact over functions of Dyson and in order to deal
with this factor the company is making robust strategies (Salem and Parusheva, 2018). Social: These are defined as needs and demands of customer and for survival in these
factors Dyson is continuously innovating their products so that these can be aligned with
needs of customer in clear manner. On the other hand social factors are the major reason
for increased sales of the company. Technological: These factors are related with using new technology in business, for
Dyson the company is very much interested in using new and innovative technology in
manufacturing process and in their products due to which the company is receiving high
market prominence and competitive edge as well. Legal: These factors are related with implication of legal laws and policies in business
and Dyson is highly active in implicating laws within their business so as to provide
higher value to their employees and customer as well.
Environmental: These factors are linked with environment and eco system in this context
strength of Dyson is that the company is using sustainable practices in their business processes
which add sustainability to the company (Schiavi and Behr, 2018).
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CONCLUSION
From the above report this can be concluded that business environment is an aspect which is
required to be analysed by businesses in order to attain success in early stage. On the other hand
external and internal analysis are two major aspect of business which are required to be
examined in proper manner so that any modification can be rendered to the business at proper
timings.
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REFERENCES
Books and journals
Aithal, P.S., 2017. A critical study on Various Frameworks used to analyse International
Business and its Environment. International Journal of Applied Engineering and
Management Letters (IJAEML). 1(2). pp.78-97.
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review. Journal of African Business. 20(2). pp.259-268.
Barker and et. al., 2016. Answer management in a question-answering environment. U.S. Patent
Application 14/570,491.
Bocken, N., Boons, F. and Baldassarre, B., 2019. Sustainable business model experimentation by
understanding ecologies of business models. Journal of Cleaner Production, 208,
pp.1498-1512.
Crawford, J.J., Jennas, I.P.A., Peipelman, J.L. and Ward, M.J., International Business Machines
Corp, 2016. Pass-through tape access in a disk storage environment. U.S. Patent
9,240,209.
Grizane, T. and Jurgelane, I., 2017. Social media impact on business evaluation. Procedia
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Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Linder, M. and Williander, M., 2017. Circular business model innovation: inherent
uncertainties. Business strategy and the environment. 26(2),.pp.182-196.
Luiz, J.M., Ganson, B. and Wennmann, A., 2019. Business environment reforms in fragile and
conflict-affected states: From a transactions towards a systems approach. Journal of
International Business Policy. 2(3). pp.217-236.
Salem, A.B.M. and Parusheva, S., 2018. Developing a Web-Based Ontology for E-Business. "
International Journal of Electronic Commerce Studies". 9(2). pp.119-132.
Schiavi, G.S. and Behr, A., 2018. Emerging technologies and new business models: a review on
disruptive business models. Innovation & Management Review.
Viriyasitavat, W. and et. al., 2018. Blockchain-based business process management (BPM)
framework for service composition in industry 4.0. Journal of Intelligent
Manufacturing, pp.1-12.
Zakaria, N.S., Hashim, M.K. and Ahmad, S.A., 2016. Business strategy and performanceofsmes
in the manufacturing sector. International Journal in Management & Social
Science. 4(5). pp.254-261.
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