Types and Purpose of Organisations

This report provides an overview of different types of organisations including private, public, and voluntary sectors. It explains the purpose, size, and scope of each type of organisation and discusses the relationship between organisational functions and structures. The report also includes a PESTLE analysis of the macro environment and its impact on business operations.

Business and business
environment

Table of Contents
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................3
P1 Explain the different types and purpose of organisations.................................................3
P2 Explain the size and scope of a range of different types of organisations........................4
TASK 2............................................................................................................................................5
P3 Explain the relationship between different organisational functions and how they link to
organisational structures.........................................................................................................5
TASK 3............................................................................................................................................7
P4 Positive and negative impact on the macro environment on business operations............7
TASK 4............................................................................................................................................9
P5 Conduct internal and external analysis of specific organisations for identifying strength
and weakness..........................................................................................................................9
P6 Interrelate the strength and weakness with macro factors...............................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is known as surroundings in which companies operate. There are
basically two types of factors present in business environment i.e. external and internal factors.
These affects business operations of the company. It is essential for companies to run their
functions and operations in an appropriate manner (Vidović, 2015). The following report
consists of three organisations which are of private, public and voluntary sector. Tesco is chosen
for private organisation, a voluntary organisation is also chosen which is Wellcome Trust and
NICE (National Institute for Health and Care Excellence) is taken for analysing public sector
( Andersson, Forsgren, and Holm, 2015). This report includes description of three types of
organisations including voluntary, private and public along with their scope and purpose. The
relationship among organisational functions of a company is also described along with PESTLE
and SWOT analysis for evaluating strengths and weaknesses of the organisations.
TASK 1
P1 Explain the different types and purpose of organisations
Classification of organisations as small, medium and large organisations
Small business Medium Business Large Business
Equity is held by family
member or founder
This is mostly privately held
and few shares are with public
This is generally investor held
equity
Decision making is largely by
owners.
Decision making is by owner
or CEO.
There is distributed decision
making by organisational
hierarchy.
Small customer base and
generally local markets
Limited customer base Diverse customer base
Private organisation – This is known as person, partnership, association, corporation or agency
which isn’t a public body and motive of running it is profit (Luqmani, Leach, and Jesson, 2017).
There are various kinds of private organisations which are sole traders, partnerships, private
limited and public limited companies.

Purpose- The purpose of private organisations is to generate higher amount of profits from vital
range of operations and activities. Such as the objective of Tesco Plc is to earn higher amount of
profit by selling more number of units.
Legal structure- The chosen company Tesco is in form of partnership. It is so because this is
managed by different partners. Basically, the partnership is best way for private organisations to
operate their business with funds. There are basically two or more owners in this case. Profit and
loss are bearded by both partners.
Stakeholders- The stakeholders for above plc are both internal and external. In the external
stakeholders there are customers, suppliers, government etc. While under internal stakeholders
there are employees, managers and board of directors.
Public organisation – These are government owned organisations of the country. The
main objective of these are to provide quality and good products and services to people. Various
public limited organisation are based on oil, gas, fertilizers, coal, steel, etc. Their objective is
profitability of company. This helps in increase of economic development of the country. The
example of public limited organisation is NICE (National Institute for Health and Care
Excellence).
Purpose- The purpose of these kind of business entities is to serve general public in an effective
manner so that development of nation can be assure. Like the purpose of chosen company NICE
(National Institute for Health and Care Excellence) is to offer better healthcare services to
general public at lower cost.
Legal structure- Under the legal structure of public organisation local, regional and state
government is included.
Stakeholders- Under this type of organisations, the key stakeholders are employees, general
public and government who makes policies and rules.
Voluntary Organisation – Such organisations do not have aim of earning profit or
money. Their focus is to solve societal problems and issues. Wellcome Trust is one such
example. It is a UK based organisation started in the year 1936 by Henry Wellcome. This
organisation has aim for Biomedical Research.
Purpose- These organisations exist in the business environment in order to help those people
whose financial condition is poor and not able to acquire basic things.

Legal structure- The legal structure of these kind of entities is made by trusts, unincorporated
associations.
Stakeholders- The key stakeholders of these business entities are general public, trusts, donors
etc. who invest funds.
P2 Explain the size and scope of a range of different types of organisations
Private Limited:
The main objective of these organisations are maximise profits of the company. All managers
have to follow what top level managers decides (Bah, and Fang, 2015). Tesco is a company that
deals in supermarkets. The main aim of this organisation is to provide quality products to people. Background: Tesco is a leading supermarket chain in UK. Tesco started in the year 1919
by Jack Cohen. This provides quality services and products to people. Vision: The vision of Tesco is do high value business by offering quality products and
services to customers. Mission: The mission of Tesco is to provide positive environment for its employees so
that they are able to offer quality and good products to customers. Objectives: The objective of this organisation is to make more profits and increase
market share around the world. Products: These business entities are performed at wide level such as the Tesco provides
a large supermarket chain that sells groceries, luxurious home products, clothes, etc. Size: Tesco is operating worldwide. The number of employees working in Tesco are
4,50,000. As well as they are leading in the aspect of supermarket in entire United
Kingdom.
 Structure: Functional organisational structure is adopted in Tesco. This makes it easy for
managers to spread information to all organisational level.
PLC (public limited company)
These are operated by legal framework. The example of public limited company is NICE
(National Institute for Health and Care Excellence)
Background: NICE (National Institute for Health and Care Excellence) is a public sector
organisation which has headquarters in London. The company was founded on 26th February,
1999 by Andrew Dillon (Belás, and et. al., 2015). They are involved in the process of providing
better healthcare services to customers.

 Products and services: The NICE (National Institute for Health and Care Excellence)
corporation offers healthcare services to customers at lower cost. Such as free check-up
and medicines. Vision: The vision of NICE (National Institute for Health and Care Excellence) is to
maintain better health services all around in United Kingdom. Mission: The mission of NICE (National Institute for Health and Care Excellence) is to
offer best health services to those people who can afford cost of private hospitals. Size: The size of NICE (National Institute for Health and Care Excellence) is larger as
there are large number of employees about more then 600. They offer their services at
Northern Ireland, Scotland etc. Objectives: NICE (National Institute for Health and Care Excellence) has an objective to
take care of health of all needed people.
 Structure: NICE (National Institute for Health and Care Excellence) follows matrix
structure of organisation.
Voluntary sector
These organisations work for welfare of the society. The major aim of such organisations
is to do good for well-being of society. For example - Wellcome Trust
 Vision: The vision of Wellcome Trust is to improve health of people and animals on
which biomedical researches are done. Mission: The mission of this trust is do well in biomedical research and benefit
individuals. Size: There are around 1797 employees working in this organisation. Objectives: The objective of Wellcome trust is to provide health improvement among
individuals. They provide funds to various biomedical research.
 Structure: The organizational structure followed by Wellcome Trust is matrix
organizational structure.

TASK 2
P3 Explain the relationship between different organisational functions and how they link to
organisational structures
Marketing and finance – The marketing and finance both department are interrelated
with each other. This is so because in order to conduct marketing activities, a huge amount of
fund is needed that is acquired by finance department. As well as finance department makes
budgets as accordance of marketing departments' activities. Such as in Tesco plc their marketing
department develops strong strategies in order to attain organisational goals (Georgescu, and
Popescul, 2015). They also conduct effective market research so that products are sold at a
higher rate and gradually profit of the company will increase. The finance department of this
organisation has to give funds and money for developing marketing plans and budget plan. Tesco
organises marketing campaigns with the help of money and fund it gets form finance department.
The interrelationship between marketing & finance department has impact on organisational
structure. As the objective of Tesco is to provide customer satisfaction. The finance department
of Tesco has to provide budget for organising marketing campaigns and programs. This
collaboration is important to achieve business aim.
HR and marketing – In addition, the HR department and marketing department also
have a link with each other. It is so because the human resource department hires highly skilled
and capable employees who can perform marketing activities in an effective manner. Basically,
in the absence of proper interrelation, it can be difficult for companies to get skilled employees
who can complete their marketing activities. Such as the HR department of Tesco is involved in
recruiting and selecting individuals who are working in the organisation (Levytska, and Vovk,
2017). Marketing department of Tesco posts vacancies for job. They also promote products &
services offered by the company. Marketing department of Tesco carry out market research and
it helps identifying needs and demands of customers. The function of marketing is to give
requisites of employee who can work in the organisation to the HR department. The helps Tesco
to hire employees who have all requisite abilities. Tesco’s aim is to enhance profits of company.
This is possible when HR department and marketing department have good collaboration. This
enhances efficiency and skills of employees.
Organisational structure

Organisational structure adopted by Tesco is functional type of organisational structure.
This helps in increasing the operational efficiency as this enhances employee's involvement in
decision making of the company. As Tesco follows functional structure, there are independent
departments in this company which are controlled and managed by a common manager.
TASK 3
P4 Positive and negative impact on the macro environment on business operations
Tesco’s PESTLE analysis will help to know what are the factors affecting business operations of
the company (Hamilton, and Webster, 2018) . Before staring operating in any country, Tesco
uses PESTLE for analysing it’s positive and negative aspects of doing business there.
Political factors – Under this factor government rules and regulations are included. Tesco
is a supermarket chain and it operates in approximately 12 countries across the world and these
include major markets like Asia and Tesco has to face different political factors at the time of
starting business in different countries. Such as in UK, the rate of taxation can be different and in
USA this can be varient. Due to this they face both negative and positive impact.
Positive impact – The import duty on Tesco affects operations of Tesco as it imports
some inventory from outside countries like East Asia, UK and China (Europe (Vision, values and
business strategies A Tesco case study, 2019).
Negative impact – There are some regulations of country that affects operations of Tesco.
In Asia, Tesco is facing problems due to increase in export charges for product.

Environmental factors –Organisations are liable for responding these issues for
benefiting society. Tesco always wants to attract more customers so it has started selling
products on tesco.com. While delivering, Tesco cars and vans uses fuel saving routes. They also
use these while collecting unwanted plastic bags from customers. This company also recycle
some waste materials. This organisation has taken pledge for using renewable sources &
generating 100% of its electricity by the year 2030.
Positive impact - Tesco is adopting new techniques and process that are not harming
environment. This helps in maintaining positive relation with business environment factors like
customers, suppliers, manufacturers, etc.
Negative impact – The installation of eco friendly techniques and processes requires a lot
of investment by the company.
Social factors – The lifestyle and trends of customers changes constantly. In such cases,
it is not easy for companies to manage all their requirements. This organisation offers organic
food due to the reason of customers becoming more health conscious (Kolk, 2016) . It is
essential for this company to analyse consumer behaviour and enhance profits and sales of the
company.
Positive impact – There are different diversification of products in Tesco that attracts
more people to buy products from their supermarket. It maintains sales and profits of Tesco.
Negative impact – The demands and needs of customers continuously thus there is
difficulty for organisations to make changes in their operations and systems.
Technological factors – In the recent time period, technology is developing in an
effective manner. Thus, it is important for companies to adopt new and advanced technologies so
that they can sustain. Tesco do not has good customer experience and that is why they have to
develop strategies that will help in increasing satisfaction of customers. When it applied latest
technologies within it’s operations, it was easy for this organisation to gain customer loyalty and
trust again in less time. Tesco launched RFID technology in order to increase in-store
experience. With the help of this technology, it was easy to count stock and remove it after sales.
Positive impact – This organisation offers its own mobile payment system known as
payQwid in stores (Palgrave Macmillan, London.Brown, 2018). It provides convenience to
customers for easy shopping as it saves time.Negative impact – Tesco’s latest techniques and
processes requires huge investments and they need research and analysis.

Economic factors – Economic factors of company affects business operations and
functions in both positive and negative manner. The different economic factors that affects
business operations of Tesco are deflation rate, Wage rate, inflation rate , income, exporting rate
etc. Economic factors affects price, cost and profits of Tesco. The main objective of this
organisation is to enhance borrowing cost. This directly impacts brand reputation and leadership
strategy.
Positive impact – Tesco has used diversification and its presence in International market
has helped for increasing success of the company.
Negative factors – Labor cost affects economic factors and this affects this supermarket.
For instance, Tesco has to pay millions of pound in UK due to increment of UK minimum wage
rate up to 4.4%.
Legal factors –Organisations follow rules and regulations of the country they are
operating in. Legal factors affects performance of the company. There are both things whether
the rules creates positive impact or they can have negative impact (Pearson, 2017). This
organisation do business operations as per the food retailing Commission. Such as for Tesco plc,
it is essential to follow various laws and acts like employment law, wages act and many more.
Positive impact - Tesco conducts business operations as per Food retailing Commission
(FRC) strict code of practise. They are following rules and regulations that is helping them to
take support from government.
Negative impact – Tesco faced an allegation because of offending legal rights of
employee. Employees of this organisation were discriminated at workplace on the basis of their
gender & age.
TASK 4
P5 Conduct internal and external analysis of specific organisations for identifying strength and
weakness
SWOT analysis is basically used by organisations for evaluating their internal strengths
and weaknesses along with external opportunities and threats. It is essential for organisations to
conduct this analysis in order to maintain growth of profit & sales. This analysis helps to know

what are the ways in which business can be done better (Ren, and et. al., 2017) . The SWOT
analysis of the two companies i.e. Tesco and NICE is described below -
SWOT analysis of Tesco
Strength Weakness
 Tesco is a well reputed organisation
and it is one of the best supermarket
retail chain of UK. It is popular for the
way in which it makes profits every
year.
 Tesco uses latest technology and
technique for giving customers good
experience.
 Tesco is having mobile payment
application and advanced M-Commerce
facility.
 Tesco is not able to conduct strong
marketing research and due to this,
profit and sales of the company are not
increased.
 Tesco has high debts and credit card
liability, as a result financial profits are
not good.
Opportunity Threats
 Tesco is a good organisation and it has
opportunity to enter other foreign
markets for increasing it’s market share
and profits. There is need of strong
researches for global expansion.
 Tesco develops strategic partnerships
with some other companies like P&G,
Amway, etc. This provides help in
attracting more number of customers.
Tesco has faced social media backlash in UK at
the time of Christmas due to it’s advertisement
(Schaltegger, Hansen, and Lüdeke-Freund,
2016). At this time, customers boycotted stores
of Tesco.
 After Brexit, there is a threat of trade
deals and costs.
SWOT analysis of NICE (National Institute for Health and Care Excellence)
Strength Weakness
 The company has wide range of
employees and branches at different
 Lack of skilled employees is biggest

locations which help them in beating
rest of other competitors.
 As well as they have enough sources of
funds as they operates their activities in
multiple nations.
weakness for them.
 Poor management of different kind of
aspects is one of the biggest weakness
for above plc.
Opportunity
 The company has opportunity to
implement new and advanced
techniques in the aspect of providing
services in most effective manner.
 They have opportunity to expand their
operations in those segments wherein
needed people are more in number.
Threat
 There is threat of strong competition in
market from private healthcare
companies.
 Ineffective allocations of funds may
lead to dissolution of their activities as
they are facing lose in recent time.
P6 Interrelate the strength and weakness with macro factors
The decision making of all organisation is affected by the macro and micro factors of
business environment (Morioka, Evans, and de Carvalho, 2016). Organisations can analyse
market by using PESTLE and SWOT.
Political factor:
Strength- In the case when Tesco plc, expands their business operations into different countries
then political stability helps them in conducting business activities in an effective manner.
Weaknesses- When political decisions in relation to business changes then it hinders stability of
business in long run.
Economical factor
Strength- Tesco is they are operating in countries which have high economy.
Weakness – The weaknesses of company is they are not able to gain profit in countries having
low economy.
Social factors

Strength- Tesco is this organisation provides products to customers on the basis of their needs
and demands (Sztangret, 2016) .
Weakness - Tesco is it has poor market strategy.
Technological factors
Strength- Strength is that it is adopting latest techniques while performing operations.
Weakness- Tesco has to provide training to employees that may lead to higher cost.
Legal factors
Strength- Implementation of all kind of laws and legislations may lead to increased reputation in
market for above company.
Weakness- In the case when higher number of laws and legislations are evolved by UK
government then this may difficult for Tesco to sustain.
Environmental factor:
Strength- The Tesco plc follow all the aspects in order to keep environment neat and clean that
helps in creating a positive image.
Weaknesses- The emission of harmful gas during production of products may lead to a negative
impact on above company.
CONCLUSION
It is concluded from the above report that business environment factors affect an
organisation. PESTLE and SWOT analysis is done by companies to know their strength and
weakness. Profits and sales of the company are increased by properly analysing these factors and
making decisions for the company. All different sectors of organisation private, public and
voluntary have different size and scope and way of working.

REFERENCES
Books and Journals
Andersson, U., Forsgren, M. and Holm, U., 2015. Balancing subsidiary influence in the
federative MNC: A business network view. In Knowledge, Networks and Power (pp.
393-420).
Bah, E.H. and Fang, L., 2015. Impact of the business environment on output and productivity in
Africa. Journal of Development Economics. 114. pp.159-171.
Belás, J. and et. al., 2015. The business environment of small and medium-sized enterprises in
selected regions of the Czech Republic and Slovakia. E+ M Ekonomie a Management.
Georgescu, M. and Popescul, D., 2015. Social Media–the new paradigm of collaboration and
communication for business environment. Procedia Economics and Finance. 20.
pp.277-282.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.Ji-fan
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Palgrave Macmillan, London.Brown, R. A., 2018. Chinese business enterprise in Asia.
Routledge.Deasy, S. and et. al., 2016. Controlling use of a business environment on a
mobile device. U.S. Patent 9,247,042.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Ren, S. and et. al., 2017. Modelling quality dynamics, business value and firm performance in a
big data analytics environment. International Journal of Production Research. 55(17).
pp.5011-5026.pp.23-34.
Schaltegger, S., Hansen, E. G. and Lüdeke-Freund, F., 2016. Business models for sustainability:
Origins, present research, and future avenues.
Sztangret, I., 2016. The Competence Centres in IT business ecosystem. Case study. Journal of
Economics & Management, 24, pp.99-110.
Morioka, S.N., Evans, S. and de Carvalho, M.M., 2016. Sustainable business model innovation:
Exploring evidences in sustainability reporting. Procedia CIRP, 40, pp.659-667.
Levytska, S. and Vovk, V., 2017. Variability of information support for the results of enterprise
business activity. Zeszyty Naukowe PWSZ w Płocku. Nauki Ekonomiczne.
Luqmani, A., Leach, M. and Jesson, D., 2017. Factors behind sustainable business innovation:
The case of a global carpet manufacturing company. Environmental innovation and
societal transitions, 24, pp.94-105.
Vidović, A.B., 2015. Growth and development of companies in the function mergers and
acquisitions. Tehnika, 70(5), pp.866-869.
Online
Vision, values and business strategies A Tesco case study, 2019. [Online]. Available
through:<https://businesscasestudies.co.uk/vision-values-and-business-strategies-a-tesco-case-
study/>

PESTLE Analysis of Tesco, 2019. [Online]. Available
through:<https://www.marketingtutor.net/tesco-pestle-analysis/>
Wellcome Trust, 2019. [Online]. Available through:<https://wt-globalhealth.cam.ac.uk/about-us-
hs>
BBC MISSION & VISION STATEMENT, 2019.[Online]. Available through:<https://mba-
tutorials.com/bbc-mission-vision-statement/>