Business and the Business Environment - Skoda

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1. Different purposes and types of organisations......................................................................1
P2. Size and scope of different types of organisations................................................................3
P2 Size and scope of different types of organisations.................................................................3
TASK 2............................................................................................................................................4
P3 Relationship between different functions of organisation and their link with organisational
structure and objectives...............................................................................................................4
TASK 3............................................................................................................................................5
P4 Impacts of macro environment factors on business operations.............................................5
P5 Internal and external Analysis of Skoda Auto with other similar organisation.....................7
TASK 4............................................................................................................................................9
P6. Evaluate how strength and weakness interrelate with the external macro factors................9
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Business environment is referred as surroundings in which organisation perform its
operations in order to earn profit. There are various forces that are present in internal and
external environment of firm which highly affect working of business. It is essential for an
organisation to identify factors and their impact on operations of firm. Determination of these
forces helps the management team in framing appropriate strategies in order to handle these and
deal with them. In the given project, company chosen is Skoda Auto which operates in auto
mobile sector (Boons and Lüdeke-Freund, 2013). Firm offers a wide range of products to its
customers and is a fully owned ancillary of Volkswagen group. The assignment covers different
scope, types, size and purposes of enterprise. The relationship of different functions of firm and
its link with its objectives is also defined. Besides this, various internal and external forces of
business environment and their effect on the activities of the business are described. Apart from
this, SWOT analysis of the firm to determine strengths and weaknesses as well as their link with
external forces is done.
TASK 1
P1. Different purposes and types of organisations
Main purpose of every organisation is to earn high income by satisfying and fulfilling the
needs of consumers by offering them good quality of products. In the firm, different departments
perform various functions. There are distinct types of organisations and each has different
purposes which are as follows:
Public limited company
Those firms which are owned and operated by legal authority and their ownership is
completely in the hands of government. Such firms are known as public sector enterprise. These
companies emphasise on offering good quality with minimum priced products. Firms issue its
shares so that fund can be raised from the market in order to execute its commercial activities
smoothly and in a proper way. The example of public sector organisation is TESCO which is a
public limited enterprise (Saleem,2017). For taking major decisions, the firm takes approval
from its stakeholders. This government sector is further divided in the following:

Central government: It has the authority to control every affair of the nation. It is
responsibility of central government to deals with all the issues and activities which comes under
government are currency printing and tax collection.
State government: All the issues of state are regulated by this government. For instance,
if need is to encourage higher education in nation then for this, it is responsibility of government
to formulate appropriate policies and plans to implement this.
Local government: All the issues related to a specific zone, area or town are controlled
and regulated by this government. It has less power then state and central Government
Private company
These organisations are those which are owned and operated by single person or group of
people. There is no role of any legal authority in the private sector organisation. These
companies offer high quality products with innovative features in order to get attraction of
customers. Main purpose of these organisations is to earn higher profits and maximise its shares
in the market (Hall, 2011). The example of private sector organisation is Skoda Auto which is a
well-known firm due to its positive brand image in market. It administers high quality products
to its clients. This sector is again divided into the following:
Partnership: In this, the firm is owned and operated by two or more than two individuals.
Maximum 20 persons can operate partnership firms. A deed is signed among partners and all
legal requirements are fulfilled by individuals so that chances of conflicts can be reduced.
Sole proprietorship: The business is fully owned and operated by single person who is
liable for all profits and losses of business.
Franchising: In this,franchisor gives right to franchise to sell its product or brand name
to others. In turn, dealers pay some amount to use its brand name. Here, franchisor is owner and
franchise is person who gets dealership.
Voluntary sector
Main purpose of these organisations is to develop the society. These sectors focus on the
development and welfare of society and satisfy or fulfil their basic needs. This would improve t
living standard of people in society (López-Gamero, Molina-Azorín and Claver-Cortés, 2011).
OXFAM is an example of voluntary sector organisations that work in order to eliminate the
poverty.