Types of Organisations Operating in a Business Environment

This assignment analyzes the different types of organizations, their scope, size, and structure. It also explores the impact of macro and micro environment factors on GSK, a business organization.

REPORT ON TYPES OF ORGANISATIONS OPERATING IN A BUSINESS
ENVIRONMENT
From: Business Advisory
Subject: An analysis of types of organisations: purpose, size, scope, legal status and structure
Executive Summary:
This particular assignment includes the analysis of the different types of organizational, its
scope size and organization structure. Further, this includes the impact of the macro and
micro environment factor on the business organisation that is GSK.
1.0 Introduction
An organisation constitutes of a group of people who are organized for a particular purpose.
Te purpose may be any kind of business, entrepreneurship or any department of government.
Some of the most elemental features of any organisation includes: teamwork, sharing same
goals, leadership, high employees morale, adapting to the risks and the like which indicates
of the organization to be a healthy one.

1.1 Types of organisations
The different types of organisation are discussed hereafter that exemplifies the structures,
scope and size of the organization
Public Sectors Organisations:The public sector organisation is usually comprised of
organisation that are owned and operated by the government and exist to provide services for
its citizens. Through the process of outsourcing, public sector organisation will often engage
private enterprises to deliver goods and services to its citizens.
Basic characteristic of Public organisation
The public ownership consists of the all the organisations that are governmental or
controlled by the public. These often include organisations that are publicly funded
agencies, enterprises and the entities that include delivering public programs, services or
goods (Bouckaert, G. and Van Dooren, 2016). The characteristics of the public
organisation includes are presented in terms of the following:
State ownership: The enterprise ownership is vested to the state that may be under
Central, local or government ownership.
State control: It is controlled both by government directly in relation to its
functionality and management. The government exercises the control in relation to any
kind issues and exercises the control.
Public accountability: These types of organisations are accountable to the public
owing to their funding being done by public. The accountability is done though
committees, legislations, ministers, audit institutions and the like.
Autonomy:These organisations are free from the daily interference in terms
management and affairs excising the utmost autonomy.
Coverage: These types of organisations cover all areas, fields of activity and operations
of the organisation.
Goals and objective
The goals and objectives of the public organisations includes the: economic development,
self-reliance, employment generation, development of backward areas, economic surplus,
consumer welfare, public utilities and egalitarian society, defense, labor welfare and the like.

Legal form of Public Organisation
The legal form of any public organisation is that of corporation, companies or franchises as
well. This is because; it has many rights, duties, and privileges as well (Adamas, 2014)
Private sector organisations
Organisations that are run by companies or individuals are the private sector that is the part of
the economy of any country. The goal san d objectives of private sector organization include
profit maximization, restricting access, transparency in reporting.
Types of private sectors organisation
1. Sole traders:This is self employed public sector where individual is the owner.
 Advantages: Low costs as start ups, owner is the boss. The profits are limited to the
sole trader.
1. Disadvantages: Unlimited liability, no legal distinction, limited capacity to raise
Partnerships: The business that is run by more than one or twenty members is known
as partnership. Partners has to register as self employed.
 Advantage: Partners share the responsibility, richer source of capital, minimal tax
fillings, no double taxation.
 Disadvantages: Unlimited liability, self-employment taxes
 Capital.

2. Companies: Company is a distinct entity that is legal and separate from
shareholders. These can be private or public.
 Advantage: Limited liability to shareholder, easy to transfer ownership by selling
shares favorable taxation rates
 Disadvantage: Expensive to establish, financial affairs are public, profits being
distribute, directors held personally for legal obligations.
3. Joint ventures: Joint ventures are also known as the Limited companies that are
governed by the registered companies.
 Advantage: sharing risks and costs, access to new markets, distribution networks
 Disadvantage: Blurred objectives, difference and management in the organizational
culture.
4. Franchising: Companies are already established and holds reputation
commendable shares in the market. This type of organizations sells their copy right to
the public.
 Advantage: The risk of business failure is very less, established market share,
experience is required.
 Disadvantage: Higher costs, monitoring the ongoing franchise is intrusive, profits
shared among all the franchises.
5. Licensing: Licensing means leasing or renting the intangible asset. This allows the
company to carry out the confidential business that is authorized to the holder of the
license in the business. The creation and the management are all done in terms of the
contract.
 Advantage: The investment is lesser for expansion from the side of the owner.
 Disadvantage: Quality is not maintained, less control over the licensed business.

c) Voluntary sector organisations
A group of voluntarily interested people, who held same viewpoints, are particularly with the
aim to carry out charity. These are also known as non-profit organisations. The aim and
objectives of the voluntary sector is to improve the condition of the society in general. Often
the aim and objectives are particular to any kind of disease or societal issue which will be
needs to be done by them.
Types of voluntary organisations:
There are two types of voluntary organizations and the difference between the two includes
the following:
NGOs:NGOs or non-governmental organizations are not maintained by the government but
the funds for the organisations are raised by the government. The operational area is large.
The registration is done through Societies Registration, Trust under Public Trust Act and the
like (Chelladurai et al.2017).
NPOs: NPOs or non-profit organisations do not go for the division of the funding between
the shareholders and the owners of the organizations rather extra funds are raised for the
purpose of the objective of the firm (Chelladurai et al.2017). The operational area is limited.
The NPOs are incorporated under the cats or sections like Companies Act.
2.0 Briefly explain what you understand by scope of an organisation.
The scope of any organisation relates to the establishment and the widespread of the business
in the particular industries. The scope of any organisation depends on the type of and
structure of the business organization which includes: Sole proprietorship, Joint Stick
Company, partnership and the like.

2.1 Identify the factors that determine the size of an organization
There are six major factors that determine the size of any business organization (Michael and
Popov, 2016). These include the following:
 Managerial ability
 Availability of lab our
 Nature of the business,
 Availability of Finance
 Entrepreneurial skills
 Extent of the market
2.2 Small and medium sized enterprises
Enterprises employing less than 50 employees but more than 10 are known Small and
Medium enterprises. The number often varies from country to country and in UK the upper
limit is 250 employees. These are independent and non-subsidiary
a) Importance of SMEs in the UK
The importance of SMEs is UK owes to the following:
 Turnover: This provides a combined turnover of £1.6 trillion in the last financial year
(Owen et al. 2016).
 Employment: SMEs contributes largely to the job creation in UK that accounts of the
60 % of in the private sector (Kanavos and Angelis, 2014).
 Growth: Owing to innovation, growth is huge that is about 47% increase from 2009 to
2013 that contributed to the recovery of the economy of UK (Bloch and Bugge,
2013).
 Industry: The largest industries are all SMEs, including retail, repairing,
manufacturing and the revenues from these include 456% of the economy of the
organization (Kanavos and Angelis, 2014).

2.3 Scope of different organisations
The Scope of the different organisation is different as per the type that includes: National
Company, International Company, Multinational Company and Global Company.
2.4 Explanation and an analysis of how structure, size and
scope of different organizations affect business objectives
and the products and services offered.
The structure, size and scope of the different organizations determine the way how
it is going to operate the organisational operations in manufacturing any product
or providing the services to the organisation. With the increase in the size of the
organisation the structure is evident to change. The organizational objectives
determine what type of strategies is required for its achievement, which further
necessities the increase in the size of the organisation and its structure as well.
2.5 Organizational functions
The different functions that are performed by the different departments of any organization in
order to achieve the targets and the objectives of the firm in the run as well are known as the
organizational function.

Figure 1: Different organisational function
(Source: Chelladurai, 2017)
2.5(a) Importance of organisational functions
The different functions that are performed in the different departments including the
production, marketing, delivering, supply chain, customer handling, and human resource are
all driven towards the achievement of the organisational goals of sales, revenue, competitive
advantage and customers’ satisfaction.

b) Organizational structure
Figure 2: Organisational Chart
(Source: Basaia et al. 2016)
c) Types of organisational structures
Organisational structure is the system which defines the system of the workflow
from the hierarchy to the employees (Murray, 2014). This includes the
arrangement of communication, the rights, roles, power and responsibilities of the
individual or group
d) Organisational structure of GlaxoSmithKline plc (GSK).
The organisational structure of GlaxoSmith is that of hierarchical which includes the board of
directors, chairman and then the different departments. The organisational objectives of the
company are to operate globally with increase in the sales and get competitive advantage in

global context. The advantage of the organisational structure is that the decision making
process will be faster but the disadvantage is that the company has great inclination to the
become autocratic that will make the employees de-motivate.
Figure3: Organisational Structure GSK
(Source: Basaia et al. 2016)