Business and Business Environment

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................2
LO 1.................................................................................................................................................2
Different types of organisations and their purpose......................................................................2
Scope and size of organisations...................................................................................................3
LO 2.................................................................................................................................................4
Relationship between various organisational functions..............................................................4
LO 3.................................................................................................................................................5
Impact of macro environment on business operations................................................................5
LO 4.................................................................................................................................................6
Identifying strengths and weakness of organisation using SWOT..............................................6
Interrelation between micro and macro factors...........................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is known to consist of all parameters which can affect decision
making and strategic direction of organisation. These factors have varying impact on different
types of organisations which have distinguish features on the basis of purpose, size and scope
(Hamilton and Webster, 2018). Thus for long term success it is very crucial for organisation to
assess the impact of macro and micro environmental factors on their decisions. The report will
discuss the types of organisation and interrelationship between their functional units. It will also
use suitable models such as PESTLE and SWOT to assess the role of business environment in
organisational activities and decisions. The study will also describe and evaluate the relationship
between macro factors and organisational strengths or weakness.
LO 1
Different types of organisations and their purpose
Business is defined as the process of converting material and skills as per the required
products and services expected by customers. Different types of organisations are as follows:
Private organisations: These organisations are owned by private individuals and aims at earning
profits. For example organisations like Sainsbury have key purpose of gaining profits from their
functions. Private organisation can be of various types like partnership, cooperative, sole traders
and limited companies (Prajogo, 2016). Private organisations can be owned by both government
and other private bodies. They have great contribution in the economic development. Private
organisations are required to emphasis on revenue generation and net income so that they can
gain competitive advantage.
Public: This type of organisations are controlled and owned by government or their related
agencies. Their purpose is to ensure the well being and benefits of citizens. Example of such
organisation is Virgin money which provides financial services to bank. The services of public
organisations help society by developing a positive relationship with them and through this also
gain sustainable profits for the shareholders.

Voluntary: These organisations are non profit and non government organisations which work
for communities (Deasy and et.al., 2016). For instance Cancer research organisation is a
voluntary group which works for the awareness and treatment of cancer. Voluntary organisations
carry out social activities which aim at only enriching the society without any profit objective.
Different legal structures which are associated with these organisations are limited
companies, partnership and sole proprietorship. In sole trade business is owned by a single
individual only and thus a single person has liability of all organisational resources. On the other
hand partnership is owned by two or more parties and thus is governed by partnership deeds.
Scope and size of organisations
Size and scope of different organisations is discussed as below:
Micro enterprises: In these organisations employment level and investment capital is low. These
organisations provide great contribution in developing economies. For instance Cancer research
UK is an example of micro enterprise.
Small organisations: Organisations such as Tesco falls in these categories and are owned
independently. These organisations include small number of employees (Cepel and et.al., 2018).
Small organisations are owned by sole traders which may vary in terms of structure or size.
Medium and large enterprises: In this type of organisations employees work as voluntary
members and are also involved in multinational bodies which have growth potential. This type of
organisations includes multinational organisations such as Virgin money which works in
government sector. These organisations earn huge money and keep their earned capital for future
development goals.
Micro organisations like Cancer research are large and work for increasing their growth
in developing countries. Since this organisation is voluntary type it needs low investment but
works on wider context for meeting its social purpose (Gaganis, Pasiouras and Voulgari, 2019).
Similarly small sector organisations aims at increasing their sales volume by holding
partnerships with other individuals or organisations. Such types of organisation have strong
controllability over their management so that they can meet the requirements of their customers.
On the other hand large and medium enterprises work solely s non profit company and thus work