Different Types of Organisations and Their Purpose

This document provides an overview of different types of organisations, including private, public, and voluntary organisations, along with their purpose and legal structures. It also discusses the interrelation among various organisational departments and the positive and negative impact of macro surroundings on enterprise operations.

Business and business
environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Different kind of organisations along with its purpose.....................................................3
P2 Scope & size of organisations...........................................................................................4
M1 Analyse structure, scope & size of business ...................................................................6
TASK 2 ...........................................................................................................................................7
P3 Interrelation among various organisational departments..................................................7
M2 Merits and demerits of functional interrelationships.......................................................8
D1 Critical evaluation of complexities...................................................................................8
TASK 3............................................................................................................................................9
P4 and M3 Negative as well as Positive impact on the macro surroundings on the enterprise
operations ..............................................................................................................................9
TASK 4 .........................................................................................................................................12
P5 Conduct SWOT of company ..........................................................................................12
P6 Interrelate the strength as well as weakness with large factors ......................................13
M4 TOWS analysis and it's impact on decision making .....................................................14
D2 Critically evaluate the impact of internal as well as external factors on business decision
making and organisational aim ...........................................................................................15
CONCLUSION .............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Business climate or environment is defined as the several micro as well as micro factors
which impacts different organisational activities, functions and operations. It is important for an
organisation to coordinate and collaborate with all factors so that operations of company are
smoothed. In the following report, a private organisation is chosen which is Tesco, a voluntary
organisation is also chosen which is The British heart organisation and for analysing public
sector, British Broadcasting company is chosen. The present report describes three type of
organisations such as 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 Different kind of organisations along with its purpose
Organisations are developed for performing different operations and functions in order to
attain specific goals and objectives. There are different types of organisations in business
environment such as private organisation, public organisation and voluntary organisation.
Different organisations have their own objectives and aims. Their existence in market has
different aim (Andersson, Forsgren, and Holm, 2015). The existence of private organisations in
international business atmosphere will costs a lot to the company. The various business
organisations are mentioned as follows-
Private organisation – Companies that are coming in this type of group are partnership,
person, association, agency or corporation. All these organisations are refers as private
organisations and mainly operates for the motive of earning profit. This can be a self-sustaining
or non-federal entity. Example of private limited organisation is Tesco. Private organisations are
of different types which includes Public as well as Private limited companies, sole traders,
partnerships and so on.
Legal structure of private organisation. Sole traders – Sole traders are those who are managing and handling different
organisational functions on his own. All the consequences of business loss or profit are
managed by the single owner. Owner has the responsibility for conducting the functions
which is associated with its operations, legal and financial aspects.

 Partnership – It is considered as a type of private organisation which needs less funds. In
this there are two or more partners working together. Example if John Lewis
Partnership. Private limited companies – These are those organisations which are owned by private
individuals and are not allowed to sell their shares in market. For example: Airdri.
 Public limited companies – Under this category all the organisations will freely sell their
shares at the marketplace so that they can gain huge amount of capital. For example:
Tesco and Sainsbury's.
Public organisation – These are a kind of business entities mainly owned by the
government. The primary purpose of such firms is to offer quality of services and products. The
working of such organisations has great contribution to economy of nation. The different types
of enterprise includes gas, coal, oil, steel, fertilizers and many more. The major objective of
public organisation is enhancement of profitability of company that will ultimately lead to
growth of nation's economic development. The example of public organisation is British
Broadcasting company. Following is the lawful structure of the organisation -
Legal structure of Private organisation Central government department – These companies are owned by state government.
 Local authorities – These organisations are controlled and managed by local authorities.
Voluntary Organisation – Under this type of organisations, primary aim of the entities
are to help the society and provide them welfare and development. In the present context, chosen
organisation for voluntary is The British Heart organisation. Following is the legal structure of
voluntary organisation -
Legal structure of Voluntary organisation Trust- In this kind of trusts, there are particular trustees mainly provide funds for the
welfare and development of the society. Others- Royal charter bodies, community, etc.
 Un-incorporated association- All these are refers as the management committees mainly
assist in performing task and operations.
P2 Scope & size of organisations
Different companies have various scope, size, mission, vision and they offer different
products. All companies want to attract maximum shareholders in their company so that they

have maximum capital with them to sustain and operate in market. Scope & size of companies is
discussed below:
Private Limited:
Such organization have the purpose of increasing the profitability & then achieve their
objectives., which are being laid by top management of company. Tesco is a supermarket chain
of UK and it is making big profits. These companies have main objective to of earning profits
and also they aim to satisfy their customer's needs and demands (Vision, values and business
strategies A Tesco case study, 2019). These companies make adequate research study their
customers and after that they try to make required changes and modifications according to their
customer's choices. Background: Tesco is a leading supermarket chain in UK. This was established in the
year 1919 by Jack Cohen. This organisation has provided quality services and products
since years. Vision: The vision of Tesco is to create high value business by offering quality
commodities, services as well as goods to the end users. Mission: Their mission statement is to provide positive environment for its employees so
that they are able to offer quality and good products to customers. Objectives: It is to make more profitability and increase market share around the world. Products: 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.
 Structure: Functional organisational structure is adopted in Tesco. This makes it easy for
managers to spread information to all organisational level.
Public organisation
It refers to an organisation which is part of public sector by a legal framework at any level
for e.g. The British Broadcasting organisation. Background: BBC is a public service of British and the headquarters of this company are
located in London. This is an old and reputed firm established on 18th October, 1922 by
John Reith. This was launched under a royal charter. This organisation offers services
like Digital, Culture, Media and Sport (BBC MISSION & VISION STATEMENT, 2019).

 Services & Products: They offers information to people by way of digital media i.e. on
television, radio, news, internet, etc. Vision: It is to be the world's most creative and innovative business entity. Mission: BBC's is to offer relevant information to people by providing entertaining
programs and news sessions. Size: In BBC total number of staff members currently working within the business entity
are around 20,916. Objectives: BBC has an objective to offer knowledgeable programs and entertainment to
people so that all individuals have relevant information regarding issues across the world.
 Structure: BBC follows Hierarchical type of organisational structure.
Voluntary sector
Voluntary organisations refers to those business entities mainly operate their functions
for the welfare and development of the society. The major aim of such organisations is not
earning money but they want to do good for society's well-being. In reference to the present
organisation which is The British Heart Foundation.
 Vision: The vision of the British Heart Foundation is to minimize death rates from
cardiovascular diseases. Mission: The mission of this organization is to help people having heart diseases and
they require fund for doing research for cause, diagnosis, prevention and treatment of
circulatory and heart diseases. Size: There are around 950 healthcare professionals providing care to patients across UK. Objectives: To provide health improvement among individuals.
 Structure: Matrix organizational structure is followed by The British Heart organisation.
M1 Analyse structure, scope & size of business
Organisational structure, size & scope directly links to business aims and objectives.
When there is wider scope for organisations, they have opportunity to expand their business
effectively. Public organisation – The business objective of BBC is to offer best entertaining
programs to its customers. It follows hierarchical organisational structure in which the
top level management of BBC makes strategies which are communicated by executives

to middle managers and lower level managers; it helps in channelizing all the efforts over
fulfilment of organisational objective. Private organisation – The objective of Tesco is to increase customer satisfaction. The
size of Tesco is huge as it operates in multiple countries and has all the products which
can fulfil customer’s demand. This size of organisation helps in achievement of
company’s goal.
 Voluntary organisation – The main objective of The British Heart organisation is to
increase the living standards and health of all individuals. This organisation works on
large scale and has scope which includes providing help to all individuals without any
discrimination. This scope of The British Heart organisation helps them to fulfil their
goal of improving health of individuals.
TASK 2
P3 Interrelation among various organisational departments
Marketing and finance – The marketing department of Tesco is involved in developing
effective strategies and conducting market research. The main objective of Tesco is to create
strong marketing strategy that will help in increasing sales of the company. Tesco's finance
department provides funds and maintains budget for making marketing plans (Schaltegger,
Hansen, and Lüdeke-Freund, 2016.). When marketing department of Tesco has to organise
marketing campaigns and advertisements the finance department has to provide sufficient money
to the marketing department. This interrelationship among marketing and finance department
affects organisational structure. This inter relationship helps Tesco to effectively use their funds
in marketing dept. which ultimately helps in achieving their goal of high profitability.
HR and marketing – The main aim of HR department is to hire, select and recruit best
and capable candidates who can work in the company. Marketing department has to post
vacancies and promote services and products offered by company. Besides this, Tesco's
marketing department is responsible for conducting effective market research & identifying the
requirements and demands of customers. The marketing department has to provide requirements
of candidate to the HR department. This coordination and cooperation helps Tesco to hire
employees who have all requisite abilities. This inter relationship helps Tesco to hire effective

employees for marketing dept. which enhances their productivity and leads to achievement of
goal of high quality staff.
Organisational structure
Organisational structure adopted by Tesco is functional which assist in increasing the
operational efficiency as this enhances employee's involvement in decision making of the
company (Belás and et. al., 2015). With the assistance of functional structure, it has been
identified that each and every department with the business organisation are managed by a
specific manager.
M2 Merits and demerits of functional interrelationships
The inter relationship between the several departments such as finance and marketing
allows Tesco to effectively utilise their funds which is an advantage of the company as they can
increase their profitability.
On the other hand, inter relationships between departments like HR and marketing in
which HR manager hires talented candidates but due to their inefficiencies of selecting a non-
suitable employee can result into a disadvantage as it will affect the marketing operations.
D1 Critical evaluation of complexities
The different types of business structures in a business environment are sole
proprietorship, partnership, limited liability company and corporation. It depends on
entrepreneur to follow any one type of business structure. Each of this has its own benefits and
drawbacks.

Sole proprietorship
Advantage - Sole proprietorship is easily formed and provides direct control of the
business. This is beneficial for low risk business.
Disadvantage - The drawback of this is money cannot be raised as stock cannot be sold
and generally banks do not provide loans to sole proprietorship.
Limited liability company (LLC)
Advantage - The owner can take benefits of both partnership business structure and
corporation. LLC protects from personal assets such as savings accounts, vehicle and house will
not be at risk in case of bankruptcy.
Disadvantage - LLC is more expensive than sole proprietorship and partnership business
structure.
There must be positive relation among all departments of the organisation. This helps in
collaboratively working for attaining organisational goals. All functional departments of
organisations are connected with each other (Luqmani, Leach, and Jesson, 2017). This provides
and advantage of collectively working for a specific aim. On the other hand, the negative aspect
of this is if one function is not working effectively then processing and functioning of other
departments is also disturbed.
TASK 3
P4 and M3 Negative as well as Positive impact on the macro surroundings on the enterprise
operations
Tesco is a retail supermarket chain of UK and for analysing the external factors which
affects operations of company, PESTLE analysis is done. This helps in estimating environment
in which Tesco is operating.
Political factors – Tesco is operating within 12 countries of the world which includes
Europe & Asia (Vision, values and business strategies A Tesco case study, 2019). This has to
deal with various political factors while operating in these countries. This has to follow various
regulation and rules of different countries (Georgescu, and Popescul, 2015). Some of the factors
that Tesco has to deal with are tax rate, current as well as impending legislation, economic rate,
political instability, rate of unemployment within various countries in which they are performing
their functions.

Positive impact – The import duty on Tesco affects operations of Tesco as it is the
organisation which highly imports some of the commodities from outside countries like East
Asia, UK and China.
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.
Economic factors – Tesco is affected by economic factors too. Some of the economic
factors which affects functioning of the company are wage rate, deflation rate, inflation rate,
exporting rate, income, etc. The various factors which impact Tesco are price, cost and profits.
This company is focusing on increasing 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 – Labour cost is an economic factor which affects the supermarket
industry. Due to expensive labour in UK, Tesco is negatively influenced as they have to pay
heavy amounts for labours.
Social factors – The trends of shopping among customers’ changes constantly with time.
Customers are having tough schedule and they want to have delivery on the same day and they
prefer one stop shopping (Levytska, and Vovk, 2017). Tesco has started to offer organic food as
people are more health conscious nowadays. It is important for Tesco to evaluate the trends and
behaviour of customers to increase sales and profits.
Positive impact – Tesco is a reputed company and it has several diversification of
products which helps in attracting a lot of customers worldwide. This helps in maintaining sales
and profits of Tesco.
Negative impact – The major disadvantage on company due to social factor is that it has
to continuously change it is products and services. It is sometimes very difficult to continuously
change the system and operations.
Technological factors – Tesco organisation due to technological opportunities is able to
gain customer trust (Hamilton, and Webster, 2018). This company has embraced technological
advancement as opportunity by implementing retrial technologies. This has launched RFID
technology for increasing in-store experience for end users. This will automatically count its
stock and eliminates it after sales.

Positive impact – This has impacted the business sales in a positive manner. Tesco has its
own mobile payment system known as payQwid in stores. This helps customers to shop in easy
and convenient manner. This saves both cost and time.
Negative impact – Technological advancement costs a lot to Tesco and new techniques
and processes needs a lot of research and analysis.
Legal factors – A business legal environment includes that companies are following legal
rules and regulations given by the government. These affects business performance and also
achievement of objectives. Tesco has to perform its business operations as per the food retailing
Commission.
Positive impact - Tesco is following all its business functions on the basis of Food
Retailing Commission (FRC) strict code of practise which helps them to tackle all the legal
aspects.
Negative impact – Tesco is accused to discriminate on the basis of gender due to which
their brand image is highly impacted.
Environmental factors – There are various institutions which are currently facing great
pressure from different governmental agencies for addressing environmental issues. Tesco has
started to sell its products on tesco.com. The van drivers of Tesco are using fuel saving routes.
They also collects all the unwanted and waste plastic bags from their consumers & recycle them.
Tesco wants to use all renewable resources and will generate around 100% of the electricity
used by them 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.
TASK 4
P5 Conduct SWOT of company
SWOT analysis is an approach used by companies to analyse their inner strengths &
weaknesses along with extrinsic opportunities & threats. For maintaining growth of sales and
profit, it is necessary for the organization to perform a SWOT analysis. This gives an idea for

doing business in an effective manner . The SWOT analysis of the two chosen companies is
listed below -
SWOT analysis of Tesco
Strength Weakness
 Tesco is one of the biggest leading
grocery retailer of UK and is in the
position of no.1 supermarket in UK.
This has higher sales and revenue
across the world.
 Tesco is involved in using technology
in best optimal manner for enhancing
experience of customers ((Morioka,
Evans and de Carvalho, 2016)).
 This has innovative M-Commerce
facility and mobile payment application
(Kolk, 2016.).
 Tesco fails to do effective market
research which leads to loss for the
company.
 Tesco has high debts and credit card
liability and because of this financial
profits of this company are affected.
Opportunity Threats
 There is ample number of opportunity
present at the marketplace for Tesco to
expand its market in other countries.
Global expansion needs strong market
research. Tesco can work in South
Korea market by doing good market
analysis.
 This company can develop strategic
partnerships with reputed companies
like P&G, Amway, etc. This will help
Tesco to offer more products and
attract a lot of customers.
 Tesco has faced ample number of social
media backlash when it introduced
Christmas advertisement. This created
people to boycott stores.
 As Britain is no longer a part of
European Union, there is a threat of
trade deals and costs.

SWOT analysis of British Broadcasting Company (BBC)
Strength Weakness
 BBC was started in the year 1922 and
since then it has maintained a good
reputation among customers.
 This organisation keeps itself updated
and brings new information for people.
 BBC knows pulse of journalism and
provides new things to viewers.
BBC has faced many controversies and it has
been blamed for presenting news items that are
based on sensitive issues of the world.
The operating cost of BBC is very high. The
competitors of BBC are operating their
business at a low rate.
Opportunity
 It has opportunity to conduct programs
related to entertainment, fashion,
technology, kids channel, etc.
 BBC is keep updating its operations
and offerings every day so it is an
opportunity to increase the number of
customers.
Threat
 There is threat of strong competition in
market.
 Increment of domestic channels are
giving competition to BBC.
P6 Interrelate the strength as well as weakness with large factors
The decision making of all organisation is affected by the macro and micro factors of
business environment. Organisations can analyse market by using PESTLE and SWOT. Both
these approaches help management to take the best decision for increasing sales and market
share of the company. Companies have to grab opportunities in market and work effectively. The
main motive of all organisations is to cope up from weaknesses and utilise resources. (Palgrave
Macmillan, LondonBrown, 2018).
The political factor is a part of macro factors which includes political stability and
country’s trade policies. The strength of political factors is that Tesco is operating in politically
stable country that is United Kingdom which helps them to fight against high competition. The

weakness of political factor is that Tesco is operating in UK which is facing issues due to
BREXIT matter, which somewhere effects businesses of UK.
The economic trends are related with purchasing power of people. Strength which
economic factors provides to Tesco is that this company is operating in countries which have
high economy power which helps them to trade freely. The Weakness of this factor is that, due to
this company will not be able to gain profit in countries having low economy.
The social factors are associated with the lifestyle, choice, perception as well as living
standard of individual. The Strength of Tesco against this factor is that, this organisation
provides products to customers on the basis of their needs and demands which increases their
satisfaction level. The weakness of Tesco against this factor is that it has poor market strategy
which fails to meet the consumer demands.
The technological factors include advancement and upgradation of technology. Tesco's
strength against this factor is that it has adopted latest techniques while performing operations
and weakness of Tesco against this factor is that it has to provide training to employees for
learning the new technologies which result in cost increment.
M4 TOWS analysis and it's impact on decision making
TOWS analysis is defined as an acronym for threat, opportunity weakness and strength.
TOWS is used by firms to develop strategy that helps firm to utilise the available resources
effectively.
Strengths Weaknesses
Opportunities  Tesco is a well-known
and leading
supermarket of UK,
this is an advantage
that allows customers
to bargain. This
company offers
discounts and offers to
its customers. Thus,
 The customer buying
pattern is similar for the
products offered by
Tesco which is their
weakness, but it can
update customers
regarding new products
and policies through
internet.

this company has
opportunity to easily
enter in foreign
markets.
Threats  Tesco is operating in
multiple countries
which is a strength for
Tesco but it also acts as
a threat as Tesco has to
fulfil rules and
regulations of
numerous nations.
 Tesco uses few cheap
suppliers which is a
weakness of this
company as well as is a
huge threat which can
result in degradation of
brand image.
TOWS analysis helps the management to decide what are the various strengths and
weaknesses that can be developed into opportunities (Sztangret, 2016). In context of Tesco, it is
seen that this company has opportunity for expanding its market in European as well as Asian
markets. For this, there is need of effective and strong market research. The decisions are made
in organisation for whether to expand in other foreign markets or not. It requires thorough
research and analysis.
D2 Critically evaluate the impact of internal as well as external factors on business decision
making and organisational aim
The macro factors and micro factors affects decision making and achievement of business
objectives. Macro factors like political factors affect the decision making as Tesco has to
perform operation as per the regulations of country it is operating. In case of countries where
there is political instability, there is no profit in business. Micro factors like expensive suppliers
can affect the profitability of this company.
CONCLUSION
The above discussion explains that all organisations i.e. private, public or voluntary have
different purpose and scope. PESTLE & SWOT evaluation will help in knowing condition of

market as well as company. This helps in making right decisions in order to raise the sales and
profit of the company.

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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/>

BBC MISSION & VISION STATEMENT. 2019. [Online]. Available through: <https://mba-
tutorials.com/bbc-mission-vision-statement/>