Different Types and Purposes of Organisation

This article discusses the different types and purposes of organisations in the business market. It explores the structure and functions of profit organisations, not-for-profit organisations, and voluntary organisations. It also examines the size and scope of various types of organisations and their organisational structures.

Business and
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisation.........................................................................1
P2 Size and Scope of various types of organisation....................................................................2
TASK 2............................................................................................................................................4
P3 Relationship between various functions of organisation in respect to objectives..................4
TASK 3............................................................................................................................................6
P4 Positive and negative impact of macro environment upon business organisation.................6
TASK 4............................................................................................................................................8
P5 Internal and External analysis to strengths and weakness of organisation.............................8
P6 Interrelation of Strength and weakness with external Macro factors.....................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment can be defined as an environment which consists of both external and
internal elements of the factors which effects operations and profit margins of a business
organisation. This majorly includes staff members, government, consumers, technology and
many other factors which majorly impacts over a company where they have to make
modifications as per the requirements (Business environment. 2018). Under this report,
organisations that are being taken within the private, public and voluntary are, Marks and
Spencer as private, Crown prosecution as public and Oxfam as Voluntary organization which
will significantly help in getting deeper knowledge related to different sorts of organisations and
their purposes within the United Kingdom or any other country. On the other hand, a proper
interrelationship in between organisation's functions are also being enclosed within the report.
Lastly the interrelationship between strengths and weaknesses of macro environment is also
going to be showed within this assignment.
Section 1
1) Different types and purposes of organisation
Within the business market, it has been analysed that there are ample number of
companies that are working at different level considering different range of offerings to the
organisations. This majorly be enclosed with profit earning organisations, not-for- profit and
voluntary organisations that majorly fulfils all the needs and requirements of customers
depending upon the duties all the offerings which are being given by the organisation.
Government and individuals are two who start and run firm for generating money and economic
stability of country. Thus, these are different kinds of organisation which are stated beneath,
Profit organisation: these are the organisations who believes in selling products and services in
the mean of exchange with the money. Basic aim of these organisations to earn money or to
generate profit for themselves for their own survival. These are the companies which basically
enhances the overall employment opportunities for the individuals that are seeking for jobs.
Considering this as their purpose, companies like Marks and Spencer offers customers with
different range of clothing and other sorts of products through which public can fulfil their own
needs and requirements (Vaiman, Sigurjonsson and Davidsson, 2011). Alongside this, if it is
talked about purpose of Marks and Spencer then companies main aim of the purpose is to offer
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quality products to customers so that it can become a leader within the market in which it is
performing business. This helps them in in giving tough rivalry to their competitors like Zara,
Tesco and many more.
On the other side, if it is talked about not-for-profit organisations then it will be
considered as the sector which basically regulated over funded by government in order to
develop the country and its economic conditions as well (Wack, 2017). From roads, criminal
cases, buildings, legislations different range of services are being provided by the sector the
organisations that are coming under public. In present context, Crown Prosecution Services as
public agency which executes criminal cases in Wales and England can easily be considered as a
good example of a public organisation which conduct prosecution and investigation work in both
Crown and Magistrate court. Basically the main purpose of this organisation is to who offers
support and advise related to legislation sorry legal Publications given to the police for
investigating agencies in order to resolve the cases which are linked with criminology. Along
with this if it is talked about non-governmental organisations, then these are the companies
which offers public with different range of services in order to improve overall standardisation of
Living and they also helps to vulnerable. Companies under this do not works for earning profit
and instead of that they look forward to serve the nation and its people. Oxfam, could be
considered as one of the vital most example which can be taken as a voluntary organisation that
are coming under this section which offers different range of services from food to
accommodation to vulnerable in all over the world. Basically, the purpose of this organisation is
to protect vulnerable and offer them with accommodation and food and different range of
services as per the requirements of them without asking for any sort of favours from them like
money.
2) Size and Scope of various types of organisation
Micro, small, large and mid level organisations are some of great examples of different range of
organisations that are present in every single country which offers customers for the public with
various offerings (from products to services). Basically, these are the organisations which
consist with different sizes and scopes with market share and many other things that stays
different from each other. Micro organisations comes under the smallest section but majorly
impacts upon economic conditions of a country there are things do not stays really very high but
they offer customers with different products or services for their own survival. If it is talked
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about their size then it stays small like a shop and mainly consists with one or two employees or
the owner himself provides customers with what they want. Market share of micro organisations
stays really very low. if it is talked about one but whole pack of micro companies holds really
very big market share within the country like United Kingdom. These organisations hardly
sustains which means a company coming under this sector has no future until and unless
provider is offering customers with what they are actually looking for. This undoubtedly affects
their growth and the profit margins stays really very low and owner of a micro company invest to
survive within the market.
On the other side, a small business organisation consist with small market share but larger than
the micro organisation. Along with this, small organisation basically earns profit more than
micro organisation which means the owner of the business can have more than two or three
stores with minimum 5 employees. Again the growth of these organisation stays limited which
means small business organisation can operate within a specific and small area only. Since every
single citizen of United Kingdom of any other nation are looking forward to become an
entrepreneur they basically start business within this only which impacts positively up on
economic conditions of a country. Medium sized organisations carries high market share which
means these companies can make or Break economy of a country like United Kingdom. Profit
margins of these companies stays high because of the competition as these companies works at a
specific level like national where small sized organisations compete with each other and offer
customers with modified products and services based on their requirements. Growth of these
companies stays highest well because of the offerings. This can be considered as the
organisations that can sustain for a longer period of time because of the competition which are
been given by them to International organisations like MNCs. Large organisations are the one
which basically performs businesses across the borders. Under this, Marks and Spencer can be
considered as an example which is performing well among different nations like Asian and
African countries. Due to ample number of stores these companies profit margin stays really
very high for huge. Since these organisations offers employment, government also supports
them to sustain which helps them in becoming a stronger brand at international level. Growth is
particularly related to expansion, organisation like Marks and Spencer would required to expand
its business in order to improve overall growth of the company.
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3) Organisation structure and functions
Organisation structures could be from functional, matrix, project and many more which
company can adopt depending over the size. If it is talked about micro-level, the organisation
structure which the owners basically follow is functional because they do not have many
employees which means direct communication will take place under micro level. Since the scope
of these organisations stage really very small to grow within the international market the
structure that follow is functional because there is a two way communication can be done
because of the small number of employees. On the other side if it is talked about small business
organisations that the employees of these companies take from 5 to 25 that means they can
follow functional Matrix as their organisational structure. Along with this, it can be said that
scope of these organisations stage specific where change cannot be seen hardly and here
majorly owners of these organisations adopts functional structure just because it is one of the
easiest and simplest way of transforming information from top level to lower level
management. On the other side, For the middle level of organisations, market condition,
objectives, size, scope are various tactics which determine distribution of staff members in
department. And this is a factor which contains uncertainty is as well which means these
organisations mainly adopts project organisation structure just because competition space
present in the market (Crane and Matten, 2016). Along with this, scope of these organisations
stays hi as they directly e gives rivalry to business organisations that are looking forward to
expand their business in their own sector. The scope of these organisations stays high, which
pushes them towards adopting project organisation structure rather than any other. Retail
business organisation named as Marks and Spencer which is coming under large business
organisation has adopted divisional organisational structure for conduction of business
internationally. Thus, resources are utilised efficiently and position of firm is maintain in respect
to competitors.
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Figure 1: Divisional Organisation Structure
(Source: Divisional Organisation Structure, 2018)
On the other side, if it is talked about complexities then it can be said that a transnational,
International and global companies structures organisational structures basically consist with
uncertainties and it is required for business organisations like Marks and Spencer to keep on
altering them as per the requirements..away with this, into different department for execution of
operations in effective manner (Tayur, Ganeshan and Magazine, 2012). Human resource,
finance, production, marketing, sales, research and development are various divisions which are
formulated by top authorities of Marks and Spencer.. In these units members are separated in
respect to their skills and abilities. This helps administration to have adequate subordinates for
delivery of items and services to buyers. Human resource department, HR duty is to manage
manpower for having sufficient staff members for conduction of activities. Recruitment,
selection, compensation, employee relations, training and development are various practices
which are executed by management of Marks and Spencer. This helps them to delegate and
distribute staff members in other units that are finance, operation, marketing, sales, R&D. Thus,
seniors are able to establish competitive advantage and fulfil demands of people. Along with
this, research and development department’s duty is to conduct survey for gaining information
about demands and need of public and rival firms. It is necessary that products and services are
provided by company in according to requirements of people (Türetken and et. al., 2011). Marks
and Spencer is retail business organisation whose R&D team conduct market research for
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getting knowledge about market conditions. This helps them to construct new and innovative
products and packages for attracting customers.
Along with this, Marketing department is another important unit whose duty is to inform
people about firm and its product. For this, marketing plan is formulated in which marketing
mix, target market, budget and other information is defined. Product, price, place, promotion,
people, process and physical evidence are 7 P’s which are defined by marketing team.
Advertising, sales promotion, publicity are conducted by them which help sales people to
convince buyers of production services of Marks and Spencer. In this, finance team coordination
is maintained in respect to decision about fund allocation in marketing activities.
PART 2
a) PESTLE model to the sector
PESTLE analysis can be considered as a tool which can be used to analyse the market
conditions of a sector of a business organisation which is related to Macro environment. This
majorly be enclosed with a range of factors like Economic, Technology, Political,
Environmental, Legal and social which majorly impacts upon business sector. In present
context, business sector which has been chosen is the retail Supermarket which consists with
many companies like Tesco, Marks and Spencer, Sainsbury’s and many more which could be
considered as some of the major and the largest business organisations of United Kingdom and
of other nations which are continuously looking forward to expand their businesses at
international level. Every single business environment considering any sector stage enclosed
with uncertainty which impacts upon overall working and functions of a business organisation
(Gharajedaghi, 2011). It has been analysed that changes required to be made within an
organisation in production services here in the same way these organisations which has been
named above has restructure themselves in order to give competition to each other and to other
business organisations.
Political factor: Government basically designs policies of taxation, licensing and other for
regulating business companies that are working in a sector like retail. This can be understood
without good example where Asda shows the use of cost cutting approach where they
announced to cut down 300 jobs out of 2500. This took place because government has asked to
enhance the job securities and redevelop there health safety and security policies which impacted
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negatively upon them and use them towards making this decision. Government of United
Kingdom Effectively played an important role within this decision which has been made by the
company which is coming under retail sector.
 Positive impact: Political stability of United Kingdom advantage retail sector of United
Kingdom to operate business with the range of approaches like cost cutting. This has
helped business organisations leg as that are coming under retail sector to improvise
internally through offering jobs to the new Employees with innovative minds. Negative impact: almost 300 individuals ask to leave the jobs from the company because
of the approach that they have chosen. Therefore comma making a decision like this
within a retail sector may sometimes become more difficult for organisations that are
performing business under this sub sector that is retail
Economic factor: another crucial element of external environment which consists with
different range of components like interest rate, growth, exchange rate and inflation which
depend on economic conditions of country like United Kingdom (Gilboy, 2016). If it is talked
about UK retail sector, any change among above components like interest rate inflation rate or
exchange rate it directly impacts upon working of business organisations that are performing and
this sector. Example can be taken is of Marks and Spencer where company had faced decline in
their profit margins which made them to close 14 shops and all the employees that were
employed within these stores become jobless. Positive impact: GDP rate of United Kingdom is strong at the moment which directly
impacts upon companies that are performing in supermarket sector of this Nation because
the purchasing power of consumers is high. Negative impact: usually interest rate of this Nation related to loans gets changes rapidly
which might impact upon companies market value that are performing business within
Supermarket industry of UK.
Social factor: perceptions, feelings, and many other thoughts of public stays involved under
this factor. Which means, organisations that are performing in supermarket industry of UK it
will be required for them to offer customers with quality products with minimal rate in order to
become successful in short span.
Positive impact: Tesco is a business organisation which is performing and Retail Industry
of United Kingdom and at international level as well most of the time quality of its products is
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very high then the consumers Expectations which directly impacts positively upon consumers
loyalty.. Negative impact: buying behaviour of consumers has changed where they might go for
alternatives as well. Therefore, organisations like Tesco that are performing in
supermarket industry required to manage the quality and the prices of products and
services that they are offering to the customers.
Technological factor: It is another component which determines that technology benefits
whole retail sector in conduction of operations effectively.
 Positive impact: This could be understood the good example of Sainsbury’s which has
targeted to who adopt new machines that will aid buyers in billing process. This has
given Opportunity to the customers to purchase products in much more faster ways.
 Negative impact: since there were many of employees were not aware of the technology
which organisation has adopted coming under retail sector, This made then jobless which
recently impacted negatively upon Sainsbury’s on performance level but for short time
frame.
Legal factor, factor which is enclosed with legislations which are made by government of
United Kingdom and this benefited to the retail sector and affected as well both at the same
time.
 Positive impact : Recently, United Kingdom has become as the open business market due to
brexit which took place because of this many business organisations like Tesco, Marks and
Spencer, Asda had faced an opportunity to enhance themselves and restructure as well to
improvise profit margins.
 Negative impact : due to brexit, which was the action taken by government most of
employees that were from European Union started resigning from their jobs which impacted
negatively account supermarket as well.
Environmental factor : another crucial factor of external environment which is linked
with pollution and healthy environment. Basically this factor is connected directly with the
organisation that are coming underscore markets because what they are offering to the customers
are somehow polluting the environment due to their manufacturing plants many other things.
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b) SWOT and Porter's five Force model of Mark and Spencer
SWOT analysis is a tool which is used to to assess or examine strengths, weaknesses,
opportunities and threats. The outcomes of analysis depicts the competitive position in the
market which can be improved through appropriate strategies (Zeng, Li and Duan, 2012).
SWOT Analysis of Mark & Spencer:
Strengths Weaknesses
 It offer variety of products and services
such as clothing, furniture, food,
financial services and many more to
capture larger share in the market.
 It is considered as largest company in UK
by sales and also it has huge
 Many customers do not try its product
because of the perception that all the
goods are being offered at high price.
 It has substitute as the number of rivals
have increased in the past few years.
Opportunities Threats
 It has more opportunities in expanding its
business internationally which can
increase its customer base.
 Alliances with already established and
successful companies.
 Economic recession is a huge problem in
carrying the business efficiently.
 Also, fluctuations in the prices of raw
materials due to the number of factors can
possess a huge threat.
Porter’s five forces of Mark & Spencer: It is used to analyse competition exist in the industry
and how attractive it is to the entities operating in the same industry or sector. Porter's five
forces of Mark & Spencer has been given below:
 Threats of new entrants: Tesco, Morrison, ASDA and many more firms have entered
the UK market to explore opportunities to become successful and gain profits by
increasing the customers. Thus, threat of new entrants is ever increasing.
 Suppliers bargaining power: The entry of new companies in UK market has increased
the bargaining position of the suppliers which is a problem for Mark & Spencer. It has to
negotiate and agreed to buy raw material at the price of word by the suppliers.
 Threat of competition: Competition is very high in UK market because entities like
Primark, GAP, New Looks, NEXT etc. Have managed to attract customers to buy its
products. Hence, there is a huge competition for Mark & Spencer.
 Buyers' bargaining power: Existence of variety of companies has increased the
bargaining power of buyers because they can buy products from various alternatives.
Earlier, Mark & Spencer was one of the options preferred majorly by the customers.
 Threats from substitute: There is an enhanced threat of substitution due to the
development of corporations like Sainsbury, John Lewis etc. Customers can have similar
products at more cheaper prices.
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CONCLUSION
From the above report, it can be comprehended that public, private and voluntary are various
forms of organisation. These are firms which have different size, scope, objective, structure and
purpose. Human resource, finance, operation, marketing, sales, research and development are
department which have interconnection with each other.
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