Business and the Business Environment

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................4
Different types and purposes of organisations; public, private and voluntary sectors and legal 4
structures.................................................................................................................................4
Explain the size and scope of a range of different types of organisations.............................6
LO2..................................................................................................................................................9
Explain the relationship between different organisational functions and how they link to
organisational objectives and structure..................................................................................9
LO3................................................................................................................................................12
Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.........................................................................12
LO4 ...............................................................................................................................................15
Determine the internal strengths and weaknesses of specific businesses and explain their
interrelationship with external macro factors.......................................................................15
Explain how strengths and weaknesses interrelate with external macro factors..................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Business environment includes all kinds of internal as well as external things that affect
the way a business operates. There can be many factors like changing preferences of customers,
changes in economic situations of the nation, government policies, trends of the market,
technological advancements, etc. All these factors have to be kept in mind by the managers to
make the business efficient in the competitive environment (Hilton and Platt, 2013). The report
discusses about Vodafone Group Plc which is a London based private multinational company in
the telecom sector. The report also talks about various types of organizations, i.e. private, public
and non-profit organizations, their purpose and relationship among them and also about their
organizational structure. Further PESTEL and SWOT analysis is done for the private
organization chosen i.e. Vodafone Group Plc.
LO1
Different types and purposes of organisations; public, private and voluntary sectors and legal
structures.
There are various kinds of business organizations i.e. private, public and voluntary and
each of these organizations work with a different motive and purpose. Even they differ in terms
of their legal structure, their vision, mission, organizational structure and the scope of their
business. For the purpose of this report, “Vodafone Group Plc” is taken as private company,
“Bank of England” is taken as public company and “Save the Children” is taken as voluntary.
Private Organization:
Private companies are the ones whose sole motive is to make sufficient profit. These are
controlled and managed by the owners or entrepreneurs and government has no role to play in
this. These companies capture a larger share of all the businesses and kind of organisations
(Fernando, 2011).
Vodafone Group Plc is a private telecom company based out of UK and was founded in
1950. They are into the business of mobile networks and is the biggest leader in the field of
technology communication via broadband, TV, etc.
Purpose of Vodafone Group Plc:
 It wants to be the leader in the communication and want to connect the whole world with
its network.

 Sole purpose is to maximize the scope of profits and operate optimally. Want to satisfy the demands of consumers by providing innovative products.
Legal Structure:
 Sole Proprietorship: Sole trader starts the business on his own with less amount of
capital. He has to handle all risks alone and also enjoy all profits alone. It is the simplest
form of a business and is not a legal entity. The person who operates a sole business is
the only one responsible for the business's debts. The business is easy to set up and the
owner has full control over the business. Since the business is operated by a single
person, he is the only one responsible for them and he may face challenges in raising the
capital for the business.
 Partnership: Partnership is a form of business in which more than one person share the
responsibility of a business and managing its incomes and losses. This helps in the better
management of the business and more capital can be raised for the same. But there are
risks of arguments and disagreements among the partners as every person will have a
different point of view. (Erasmus, Strydom and Rudansky-Kloppers, 2016). Private limited company: These are treated as separate entity i.e. business and owners
are separate and they are usually handled by families. Shares of the company are owned
privately and liability is limited. The shares of the company cannot be traded publicly.
Once the company is formed, it will continue to exist until and unless it is liquidated. But
the cost involved in forming the company is high and the profits are to be shared unlike
sole proprietorship.
Public Organization:
Public companies are those which are completely handled and taken care by government
and the funds are given by the government to operate these companies. They work for the
development and welfare of the nation. Example: Railways, transportation, etc. Bank of England
is the central bank of UK and was founded in 1694 to bring stability in the economic
environment of UK (Halbert and Ingulli, 2011).
Purpose of Bank of England:
 To ensure that the UK economy is working efficiently and smoothly.
 To bring monetary and financial sector of UK stable and safe. To ensure that payment system works effectively.