Business and the business environment in IKEA

BUSINESS AND THE
BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Types and purpose of different organization and legal structures..................................1
P2: The size and scope of a range of different type of organization......................................3
P3: The relationship between different organizational function and linkage with objectives
and structure...........................................................................................................................4
TASK 2............................................................................................................................................6
P4 : Positive and negative impacts of macro environment on business operations of IKEA 6
P5: Internal and external analysis of IKEA............................................................................7
P6: The interrelation of strength and weaknesses with external macro factors.....................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Businesses have various purposes that depend on why they were established.
Organizations operate their businesses in an environment which is shaped by various functions
associated with them such as finance, human resource, customer relations, marketing etc. In
addition, the business environment for an organization means all the external as well as internal
factors that have to affect the enterprise activities including Customers, management, employees,
business regulations, supply and demand and so on. The present study is focused on IKEA- a
well-known home furnishing retailer. It always uses customer centric approach and had concern
for people and the environment. In the study, the discussion is made on various dimensions of a
business environment. The types and purpose of an organization and related legal structure are
discussed. The relationship between organizational functions and their linkage with objective
and structure also evaluated. Furthermore, the positive and negative impacts of the macro
environment on IKEA business operations also taken into consideration.
TASK 1
P1: Types and purpose of different organization and legal structures
The following is the description related to purpose of different type of organization:
Private sector organization- The private sector is concerned with all for-profit businesses
which are not owned and operated by the government. It is an integral part of the economy and
run by private groups or individuals. The intention behind the formation of this type of
organization is making the profit (Botha, Kourie and Snyman, 2014). For example, IKEA is
associated with the private sector and dealing as a world's largest furniture retailer, It has
expanded its business in restaurant and kitchen utensils.
Shareholders can have the company's debt. This company can run by the elected BOD by the
debtors or shareholders and this directors are governed by the founder or the chair person of the
organisation. The documents of the IKEA should include all the legal informations about its
headquarters and the registered offices. There will be regular Audit of the books of accounts
which is will bw annually or half yearly.
The below table is describing the objective, mission and vision of private sector organizations:
Objectives  Increase the level of profitability
 Increase sales volume and level of
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services
Mission  Become market leader in respective
industry
Vision  To provide excellent quality of goods
and products to customer
The legal structure of private sector organization- This type of organizations are known
as the joint stock company and business has a separate legal identity. As per the legal structure,
each shareholder should be a part of the business with limited liability and company cannot offer
their shares to general public. Before the formation of such type of company legal document
such as Memorandum of Association and Article of Association must be completed (Belás and
et.al, 2015).
The legal structure of IKEA- This MNC group has the annual turnover in home
furnishing is more than 20 billion euros with around 260 corporate groups in more than 25
countries. It has the stitching group in Leiden, Netherlands which is totally non profit
organisation.
Public sector company- The public organizations are those which are operated and
owned by the government and determined to provide services to the citizen. Totally opposite
from private sector this organization is not seeking to generate profit. It can deal in stock
exchange by selling its shares. The companies are funded through taxation and have no particular
requirement to meeting the business success criteria and decision for production are determined
by the government (Kolk, 2016)
For example, Sainsbury is a public sector company which is handling the largest chain of
supermarket in the UK.
The proper audit on the books of account and records. Tax and insurance details should be
mentioned which are paid by the general public and it is in the control of the domestic local and
the central governmental bodies. The below table is describing the objective, mission, and vision
of public sector organizations:
Objectives  Providing better support to people
 Be a part in the development of
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