Different Types of Organisation: Purpose and Legal Structures

This document provides an overview of different types of organisations, including public sector, private sector, and voluntary organisations. It explains the purpose and legal structures of these organisations. The document also discusses the size and scope of organisations like ASDA, Oxfam, and NHS. Additionally, it explores the functions of organisations and their relation to objectives and structures. Finally, it identifies the positive and negative impact of the macro environment on businesses using the example of ASDA.

BUSINESS & BUSINESS
ENVIORNMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Explain different types of organisation along with its purpose and legal structures.............1
P2 Explain the size and scope of a range of different organisations...........................................4
Task 2...............................................................................................................................................5
P3 Explain the organisation functions and with relation to the objective and structure.............5
TASK 3............................................................................................................................................6
P4 Identify the positive and negative impact of macro environment upon business by suitable
example ......................................................................................................................................6
P5 Conduct internal and external analysis to identity strength and weakness of ASDA............8
TASK 4............................................................................................................................................9
P6 Explain how the strength and weakness inter-relate with external macro factors.................9
CONCLUSION..............................................................................................................................11
References:.....................................................................................................................................12

INTRODUCTION
Business environment is described as aggregation of individual, organisations and
internal and external factors, that may or may not be in organizational control, but have a
significant effect on its productivity and performance (Zaušková, A. and Rezníčková, M., 2020).
These factors alters companies prosperity, profitability and persistence. ASDA, a retail private
company founded in 1949, NHS, public company, founded in 1948 with headquarter in London,
and a voluntary organisation Oxfam founded in 1942 are the basis of report. In this report, a
vivid description of distinct type of organisation along with purpose and legal structure are
mentioned. Apart from this, relationship between organisational functions in relation with
structure and objective of organisation are also mentioned. Furthermore, positive and negative
impact of macro and micro factors over a these organisation structures are explained through
PESTLE and SWOT.
Task 1
P1 Explain different types of organisation along with its purpose and legal structures.
Organisations are classified on the basis of their purpose to achieve a defined goal and
objectives. Organisations with objective of profit-generation falls under the category of private
sectors. Companies under a public sector, instead of profit generating profit works for the
betterment of public (Alrishani, 2020). Whereas, voluntary organisations are those non
governmental organisation who operate independently and are non-profitable.
 Public sector organisation :- Public sector consist of all the organisational bodies
that are governed and managed by government (Shukla, and Pattnaik, 2019). The
products and services of these state-owned organisations are designed to cater the
society as whole rather than a individual such as military, electricity, healthcare,
gas and oil, police service, postal service, public education, public transport etc.
Purpose of public organisations are :-
 The sole purpose of these organisations are to serve the common masses instead of
meeting the individual needs. Through their fair and equal services to everyone, helps in
eliminating the regional differences in the society.
Legal Structure
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 State-owned enterprise :- State owned or government owned business are those in
which government has a full or partly control over the entity and decisions are
taken with the involvement of government. Though the objective of these firms
are profit making but their services are directed to the common people. These are
postal service firms, state owned bus services , healthcare and electricity provider
firms.
 Central owned enterprises :- Public sector undertakings or public sector
enterprises are those owned, governed and operated by the central government or
sometimes jointly with state governments. Country with rich mineral and natural
resources forms this types of organisations (Sedej, 2019). These may include, gas
and oil companies, postal services, railways, telecommunication ,electricity and
health care. National Health Services are the central owned enterprise aimed to
provide a free medical services to the citizens of UK.
 Local councils :- These are the organisations whose services are directed towards
the local people of a district. These can be local transportation between local
area,health care units and educational institutes.
 Private sectors :- These are all those profit-making organisation which are owned,
controlled and governed by an individual or enterprises (Vo, and et. al., 2020). They
are sole-proprietorship, partnership firms, small and medium business, large and
multi national cooperation and trade unions.
Purpose of private organisations are:
 Private organisations are profit-driven and aims at increase the profit day by day. Another
objective of these organisation is to opt for a adequate organisational structure for future
growth and success.
Legal structure
 Sole-proprietorship :- Under this type of private companies there is only a one
owner where profits and losses are shared by a individual. This approach is
adopted by those who want be their own boss (Lu, Wang, and Xu, 2019). Few
examples of these business are, freelancers, artists, babysitters, cleaning service
providers and tutors.
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 Partnership :- It is a type of business where there are two or more individual
involved in running a business enterprise. Profits and losses are shared equally or
on the basis of capital investments. ASDA which is now owned by the two
brothers is a perfect example of the partnership firm. This is ideal for those who
are seeking to enter into a business with family or friends.
 Corporation :-Corporation is a legal entity that is formed by incorporating
members into a organisation by giving a share or holding which act as a owners.
They are formed basically for the interest of their shareholders and shares profit
with them in form of dividend. Corporation can enter into a contract, can be sued
and sue, lend a money, hire employees and pay taxes.
 Voluntary Sectors :- These organisation are defined as the group of individuals who
voluntarily come forward to work for a common objective. These are also referred as
common interest, non profit or non governmental organisations.
Purpose of these are:-
 Trade associations, trade unions, environmental groups fall under voluntary organisation
whose main aim is to address the issue, support a particular community and work for the
social purpose.
Legal structure
 Trusts :- These are the corporations which act as an agent or trustee to the
agencies. Under this type of a entities, a person who gives another person a legal
right to own and take care of their assets for the benefit of other party, known as
beneficiary, determines how these assets can be used further (Trigkas, and et. al.,
2020).
 Charitable organisations :- This the most common type of voluntary organisation
who work for the philanthropic activities and social well being of community.
They are non-profitable organisations whose activities are carried out in
educational, religious or in public interests. Oxfam is a charitable organisation
whose prime objective is eradication of poverty along with addressing the issues
like women discrimination and climate changes.
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P2 Explain the size and scope of a range of different organisations.
The size of a organisation determines the number of employees, managers, availability of
financial and other resources and nature of business. Whereas scope determines the size of a
market.
 ASDA :- ASDA, founded in 1949, is a British supermarket chain with its headquarters in
Leeds, England. ASDA is a retail private limited company, with an aim to generate profit
and serving the customers. Apart from its core business in supermarkets, ASDA is
offering its services in other sector too, such as finance, gas and oil, clothing and
electronics, ASDA stated its operation in England and with its further expansion and
growth, ASDA have managed to operate in more than 632 location as on 31 January
2021. Its expansion to overseas and local market have provided a employment to
thousands of people, with present work force of 165,000 employees.
 Oxfam :- Oxfam, founded in 1942 is a non-profitable organisation work with a primary
objective of abatement of global poverty. It is a federation of 20 independent institutions
who work for a common cause. According to the recent data, Oxfam has worked
purposefully all over the world with around 3,624 organisation who shares a common
interest and goals (Syazali, and et. al., 2019). They together have served approximately
19.5 million people across globe and have induced around 3.1 million people through
their initiatives. They operate in 65 countries addressing the issues like women
discrimination, climate change, poverty eradication and land rights.
 NHS :- National Health Service is a public organisation working with the objective
providing health services to the common masses. Founded in 1948, with an aim to
provide a universal, free, extensive medical services to the residents of United Kingdom
apart from dental and eye care. The funding of NHS is done by the tax collection by a
country. NHS constitute a four National Health Services i.e. NHS of England, Scotland,
Wales and Northern Ireland, which provided employment to around 1.6 million people in
year 2015-2016.
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Task 2
P3 Explain the organisation functions and with relation to the objective and structure.
Organisational structure is related with distribution of roles and responsibilities within a
organisation. The structures clearly defines how the information and order flows between
different departments. Organisational structures are designed in keeping in mind business
objective. Hence, effective structure within a organisation ensures success and growth. Three
types of structures on the basis of functioning of a organisation are :-
11 Functional Structure :- This is the traditional way of defining organisational
structure. People under this structure are grouped in a smaller groups on the basis
of their specialisation and skill set. National Health Services have divided the
work force on the basis of their job to be performed. Various departments in NHS
are human resources, accounting, marketing and promotion (Radović-Marković,
Salamzadeh,and Vujičić, 2019). Functional structure ensures NHS in achieving
the common objective through coordinating activities of each departments that is
to provide a free medical services.11 Divisional Structure :- Divisional structure is adopted by the organisations which
have a different business units or have a overseas operations. Under this type of
structure organisation designs its activities on the basis of the market or type of a
product or according to the specified target market (Popescu, and Popescu,
2019). Though ASDA is British retail supermarket chain but also offers other
services and products which are grocery, general merchandise and financial
services. Their overseas operations and multi stores across the world have
contributed towards the adoption this structure.11 Matrix Structure :- Matrix organisational structure is a combination of both
functional and divisional structures. Employees are grouped on the basis of both
products or services and function simultaneously. Oxfam is voluntary
organisation whose aim is to serve a nation and make difference by their
initiatives. Oxfam works for a different cause like, climate changes, eradication
of world poverty and women discrimination, through this structure Oxfam work
efficiently on these task across world.
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Types of organisational functions
Organisational functions constitutes production and design, human resources, finance,
research and development, sales and marketing, and administration. Effective co-ordination
between these function ensures ASDA smooth functioning of day to day operations. Detailed
research and development department help ASDA in designing and development of products.
Clear insight about the product details contribute in procurement of raw material and other
sources to start a production (Vlados, and Chatzinikolaou, 2019). Allotment of sufficient funds
to each department provide a ease of operational activities and coordinating with HR department,
finance department prepares a budget which mentions the companies expenditure and income.
ASDA significantly have augmented the sales revenue through implementing marketing and
promotion strategies.
TASK 3
P4 Identify the positive and negative impact of macro environment upon business by suitable
example
ASDA is a grocery and general merchandise retail store in UK, owned by Walmart,
founded in 1949. ASDA continuously examines the companies position by analysing the various
internal and external factor in order to adopt to changes in a environment and gain a competitive
advantage over others. Following PESTLE analysis is used to determine the level of impact these
factors have over ASDA and affecting its competitiveness.
PESTLE analysis stands for Political, environmental, social, technological, legal and
economic factors that evaluates the changes in the market environment.
 Political Factors :- These factors examines the national and international rules,
regulations and laws, consumer rights, tax policies, price regulations, directives
related to employment. (Möller, Nenonen, and Storbacka, 2020) ASDA
continuously examines and ensures that their overseas operations must abide the
stated rules and regulations for smooth operations. Emerging of a Brexit have
significantly impacted its operations in overseas market as it has created a lot of
uncertainties. Though they have flourished in local market. To overcome this
problem in response to Brexit, ASDA much consider its future overseas
operations and must comply with the new stated laws.
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 Economic factors:- Economic factors is concerned with the factors such as pay
level to employees, competitive pressure, labour supply and demand, cost of
credit and exchange rates, and inflation. ASDA have seen as not responding to
the needs of the local people. One of the incident state that ASDA have not
provided the UK farmers a fair price for their agriculture products. It may
adversely impact the companies image and lead to the fall in customer base.
ASDA must give a fair price to its farmers, employees and ensures that they
promote fair means of trade.
 Social factors :- These factors consist of dietary habits, income level, change in
taste and preferences, health consciousness and celebrity following. Having a
deep knowledge of a social changes in the market helps in developing and new
product or services (Mutalimov, and et. al., 2020). ASDA continuously respond
to the change in consumer demands such as growing vegan, vegetarian or
organic is increasing in UK and ASDA have introduced a list of items meeting
these demands. Another change which may be beneficial for ASDA is it may
add range of foot items like Mexican, Italian and Chinese into their offerings.
 Technological Factor :- Increase in technological awareness, automation,
innovation and advancements have contributed companies in better connect
with people. ASDA have done in this field as they have promoted a online
shopping through development of a application and a introduction of self-
service checkout have helped the customer to get rid of a large queues.
Moreover ASDA is using promotional techniques to increase the sales.
 Legal Factors :- These factors focus on consumer protection laws, health and
safety laws and employment laws (Khan, Çera, and Nétek, 2019). ASDA
operates in overseas market too, thus it is essential for the company to comply
with the norms and regulation to avoid any unfair trade practices. UK ensures
that the each employee is paid and treated fairly and gets equal opportunity.
 Environmental factors :- People are becoming aware and contributing towards
safeguarding of environment. As the organisation cause a huge damage to a
environment, governments are putting pressure on organisations to contribute
equally in protecting the environment through operating in a friendlily manner
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(Cepel, and et. al., 2019). Efficiently managing the production residues,
adopting a recyclable packaging, and abiding by the environmental regulations
could possible help ASDA towards sustainable growth. ASDA have recently
introduced a organic foods items so as to promote a natural food, which is a
great initiative towards conserving a environment.
P5 Conduct internal and external analysis to identity strength and weakness of ASDA
SWOT analysis provides a company brief knowledge about its strengths and
opportunities which can be fruitful to a company's decision making and weakness and threats to
anticipate future uncertainties.
Strength Weaknesses
 ASDA includes diverse range of
products and services in its portfolio
including financial services apart from
supermarkets, which have contributed
in augmenting customer base.
 Company have positioned itself as a
trusted brand by means of acquisitions.
 ASDA is working continuously
towards reducing the impact on
environment by offering a organic
products (Zaušková, A. and
Rezníčková, M., 2020).
 ASDA remain in touch with its
customers and seek their feedback
through social media as to improve
their service and serve them in a better
way.
 As compared to other competitors,
ASDA have relatively low share in the
global market.
 ASDA have a monopoly over its selling
price, which have restricted their entry
to other countries.
 Being in the news for unethical act
have weaken the company's image.
Apparently, in the year 2007, ASDA
along with other supermarkets have
contributed in fixing the price of dairy
products between 2002-2003.
 Negative critics about the quality
products of ASDA had a significant
affect on its brand image (Alrishani,
2020).
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Opportunities Threats
 ASDA have broaden its market share
by entering into the other markets like
ASDA' financial services. By entering
into a new market segment like
jewellery, pharma or accessories like
watch and aviators could help ASDA in
compete with its rivalries.
 Expansion to overseas markets to a
developing countries like India and
China whose extensive markets can
increase their customer base and sales
revenue (Sedej, 2019).
 In the era of digital revolution, ASDA
can expand its operation and could
reach a large customers by means of
creating a website or application.
 With the change in a political and
economical environment government is
changing its policies which could affect
the operations of a business in the local
and international market (Shukla, and
Pattnaik, 2019).
 Rigid price policy of ASDA have a
negative impact on its business. It has
restricted a limited market for ASDA
operational activities.
 Emergence of new business entrants
who are coming with a innovative ideas
and flexible price policy, is another
hindrance in growth of ASDA.
TASK 4
P6 Explain how the strength and weakness inter-relate with external macro factors.
External macro factors of PESTEL framework gives a deep insight of organisational
strength and weaknesses. Detailed analysis of these factors are mentioned below :-
Basis Strength Weakness
 Political
factors
Attractive foreign trade and tax
policy is considered as a strength
for ASDA as some of the
With the change in a political
scenarios contribute in change
policies, thus it's a quite
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countries have liberal tax policy
which contribute in foreign
investments (Vo, and et. Al,
2020).
challenging task for company to
abide by different policies of
different countries.
 Economical
factors
Easy availability of local labour
and raw material ensures smooth
functioning of a business.
Economic instability and low level
of income can affect the price
policy of ASDA as the buying
power in such state is relatively
low.
 Social factors Change in customers demands and
needs stimulates innovation and
encourage company to be unique
and creative.
Varying dietary habits and income
level of consumer reduces the sales
revenue of a company (Lu, Wang,
and Xu, 2019). In pandemic
everything was at standstill and
sometimes it is impossible to
respond to such a dietary habits.
 Technological
factors
ASDA have introduced a self-
service check outs from their
stores by adopting a technological
advancements.
Improving in technological aspects
requires a huge amount of
investments and become obsolete
with the continuous advancements.
 Legal factors Legal factors ensures the ethical
and fair means of trade practices.
Complying with legal factors
increases credibility of a
organisation (Trigkas, and et. Al,
2020).
ASDA was in controversy along
with another supermarkets for price
fixing of dairy products which
relatively have a adverse effect on
its image.
 Environmental
factors
ASDA have added a organic food
items in their offerings which are
grown without using chemicals.
People with health consciousness
Managing waste from the
production units is a challenging
task and requires a meticulous
designing and planning (Syazali,
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are attracting and appreciating the
initiative.
and et. al., 2019).
CONCLUSION
From the above stated report it has been concluded that macro external factors gives
company an overview of the prevailing market conditions. With the aid of these factors company
can make a strategic planning to gain a competitive advantage and prepare in advance for the
future uncertainness. Also it has been noted that, organisational structure contribute directly in
smooth functioning of operational activities, improves communication within a organisation and
helps in achieving its goals. Thus organisational structure along with a legal structure of a any
business determines its success and growth.
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References:
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