Business Environment and Organizational Structure

The assignment provides a detailed analysis of the business environment, including its impact on organizational structure. It also discusses the importance of considering macro factors such as political, social, and economic conditions when designing a company's strategy. The document includes references to various books, journals, and online sources for further reading.

Business & Business
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purpose of organisation.....................................................................1
P2. Size and scope of different types of organisations...........................................................4
TASK 2............................................................................................................................................5
P3. Relationship of organisational functions with its objectives and structures....................5
TASK 3............................................................................................................................................9
P4............................................................................................................................................9
TASK 4..........................................................................................................................................11
P5..........................................................................................................................................11
P6..........................................................................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment includes various factors like customers, suppliers, government, and
employees, etc. which have their direct impact on the operations of company. It is made of two
terms where one is “business” which is operated by human beings for earning huge amount of
profit while another word is “environment” that means surroundings which directly or indirectly
affect the business activities. If firm wants to get success in the market, then it should analyse all
those components which may negatively affect it and then should make some strategies so that it
can be implemented effectively and successfully (Chavis, Klapper and Love, 2011). This project
is based on NATWEST Company which is the largest retail and commercial bank in United
Kingdom. It will explain about different types and purposes of organisations as well as state
about various functions that are performed in the enterprise. In today’s changing environment,
there are various factors which affect the business operations negatively and positively.
TASK 1
P1 Different types and purpose of organisation
There are various types of enterprises which are described below- Public company- This kind of corporate is owned or controlled by government which
have main motive to use public funds so that they will be able to provide more benefits to
society (Klapper, Lewin and Delgado, 2011.). In other terms, it can be said that main
objective of this firm is to do social welfare rather earning more profit. It may include
various types of regulatory bodies like national or local agencies. Its main sources of
funds are tax revenue. For example- TESCO.
◦ Legal structure-
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Public company's legal structure is as follows-
 General government- It is also divided in various parts-
◦ Central government- It is the biggest regulatory body which controls the activities
of whole nation. In United Kingdom, central and state both share powers
mutually. Its main obligation is to collect taxes and to print money as per
requirements (Commander and Svejnar, 2011).
◦ State government- It is a national governing body which regulates the activities of
state. This kind of authorities is formed because of giving proper education to
children as well as for controlling the activities of universities.
◦ Local government- This kind of authority looks after a tiny area like city, town
etc. which means that they only control a specific region.
 Private company- This kind of company is managed by private establishment or
individuals which have main purpose is to earn profit and to increase market share. For
example- NATWEST etc. Private company is divided into following parts that are given
below-
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Figure 1: Legal structure of public company
(Source: Legal structure of public company, 2017)

 Sole trader- This type of business is owned or controlled by an individual who have only
right to take decision regarding venture as well as will also be liable for any loss or profit
(Commander and Svejnar, 2011). In other terms, it can be said that this kind of business
is operated by an independent individual who will only be liable to take important
judgement. It has limited source of capital and also has to bear loss. Its main advantage is
that it can be started by investing less amount. Along with have some drawbacks like
unlimited liability of owner, difficulties in raising fund from the market etc. Partnership- In this, two or more people meet together through an agreement and carry
out business activities by having same objectives. In other terms, it can be said that in
this, individuals carry out operation of company together for attaining the common goals.
In this, a written agreement is prepared in which all terms and conditions regarding
business are written down so that no one can cheat with each other and can carry out
activities without any confusion. It contains various things like ratio of profit, capital
roles and responsibilities of partners. Its main benefit is that risk or loss will be divided
into partners as per decided profit sharing ratio but main limitation is that there occurs
more conflicts.
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Figure 2: Legal structure of private firm

 Franchising- It is the best strategy in today’s competitive environment because it helps in
increasing market share. In this, individual gives right to other person to use its business
name in exchange of royalty. That person who allows will be known as franchiser and
other one will be known as franchisee (Eckardt, 2012). In this, franchisee has to follow
all business standards or rules and regulations of the franchisor. In this, all material will
be used by person which will be given by franchisor.
 Voluntary sector- This kind of firm is also known as non-profit organisation which is
owned or controlled by group of people for the development of society. Its main motive
to provide various benefits to the public so that they can live their life smoothly. For
achieving same, some enterprises adopt various methods so that they can serve to people
effectively and successfully. For example- OXFAM which has main objective is to
remove poverty from the entire world (Jayeoba, 2012). This sort of company has main
advantage that it has to face less competition in the market but has also limitations like it
does not provide any benefits to its members.
P2. Size and scope of different types of organisations
Public sector organisation- TESCO is the biggest retail store in United Kingdom which
provides grocery and general merchandise to the people. If it will be measured in terms of profit,
then it is the third largest retailer in the world. It has approx. 6553 stores in the entire world by
which it earns approx. 54 pound million per year. It has approx. 476000 employees who help in
carry out business operation effectively and efficiently by which it is able to reach to its decided
destination.
Its vision statement states to provide better quality of services to people every day while
its mission statement says to be champion for customers, helping them so that they can enjoy
better quality of services and an easier way of living.
Private sector organisation- National Westminster Bank which is the largest retail and
commercial bank in UK. It has large network because of having more than 960 branches and
3400 cash machines in the entire Britain. It provides 24*7 hour online banking and action-line
telephone services to their customers (Eisenberg and Miller, 2012). It has approx. 33300
employees who assist in achieving the desired result within stipulated period of time. It serves to
approx. 7.5 million personal clients and have 850000 small business accounts. In 2017, it got
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award as “Best Banking App” in British Bank Awards. It is operating their business for serving
their customers in better manner.
Voluntary organisation [OXFAM] - It is a charitable firm which is operating their
business at international level which has main motto to reduce the poverty level from the world.
It conducts various programmes for addressing the structural causes of poverty and related
injustice. For increasing its own effectiveness, it works primarily through local accountable
organisations. Its main objective to provide help to people directly when local capacity is not
appropriate and sufficient. It also assists in the development of structures which helps in
providing benefit to those people who are facing the realities of poverty and injustice (Hamilton
and Webster, 2015). It can be divided into three areas that are described below-
 Primary sector- In this sector, raw material is acquired from third party. For example- For
OXFAM, raw material will be information about poverty of people.
 Secondary sector- In this area, all required equipments or resources are assembled so that
production process can be began. like money will be collected from various sources son
that poverty can be removed from the world.
 Tertiary sector- In this, all concerned commercial services will be carried out which will
support in production or manufacturing process. In simple terms, it can be said that in this
consumers purchase products or services from companies.
TASK 2
P3. Relationship of organisational functions with its objectives and structures
As above discussed that NATWEST is the biggest retail and commercial bank in UK
which provides banking and insurance related products to their customers and also serves better
quality of services to them that aids in achieving the desired result within stipulated period of
time (Klapper, Lewin and Delgado, 2011). There are various functions which need to be
performed effectively and efficiently so that cited firm can reach to its decided destination within
stipulated period of time that are described below-
 Design and production- Before designing products or services to consumers, it is very
necessary that NATWEST should identify their needs or wants and accordingly should
design their merchandise. This action will help in getting attention of large number of
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people that will aid it in reaching to its decided destination within stipulated period of
time. While carrying out production process, firm can use various strategies like batch,
flow etc. (Jayeoba, 2012) by which activities can be carried out effectively and
efficiently. Apart from this, there are numerous elements by which production process
is carried out smoothly that are given below-
◦ Labour
◦ Capital
◦ Raw materials etc. Finance- It is one of the most important function that carries out in every organisation.
For completing a project, there is requirement of huge financial resources if it will not
be proper availability of it then NATWEST cannot achieve its desired result or
outcome. So, finance department have responsibility to analyse the requirement of
funds and to allocate budget to each and every activities so that company can reach to
its desired result. Human resource function- It is another function which is also very important for a
company because it manages and controls manpower that helps in achieving specified
target (Klapper, Lewin and Delgado, 2011). This department has obligation to analyse
the requirement of staff and accordingly should hire best qualified employees so that
they can perform their job effectively and efficiently. If there will not be proper
availability of manpower then company will not be able to reach to its decided
destination. So human resource department is very important that helps in achieving to
competitive advantages over its rivals (Klapper, Lewin and Delgado, 2011). It is also
called as backbone of company because without having them, it cannot do anything. Sales and marketing functions- In today competitive world, it is very necessary for the
success of company to analyse the needs or wants of consumers that is done by
marketing department. With the support of this, firm can easily serve to their consumers
as per their requirements that aids in maintaining them for long period time in the
company by which it can obtain its desired result. Administrative functions- In this department, various types of functions are performed
like complaint handling, e-mails etc. It also made several documents that helps in
maintaining tools and techniques of company in effective manner like newsletter, forms
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etc. It also work as a link between management and employees of NATWEST. Its main
obligation is to collect important data related to research as well as to organise meetings
in an appropriate manner so that all problems can be resolved (Krishnan, 2013).
 Research and development- This function collects numerous information about market
situation, customers etc. that helps in designing effective and successful strategy by
which company can reach to its decided destination within stipulated period of time.
If NATWEST wants to achieve its pre-specified objectives and goals then it should
follow above mentioned functions which will help in obtaining same.
(Source: ORGANIZATIONAL CHART AND GROUP STRUCTURE, 2012)
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Figure 3: ORGANIZATIONAL CHART AND GROUP STRUCTURE

Tall structure:
(Source: Organizational Chart Templates for Any Organization, 2014)
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Figure 4: Organizational Chart Templates for Any Organization

TASK 3
P4
9

10

TASK 4
P5
11

P6
12

13

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CONCLUSION
From the above report, it can be concluded that business environment includes set of
factors that affect the organisational activities. This assignment has stated about different types
of companies and their purposes like public which operate their business for the development of
society by earning profit. In an organisation, there are various functions like human resource,
finance, etc. that are needed to be performed as it helps in achieving the desired results or
outcomes. This project has also stated about the macro factors which affect business operations
positively or negatively like political, social, etc. So, while designing strategy, firm should
evaluate them otherwise it will not be able to achieve the competitive advantages over its rivals.
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REFERENCES
Books and journals
Chavis, L.W., Klapper, L.F. and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Eckardt, M., 2012. The European Private Company: Do we need another 28th private company
law form in the EU? On regulatory competition of corporate law.
Eisenberg, T. and Miller, G.P., 2012. The English versus the American rule on attorney fees: an
empirical study of public company contracts. Cornell L. Rev.. 98. p.327.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Jayeoba, F.I., 2012. NEED-GOAL INTEGRATION AND ORGANISATIONAL TYPES;
IMPLICATION FOR INDUSTRIAL RELATIONS. European Scientific Journal. 8(19).
Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp. 108-
123). Palgrave Macmillan UK.
Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp. 108-
123). Palgrave Macmillan UK.
Krishnan, A., 2013. Culture As a Successor of Quality Initiatives: A Review. International
Journal of Social Science. 2(1). p.53.
Love, V.J., 2011. Private company accounting: A concept whose time has come. The CPA
Journal. 81(2). p.16.
Macdonald, R., 2012. Unilever. A Strategic Analysis.
Online
Business environment. 2017. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>. [Accessed on 4th
August 2017].
MARKETING THEORIES – PESTEL ANALYSIS. 2017. [Online]. Available through:
<https://www.professionalacademy.com/blogs-and-advice/marketing-theories---pestel-
analysis>. [Accessed on 4th August 2017].
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