(PDF) Types And Purposes Of Organisations Assignment

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................3
P 1 Explain different types and purposes of organisations; public, private and voluntary
sectors and legal structures.....................................................................................................3
P2 Explain size and scope for different types of organisation...............................................5
TASK 2............................................................................................................................................6
P3 Explain the relationship between Different organisational functions and how they link to
organisational objective and structure....................................................................................6
TASK3.............................................................................................................................................7
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples. .........................................................................7
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses. ...................................................................................................10
TASK 4..........................................................................................................................................11
P6 Explain how strengths and weaknesses interrelate with external macro factors.............11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment is the sum of all the external and internal forces that affect the
operation of business. There are various type of organisation such as public, private or voluntary
organisation which has their own legal structure. The private company chosen for this report is
Sainsbury which is a parent company of Sainsbury's supermarket Ltd. The public company
chosen for this report is NHS which was established in 1948. The voluntary organisation chosen
for the company is Oxfam which is a charitable organisation focused on reducing poverty. This
report will cover different type of organisation and their size and scope. It will also show
interrelationship of various functions within an organisation and demonstrate about positive and
negative impact of macro environment through PESTLE analysis and determine strengths and
weakness of specific business through SWOT and its relation with external macro factors.
TASK1
P 1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures.
There are various type of organisations exists which work to achieve their goals and
objectives. The legal structure of various organisation are as follows-
Public organisation- This sector is owned and operated by government and provide
services to citizens of country. The funding for public organisation are arranged by taxes, fees
and through financial transfer or from other government. NHS is a organisational unit which is
not a trust in legal sense but through the effect of government (Baycheva-Merger and
Wolfslehner, 2016). They follow the principles which states that services are provided
comprehensive, universal and free at the point of delivery. Each services is providing a
comprehensive range of services which is free for the people ordinary resident in the United
Kingdom apart from the dental treatment.
Legal Structure-
 Local government- The rules and regulation which are formed by local government
for the people living in the particular region.
 State government- The rules and regulation which are formulated by state
government for the people living in state to provide better services.

 Central Government- The rules and regulation which are formulated by central
government for the broad region which is country.
Private organisation- This sector is owned and operated by a private body which can be
sole trader, partnership or company. The purpose of private sector is to This is a major non
profit group of organisation with high collection of operations. The purpose of voluntary sector
is to provide a sustainable livelihood and provide work for injustice through local accountable
organisations enabling to increase their effectiveness to earn money and attain growth and
development. Sainsbury's is the chain of supermarkets with huge share in supermarket sector.
The purpose of private organisation is to attain highest market share of supermarkets in united
kingdom. The legal structure of private organisation depends upon the type of private body
which are-
 Sole trader- This type of organisation is owned and operated by a one person. This is the
simplest form of business under one can operate their business. The sole trader is not
different from the business entity legally. The one person is solely responsible for the
business profit and debts. This entity do not offer protection for personal assets which
creates a legal obligation in case of not able to meet debt. For example, Social chain
which is formed by two persons (Bysted and Hansen, 2015).
 Partnership- This type of organisation is owned and operated by two or more person.
This the complex form of business as it includes debt on whole organisation taken by one
partner. The profit and loss are distributed equally or equal to their capital invested
depends upon the legal compliance. For example, Wettone Matthews Ltd is a partnership
consultancy firm.
 Small and Medium Enterprise- A small enterprises is an enterprise whose investment
in plant and machinery is more then 25 millions but do not exceeds 5 billion whereas
medium enterprise is an enterprise whose investment is between 5 billion to 10 billion.
For example- John good shipping which is an independently owned logistic company.
Voluntary Organisation- This sector include voluntary association or nongovernment
organisation which are independent, flexible, democratic who work for welfare of the society.
Oxfam is a charitable organisation established in 1942. This is a major non profit group of
organisation with high collection of operations. The purpose of voluntary sector is to provide a

sustainable livelihood and provide work for injustice through local accountable organisations
enabling to increase their effectiveness (Cordella and Bonina, 2012).
Legal structure-
 Trust- Trust is a legal set up to managed the fund or property for a specified purpose.
There are three parties in trust are donors, trustee and the beneficiaries. Trust is a non
democratic organisation and trustees are liable for contracts entered on the behalf of
trust.
 Association- The structure of this type of voluntary organisation are formed for short
term goals where two or more people associate which has no separate legal existence and
any contract entered by individual on the behalf of group will be liable to individual
personally (Groeneveld and Verbeek, 2012).
The voluntary organisation need to register themselves in a particular act and they are not
allowed to make profit otherwise this will be treated as misconduct and punishment is provided.
P2 Explain size and scope for different types of organisation.
Voluntary organisation : Oxfam
Background details- The Oxfam was registered in accordance with UK law in 1943, the
first overseas committee was founded in Canada.
Services- The Oxfam provide food and medicines to relieve famine and provide tools to
make people self- supporting and opens market of international trade of craft.
Size & Scope- The Oxfam is working in 12 countries like America, Australia, Belgium
etc. and has International confederation of 19 organisation who are working together with
partners and local communities.
Objectives- The Oxfam want to remove poverty and has goal to help people in
development of structures (Jurisch and et. al., 2013).
Legal structure- The rules and regulation formed for a voluntary organisation are needed
to be followed by NHS to sustain in the legal existence.
Public organisation : NHS
Background details- The NHS is affiliated with Health and social care and established in 1948.
Services- Free eye test, mental health care, heart surgery services to the citizens of
European nations.

Size & scope-This is a one of the largest employer in the world by having 14000
employees and provide free health service to needy peoples.
Objectives- The purpose is to enhance the wellness of citizens through eliminating
infectious diseases
Legal Structure- The NHS has to follow rules and regulation which are applicable on
public organisation of U.K and performs its duties at all levels.
Private Organisation : Sainsbury's
Background details- This is the third largest chain of supermarket with a 16.9% share of
supermarket sector.
Services- They provide top rated product having great quality, freshness of all owned
brand (Knudson and et al., 2012).
Size & Scope- There are total 608 supermarkets and 806 convenience shop and has
market are in 8 areas such as Swindon, Torquay etc.
Objectives- The objective of Sainsbury's to be the most trusted retailer and making great
working atmosphere.
Legal Structure- The company is performing its operations in private sector so it has to
follow all the rules and regulations for the companies in U.K
TASK 2
P3 Explain the relationship between Different organisational functions and how they link to
organisational objective and structure.
The link between functions of organisation is essential to achieve the objectives of
organisational goal. The link to organisational functions are as follows-
 Marketing and production function- The marketing and production function are
required to inter relate with each other otherwise Sainsbury's will not be able to achieve
its objective. Production department manufactures goods and services and marketing
department is required to sold those goods and services. Marketing function identifies the
need of customer and provide information to production department and according to that
information goods are produced to satisfy the needs and want of consumer(Raziq and
Maulabakhsh, 2015).

 Human Resource and sales function- The human resource and marketing are required
to inter relate with each other to achieve the target of sale of Sainsbury's. Sales
department are responsible for achieving target of sale and human resource have
responsibility to select the right people who will achieve the target sale. The target
achievement depends upon the selection of candidate who possess right skills and
abilities to achieve the departmental objective which will lead to achievement of
organisational objective.
Advantage- The inter relation of department results in better coordination among staff
and support of each other in order to achieve organisational objective (Robertshaw, 2015).
Disadvantage- The inter relation can be harmful if employees do not support each other
and do not provide right information to each other which result in conflicts between departments.
Influence of this inter-relation of organisation functions on organisational structure-
Organisation structure can be defined as the hierarchy in which employees of the
organisation operate. The inter relation between departments benefits the operation of company.
Sainsbury's uses line and staff structure as it provide equal emphasis on staff. Each employee
enjoys their own authority and responsibility. There is only one superior to all employees it
makes employee happy and satisfied results in effective operation of organisation and this result
in achievement of objective.
TASK3
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
The business environment contains of various internal and external factors under which
an organisation operates. In macro environment business considered various external factors
such as inflation rate, social conditions, technologies development, climate changes, and many
others. In context of Sainsbury’s, all these factors highly impact their overall performance. Many
macro environment factors will directly impact both Sainsbury's as well as their competitors so
its it important for management to find what these are which can impact on the company's
performance. For knowing the micro environment factors of Sainsbury's, its must to use accurate
tools which are built for this case that is PESTEL analysis (Thiele and et. al., 2012). The tool of
pestle analysis is used to defined the components of micro environment which comprises a
number of factors that can positively or negatively affect business. PESTEL helps them to

analysis the influences of political, economic, social, technological, legal, and economic factors
on the business. These factors have effect their performance in the both positive and negative
manner which described below:-
Political factors - These factors are those which is related to the degree of government
intervention in the business, economics and certain industry. Its involves government
policies, political stability, corruption, foreign trade policy, tax policy, labour laws, trade
restrictions and so on. In case of Sainsbury's, as it is based in the UK and in UK the
government debt and consumer debt are very which impacts consumers attitudes. Besides
the all conditions, these factors effect Sainsbury's performance in both positive and negative
manner (Watkins, 2014).
Positive effect – In UK the policies of the government are not constant, in this situation
Sainsbury's still able to sustain as a large retailer due to its legacy of offering great product
quality at competitive price. This situation helps them to beat their competitors because they are
highly influenced by government policies.
Negative effect – This situation can be understood by the example of Brexit, when UK
government applied Brexit, then the company have to face an unprecedented food crisis.
Economic factors - The factors related to the economic which includes exchange rates, inflation
rates, and many others which can leave direct or indirect long term effect on the business.
There are various factors which influenced Sainsbury's business are recession debt,
unemployment, hike in food prices, and many others. They have impact on the business of
Sainsbury's in the both positive and negative manner (Yoon and et. al., 2013).
Positive effects – In the UK unemployment rate is always high so Sainsbury's would not
have to face the problem of lack of employees in their organisation.
Negative effects– In this situation because of global food crisis Sainsbury's have to
increase their products price. Because of increasing prices the demands will automatically
decrease of Sainsbury's products which will lead them to less profitability and production.
Social factors - These factors are those which involves customers belief, socio-culture and their
changing preferences. This also effects Sainsbury's overall performance in the aspect of both
positive and negative manner.

Positive effects – As Sainsbury's meet all the social responsibility and provide all the
products at under one roof. Moreover, customers perceptions towards their products and services
of Sainsbury's has helps them to earn a higher profit.
Negative effects – In the market there are various retailers which are dealing in the same
products so Sainsbury's have to face tuff competition in the market. For differentiate from the
competitors, Sainsbury's have to adopt great market strategies to beat them.
 Technological factors - It involves the rate of technological innovation and
developments that could affect a market and industry. In context of Sainbury's, they
are adopting various technologies in their organisation like introducing self checkouts,
computerised stock controlling etc. These factors also leave effect of Sainsbury's
operations in positive and negative manner (Zhao and et. al., 2013).
Positive effects – The online shopping facility provided by the Sainsbury' s helps them to
increase their sales and profitability.
Negative effects – The challenges that have to face Sainsbury's is implementing a new
technology in the organisation is very risky, as they utilize high cost and it is not sure that it will
be succeed or not.
 Environmental factors - These factors relates to the influence of surroundings
environment. Without concentration on the economical factors Sainsbury's can not
succeed in the market.
Positive effects – As Sainsbury's is always taking care the environment by their activities
which helps them to attract its customers and investors. They are always working on this concept
Reduce, Reuse, and recycle approach and also trying to reduce the operational carbon footprints.
Negative effects – Sainsbury's have to face a lot of ethical issues which are related to
retailing like selling organic foods, treatments of animals etc. They have to sell all this kind of
products to their customers at a fair price.
 Legal factors - It includes more specific laws such as discrimination laws, consumer
protection laws, and many others. In Sainsbury's they needs aware of all legal factors
before all the production activities because these factors leaves both positive and
negative effect on the company.
Positive effects - Getting registered for its patent and copyrights may help Sainsbury's to
increase their sales and avoid the sale of fake products of them.

Negative effects – Sainsbury's is restricted by various laws which include consumer laws,
competition laws, heath and safety laws and many others.
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
The Swot analysis helps the business to evaluate the strength, weakness, opportunities,
and threats. It is help out various companies to developing a strong business strategy by helping
on understanding how external environment in which they operate now and in future. In context
of Sainsbury's, they are adopting SWOT analysis to identifies all the benefits and crisis which is
exist in their organisation. There are define Sainsbuty's SWOT which is listed below:
Strengths Weaknesses
 As Sainsbury's is an oldest and largest
super market in the UK, so it has
covered a great market area.
 Secondly, acquisition of Argos has also
given them a competitive benefit in the
non food market.
 The weakness which have to faced by
Sainsbury's is that they does not have
any expansion plan because it is only
based on UK.
 Sainsbury's have to increase their
products prices because of Brexit
sainsbuy's which results in losing the
customers of their products.
 They move to everyday low prices
strategy that effected its value
perception, so that they have to face
trust issues with the customers.
Opportunities
 If Sainsbury's try to global expansion of
their business than it become a golden
opportunity for them.
 As they are dealing in organic food so
they are in very good position to take
Threats
 Sainsbury's have to face a tuff
competition in the market like Tesco,
Morrisons, Ocado, and many others.
 The higher labour cost in the UK is also
a big threat to Sainsbury's. They have to

advantage from the wide demand for
healthy foods.
pay higher to their employees which
become issue for the company.
 Brexit is also a great threat because of
this Sainsbury's have to increase
products prices which leads them to in a
downfall position in the market.
TASK 4
P6 Explain how strengths and weaknesses interrelate with external macro factors
A business is affected by various external or macro factors such as inflation rate, social
conditions, technologies development, climate changes, and many others. These macro factors
greatly influenced the business activities,strategies, and decision making.
Political factors - These factors are those which is related to the degree of government
intervention in the business, economics and certain industry. In the Sainsbury's these all the
factors leaves effect on the decision making and their objectives which can understood by their
strength and weaknesses (Bysted and Hansen 2015).
Strength – Sainsbury's can save huge amount of money because in the UK corporate
taxation rate is very low.
Weakness- In this situation Sainsbury's have to compete against unknown forces and to find
the sources of the products with economical and quality values.
Economical factors – It is those factors which is related to the economic and effects on
the demand, cost, price and profitability. There are some some strengths and weaknesses which
are effects on the Sainsbury's performance and helps to take the decision according to them.
 Strengths – By doing expansion of their business they can increase their
profitability and brand value.
 Weakness- In this case of sainbury's they have to face credit crunch situation
which directly effects their sales because that time customers give preference to
the lower price products.
Social factors – These factor are direct related to the changing socio culture trends and
people's preferences.

 Strengths – As Sainsbury's is doing various social welfare along with earning profits
which helps them top create a good image in the market
 Weakness – Sainsbury's have to face tuff competition in the market so they should adopt
various strategies to compete their competitors.
Legal factors - It includes more specific laws such as discrimination laws, consumer protection
laws, and many others. Strengths – As dealing in organic and healthy food so in this Sainsbury's can save
themselves various laws.
 Weakness – Sainsbury's is restricted by various laws which include consumer laws,
competition laws, heath and safety laws and many others (Suh, J., 2014)..
CONCLUSION
There are various type of organisations having different types of legal structure such as
public, private etc. These organisations has different size and scope which is related to their
organisation objective, The interrelation of organisation functions helps in achieving them
functional objectives and organisational objectives. From the above report it can be concluded
discussion it can be understood that if Sainsbury's is evaluating their activities by adopting all the
above strategies then they can better analysis their company. This strategies help them analysis
their competitors, production activities, profitability, and many others. By evaluating their
company they can take decision according to the market situations and conditions.