Types of Organisations and their Impact on Business Operations

This report discusses the different types of organisations and their legal structures. It also explores the size and scope of different types of organisations and the relationship between organizational functions and their link with objectives and organizational structure. Additionally, it analyzes the positive and negative impact of macro environmental factors on business operations and conducts an internet external analysis of a specific organisation to identify its strengths and weaknesses.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
Part 1................................................................................................................................................3
LO1..................................................................................................................................................3
P1 Different types of organisations.............................................................................................3
P2 Size and scope of a range of different types of organisations................................................5
LO2..................................................................................................................................................6
P3 Relationship between organizational functions and their link with objectives and
organizational structure...............................................................................................................6
Part 2................................................................................................................................................9
LO3..................................................................................................................................................9
P4 Positive and negative impact of macro environmental factors on the business operation.....9
LO4................................................................................................................................................10
P5 Internet external analysis of specific organisation in order to identify strength and
weakness....................................................................................................................................10
P6 Strength and weakness interrelate with external micro factors............................................13
Conclusion....................................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment refers to collection of all elements and factors that affect and
surrounds business environment. There are different organisations and environment of these
organisations are also different from each other. This report will discuss about different types
and purposes of organisations and their legal structures. Later this report will also discuss size
and scope of different types of organisation and relationship between different organisational
functions and their link with organisational objectives and organisational structure. In second
part report will involve analysing positive and negative influence of organisation on business
organisation. This will be followed by internal and external analysis of the environment in which
organisation operates and will involve interrelating strengths and weaknesses with external
macro factors. For the purpose of environment analysis report will contextualise Sainsbury’s
second largest chain of supermarkets in UK. It was founded in 1869 and is headquartered in
London, UK. Sainsbury’s serve UK and Ireland and operates around at 1428 locations.
Part 1
LO1
P1 Different types of organisations
There are several types of organisations and these organisations mainly differentiates on
the basis of sector in which they operates. These sectors and organisations are-
Public organisations
Public organisations are those that operate in public sector. These are organisations that
are owned and operated by government. Main purpose of these organisations is to provide
required and substantial services to public and society. Mainly these organisations operate at
local, state and national level on the basis of their ownership by governments. These
organisations’ size and scope differentiate on the basis of ownership of the government. This
means that organisation owned by local government in such situation size and scope of

government both remains limited (Canel and Luoma-aho, 2018). Such organisations are financed
by the funds that are raised by general taxation.
Concerned with legal structure these are owned and operated by government and this is
why 51% or more shares are owned by government. NHS is an example of such organisation that
is owned and operated by government. These organisations are also accountable to governments.
Private organisations
Private organisations are those that are owned and operated by private organisations.
Main purpose of these organisations is to generate and increase profit and businesses are
accountable for their owners. Concerned with legal structure private organisations have different
organisations, that are-
Sole Proprietorship- These are businesses that are owned by individual owner of the business
and in these business owner and business are not considered separate from each other.
Partnerships- This is another legal structure of private organisation in this business organisation
is owned and operated by two or more people. Separation of business and partners differentiate
on the basis of type and nature of partnerships.
Limited Companies- These are organisations that are owned on the basis of shareholding. These
organisations have separate existence from their owners (Tereso and et.al., 2019). Shareholders
and owners of the company are not liable for liability of the company. Sainsbury’s is an example
of this type of organisation.
Voluntary organisations
Voluntary organisations are those that are operated with the purpose to make social
impact. These organisations focus on improving and enhancing existing lifestyle and also for the
purpose of welfare of society.
Concerned with legal structure voluntary organisations are operated by volunteers who
participate voluntarily by agreements. British Red Cross is an example of this type of
organisation. Different types of voluntary organisations are-

For-profit- This means that organisation generates profit through their activities and this is again
invested back in organisation to realise its objectives.
Not-for-profit- These are organisations that do not generate any kind of profit from their
activities (Tomczak and Thompson, 2019). These organisation are financed through membership
fees and donations and charity contribution.
P2 Size and scope of a range of different types of organisations
Basis Micro Small Medium Large
Firm BKJ Construction
Limited
Ozone Coffee
Roasters
Brightstar
Financial
Sainsbury’s
Business Organisation
offers several
services and
products and that
includes providing
construction
services.
Organisation has
expertise in coffee
roasters and also
provide hospitality
services
Organisation
offers different
types of financial
services including
different types of
loan and other
types of finances.
This organisation
offers retail and
supermarket
services in UK and
Ireland.
Size In terms of size,
because BKJ
Construction
Limited is a micro
organisation and
this is why its size
is small and
employs less than
10 employees.
Ozone Coffee
Roasters is big in
its size. Employees
of Ozone Coffee
Roasters are less
than 50 and Ozone
Coffee Roasters
has its operations
at more than one
locations (Tezel,
Koskela and Aziz,
2017).
Compared to other
organisations
Brightstar
Financial is bigger
in size and
services of the
organisation are
also comparatively
higher.
Sainsbury’s is
bigger compared
to all other types
of organisation.
Sainsbury’s has its
operations at
several locations
and several sizes.
Sainsbury’s also
employs 116,400
employees.

Scope It has limited
scope because in
order to increase
its scope BKJ
Construction
Limited will
require making
significant
investments.
It has more scope
compared to micro
organisation
because its
operations are
expanded to more
than one location.
This organisation
can easily expand
its scope by
increasing its reach
through different
strategic choices.
Sainsbury’s have
significant scope
and this is why it
will require least
efforts to increase
and expand its
operations.
Objectives Objectives of
micro organisation
are limited to
earning fair
amount of profit
over its
investments.
Objectives of
small organisation
are to maintain a
lifestyle and
increasing its
customers.
Objective of
medium
organisation is to
increase and
expand its services
and operations.
Objective of
Sainsbury’s is to
help our customers
live well for less.
Legal structure Legal structure of
the company is
sole proprietorship
Legal structure of
medium
organisation is
partnership
venture
Legal structure of
small organisation
is limited company
(Müller, 2019).
Legal structure of
large organisation
is limited
organisation.
Product and
services offered
by organisation
Construction
services are
offered by this
organisation.
Coffee services
and hospitality
services are
offered by small
organisation
Financial and loan
related services are
offered by this
organisation.
Retail services and
several products
are offered by
Sainsbury’s.

LO2
P3 Relationship between organizational functions and their link with objectives and
organizational structure
There are several organizational departments within organization that plays a vital role in
accomplishing goals. Different functional departments perform several functions but for
accomplishing main goal of the company, there is requirement of communicate with each others.
Interrelation between organizational functions of Sainsbury’s that is well known retailer of the
UK includes:
Marketing and Sales: Marketing is one of the effective functional departments that is
responsible for promoting products as well as attracting customers towards buying products of
company. Increasing customers base is mainly depends on the marketing function. Whereas,
sales department is responsible for increasing sales of the company by providing qualitative
products. For accomplishing goals of both departments there is requirement of having
information of customers (Dewsnap and et.al., 2020). By identifying customers’ needs and
information by marketer, marketer requires providing these information to sales departments.
Sales department also require knowing information of customers that are being collected by
marketing department and by getting all these information, sales department provide or deliver
products according to needs of customers.
HR and finance: HR is known as the main key of success of company as this department plays
several roles like recruiting, hiring, selecting, training, performance appraisal to employees and
motivating them. Increasing skills of employees for retaining them with the company is main
role. Whereas, financing department is mainly responsible for maintaining a balance between
cash inflow and outflow. For performing all functions of HR department, HR staff requires
communicating with financing for money and financial resources (Bussinc and Christos, 2016).
Finance department also require knowing all information as how much amount will be going into
functions along with reason. It helps in accomplishing main goal of balancing all resources.
Customer service and purchase: There is link between purchasing and customers
service as for solving needs of customers there is requirement for customers’ service department
of knowing number of customers. How many customers have purchased products from company

and which services they have taken and all these information they can take from purchasing
department and can solve queries of customers in an effective manner.
There is link of functional departments with organizational structure an objectives and
functions are being followed as per the organizational structure. Flow of information is also
being done accordingly and by communicating with each other’s and this link of organizational
functions also allows company in accomplishing main vision and goal.
Hierarchical structure: It is stated that Sainsbury’s follows is hierarchical. One of the main
reasons of following this structure is because of series of levels of people and level above control
each level. In this structure there is direct chain of command from the top of the company to the
bottom. It maintains discipline because main decisions are being taken by senior management
and after that these are passed down via subsidiary levels of management (Saiti and Stefou,
2020).

Figure 1: Organizational Structure of Sainsbury's
Sources: (Sainsbury’s Organizational Structure. 2018)
There are several advantages of following this structure such as: clear career path, control
orientation, clear reporting as well as specialization.

Part 2
LO3
P4 Positive and negative impact of macro environmental factors on the business operation
Macro environmental factors Like political, environmental, technological, legal ,
economical etcHave huge impact on the business operations of Sainsbury (Merzy and et.al.,
2018). It is necessary for the leaders of this company to be aware of negative impact and positive
impact affecters so they can create opportunities by reducing the negative impact and taking the
advantages of the positive impact.
PESTEL analysis
Political factors
Political factors like Brexit create huge impact on the sales and probability of the
Sainsbury. They were taking cheaper raw material from the European countries and after this
memorandum they have to purchase raw material from the other country in high rises. On the
other side political factors also have positive impact because they’re having a good terms with
the government, It is necessary for the leaders and managers to create good terms with the
government to get benefits.
Economical
Economical factors like unemployment within the countries can have positive impact for
the Sainsbury because, People will be ready to work in lower wages. company and save the
money and spend it on research and development and also can provide training and development
to their employees to make them more skilful an effective. on the other side increasing the
employment within the country can have negative impact because employees will demand for
higher wages.
Social
A large part of the Sainsbury revenue is generated through the fast food products on their
outlets. The UK population is shifting toward the health conscious diet that does not include the

fast food items (Strzelczyk, and Chłąd., 2017). It is creating negative impact on the company and
this is becoming global trend. Sainsbury can convert this negative impact into the positive if they
add organic food in their product list. it will help them to create good imagine customers mind
and they will able to satisfy the needs and demand of the customers.
Technological
Technological factors like E- commerce Stores are highly helpful to increase the sales of
Sainsbury company because it is new trend and people are shifting toward the online shopping
more than offline. On the other side it is creating negative impact on the Sainsbury becausr the
technology used by Sainsbury old and another competitors are overtaking them easily.
Environmental
A supermarket chain like Sainsbury products are high level of carbon footprint that is
highly advertorial to the current environmental conditions (Lin, Die, and Renpu., 2019). It is
helping them to create good image in customers minds and they can take competitive
advantages. on the other side it is also creating negative impact on the Sainsbury because Most
of their products are contained plastic wraps Which create huge impact on the environment.
Legal
Governmental legislation and policies have direct impact on the performance of
Sainsbury, some of the policies can have negative and some of them can have positive impact
both. it is necessary for the leaders and managers to be aware of policies to make sure it matched
with their business.
LO4
P5 Internet external analysis of specific organisation in order to identify strength and weakness
Internal and external factors have huge impact on the Sainsbury and it becomes strength
and weakness of the company (Islam., 2017). Awareness of these factors can provide
competitive advantages to the Sainsbury and take higher position in future withinthe retail
industry. Internet and external environment can be explained through SWOT analysis and
VRIO Analysis.
SWOT analysis

Strength
 Right expansion move- From a small business store which dealt in the limited range of
product the brand expanded to convenience store which later become a supermarket that
deal with number of merchandise categories that caters everyday Needs of the
customers. Sainsbury is the 4th largest supermarket brand within the UK currently.
 Employees are highly motivated and they get skill based training at their workplace that
help them too improve their working abilities and they get chance to develop new skills
in themselves.
Weakness
 Brand switching- Sainsbury’s facing a common problem within the written industry
which is brand switching, customers are attracted toward the discount stores that provide
products and services in lower prices (Ajmera., 2017).
 Low margin- Increasing the competition within the industry where Sainsbury’s operating
their business is Become weakness of the company because other companies are cutting
down there cost to take competitive advantages and it is also forcing Sainsbury to cut
down their product prices as well.
Opportunities
 Online shopping- New trend among the customer is online shopping, people like to buy
their products and services from their home without going to physical stores. it can be a
good opportunity for the Sainsbury if they shift their most of their business on online.
 Growing economies- There are some growing up economies that can be a good
opportunity for the Sainsbury to expand their business. emerging markets like China,
Indonesia etc Can be a good opportunity for the company to expand their business and
they will able to show their presence.
Threat
 Competition- Competition is the biggest threat for Sainsbury. In the UK market it is
getting hard for the Sainsbury to compete with the brands like Tesco, Marks and
spencer’s etc. This companies hold the higher market share in United Kingdom.

 Increasing raw material price- Increasing raw material prices creating threat upon
Sainsbury because it is cutting down their profits and they are not able to provide
discount to their customers.
VRIO Analysis
Valuable
 Financial resources of the Sainsbury is identified as the valuable for them, it is becausr
companies leaders and managers can use this financial resources too increase the
efficiency and effectiveness of the operations by implementing new technology at their
workplace (Büyüközkan, and Ilıcak., 2019). they can also spend on human resources to
develop more effective workforce.
 Food product sale by the Sainsbury company on their outlets are valuable because The
taste and product quality is unique and it is not possible for everyone to provide quality
an based in lower prices as Sainsbury provide.
Rare
 The patents of Sainsbury I suppose to be rare because, This patents Are not easily
available and are not processed by competitors. This allow Sainsbury to use them without
having any kind of interference of their competitors.
 Employees who are working at the workplace of Sainsbury are rare because They get
skilful training at their workplace that make them more effective and it is not possible for
everyone to have skills like employees at the Sainsbury have in them.
Imitable
 The financial resources of the Sainsbury are costly and imitate as identified by the Vrio
analysis. The companies resources are acquired by the prophets then generate over the
years. it is necessary for the other companies to have strong financial resources to give
competition to Sainsbury.
 The local food product sales by the Sainsbury are not that costly to imitate, it can be
easily acquired by the competitors of this company if they invest significant amount of
research and development on their food products.

Organisation
 The distributed network of the Sainsbury Is properly Organised and when went end
(Lopes, Oliveira, and Silveira., 2020). the network is easily reaching to their customers
and their product are easily available on their stores without having any problem. It is
helping company to take competitive advantages.
P6 Strength and weakness interrelate with external micro factors
Strength and weakness of the company are always interlinked with the external micro factors of
the company. it is becausr external environment has huge impact on the company's operations
and inner environment of the company as well.
Strength- EconomicExternal factors like growing markets like China, India and Indonesia are
creating good opportunity for the company, it can become strength of the company if Sainsbury
expand their business in developing countries (Yu., 2018). Similarly, Following the new
technology trend can have positive impact on the company and Sainsbury can take competitive
advantages within the market where they are operating their business. they can implement new
technology at their workplace that will make their operations more effective.
Weakness- Sainsbury’s Weaknesses that their customers are switching the brand And mostly it
is because of discount by the other competitors but it also includes the prospective and change in
demand of the customers. companies selling old product an old fashion product’s that are not
preferred by the customers. It is necessary for the company to come up with the new product that
can satisfy the customers needs.
Conclusion
As per the report has been explain types of organisations, including their size and scope.
this report has been identify the role of functions and how they are interlinked with each other. it
has been explained the function of human resource management, finance, marketing etc. This
report has been included PESTLE analysis To identify the positive and negative impact on the
business operations of Sainsbury. In the end of this report has been it remind the internal strength
and weakness of specific business an explain their integration ship with macro factors.

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