Business Environment Assignment 2022

BUSINESS ENVIRONMENT
Assignment – Roger Muthama
Task 1 continuation
1.1 Different types of organisations
Now it is clear what type of organisation a business can
be ( local, national, voluntary and multinational) I will
show you the different classes these organisations may
be classed in.
A business can either operate in the
i) Private sector
Or
ii) Public sector
Private sector Businesses
- Business in thisare privately owned.
- They consist;
 Sole traders
 Partnerships
 Public limited companies
 Private limited companies
A sole trader; is a business owned & controlled by one
person who may be assisted by family members. This is a

local business that serves to deliver service to a small
area. Such as a local convenient store.
It is likely that because a local sole trader is not handling
a large amount of customers their prices will be ever so
slightly more expensive. For example say at Walmart a
pack of crips is GBP 4.00 , in a local store the same bag of
crisps may be GBP 4.50. This is not a mandatory rule but
is common, as the store owner most likely fully depends
on their store for survival.
A partnership;is a business where 2-20 people with an
aligned vision come together to start a business. In order
tosuccessfully run a partnership, it is essential to sign a
deed of partnership. The deed of partneship covers
matters on profit sharing, the remuneration of service
and the responsibilities of each partner. This creates
accountability of actions.
Theadvantages of a partnership consists
- Shared risk
- Shared knowledge
- Shared workload
- Capital can be raised faster
Disadvantages are;
- Fall out of partners will contribute to business failure
- Unlimited liability
- The more the partners the slower decision making
- Losses are shared but so are profits

Public limited company;is a business that is listed on
the stock market allowing for the public to buy shares.
When you buy shares in a public limited company you
essential own part of that company.
Shareholders elect directors to represent the interests
during annual general meetings.
There is a difference between a public limited compony
and a public sector company. Public sector
businesses; have been set up and funded by the
government of a country. Example include;British
brodcasting corporation, National Health Service. Such
organisations operate to offer essential products/services
to the public. They are not profit driven. Public
sectorconsist industries such as education and
healthcare.
Advantages of Public limited companies
- Additional finance is raised by selling shares
- Professional management
- Limited liability
Private limited company (LTD):they are smaller than
public limited companies. An example of a private limited
company is a family business. The ownership of such an
organisation can stretch no further than 50 shareholders
who have bought private equity.
Advantages include
- Limited liability

o Meaning financial liability of shareholder is
limited to their shares
- Continued existence
o In the scenario that an executive died business
would carry on as usual
- Organised structure and adequate resources
Disadvantages
- Conflict of interest may occur during decision
making. This will slow the process and business crisis
can take place.
- Retained earnings. LTD’s may not distribute
dividends to shareholders and reinvest the money
instead.
- Difficult to set up as they require plenty of paper
work, legal and administrative paper work is
expensive.
Purposes of Organisations
Local organisations
• It is common to find that most local organisations are
ran as a sole trader in the beginning or as a family
business.
• They bring together people who have aligned
interest in satisfying needs within their community.
• Local organisations can be of essence to national
organisations. For example during the battle against

COVID-19, what larger national hospitals do is supply
local clinics with the vaccines that way they can help
the people of their community.
• Local organisations are a quick way to get service
which may otherwise take a longer time.
National Organisation
• When a business goes national, it expands its
business reach. It is important the company makes
wise public relation decisions to create a good brand
image.
• National organisations deliver standard quality
throughout the country, this is a core purpose of
running a national business.
• It is likely that when an organisation operates across
one country that they are likely to grow to
multinational, however, in some cases businesses
would rather corner their entire market over time
and deliver the best service to its people.
• Some business would want to stay national but
raising demand makes expansion inevitable.
Multinational Organisation
• Multinationals are able to capitalise off of many
countries through tax benefits. This means that they
can record money that they would paid as tax as
revenue and investors are glad to see high revenue.

• They have to frequently adapt, as they are dealing
with different people and cultures, some business
practises will have to be changed to suit specific
areas of operation.
• Global business make it their purpose to increase
globalisation by integrating the economies of
different countries.
• Collaboration is essential for multinational success. In
most cases you have to give the people what they
want even though it is a product you would not
normally sell.
• An example of given the people what they want;
- A business that sells alcoholic beverages want to
expand into the middle east, as it is against the culture of
that area to consume alcohol, this company can create a
new product that is alcohol free. Or alternatively, for
easier entry, buy into a tea/ coffee company.
Voluntary Organisation
- Serve to help others at no cost. Volunteers and good
will donors help such organizations get by.
- The goals and issues range from: fighting sex
trafficking, raising funding for colleges and
universities, advocating for the mentally ill or
fighting against gay marriage. Being charitable
doesn't mean everyone agrees with their agenda, or
with the methods they use.

Local, National, Multinational and Voluntary companies
can be classed into the private sector, public sector or
third sector.
For exampleRed Cross is a charity which would fall into
the third sector. However, this is a charity that has grown
into a multinational organization. That does not change
the vision and mission of the charity but it is able to serve
its purpose globally. Private sector businesses serve to
give customers what they want at a profit. They can be
owned as a small or big business and opted in or out of
the stock exchange. Public sector are those funded and
run by the government to give service to the citizens of
its nation.
1.3 Responsibilities of organisations
Depending on the type and sector of a business, their
responsibilities may vary or be similar in certain aspects.
A responsibility which must be respected by all
businesses are the
Legal Responsibilities
Regardless of what sector you are in you must abide by
the legal requirements. This is to legally run your
business. Failure to abide by legal responsibilities you are
liable to fraud and it the business is not certified.
The legal responsibilities will vary in different countries
and organisaitons need to adapt accordingly.

Private sector legal responsibilities
- Product laws
o Meets pricing regulations and is taxed on every
sales
o Patented or trademarked
o Label is registered
- Employment laws
o Employee salary and wages
o Work hours
o Discrimination laws
- Discretion of personal information; do not leak
personal files
- Business registration; necessary paperwork is filed
- Publishing reports; such as a quarterly report
- Contract agreement; must be followed
Failure to abide by legal responsibilities a business can be
sued by investors and report to a court of order for
breeching protocol.
The purpose of legal responsibilities is to ensure that the
consumers, the employee’s and the government is
safeguarded. The consumer is protected by ensuring that
the products being sold are safe for consumption and
whether safe for children. The employees are protected
by laws regarding their minimum pay and welfare at
work. Welfare such as health and safety of the space. The
government makes sure that the necessary levis are paid