Types and Purposes of Organization in Public, Private, and Voluntary Sectors

This report provides an analysis of the types and purposes of organizations in the public, private, and voluntary sectors. It explains the legal structure of these organizations and discusses their relationship with the macro environment. The report focuses on General Motors as a case study.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explanation of types and purposes of organization as well as its legal structure in relevance
to public, private and voluntary sectors:......................................................................................1
P2 Explanation of different types of organization in relevance with its size and scope:.............3
TASK 2............................................................................................................................................4
P3 Explanation of relationship among organizational functions and its linkage with
organizational structure and objectives:.......................................................................................4
TASK 3............................................................................................................................................6
P4 Identification of positive or negative impacts of macro environment on operations of
business:.......................................................................................................................................6
TASK 4............................................................................................................................................7
P5 Conducting external as well as internal analysis of enterprise with the purpose of
identifying its strength and weaknesses:......................................................................................8
P6 Interrelation of strengths and weaknesses with external macro factors:................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment can be defined as sum total of external and internal forces that
impacts sustainability, performance, growth and profitability of entity. Former forces further can
be divided into two factors, that is, micro and macro environment. This environment is dynamic
and complex in nature, hence contains uncertainty and has multi-faceted influences. Analysis of
business environment enables firm tapping available and useful resources and warning signals
(Ali and Miah, 2018). This report is based on business environment analysis of General Motors.
It was founded in 1908 by William C. Durant and Charles Stewart Mott. Entity is headquartered
in United States and serves in automotive industry.
This report consists explanation of different types, scope and size of enterprises. Further,
interrelationship among various functions of organization is demonstrated in relation to its
structure and objectives. Macro environment of business is analysed along with its positive and
negative impact on operations of firm. In addition to it, strengths and weakness of entity is
identified along with its relation with macro environmental factors.
TASK 1
P1 Explanation of types and purposes of organization as well as its legal structure in relevance to
public, private and voluntary sectors:
Purpose of business indicates its mission or objectives that firm desires to achieve. It sets
direction for working of staff members and strategy formulation of management. Legal structure
of business refers to ownership structure of entity or form of business (Bellucci, Bini and Giunta,
2020). Organizations are of different types that have different purpose and legal structures which
are further explained below:
Public Sector: It refers to entities which are owned as well as controlled by government.
Importance of such organization is providing good services to public, employment, regional
development, and economic development. Such enterprise is large in operations hence enjoys
economies of scale (Boone, Kurtz and Berston, 2019).
Legal structure: Legal structure of public sector organization is described below:
 Local government: It refers to public administration whose authorities is restricted to
local areas. It involves school districts, municipalities, counties as well as special
districts.
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 State government: This government is of federal form. It contains limited level of
autonomy in politics and shares power with national and federal government.
 Central government: It deals with national matters and contains power of control over
unitary state.
GENERAL MOTORS is following central government legal structure because it
operates in large level as it serves worldwide. It indicates that firm follows regulations that are
directed by Central government.
Purpose: On consideration of purpose of General Motors, it can be stated that it is
focused on serving interest of public by provisioning impartial and superior value products or
services to customers. And, it is also dedicated to providing higher return on investment to
stockholders.
Private Sector: It is a profit driven organization that finances money from shareholders
and debentures. It is a growth driven entity (Duarte, do Rosário Cabrita and Cruz-Machado,
2019).
Legal structure: Following is the legal structure of private sector company:
 Sole trader: Such business is owned and manages by sole trader or owner. Here, owner
bears all the risks associated with business and even enjoys all the profit generated.
 Partnerships: It is a contractual agreement between two or more persons or parties.
These parties gains profits and bear losses on mutually agreed ratio.
 Cooperatives: Such entity is owned as well as controlled by association of people that
contains common needs, objectives or aspirations.
 Limited companies: In this legal structure of organization, liability of person is limited
to the shares purchased by him or her, that clear states that, limitation of liability is
towards the extend of capital invested in business.
TESCO follows legal structure of limited companies as it is offers shares to public and
here liability is limited to the number of shares that person holds.
Purpose: Motive of TESCO is to enhance standard of living of people by improving
quality of life of people and making it easier. Firm aims at providing greater value products to its
customers and making it easily assessable by improvising delivery services.
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Voluntary sector: It refers to entity which operates in civic or independent sector. It is a
non profit organization that emphasizes on fulfilling civic responsibilities by encouraging social
activity duties (Habib and Hasan, 2020).
Legal structure: While considering legal structure of voluntary organization, following
structures can be analysed:
 Unincorporated Association: This association does not have separate legal existence
and remains determined with the purpose that its committee members have. Such entity
sustains short term goals, low level of income and does not employee staffs.
 Trust: Organization is set up with the motive of managing money for a defined purpose.
It establishes relationship among donors, trustees and beneficiaries.
 Limited company: Here, entity manages employees and large fund amounts. It is
separate legal entity from its owners and firm is limited by guarantee.
OXFAM incorporates trustee legal structure. It is responsible for governance, activities,
constitution as well as assets of charity.
Purpose: Aim of OXFAM is to instigate lasting solutions for the injustice that are faced
by poor people. It is focused on empowering people and creating secure environment by
eliminating poverty.
P2 Explanation of different types of organization in relevance with its size and scope:
Size of business indicates its scale of operations which involves various factors such as,
capital involved, plants equipped, number of people employed, and many more. On the other
hand, scope of business refers to objectives, requirements and growth opportunities of business.
It enables management to determine costs and goals of business (Harrison and et.al., 2018).
Following are the scope and size of different types of organization, that is, public, private
and voluntary:
Public: Size and scope of General Motors are mentioned below:
 Size: This public company is an international company that operates worldwide. It deals
in auto-mobile, commercial vehicles and parts of auto-mobile. It even consists vehicle
financing services. Approx 164000 people are employed in this organization.
 Scope: General Motors has launched itself as a newly reconstituted entity that has
strategical transformed itself for paving profitable future by enhancing its global
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activities. It is also committed towards uplifting of its financing subsidiary and car
divisions.
 Vision: Firm has a vision of becoming most valuable automotive enterprise. That clearly
indicates improvising its brand value and market scope.
 Mission: General Motors is determined to inspire passion by building brand image that
enables business to earn customer loyalty by constant innovations and improvisations.
Private: Tesco has following scope and size:
 Size: TESCO is a retail oriented entity, which contains supermarket, hypermarket,
convenience shops and superstore in its product range. While considering areas in which
it serves, it can be evaluated that firm operates in United Kingdom, Ireland, South Korea,
Czech Republic, Hungary, India and Slovakia. Employee range of 450000. Other than
this, it has various divisions, that is, Tesco stores, bank, mobile, family dining, booker
group etc.
 Scope: Firm has scope of widening its operations at various area such as developing
countries which TESCO has not tapped yet.
 Vision: To build customers and serve them with loyalty with the motive of improving
shareholder value.
 Mission: Firm is directed towards strategical decision making that enhances brand value.
Voluntary: OXFAM
 Size: Organization is a poverty eradicator and disaster relief entity. It serves worldwide
and is headquartered in Kenya.
 Scope: OXFAM has a opportunity to focus on various local areas that aree untapped yet.
 Vision: To create a world where people are treated equally, poverty is eradicated and
every individual is valuable.
 Mission: To encourage a global movement for empowering people and initiating change.
TASK 2
P3 Explanation of relationship among organizational functions and its linkage with
organizational structure and objectives:
Organizational structure can be defined as outline directed by management with the
motive of achieving organizational objectives. It includes task allocationb, supervision as well as
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coordination and direction (Hurmelinna, 2018). It plays a crucial role in smooth functioning of
GENERAL MOTORS. Following are types of organizational structure along with its application
in the company:
 Functional: it indicates division of business operations on the basis of functions in
accordance with its purpose. Application of this structure in GENERAL MOTORS
improves specialization in each process which provides clarity for implementation of
smooth operations in business.
 Divisional: It separates operations into various departments, such as, finance department,
marketing department, production department etc. It empowers separate issue handling
and decision making in GENERAL MOTORS, which minimizes complexity of business
processes and enhances productivity.
 Matrix: It suggests combination of two or more structures of organization. Implying this
in GENERAL MOTORS, improves efficiency of business and initiates collaboration
among various departments which enhances communication within organization.
Divisional organizational structure is applied in GENERAL MOTORS as firm has wide
operations. It improves specialization and effectiveness of business.
Objectives of organization: It indicates ultimate goal of business, which comprises of
long term and short term targets. Objective of GENERAL MOTOR is profit maximization by
providing quality products and hence, increasing sales of company.
Organizational functions: While considering functions of organization it can be
evaluated that organizational functions refers to set of activities carried out by business for
achieving its set goals. That is, it refers to core process that is formulated by business in its day
to day operations (Julien, 2018). Following are some types of functions and its influence in
relevance with GENERAL MOTORS:
 Human resource function: This function indicates management of human resources of
an organization. It includes, recruitment, selection, induction, training, motivation, and
compensation of employees. Effective implication of this function in GENERAL
MOTOR ensues selection of skilled employees and their regular motivation for high
productivity of business. Divisional organizational structure in company enables firm to
motivate employees according to their skills and department rather than treating entire
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staff generally. As, every employee have different competencies, skills and issues. It
encourages effective goal achievement.
 Marketing functions: It covers selling, promotional and brand building activities of
business. Role of this activity in GENERAL MOTORS is increasing visibility and
recognition of brand and enhances brand value with the main motive of increasing sales
and customer loyalty. Divisional structure encourages division of various task or
marketing, such as, selling, promotional etc. It enables setting different targets and
accountability of each hence, improves sales and maximizes profit.
TASK 3
P4 Identification of positive or negative impacts of macro environment on operations of
business:
Macro environment can be explained as an uncontrollable external forces that influence
process of business and impacts its productivity or performance. Pestle analysis is an effectual
tool that is availed by GENERAL MOTORS for monitoring macro environment and its impact
on an organization. Factors of pestle analysis and its impact on entity are described further:
Political factors: It consists potential changes in regulations of government, political
stability, global political influences etc. Following are its positive and negative impact on
functioning of GENERAL MOTORS:
 Positive Impact: Company has enjoy political stability in country and fair rules and
policies enhance the operational and probability in company because political condition
can impact directly on functioning of company.
 Negative impact: Company is also operating in China and USA and has large market
share there, so political policies and environment is so complex in china than US. So,
company has to follow their rules religiously.
Economic Factor : It refers to economical activities that influence the business such as
demand and supply, inflation rate, interest rate and level of GDP and unemployment (Roobeek,
De Swart and Van Der Plas, 2018). Positive and negative on company are as follow -
 Positive Impact: GENERAL MOTORS is operating in safe economic environment as
US has growing economy which leads to healthy economic condition to company. China
is also leading auto mobile industry that was beneficial for the growth of company.
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 Negative impact: Company is majorly operating in US and china and in both countries
current situation is not satisfactory. Due to regular fluctuation in rates impact indirectly
on business because accordingly they have to formulate their strategies.
Social Factor : This includes the social behaviour of costumer, taste and preferences
exist in market (Petrů, Havlíček, and Tomášková, 2018). Accordingly they have to target their
audiences and pitch them. Some positive and negative impact of factors on company:
 Positive impact: Organization has large costumer base in US who are mostly from elite
class, so company can target their audiences easily by positioning their product according
to their requirements.
Negative impact: GENERAL MOTORS is dealing with multiple dimension so they has to
carefully target their product and come with different campaigns.
Technological Factor – This refers to changing in technological factor in market can
influence business. Here are positive and negative impact on company (Schell and et.al., 2020).
 Positive impact: GENERAL MOTORS is operating at large level and sustained in
market for so long because of its up gradation in technology and continuous innovation.
 Negative impact: As there are many companies who were coming up this new ideas and
innovation, so to match or performing better than them is important to sustain.
Environmental Factor- This means factors in environmental surrounding can impact the
business. Positive and negative factors are:
 Positive impact: GENERAL MOTORS is already focusing on Eco-friendly and
sustainable vehicle which is positive sign for company to continue it longer period.
 Negative impact: As policies and rules are quite rigid and it is difficult for firm to follow
and implement them.
Legal factor: It refers to laws and regulation that vary from place to place. It include
safety, healthcare and legislation rules. There are positive and negative impact -
 Positive impact: GENERAL MOTORS is following all legislations and regulations
which improves sustainability of firm in market.
 Negative impact: It becomes difficult for enterprise to operate and follow all legal rules
and formalities as it becomes more complex for global enterprise.
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TASK 4
P5 Conducting external as well as internal analysis of enterprise with the purpose of identifying
its strength and weaknesses:
Internal analysis examines firm in examining its core competencies and resources which
enables enterprise in gaining competitive advantage (Li, T., and et.al., 2018). GENERAL
MOTORS uses SWOT analysis as a tool for identifying internal forces that impact business and
planning for effective strategy making that delivers competitive edge to firm. It helps company
in understanding business appropriately with the intention of taking advantage of strengths and
coping with weaknesses. SWOT analysis of general motors is expressed below:
STRENGTHS WEAKNESSES
 General Motors is enjoying large
market share in US and fourth biggest
auto mobile company in the word.
 Large variety of products and has
introduced many subsidiaries like
Chevrolet, Cadillac, GMC and many
more across different countries.
 Eco-friendly and sustainable policies
enable company to stand out in market
as there are few only who emphasis on
this policies.
 Costumer sanctification aids in
surviving of company in market which
will give long term benefit to company.
 Company mostly rely on pickup or
transport vehicles which restrict to
enter into other transport business.
 Low investment in technology hamper
in the growth and need more focus in
the technology and research
department.
 Lack of marketing strategies results in
low brand awareness among market
and require proper positioning and
targeting strategies to attack on
competitors (Schaltegger and Burritt,
2018).
OPPORTUNITIES THREATS
 As company has already stable cash
flow helps the company to spend more
on its department where investment is
required and can achieve desired
 Entry of strong players in market can
create difficulty for company and with
new creative marketing strategies gives
tough competition to company.
 Changing in the behaviour of costumer
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position.
 Increasing in the awareness of
sustainable and pollution free vehicle in
the market can give new opportunities
to company as they already
manufacture such vehicle.
 New trend in market can open up new
opportunities to explore more and they
can diversify their products into new
segment and achieve the desired
profitable result.
as they prefer online mode to purchase
could create threat to industry as it
operate in physical mode.
 Rapidly changing in the technology can
affect the operation of company as it
require good amount of capital to invest
in this department.
P6 Interrelation of strengths and weaknesses with external macro factors:
External factors are set of forces that are capable of affecting profitability, performance
and even functionality of business. When operations of an organization is affected by some
factors that automatically affects its internal environment. Hence, whether directly or indirectly,
it can be stated that it has huge impact on strengths and weaknesses of enterprise (Naidoo and
Verma, eds., 2019). On evaluation of influences of macro environment on GENERAL MOTORS
following factors were identified:
Strengths: Political stability in UK serves as a strength for GENERAL MOTORS
because it indicates that rules and regulations are not changing frequently which enables firm in
determining strategies for future operations effectively. It enhances process of management
which ultimately improves performance of company. Additionally, up-gradation and automation
in technologies that provided made business operations more efficient. Further, it also
encouraged innovations which improved customer experience, thus increased their level of
satisfaction. All these enhanced core competencies or business which led to strengthened brand
value of entity. Hence, above mentioned factors proved as a strength to company which
improvised its scope of expansion and facilitated as a purpose of increment in brand recognition.
Weaknesses: General Motors is an international enterprise. Hence, it operates worldwide
and over the seas. Different countries have different religions and cultures which sometimes
emerge as a hindrance or as a reason of arising conflict. Hence, it serves as a weakness to firm.
GM is a global entity hence, it has to follow regulations of every country it operates in. It comes
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up as a complex task and therefore, can be analysed as one of the weakness of business. Further,
enterprise has to follow several environmental legislations in order to sustain for longer duration
of time. It increases expenditure of company which ultimately results in decrement in its
profitability.
CONCLUSION
Above report concludes that 'Business environment' consists of various elements which
can be internal or external. Such elements have consequences on performance of an organization,
which can be positive or negative. Hence, business environment analysis is formulated by entity
to monitor influence of these environmental factors on business. It involves identifying,
understanding, scanning, analysing, and forecasting of business environment. This report further
states that organizations are of different types, that is, voluntary, private and public sectors which
have different legal structure, purposes, size and scope. Further, organizational functions have a
linkage with organizational structures and objectives. Organizational structure defines procedure
or methodology adopted by firm for achievement of objectives. For studying macro environment,
Pestle analysis is applied which states impact of external factors on business. On the other hand,
for monitoring internal environment of business swot analysis is an effective framework. It
enables firm in identifying opportunities and gaining first mover advantage . Along with it, such
analysing also helps business in deterring of threat. Additionally, relationship of macro factors
with strengthens and weaknesses of enterprise are analysed.
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