Business and Business Environment - Types of Organizations, Organizational Functions, and Macro Environment Impacts

This report explains the different types of organizations, their structures, and how they link to business objectives. It also analyzes the interrelationships of organizational functions and the impact of macro environment factors on business operations.

C05180
Business and Business
Environment

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures......................................................................................................................1
P2 Explain the size and scope of a range of different types of organisations..............................3
M1 Analyse how the structure, size and scope of different organisations link to the business
objectives and product and services offered by the organisation................................................4
D1 Provide a critical analysis of the complexities of different types of business structures and
the interrelationships of the different organisational functions...................................................4
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure........................................................................................5
M2 Analyse the advantages and disadvantages of interrelationships between organisational
functions and the impact that can have upon organisational structure........................................6
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.................................................................................6
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organisation.............................................................................................7
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses.............................................................................................................8
P6 Explain how strengths and weaknesses interrelate with external macro factors....................9
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision
making..........................................................................................................................................9
D2 Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making...................................................................................................9
CONCLUSION ...............................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Organisation is referred as an entity such as companies, associations or institutions which are
basically a combination of two or more then two individuals, working towards the attainment of
a common goal. This report will aim to clarify the various types of organisation and their
organisational structures followed by the effects of these factors on the functioning of the
organisations. External as well as internal organisational relationships plays an important role in
the functioning and on the mission of the company which will be briefly explained in the
succeeding sections of the report(Fu, and Coope2021).Application of various analysis
framework will be made to analyse the effects of the macro and micro environment and their
subsequent advantages and disadvantages on the organisation. Through this report the primary
formation and the values of several different organisations will be analysed which will be
helpful for the other organisation tin formulating their micro and macro strategies.
MAIN BODY
P1 Explain different types and purposes of organisations; public, private and voluntary
sectors and legal structures.
Public Organisation Private organisation Voluntary
organisation
Definition Public Organisations
are the non profit
institutions which are
regulated by the
government for social
work.
Private organisations
are considered as
profit making
organisations which
owned by individuals
or group of
individuals.
Voluntary
organisations are not
considered in the profit
making institutions
neither government
owned organisations.
Reason of existence The purpose of the
organisation is to
The purpose of such
organisations is to
the purpose of such
organisation is to
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provide the service
and commodities that
the government has to
offer, including civil,
military and medical
facilities for the
upbringing of the
society.
significantly
contribute in the
nations economy by
which the nation can
seek growth and
development.
provide the social
benefits to the ones
who haven't
experienced it and help
in the enhancement in
the society by creating
value.
Relevant Example National Health
Service as an example
is offering free health
services to the citizens
of the UK from
surgeries to getting a
mid wife.
TESCO as an
example is a
multinational company
based in UK, along
with making profits
the company is
contributing in the
development of the
nation as it is
providing employment
to many which helps
the nation to grow.
Trees for cities as an
example is promoting
the growth of trees in
the cities and have
successfully executed
various projects.
Legal Structure of
the organisation
National Heath
Services legal
structure regulates the
flow of funds which
will be helpful in
providing the NHS to
the ones who need it
along with, it governs
the clinical staff is
employed.
TESCO is
incorporated under
public limited
company, the legal
structure of the
company allows them
to collaborate with
stakeholders, and
through which they are
able to implement the
The legal structure of
Trees in cities allows
the association to
collaborate with
government and
private organisations
to develop awareness
among the employees
in the country.
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strategies to achieve
the goals that the
stakeholders wishes to
achieve parallel to this
the company is
responsible for
reducing its carbon
footprints
P2 Explain the size and scope of a range of different types of organisations.
Micro Enterprises Small Enterprise Medium and large
Enterprise
Size Micro enterprises are
the result of the further
segmentation of small
enterprises and
consists of less than 10
employees and are
incorporated with a
small amount of
capital.
Small enterprises
consists lesser than 49
employees and more
than 10 employees.
These organisations
are owned by
individuals.
Medium size
enterprises consists of
less 250 employees
and at the same time
the large enterprise
consists of more than
250 employees, and
are owned by
individuals or group of
individuals.
Scope Micro enterprises have
wide scope as they do
not require the
installation of
complicated and high
maintenance
technologies which is
The businesses which
requires the constant
involvement of the
stakeholders as well as
the owners, can
effectively run their
operations within
The enterprises which
deals with highly
sophisticated
technologies for their
daily operations along
with have provided
employment to more
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beneficial for small
business owners, along
with this is the
common type of
enterprise in
developing countries.
enterprises which are
small in nature.
than 250 employees is
considered as a large
enterprise.
M1 Analyse how the structure, size and scope of different organisations link to the business
objectives and product and services offered by the organisation.
The structure of the organisations have been categorised to ease the functioning and the
implication of rules and regulations on the basis of their size and structure. The different
enterprises are incorporated by companies act under various titles on the basis of their
characteristics. As the companies are contributing in different ways, as they have different roles
and responsibilities to perform by their execution process. Irrespective of all, the different
organisations contributes in the development of the economy in the most favourable ways by
providing employment to many which contributes in the economy of the nation( Teixeira-Poit
2020). National health services explains the functioning of the public enterprises and their
contribution in the economy, TESCO on the other hand helped in explaining the functioning of
the private enterprises, the complexities that the enterprises goes through, their role and
contribution in the nations economy followed by Trees in cities which is a voluntary enterprise, it
explained the perspective of such organisations and the motive of formation along with their
contribution in the economy. On the basis of the size and scope the organisations can be
categorised as micro, small, medium and large enterprises which states the number of employees
that the organisations can employee along with the scope of the organisations in the longer run.
D1 Provide a critical analysis of the complexities of different types of business structures
and the interrelationships of the different organisational functions
Business structures are the building blocks of enterprises and their different kinds, which
allows them to be differ in their roles and the way they contribute in the economy. As the
approach and functions of theses enterprises differs. As micro enterprises have significantly
simpler operations which the associated organisations runs, even though they have multiple
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operations to execute, the approach they follow is quite simple as well suits the objectives and
predetermined goals of the organisation. In comparison the small sized enterprises are a bit
complex as they have deal with issues, which could have occurred by the partner of the
organisations, this business structure involves more than 2 people to create the organisation
which complicate the processes in comparison to the small enterprises(Amici, and Cepiku, .,
2020). But the functions of small enterprises are considered moderately complex in comparison
with the large and medium sized companies which requires the adaptation of complex
technologies to deal with the multidimensional functions of the organisation.
Companies such as National Health Services, TESCO, Trees in the cities explains the
structure and the functioning of the public, private and voluntary sectors respectively. And
provide the overview of the objectives that these companies set fro themselves and the ways they
adopt to execute them, and the benefits the government provides to which enterprise more and
less to which. These enterprises also explain the scope and structure of micro, small and medium
and large enterprises by providing the facts and figures which belongs to these enterprises.
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
The processes of the organisations are interconnected with the objectives of the
organisation, as the processes takes place only on the basis of the vision and mission of the
company which is predetermined and cannot be neglected in any scenarios as it contains the
essence of the companies value. The influence of the objectives and goals is immense on the
organisations each and every operation that the company executes which bring the company
closer to its goals for which the company is working. The organisational functions accounts for
the market place the company holds, the revenue the company is generating along with the work
ethic that the company is sticking to (Boris, and LEYDIER, 2021). For Example; the hierarchy
of TESCO is complex and so are the functions of the organisation, Tesco is a UK based
company which operates in the retail sector and is one of the biggest players in the industry.
The whole functioning of the company is dependent upon the satisfaction of the
companies customers and stakeholders as they are the ones who are diverting most part of the
revenue. By keeping this in mind the company formulates its strategies to sustain the satisfaction
among the stakeholders and provide excellent customer experience. Fro which the company has
adopted new methodologies of management along with the adaptation of updated and effective
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software which eases out the processes for the organisation and helps them in effective execution
of strategies which ultimately helps the organisation in achieving its pre- determined goals and
objectives.
M2 Analyse the advantages and disadvantages of interrelationships between organisational
functions and the impact that can have upon organisational structure.
The organisations do interconnect as they all have objectives t determine and goals to
achieve, they do use different methodologies to achieve the desirable but they do go through the
same standard process, large and complex organisations have the resources to resolve their
complex issues and execute their operations effectively as they are capable of adapting the
technologies that eases out the process. On the contrasting side small or micro enterprises goes
through the standard structure by which they can execute their processes, they do not need to
install complex software as their operations neither their issues are that complex.
Well interrelation of business functions is a crucial element as TESCO is a multinational
companies who have various departments to deal with different issue that arise while the
execution of the processes, for companies like this interrelation among organisational functions
is crucial and which can be practised and implemented by effective communication as when the
teams will be internally communication , this will not divert them from the end goal. In such big
organisation inefficiency of such organisations could decline if there is no communication link
between the team members, along with if the teams are not practising the effective management
methodologies, as the old methodologies are not capable of handling the kind of work the
organisation is handling, and when the team are inter related this could lead to confusion within
the teams, if the objectives are not clearly defined(Federo, Rand Esteve,2020).
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples
Macro factors are those which governs the functioning of all the businesses working in
the economy. Majorly the macro factors affects the trends in the policies which affects the
functioning of many including; gross domestic product, employment, the business life cycle
doesn't matter from which sector it belong is affected by the macro factors which defines a ton
lot of things. Macro environment factors are primarily responsible for the proper functioning of
the economy. Tesco's operations are also affected by the market trends regulated by the macro
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factors, as it determines the supply and demand chain which regulates the price level for the
company along with the manufacturing rate, which can sometimes turn out be non beneficial for
the company(Rahman, and et.al , 2019). As Tesco is completely depended on the macro
environment, as the customers of the brand are also, which diverts all the focus on the external
environment which will be regulating the business prospects for the organisation.
Not only businesses but also the customers are affected by the macro factors as it
regulates the tax percentages, employments rate, and inflation in the economy which are the
deciding factor for a consumer as their purchasing capacities are completely dependent on that.
Whenever the market will be going to inflation, will bring subsequent consequences, which can
sometimes be favourable (Forleo, and Palmieri, , 2019). ... .. Major macro environmental factors
depends upon the monetary policy formulated by the Federal Reserve and it creates the base for
all the macro factors that will be affecting the functioning of the business, for which the
company can hire a well qualifies and experienced employee at the position of the business
analyst who will be analysing the trends of the market for effective functioning.
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organisation.
Pestle Analysis is a tool used by businesses to analyse the macro factors affecting the functioning
of the business. Tesco as being the worlds second largest retailer in the food industry requires
various analysis which can evaluate the market factors or trends that will be directly or indirectly
be affecting the functioning of the organisation (Sharapova, and Borisov2019). Under Pestle
analysis 5 factors analyses the macro factors affecting the business, the 5 factors that are
included under political, economical, social, technological and environmental.
 Political Factor: As being a global company, Tesco needs to deal with many political
factors which regulates the functioning of the company in the respective country. The
policies formulated by the respective countries needs to be abided, if not done one will
face serious repercussions. On contrary the countries in which Tesco is executing its
processes have responsibility to protect its interest as, the company is providing
employment to many which is directly contributing in the countries economic growth
which can't be suffered at any cost.
 Economical Factor: These factors are of major importance as they directly affect the
revenue of the company by alternating the pricing level, profit margins along with the
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demand (Kalisz, and et.al2021). Business analyst of the company helps in this scenario
as they constantly evaluate and study the market and the changes that are being issued
which possibly could affect the interest of the company, and formulate strategies to work
upon them.
 Social Factor: As mentioned that Tesco is a globally established brand, because of
which it needs to deal with varying demographic factors which affects the overall
functioning of the company. As the same strategies can't be implemented to all different
countries they need to be altered and mould to bring the desired results.
 Technological Factor: Tesco's functioning can't be executed manually, as the data that
the company needs to deal with is huge and complex, which can only be dealt via a
software that matches with the need of the company (AnRangkuti,2015). There exists
several technologies and methods which have proven to be beneficial for the company
such as big data which has been filtering the data in the most effective manner.
 Legal Factor: Tesco has relied its functioning around the code of conduct released by
the Food Retailing Commission. Following FRC guidelines has proved to be beneficial a
it has stopped the company from taking any illegal actions which could have banned the
functioning of the company.
 Environmental Factors: As now it is essential for the companies to address and adopt
the sustainable measures to prevent the environment, Tesco has been committed in
addressing the issue by reducing its carbon footprints by year 2020 along with its
customers.
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses
SWOT Analysis is the tool which is used to address the internal as well as the external factors,
which helps in evaluating the strengths, weaknesses, opportunities and threats associated with the
company(Teoli,, 2019).
Strengths Opportunities
 Tesco as a company is having strong
brand value which has helped the
company to develop a a firm market
 As being a global brand, Tesco
experiences the several growth
opportunities internationally.
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presence.
 The company provides a wide range of
product portfolio which helps in
triggering the customers needs.
 Tesco has developed a capable and
structured value chain along with the
adaptation of updated and effective
technologies.
 With the wide product portfolio, Tesco
has the opportunity for diversifying the
companies horizons. Companies global
expansion has given the opportunity for
product innovation.
 In regards with other factors the brand
enjoys implementing, sustainable
practises which are helping the
company in reducing its carbon
footprints along with its customers.
Weaknesses Threats
 Tesco is operating in the food retail
business which constraints the
diversification options for the company.
 The functioning of the brand is overly
dependent on its retailers, which
excessively hinders the processes of the
company.
 The rapid expansion or acquisition is
creating unfavourable consequences for
the company.
 Similar to Tesco there exist many brand
which are working in the same industry
which are considered as rivals.
 The small enterprises which originates
from the traditional markets are tough
to compete with as the customers have
strong belief in them.
 Market has also been a threat for
industries and will always be, as the
companies are dependent on the market
conditions.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
Strengths and weaknesses are the determining factor of an enterprise which are connected
with the external environmental factors. These factors have influence upon each other, and in
certain ways are responsible for the irregularities that could take place in the business model. The
internal factors of the company determines how the company is going to deal with the external
factors that influence the functioning of the company (Foster,and Grannell, 2022). The external
factors determines the alterations that the company has to go through and the strengths and
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weaknesses determines how the company is going to react to the changes that has occurred.
Tesco is a strong brand build up with many strengths along with some weaknesses which
together runs the process of the company and handles the consequence of the macro
environmental factors.
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision
making
Swot analysis is a tool which helps in identifying and at the same time evaluating the internal as
well as external factors which derives the force of the organisation. Implications of SWOT
analysis has helped the model in many ways, which helped the brand to develop strategies and
business plans which help to shadow its weaknesses and will use its strengths to overcome its
weaknesses. As when the company shows its strengths and the market opportunities they have
builds the trust in the customers along with attracts future investors to invest in their business
(Hamilton,and Webster2018). The weaknesses of Tesco are the reason in the companies failed
acquisition, and ineffective diversification for which the company needs to develop effective
plans which will help the company to overcome its losses.
D2 Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making.
The macro and micro factors affects the businesses in several aspects including, political,
economical, social, technological and environmental. The micro factors are responsible for the
changes that take place within the organisation and affects it internally, micro factors are only
concerned with the interest of the organisation itself. On the other hand the macro environmental
factors are responsible for protecting the interest of the entire industry and the factors that derive
the factors for the success of the economy. Both of the approaches in certain conditions are
favourable for Tesco and in some conditions they are not in certain(Gavieiro Besteiro 2022). The
factors that are affected by macro environmental conditions includes; Inflations, GDP of the
nation, employment rate respective to the industries, the purchasing capacities of the customers
along with monetary and fiscal policy.
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CONCLUSION
The aim of the report was to explain the different kinds of organisations and their classification
on the basis of the ownership along with the size and scope of the organisations. The influence of
these factors was analysed which provided a broader view on the functioning of the organisations
. Different examples were taken into account to explain the factors well, by associating them
with the companies that are present in real life. The companies that were taken into account to
explain the factors were Tesco, National Health Services, and Trees in cities which explained the
working condition of private,public and voluntary organisations in the UK. The relationship that
the different organisations share irrespective of their constitutional differences, and how their
functions differ on the basis of their organisational structures and objectives. Analysis
frameworks such as Pestle and SWOT has been applied to evaluate the internal as well as the
external factors affecting the operations of the organisation and evaluate the trends.
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