Organizational Structures and Business Ethics

This assignment explores the relationship between organizational structures and business ethics within a globalized business context. It delves into various structural models like functional and divisional organizations, examining how they influence ethical decision-making and corporate citizenship. The analysis incorporates real-world case studies and relevant academic research to demonstrate the practical implications of these concepts.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisations.......................................................................1
P2 Size and scope of a range of different types of organisations................................................3
TASK 2............................................................................................................................................4
P3 Relationship between different organisational functions and link to objectives and structure
.....................................................................................................................................................4
TASK 3............................................................................................................................................6
P4 Identify macro environment positive and negative impacts upon business operations.........6
TASK 4............................................................................................................................................9
P5 Internal and external analysis of specific organisation to identify strengths and weaknesses
.....................................................................................................................................................9
P6 Strengths and weaknesses interrelate with external macro factors......................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13
.......................................................................................................................................................13

INTRODUCTION
Business environment comprises internal and external components which influence on
operations of an organisation. Government, management, employees, suppliers, customers and
many other factors directly or indirectly affect on business. It is essential that management
consider them while formulating policies and rules. Besides this, competitors strategies and
functioning are acknowledged for making system function effectively (Business environment.
2018). Present report is based on Lego which is private firm headquartered in Billund, Denmark.
It is a toy sector company that provides variety of playthings and bricks to people. Different
types and purpose of organisations is specified in this assignment. In addition to this, relationship
between organisational functions and their link to objectives and structure is stated. Macro
environment factors positive and negative impact on business is mentioned in report.
Furthermore, internal and external analysis to identify strengths and weaknesses is explained.
TASK 1
P1 Different types and purposes of organisations
In recent time, organisations plays essential role in driving market conditions. Public,
private and voluntary are three forms of firms which increases employment chances. Besides
this, they also contribute in economic and social growth of country. But these organisation differ
with each other in respect to ownership and functioning that is described below:
Public sector: This segment includes firms which are run and functioned by government
for serving society. Police, education, health care, infrastructure such as bridge, water supply,
road, telecommunications are services which are provided by this industry (Vaiman,
Sigurjonsson and Davidsson, 2011). Bank of England is central bank of United Kingdom that
regulate nation by framing laws and regulations in respect to monetary policies and commercial
bank.
Purpose: Bank of England aim is to regulate economic conditions of United Kingdom. It
issues currency and formulate policies in respect to monetary and fiscal. Along this, it also
function as lender of last resort to financial institutions and government's bank.
Legal structure: State, local and central government are various structure that are
followed by public sector organisation are mentioned beneath:
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 State Government: These are authorities which have political power and controlling
authority of country. Local Government: These are administration whose duty is to control local part of
territory. State, province, region, district, city, town and village are part of local
government entities.
 Central government: These are administrative units of state and central agencies that are
responsible for economic territory of nation. This level government formulate policies,
issue currency and provide other economic and social services for development of
country (Wack, 2017).
Private sector: It is another segment which comprises companies which are owned and
controlled by a single person or individuals. These are firms that are incorporated by people for
generating profit and didn't need to be function in respect to government bodies. Lego is private
manufacturing firm which provide branded toys and interlocking plastic bricks. Thus, company
deliver products and services for accomplishing demands and needs of buyers.
Purpose: Lego aim is to encourage and inspire children to make them think in creative
manner. Besides this, they are also made capable to shape future by playing with toys (Yu and
Ramanathan, 2013).
Legal structure: Sole trader and partnership are two types of structure which private
firms follow are stated below: Sole Trader: These are firms that are incorporated and run by single person for
generating money for their livelihood. This scale of enterprise have limited liability that
is an individual require to pay debts of business only. Thus, there are no complex
documentation work require to be conducted by proprietor.
 Partnership: These are enterprise which are managed by two or more individuals that
invest money for gaining profit. Partnership deed is sign by people which define rules
and conditions which all members require to follow as defined under an agreement
(Chetwood and et. al., 2014) .
Voluntary sector: This segment includes firms whose responsibility is to conduct
activities for social development of country. These are organisation which are established by
people for providing items and services to needy individuals. UNICEF is agency of United
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nations which provides mothers and children development assistance. Henceforth, it helps
government to enhance and develop state of nation.
Purpose: UNICEF is organisation, whose aim is to protect rights of children by fulfilling
their basic demands. Besides this, they even enlarge opportunities and aid them to reach to full
potential (Zsambok and Klein, 2014).
Legal structure: These are structure which are followed by voluntary sector are stated
below: Not- for Profit organisation: These are firms whose goal is to serve community by
providing products and services in respect to needs of people. For funds they rely on
stakeholders which grant money for corporate social responsibility.
 For- profit organisation: It is another kind of firms which are set up by people to
develop society but also earn revenue for their business.
P2 Size and scope of a range of different types of organisations
Public, private and voluntary are various kinds of organisations which differ with each
other in respect to size, objectives, scope and structure. These are firms that provide products and
services to fulfil demands and requirements of people. But, as their resource vary which affect on
their operations and scope. Henceforth, this is description about different sector difference are
mentioned below (Meiners, Ringleb and Edwards, 2014):
Public: Bank of England is central bank of United Kingdom which regulate and control
economic functionality of country. It is an independent public organisation which issue currency
and frame policies that is monetary and fiscal. Mark Carney is governor of bank who take
decisions and run functioning of institution.
Size: It is eighth level old bank in all over world which was founded in 1694 and got
nationalised in 1946.
Scope: Bank of England is central bank which formulates policies in respect to monetary
and fiscal. Bank also issues bank notes and currency for maintaining financial stability of
country. Besides this, it also provide banking services to government and commercial
institutions.
Mission and Vision statement: Mission of Bank of England is to maintain financial and
monetary stability of United Kingdom for promoting goodness of people (Sekaran and Bougie
2016). Vision of bank is to explore financial system for better tomorrow of country and people.
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Private: Lego is private company which had headquarter in Denmark selling variety of
toys and bricks. Ole Kirk Christiansen is founder whose support people are Jorgen Vig
Knudstorop and Niels B. Christiansen who are executive chairman and chief executive officer.
Size: Lego was started in 1932 and now in 2017 there are 42 offices all over country.
This help top personnel to generate profit of about 37.9 billion as per 2016. Company have
nearly 19000 subordinates employed. This help in delivery of products and services in respect to
needs and demands of people (Saleem, 2017).
Scope: Lego is a leading firm which manufactures creative and innovative toys and
bricks for enhancing mental ability of children.
Mission and Vision statement: Vision of Lego is to provide playing material to people
for increasing their mental ability of construction work. Their mission is to develop and inspire
children to become builders in future.
Voluntary: UNICEF stands for United Nations Children's Fund agency which provide
developmental assistance to mother and children for enhancement of nation. Tore Hattrem is
president and Henrietta H. Fore is executive director that run agency.
Size: UNICEF got established in 1946 for providing vaccine, educational supplies,
medicine, shelter and other services to children and mothers. This help agency to earn revenue of
about $5,000,000,000 (Tayur, Ganeshan and Magazine, 2012).
Scope: Goal of UNICEF is to protect rights of children and mother for development of
country. Activities performed by UNICEF are providing education, protection, safety in respect
to health and nutrition of children and mother. Besides this, disaster preparedness and response
are other tasks performed by them.
Mission and Vision statement: Vision of UNICEF is to create a world where children are
protected and get healthy environment and education for their growth. Their mission is to
complete basic needs of children and provide them opportunity for reaching their full potential.
TASK 2
P3 Relationship between different organisational functions and link to objectives and structure
In an organisation, management have constructed structure under which various
department and people are positioned for attainment of business goals and objectives. Human
resource, finance, marketing, sales, research and development are different units which are
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created by top personnel. In Lego, these are unit which help business person to conduct
operations effectively (Türetken and et. al., 2011).
Human resource department: HR duty is to manage workforce, so that sufficient people
are present in organisation for attainment of objectives. Recruitment, selection, training,
development, compensation are various practices which are conducted by human resource of
Lego. This help company to have skilled and competent people that are divided into other units
that are finance, marketing, production, sales, etc. on basis their capabilities. Thus, management
have sufficient manpower that support them in attainment of business goals and objectives.
Finance department: This unit responsibility is to utilise funds properly by maintaining
financial statement that is trial balance, trading, profit & loss, balance sheet. They keep check on
budget allotted to production department in respect to store, material and other activities. This
help finance people of Lego to control expenditures by keeping record of cash flow, receipts and
profitability (Crane and Matten, 2016). With this, management utilise funds in execution of
operation through which organisation objectives are accomplished.
Production department: It is functional unit whose duty is to convert raw material into
finished item for delivery in market. Lego is manufacturing firm which provide toys and bricks
to people. For this, management require to have skilled people which produce quality and
innovative items. In this, marketing department support is necessary to inform public about
products. Along this, salespeople aid production people to get information about preferences and
requirements of people. Thus, changes in toys and bricks are made for increment in sales volume
and revenue.
Marketing department: This unit consists essential role in promoting firm for creating
awareness and information to public. Management of Lego have formulated marketing plan
through which activities are conducted in systematic manner. Promotional tools such as
television, online advertisement, publicity, sales promotion are used for informing people about
toys and bricks (Gharajedaghi, 2011). Besides this, budget formulation that is allocation of
money in different marketing activities is done with support of finance team. This helps
salespeople to grab attention of buyers and influence them easily to purchase product.
Sales department: This unit responsibility is to construct and manage relations with
buyers for effectiveness of firm. In Lego, salespeople inform people about toys and bricks, their
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features, working and other attributes related with item. Marketing team promote and aware
public about products which help salespeople to influence customers decisions.
Research and development department: This unit plays important role in firm which is
related with making plan and execution of new methods and equipments. It helps management of
Lego in creation of new and innovative items. In this, marketing and sales team aid R&D people
to have information about requirements of people. Besides this, they also find out competitors
items. Thus, changes in system and products are made for business sustainability in market
(Gilboy, 2016).
Organisation structure: It is a system which state hierarchy designed by top personnel in
a firm. For this, each and every job, its function and reporting are identified for allocation of
tasks properly. This help in coordination and supervision of employees for attainment of business
goals and objectives. Divisional, functional, matrix, project and line are various types of
structure which are used by management in respect to end targets and market conditions.
(Source: Functional Organisation Structure, 2016)
(Source: Divisional Organisation Structure, 2013)
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Illustration 1: Functional Organisation Structure
Illustration 2: Divisional Organisation Structure

In Lego, functional and divisional organisation structure are used by business person.
With use of function structure, different departments that is human resource, finance, production,
marketing, sales and R&D are constructed. This help management to execute activities
effectively for delivery of quality products to customers. Besides this, divisional structure which
benefit company in conducting business globally (Li and et. al., 2011).
TASK 3
P4 Identify macro environment positive and negative impacts upon business operations
Macro environment plays a crucial role for every single business organisation when it
comes to running business in a smooth manner. In order to understand the impact of macro
environment on business operations of Lego. PESTLE framework is used by management of
Lego for gaining information about external factors influence on firm. Thus, these are macro
environment factors which are described below:
Political factor: This component define policies and rules which are formulated by
government for regulating functioning of an organisation. Trade restrictions, tariff, taxation are
various policies which influence on business and their operations. In UK, there is political
stability which help management of Lego to expand firm and their operations effectively (Zeng,
Li and Duan, 2012). Positive impact – Lego firm core value of executive is to maintain political neutrality of
UK. Government had formulated flexible policies for promoting and encouraging firm.
This help management to sustain their business functionality and market reach to other
nations.
 Negative impact – If political market is not stable than this affect on performance of
Lego. Business person will require to make changes in policies in respect to government
that influence on system working.
Economical factor: It is the external factor of business environment which may affect
Lego company. Economical factors include purchasing power, inflation rate, foreign exchange
rate, increase as well as decrease in price level of goods and services. All these elements give
direct impact on economy of the nation and organisation in positives as well negative both
manner.
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 Positive impact: If their will be stability in several factors such as foreign countries,
develops employment opportunities and research and development work on its products.
Then it will directly result in growth of the Lego company business (Vaiman,
Sigurjonsson and Davidsson, 2011).
 Negative impact: Because of economic changes if their will be high inflation rate then for
customers purchasing of goods and services will not be easy. This will direct reflect on
no profit and reduction in sales.
Social factor: It is the factor which point out thoughts as well as beliefs of the customers
perception. Social factors include life style of individual, culture, along with this all the social
perceptions are also included (Wack, 2017). Positive impact: With the assistance of social factor, Lego company can work on
consumer perception like taste, preference and quality of offerings. This help
management to easily grab attention of people by providing them products in respect to
their demands and needs.
 Negative impact: Sometimes, few products related to quality or any other issue give
adverse impact on the Lego.
Technological factor: This is the most effective factor because through this company can
maintain quality of their toys. Technological factors help company in making positive changes in
their offerings and help in satisfying customers. It is the most effectual factor which result in
maximising profitability, performance and effectiveness of a Lego (Yu and Ramanathan, 2013). Positive impact: New or upcoming technology help company in maintaining quality of
their services. Through technological factors Lego complete their product process on the
time and enhance their business in several other nation.
 Negative impact: Latest technology needed huge funds for installation of equipments and
software. Along with this, it also requires trained staff to use or work on these technology
in appropriate manner.
Environmental factor: This factor is dynamic in nature and changes in weather can
affect the supply of Lego company goods as per the clients demand in a particular weather. The
environment law is prepared for the protection of environment and makes products environment
friendly which can give them health (Chetwood and et. Al, 2014).
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 Positive impact: Laws related to environment don't affect overall policies of the business
and supply of their products at domestic as well as international level.
 Negative impact: Now a days, using of plastic bags and different packaging which are
hard to dispose are ban. For this, organisation have to manufacture or use ozone-friendly
bags which are expensive.
Legal factor: This involves all the laws and legislation related to labour, minimum wages
and provisions, working hours and so on. All these have to be implemented by the business in
proper manner. Positive impact: If personnels are get selected as per their job specification. This will cut
down the expenses of training and developing process.
 Negative impact: Several type of facilities provided to staff members of Lego result in
increasing the cost of organisation (Zsambok and Klein, 2014).
TASK 4
P5 Internal and external analysis of specific organisation to identify strengths and weaknesses
SWOT analysis is technique used by organisation for acknowledging system capabilities
and market conditions. Strengths helps business person of Lego to utilise opportunities which are
present in market. Besides this, weaknesses and threats are overcome for execution of operations
effectively. Management is even able to establish competitive advantage in respect to position
firm superior than rival brands (Meiners, Ringleb and Edwards, 2014).
SWOT Analysis of Lego:
Strengths Weaknesses
 Lego manufactures educational toys for
young children as it helps them in
enhancing their knowledge. It increases
popularity among not only children but
in parents and schools too.
 The company owns strong product
portfolio which avails huge variety of
option of customers. This contributes in
the increase in sales which impact
 Product offered by Lego are of
premium price which impacts
negatively on sales of company. Its
prices are high in comparison to the
other rival companies (Sekaran and
Bougie 2016).
 Usage of high digital technology
impacts negative on the environment.
 Lego spends huge amount of budget on
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positively on profitability of
organisation.
 The company uses the advance digital
technology which is helpful in
organisational growth as it directly
enhances number of opportunity for
company.
 Mainly, Lego focuses on manufacturing
its toys with high quality as these
prepared products are used by children.
High quality toys are successful in
gaining trust of parents who feels
attracted towards product of company
because of its safety measures.
research department. In order to offer
innovative product with new designs
every time the company have to use
critical elements which consumes huge
amount of costing.
Opportunity Threat
 Lego can diversify its business by
entering into new segments. This will
not increase its product portfolio but
also contributes in grabbing attention of
new customer (Saleem, 2017).
 Lego should refresh its pricing strategy
as present products offered by the
company are expensive. If it will cut
down its prices, the company can
develop its opportunity level among
middle class people.
 The company can introduce
experimental learning products for
schools. As children feels more
comfortable in gaining knowledge from
 Increasing number of competitor
among same sector is a major threat for
Lego as it reduces number of customers
and directly affects sales of company.
 Updation in current technology is a
major threat for Lego as it consumes
huge amount of budget again in
updating their present working pattern.
 Currently customer are accepting
educational toys because of new
features. But, entrance of any other
substitute product might affect the
preferences in customers taste and
preferences (Tayur, Ganeshan and
Magazine, 2012).
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educational toys. Increasing number of
schools as a customer is considered as
opportunity for Lego.
P6 Strengths and weaknesses interrelate with external macro factors
PESTEL analysis helps business person of Lego to have knowledge about system
capabilities and market conditions. Strengths are acknowledged for utilisation of market
opportunities. Besides this, weakness and threats are prevented for functioning of system
effectively. Thus, this is description of external macro elements impact on organisation are stated
below (Türetken and et. al., 2011):
Political: This factor includes tax, employment law, trade restriction and tariff are
various government policies which affect business. Strengths: If the stable government is there then it helps in making effective business
policy and due to which there are larger growth opportunities in business.
 Weaknesses:The instability in the government resists in making effective policies as
there would come large amount of threats if policies are ineffective.
Economical: This factor comprises inflation, exchange rate, growth which depend on
economic conditions of country. Strengths: Inflation help management of Lego to have good customer base to purchase
products in respect to their demands (Crane and Matten, 2016). Weaknesses: Fluctuations in currency affect on business of Lego, as they are conducting
operations globally. This also become threat on company influencing on their sales and
revenue.
Social factor: Organisation provide products and services for fulfilling needs and
demands of people. Strengths: If people supports the product it means particular product is socially
acceptable at that geographical region so acceptability means it supports social factors. Weaknesses: Socially backward region does not allow the fashion or particular to run as
their culture don't allows it. So this weakness generally appear in rural or backward areas.
Technological factor: Business person implement advanced tools and technologies for
utilisation of resources in efficiently. Along this, new and creative products are delivered to
buyers.
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 Strengths: Digital technological always boots the performance of the business and it
helps in reaching to the remote areas also as digital medium is far better then any other
medium of information (Gharajedaghi, 2011).
 Weaknesses: Technology changes rapidly so that rapid transformation some times
become difficult to learn and to applying in the particular process is also difficult.
CONCLUSION
From the above report, it can be comprehended that public, private and voluntary are
different types of organisation. These are sector which varies with each other in respect to scope,
size, structure and purpose. Functional structure help management to conduct operations
effectively by dividing people into departments that are human resource, finance, production,
marketing, sales, R&D. PESTLE analysis is conducted by top personnel which aid them to gain
information about external factors influence on business. Besides this, SWOT technique benefit
them to have knowledge about strengths, weakness, opportunities and threats.
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REFERENCES
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sustainability in the age of globalization. Oxford University Press.
Gharajedaghi, J., 2011. Systems thinking: Managing chaos and complexity: A platform for
designing business architecture. Elsevier.
Gilboy, G. J., 2016. The myth behind China's miracle. In SEEKING CHANGES: The Economic
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Li, Q., and et. al., 2011. Towards the business–information technology alignment in cloud
computing environment: anapproach based on collaboration points and agents.
International Journal of Computer Integrated Manufacturing, 24(11) pp.1038-1057.
Meiners, R. E., Ringleb, A. H. and Edwards, F. L., 2014. The legal environment of business.
Cengage Learning.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Saleem, M. A., 2017. The impact of socio-economic factors on small business success.
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antecedent of economic crisis: The case of Iceland. Journal of Business Ethics. 98(2).
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Wack, P., 2017. Shooting the rapids. Historical Evolution of Strategic Management, Volumes I
and II, 1, p.121.
Yu, W. and Ramanathan, R., 2013. Business environment, employee competencies and
operations strategy: anempirical study of retail firms in China. IMA Journal of
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Zeng, L., Li, L. and Duan, L., 2012. Business intelligence in enterprise computing environment.
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Online
Business environment. 2018. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>.
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