This report explores the different types of organizations, the interrelationship of various functions within an organization, and the impact of macro environmental factors on business. It also discusses the organizational structure and the positive and negative effects of macro environmental factors on business activities.
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Table of Contents Introduction....................................................................................................................................3 LO1..................................................................................................................................................3 Different types of organizations..................................................................................................3 Large, medium and small organisations......................................................................................5 LO2..................................................................................................................................................6 Interrelationship of various functions within the organisation....................................................6 Organisational structure...............................................................................................................8 LO3..................................................................................................................................................8 Positive and negative impact of macro environmental factors on business................................8 LO4................................................................................................................................................11 Introduction to the SWOT and VRIO........................................................................................11 Conclusion....................................................................................................................................12 Reference......................................................................................................................................13
Introduction Business is always surrounded by the internal and external Factors that have huge impact on the company’s profitability and their growth. It is necessary for the company superiors to be aware of internaland externalfactorsso they can . identify the opportunitiesand take competitive advantages within the market where they are operating their business. This report will cover case study of IKEA Is Swedish multinational conglomerate That sells and design readymentFurniture call my home accessories and kitchen appliances among the other useful goods and occasionally home services. This report will explain the scope, type, and size of organisations. it will explain how the function within the organisation are interlinked with each other, including influence of positive and negative impacton themacro environmental Factors. in the end of this report will determine how the weakness and strength of the company interrelate with macro factors. LO1 Different types of organizations
Profitable and non profitable business There are always two type of organisation of one who always work to identify the needs and demand of the customers so they can sell their product and earn the probability (Oliva and et.al., 2019.). Ikea is also Profit earning organisation who sell their product and services to their customers and earned probability to grow their business more. the other side some of the organisation does not work to earn probability but their main motivation is to help this society without earning any profit, they work just to add value in society not to earn money.Examples of the known profitable businesses are NGO's. Micro, small and medium sized enterprise and different purposes of businesses Small medium sized businesses whose personal number fall below certain limits. they're having a huge contribution in the economy to grow and create large number of employment within the country. every business start with micro, small and media and slowly they grow to the large businesses. The Made purpose of every business is to earn profitability by selling their good sense services. they always come up with the new product and services that can add some value in customers life and help them to grow effectively within the market. they said their objectives and supply, good sense services on various channels and their stores. The range of legal structure associated with the different form of business The most common legal structures are the soul proprietorship, partnership and private limited companies. this all type of legal structure have their own way of working and contracts are totally different from each other. Sole traders Sole partnership Or the sole trader is the business which isindividually owned by the person. They are owner of the business alone so they do not share their profits and liabilities with any other person. If there are need probability then it will be their own and liabilities are also their own. Partnership Partnership business has done between two or more than two people where partners come in a contract to do business with each other. they share fix amount of capital, profits and shares.
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Private limited companies A private limited company is an entity that is owned privately and used in many justification, In contrast to a publicly listed company with some different from country to country. Size and scope of organisations Large, medium and small organisations And Lara organisation is formed when there are more than 1000 employees and more than 500 personal computers is called large organisations. The large organisations are stand to for more services and product to the varieties of customers (Čepel, And et.al., 2018). Their main objective is to earn probability, their market share cover the international and national markets and growth of companies very high. Medium Medium size organisation can have employees from 100 to 1000. it is also used by growing business who are seeking to manage their working capital, examples of the medium sized businesses are transport, wholesalers and manufacturers. their main objective is to provide best possible services to their customers and clients and there market shares are limited and profits are equally distributed and their growth is also slow. Small businesses A small enterprise can have employs around 0 two 250. their main motive is 2 provide protecting services to the local people and there profit ending and market share are limited. Global growth and developments of transactional international and local organisation Transitional businesses are the store that are locally owned and offer the product and services to their local customers. their growth is limited and their provide product and services to local community. International
International business refer to the trading off their coats and services across the word as of the country an at the global level. growth of this kind of companies are very high and having a huge network. Global business Global businesses company that operate their business in various Princess in all around the world. IKEA is one of them who are operating their business in various countries and having higher growth in all of this segment. Difference between franchising, licencing and joint ventures Franchising, joint venture and licencing Franchising involves a relationship that goes behind the grant of, I like science and includes a relationship of control where underlying, joint venture is the business where two business plan to work together an expand their business in other countries. . licencing is a legal relationship that is limited in relates and scope only to the use of trademark or technology Stakeholders and responsibilities of organising to meet different stakeholders interest and expectation Other stakeholders of the companies are investors and shareholders, it is necessary for the organisation and stakeholders to meet the demand that is return on the investment to fulfil I providing probability can help to create trust among the outside investors. LO2 Interrelationship of various functions within the organisation Various functions within the organisation There Are various Department at the workplace of IKEA company who help them to achieve success within the market where they are offering their business. all the functions of this Department are interlinked with each other and they have common goal which is producing a goods and services that can satisfy the needs and demand of their customers. Marketing
marketing is one of the most important function OfIKEA company because This function is responsible to bring customers who can buy product and service from the company and help them to achieve their goals and objectives (Grizane, and Jurgelane., 2017). marketing function interact with other functions as well for example- Marketing team of the IKEA company help to connect information of the customers needs and demand and they hand over this information to the production team of the company where they product and services according to the customers need. Finance Finance manager is responsible to ensure the flow of find within the workplace of IKEA. They provide budget to run other functions of the company because Without having a proper budget other function can't run their day to day activities and achieve their objectives. they also ensure Proper use of financial resources to get the best possible result for the company. Human resource management Human resource management another most important function of the company because They are responsible to bring skilful and talented employees who can help company to achieve their goals and objectives. they also provide training and development programme where employees get chance to develop their new skills and improve their career. this function is also interlinked with other function of the company because HR Manager recruit the employees for every Department whenever they need. Operations An operational Department help IKEA to ensure that the production process of the company is completed from the start point to the end point. This production process needs to line up with the company’s goals an the other departmentally functions of IKEA. This is how operational Department is interlinked with the other functions of the company and help them to achieve their success and daily goals. How functions relate to overall of organisational mission objectives Each and every function of the company it’s entirely to the companies missions and objectives because Their main objective is to produce service an product that can be helpful to
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satisfy the needs and demand of the customers (Prajogo, and Oke., 2016). Set increase in satisfaction level can help company to be successful in their business.Each and every Department work together becausr they all need each other to run their day to day activities. Ultimately their final goal is to make final product that can satisfy the needs and demand of the customers. each and every purchase create achievement of the objective and lead them toward the mission of the company. Organisational structure IKEA company is usingMetrixorganisational structure at their workplace that make sure the flow of communication within the company. Metrix organisational structure helps to increase the flow of communication from the bottom to the top. similarly at work whenever the top management need to flow the information which is important for the lower level employees then they can use the Metrix structure to send that information to the lower level. Each level of the company is attached or linked with other channel. This hierarchy is followed by every level of the company to send the information. Organisedstructureandcomplexityoftransactional,internationalandglobal organisations In each kind of organisation have different structure according to the numbers of employees working with in there company (Hudáková, and Masár., 2018). It means then the transitional level it is not necessary for the organisation to have a complex structure for their company. international level they required organiser structure becausr here they have various places where they are operating business but on the global level each and every organisation need a proper organisational structure to operate their business. LO3 Positive and negative impact of macro environmental factors on business PESTEL analysis Political factor IKEA is operating their business And more than 41 countries recently which means this company is exposed with the various potted political environments.UN stability in the politics
have negative impact on the company and again may lose that profit. On the other side a good relationship is blessing for this company and some of the international markets like India and China are open for the businesses like a Kia, seeing this positive shift is considering moving into Asian market. IKEA is taking advantages of opportunity. Economical Economical Factors like increasing prices of raw material can have negative impact IKEA on their profitabilitybut on the other sideIKEA come up with the new strategies By creating a good relation with the supplies helping them to relief and discount on raw material prices (Aithal., 2017). it is positive impact on the company because Company and of ability and also provide satisfaction to the customers by providing product and services in lower prices. Social Social factors like changing the perspective of customers is affecting the care company and customers are shifting their brand. It can create positive impact of social factors, if company follow the Social trends And understand the needs and demand of the customers. Technology IKEA is using old technologyAt their workplace which is affecting their profitability and other companies are taking competitive advantages by pushing the IKEA beside. Comedian convert negative impact into the positive impact,if they use the latest and trending technology at their workplace. It will help them to increase their production level and company will able to achieve success in their business. Environmental factors Environmental factors is creating negative impact on the IKEA because they are getting Force from the governmental bodies to do their support toward the environmental issues. on the other side company can use it to create positive and good image toward the society, a good work towards the society or the environment can help company to create good imagine customers mind and they can take competitive advantages. Legal factors
IKEA is having licenced to operate their business on the international market and having a good reputation with all the government (Ruël, and Wolters., 2016). If IKEA does not follow the rules and regulation of the government then it can create problem for them and can have negative impact on their business. Impact of micro environmental factors on business activities Micro environmental factors have huge impact on the business activities, new technology within the workplace of IKEA can increase the production and efficiency of the operational activities. similarly other social and economical factors like changing customers prospective and any crisis in the economy affect whole business and their activities. Digital revolution on production and consumption The technology has huge advantages for the company to increase their production and also impact on the consumption of product and services of the company. It is necessary for the IKEA get up new technology and take competitive advantages through the digital revolution within there workplace. Factors that impact Impact of the social technology the businesses that new technology can enhance the customer satisfaction and create loyalty among the customers (Kwilinski and et.al., 2019). It is necessary for the ikea to have a cyber security at their workplace that will help them avoid leaking their personal data of their business. EmergingBRICS – There are many emerging market like China and India can have positive impact on the IKEA company, it is necessary for the IKEA to take benefit of the opportunities they are getting. Global shifting economy and social power an ethical and sub stainable growth Slowly economy is growing toward the globalisation and it is necessary for the IKEA to globalise their business to increase their profitability and achieve success in their business. Social power can have positive impact on the company, if the company give their contribution toward the society and understand their responsibility. it will help them to create good imagine customers mind and they will able to take competitive advantages. It is necessary for the IKEA to have a ethical and sustainable growth in their business, to gain these sustainable an ethical
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growth it is necessary for their business to behave ethically and understand their responsibility towards society and they should also motivate their employees. How organisations go through transformation process and overcome resistance to change in response to change market environment Change management is important part of the business and it is necessary for the IKEA to implement necessary changes when it is required (Michael, Reisinger, and Hayes., 2019), change can create resistance for the company if it is not implemented properly or with the transformation process. to go through the transformation process at is required for the leaders and managers of the IKEA to adopt methods of implementing change and one of them is Lewin's Change management model,It is useful to managing the change, first stage Of this model is unfreeze where leaders try to motivate their employees by communicating with them another stages change where real changes implemented an last ages re freeze. LO4 Introduction to the SWOT and VRIO SWOT analysis Strength Product sale by the IKEA Are very cost effective an value for the money. customer get a higher return on the investment the money they spend on their furniture. Product sale by the IKEA are famous because of their manufacturing and designing. Weakness Again is operating their business in various countries and political environment of this countries are affecting because of the corruptions and best example of the corruption with this company is Russia. It is not possible for IKEA to provide quality productand affordable prices because prices of raw material is increasing day by day. Opportunity
Retail businesses are shifting toward the online business and it can be a good opportunity for the IKEA if they sell their product on online, it will increase the profitability of the company. IKEA needs to keep in cheque about its stakeholders, IKEA has been in the news about environmental issues many times creating a bad brand image. Threat Competition within the industry where IKEA is operating their businesses very high. there are many discount sailors who are creating threat upon this company (Çera, and et.al., 2019). Growth of disposable income have lead customers to trade higher in the market chain. Vrio analysis Valuable The furniture sell by the IKEA his valuable because The design and quality of the product attract the customers effectively and helping this company to achieve success. Rare Financial resources of the IKEA Is rare because This company is financially strong and they can use finance to expand their business and spend to adopt new technology within their organisation to take competitive advantages. Imitable Employees of the IKEA company are not that costly to imitate Because other forms can also train their employees to improve their skills (Ingenbleek., 2019.). Organisation Distribution network of the IKEA is organised and this company is using their network to reach out its customers by ensuring that products are available in all outlets of IKEA. Keyexternalmicrofactorsincludingthecompetitiveenvironmentangovernmental intervention that influence business or organisation
There are some external micro factors that create competitive environment and one of them is technology factors,IKEA company and take competitive advantages within the market where they are operating business if they implement the new technology within their workplace (Paul, and Osmond., 2016). it will help them to enhance their productivity and increase their probability. Government also have intervention that influence the IKEA company, politicalfactors like rules made by the government should be followed by the IKEA otherwise government can create problem for them and they have power to Close the business of Ikea Conclusion As per the report has been explained the scope, type, and size of organisations and how this all organizations function. it has beenexplained how the function within the organisation are interlinked with each other, including influence of positive and negative impacton the macro environmental Factors. in the end of this report has been determined how the weakness and strength of the company interrelate with macro factors.
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Reference Books and journals Oliva, F.L., and et.al., 2019. Innovation in the main Brazilian business sectors: characteristics, types and comparison of innovation.Journal of Knowledge Management. Čepel, M., And et.al., 2018. Business environment quality index in the SME segment.Journal of Competitiveness. Grizane, T. and Jurgelane, I., 2017. Social media impact on business evaluation.Procedia Computer Science. 104. pp.190-196. Prajogo, D.I. and Oke, A., 2016. Human capital, service innovation advantage, and business performance.International Journal of Operations & Production Management. Hudáková, M. and Masár, M., 2018. The Assessment of Key Business Risks for SMEs in Slovakia and Their Comparison with other EU Countries.Entrepreneurial Business and Economics Review.6(4). P.145.
Aithal, P.S., 2017. Impact of Domestic, Foreign, and Global Environments on International Business Decisions of Multinational Firms: A Systematic Study.International Journal of Management, Technology, and Social Sciences (IJMTS).2(2). pp.93-104. Ruël, H.J. and Wolters, T., 2016. Business diplomacy.The SAGE handbook of diplomacy. pp.564-76. Kwilinski, A., and et.al., 2019. Formation of the entrepreneurship model of e-business in the context of the introduction of information and communication technologies.Journal of Entrepreneurship Education. 22. pp.1-7. Michael, N., Reisinger, Y. and Hayes, J.P., 2019. The UAE's tourism competitiveness: A business perspective.Tourism Management Perspectives.30. pp.53-64. Çera, G., and et.al., 2019. The effect of business enabling policies, tax treatment, corruption and political connections on business climate.Acta Polytechnica Hungarica. 16(4). pp.113- 132. Ingenbleek, P.T., 2019. The Endogenous African Business: Why and How It Is Different, Why It Is Emerging Now and Why It Matters.Journal of African Business. 20(2). pp.195-205. Paul, O.C. and Osmond, O.N., 2016. The Principles of Islamic Banking and the Nigerian Business Environment.International Journal of Business and law research.4(1). pp.46- 56.