Business & the Business Environment.

Business & the Business
Environment

Contents
INTRODUCTION.....................................................................................................................................3
LO 1............................................................................................................................................................3
P1 Explain different types and purposes of organizations; public, private and voluntary sectors and
legal structures.........................................................................................................................................3
P2 Explain the size and scope of a range of different types of organizations...........................................4
LO 2............................................................................................................................................................6
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure....................................................................................................6
LO 3............................................................................................................................................................7
P4 Identify the positive and negative impacts the macro environment has upon business operations,
supported by specific examples...............................................................................................................7
LO 4............................................................................................................................................................9
P5 Conduct internal and external analysis of specific organization in order to identify strengths and
weaknesses..............................................................................................................................................9
P6 Explain how strengths and weaknesses interrelate with external macro factors...............................10
Conclusion and Recommendations........................................................................................................11
REFERENCES........................................................................................................................................12

INTRODUCTION
Business environment can be defined as the collection of all factors, both internal as well
as external that can affect an organization (Asongu and Odhiambo, 2019). The factors can
include demand and supply, clients, customers’ needs and expectations, employees,
management, owner of the organization etc. Business environment plays an important role in
improving the overall performance of the organization. This report is based on NLCCE, an
organization that supports individuals and businesses in setting up a business as well as trade
locally, nationally and globally. Organizations can scan their business environment in order to
get information about the different potential risks as well as opportunities. Also, since the
environment is dynamic in nature, it can act as a source of continuous learning for the
organization. This report explains different types and purposes of organizations and the
relationship between different organizational functions within an organization. It also includes
the positive as well as negative impact of the macro environment on business operations.
LO 1
P1 Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures
Private Sector Organizations
The private sector is a segment that is owned, managed and controlled by private
individuals or organizations rather than the government. The main aim of private sector
organizations is to earn profit and some examples of organizations operating in the private sector
include sole proprietorship, partnerships, small and medium sized businesses, trade unions and
large multinationals. Profit organizations fall under the category of private sector organizations
wherein the owners of the company can decide to keep all the profits with them. Private sector
organizations recruit more employees as compared to the public sector. These types of
organizations basically involve forming a new enterprise or even converting public organization
to private. Profit that is generated by a private organization not only benefits it, but also its
shareholders, investors and owners (Types of business organisations, 2020). SMEs or small and
medium business enterprises are also considered to be a part of private sector organizations.
They play an important role within the economy of a nation.

Public Sector Organizations
Organizations operating in the public sector have the main purpose of offering the best
possible service to people. The public sector consists of organizations that are owned by the
government. These types of organizations usually exist in order to provide services to the
citizens of a country (Bock and George, 2017). Public sector organizations usually engage with
private organizations in order to deliver goods and services to the citizens. Public sector
organizations usually operate with the money that is raised from taxes, fees and financial
transactions. Public sectors organizations engage with private sector organizations through the
process of outsourcing. The main aim of these organizations is not to earn profits, but providing
services to the public. Also, these organizations are either partly or fully owned by the state or
central government of a nation.
Voluntary Sector Organizations
Organizations that operate under the voluntary sector do not run with the sole purpose of
making profits. But their main purpose is to help the community by fulfilling their needs and
requirements. These operations operate with the money that is collected from gifts and donation.
Also, any profits that are generated by the company are then reinvested in the organization. A
voluntary organization comprises of people who come together and form a company in order to
achieve a common purpose of serving the community.
There are different legal structures that are associated with different types of businesses
like partnerships, sole trader as well as private limited companies. A sole trader is not required to
pay any kind of registration fees and also gets to keep all the profits legally (Bojovic, Genet and
Sabatier, 2018). They are responsible for making all decisions for the firm as well as raising
money for the assets. On the other hand, in a partnership, it is necessary to register with the
Corporate House and send it an annual return.
P2 Explain the size and scope of a range of different types of organizations
There are different sizes of organizations like large, medium-sized and small
organizations that have different objectives, goals and market share. Large organizations usually
have more than 100 employees working for them while medium and small organizations have
100-1000 and less than 100 employees working for them. The market share of these different