Different Types, Size and Scope of Organizations

Contents
Introduction..............................................................................................................................................3
Different types, size and scope of organizations...........................................................................3
Types of organizations.........................................................................................................................3
Size of organizations............................................................................................................................5
Organizations structure........................................................................................................................6
The interrelationship of the various functions within an organization and how they link to
organizational structure........................................................................................................................7
The positive and negative influence/impact the macro environment has on business
operations..............................................................................................................................................10
PESTLE analysis................................................................................................................................11
The internal strengths and weaknesses of specific businesses and explain their
interrelationship with external macro factors. Understand the organizational purposes of
businesses.............................................................................................................................................13
Strategic capabilities of on organization..........................................................................................13
Value chain of an organization..........................................................................................................13
SWOT analysis...................................................................................................................................14
TOWS analysis...................................................................................................................................17
Conclusions...........................................................................................................................................19
References.............................................................................................................................................20
1

Introduction
The environment of a business can affects the running of an organization and
also its functions. In a market, there are different types of business, different sizes, and
scope. Also, the businesses can have different functions and also different structures.
There is a link between the functions of a business and their structures.
The macro environment of a business can affect every organization. The macro
environment can be analyzed using PESTEL analysis. The political factors, economical
factors, social, technological, environmental and also legal factors are influencing the
business.
For analyzing the internal environment of a business is using the SWOT analysis.
The SWOT analysis is about strengths, weaknesses, opportunities and also threats.
TOWS analysis is using the information from SWOT analysis to give strategies for the
organizations.
Different types, size and scope of organizations
Types of organizations
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In business world are different types of organizations which have different
structures, a different number of employers and are developed by one or more people.
Depending the sector in which the business is developed, there are three types of
businesses:
 Organizations from public sector: these organizations are led by the
government. The government is the owner of the organizations, and he is the
one who decide what the organizations objectives are and how the organization
is using resources to help the community. These organizations are usually
medium size organizations which are developed locally or nationally. One of
these public organizations is ESPO. The main objective of ESPO is to provide
different types of products and services to help the community. The organization
has over 27,000 products and if there is any left products the company will give
them to the people.
 Organizations from private sector: these organizations are led by individual
people. The main goal of the organization is to make profit. If the government is
involved in the organizations leadership, the sector is called citizen sector. JCB is
a big British company with headquartered in UK. This corporation produce tools
used in construction, also in agriculture and waste handling.
 Organizations from voluntary sector: For voluntary organizations profit is not
important. The objective of these organizations is to have an impact on society,
to improve people. The voluntary organizations are non-profit organizations,
independent businesses, which want only the good of the society. One example
of these organizations is Macmillan cancer support. The organization is a charity
organization, which is established in London. Macmillan is a large charity in UK
which offers help, financial and informational, to people which suffer by cancer
(Salamon and Sokolowski, 2016).
The organizations from private sector can have different structures. The main
types of private organizations are: sole traders, partnerships, limited companies, co-
operatives.
 Sole trader business: is very easy to set up with does not require complicate
papers. This type of business is very common and can be establish in many
3

domains. All the decisions are taken by the person who establish the
company. These person is the one who collects the business’s profit, but also
he is the one who can also suffers if the company goes bankrupt. Sole traders
are small size organizations which are develop by the owners locally. Being
small organizations, sole trader are in a big number in UK.
 Partnership business: is a business which is led by two or more partners. The
advantage of this type of business is that the owners can work together for
the goof of the business and also can increase the profit easier. Partnership
businesses can be small or medium size organizations which can be develop
locally or national.
 Cooperative: are private businesses which are develop by the people who
use the services and products of the businesses. The size and the type of
these organizations can be different. The cooperatives can be small, medium
and also large size organizations, and are create and led locally as well as
nationally. Also, these type of business can be develop for obtaining the profit
or not.
Size of organizations
Businesses can have different structure and size. In UK over 90% are small and
medium size companies and only almost 10% are large enterprises. The people and the
profit of the large businesses are more than the employees from small and medium
organizations (Department for Business, Energy and Industrial Strategy, 2017).
Depending the number of people employers, the business are classified as:
 Microenterprises with less than 10 employees
 Small businesses with 10 to 49 employees
 Medium businesses with 50 to 249 employees
 Large businesses with over 250 employees (Department for Business,
Energy and Industrial Strategy, 2017).
Every organization has a strategy and some objectives to make profit or to make
good to customers.
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For example, ESPO is an organization from public sector. ESPO is considered a
large organization, because it has around 300 employees. Regarding the revenue of the
organization, can be considerate a medium size organization, with a revenue estimated
at £12, 93 million (ESPO, 2020).
Also, JCB Company is a business developed in private sector. JCB is also
considered a large organization, but with a biggest number of employees. The company
has around 12000 employees. The company revenue was estimated in 2017 at £3.35
billion, and these organization is a large size organization (JCB, 2020).
Regarding Macmillan cancer support, this one is a voluntary organization.
Macmillan is also a large organization with approximately 2900 employees and
regarding the revenue, in 2017 this was of £356.98 million (Macmillan, 2020).
Organizations structure
In an organization, the products and services are linked with the size of business,
the structure and also with its scope. Any organization has a structure which help the
different levels of the business to communicate, and if these levels have a good
communication, the business will grow. Usually, the small businesses have a functional
or divisional structure because these type of business have few employees. Also, the
small businesses develop a few products and services and have a reginal or national
geographical coverage. Regarding the large businesses, these have a matrix or a
transnational structure with many products and services developed. The geographical
coverage of these types of businesses is national or international.
ESPO is a business which develop around 27000 product catalogs with over 120
frameworks. ESPO offers guidance for products from the organization team of expert.
This help is offered free. The mission of ESPO is to give “value-for-money for the public
sector” (ESPO, 2020). ESPO has a variety of products from furniture, school equipment
to electronic service and also catering service. ESPO has a divisional structure of
organization and the geographical coverage is national (Guliyev et al, 2018).
JCB is a large organization which provides products like forklifts, excavators and
other equipment used in construction and in agriculture. The mission of JCB is to
develop the highest quality of their products for the customers. JCB is a large
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organization with a matrix structure and an international geographical coverage. JCB
operates in UK, Germany, Brazil, India, China, Australia and North America (JCB,
2020).
Macmillan cancer support is the largest British voluntary organization which
provides financial and emotional help to people affected by cancer. The mission of
Macmillan is to help people suffered by cancer from UK. Macmillan has a national
coverage and a functional structure (Macmillan, 2020).
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The interrelationship of the various functions within an organization
and how they link to organizational structure
All the organizations have a structure to manage the role of employees in the
organization. This structure is important for an organization because in this way the
employees know exactly what to do and they are not working at same task. There are
five different types of structure: functional, multidivisional, matrix, transnational and
project. In functional structure, the roles of employees are divided by the organization’s
functions. The multidivisional structure is used when the organization has more
products and services and also the organization has a larger geographical coverage.
The matrix structure is a combination between functional and divisional structure.
Transnational structure is used internationally. The project structure is used to form
team for a special job and after the work is done, the team is dissolved.
Every organization has an organization structure and plan their objectives based
on the customer needs. JCB creates their business objectives to grow the production.
Also, the products developed must correspond with what the customers want. The
organization structure is helping the people to know their role in the company. Al the
departments of JCB work together to achieve their goals. The financial department has
different roles in an organization: to keep the record of money, incomes and outcomes,
to pay employees. The financial department is linked to production department to
control the balance of expensive. If JCB wants to develop a new product, the marketing
department needs to do a research to find want are the customer needs. To find want
are the customer needs the human resource department will conduct a research, a
questionnaire on clients. After the human resource department finds the clients desires
the production department will project the new product. The financial department will
calculate how much the materials cost and what will be the price of the product. In
conclusion, if JCB wants to gain profit, to have the best quality products, the
departments of JCB must communicate and work together.
Every organization has a sale department. If between sale department and
marketing department is a good communication, the sale’s problems are easily
communicated to marketing officials, who will make every that is possible to remediate
the problems. If the R&D departments communicate between them, the feedback from
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clients is easily communicate to R&D by marketing department. If these departments
are linked together the new products developed will fulfill the customer needs (Cegarra-
Navarro et al., 2016).
There are some advantages and also disadvantages if in an organization exist a
relationship between organizational functions:
Advantages:
 If the employees work together, they can share their information and
develop new skills.
 Every department is led by a person who has experiences, skills and
knowledge
 If the people from organization departments work together the business
profit will increase.
Disadvantages:
 The competition between different departments can increase.
 People from departments will not be all together on meetings, so they will
not share their knowledges.
Joseph Cyril Bamford is the founder of JCB. He started his business with one
vehicle, a tipping trailer. After he have sold the vehicle, he and other 6 people who
worked for him had made a hydraulic tipping trailer. In this period, JCB was a small
business with a product developed and a functional structure. After their success in UK,
the JCB tractors arrived on North American market. JCB started to develop new
products. With new products, JCB arrived on Indian market, and after India, JCB
entered on Japan market and Brazil market. So, JCB became a large business who
operates in four continents. JCB has more than 12000 employees and also over 300
products. The structure of JCB became a matrix structure (JCB, 2020).
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The positive and negative influence/impact the macro environment
has on business operations
Macro environment of a business can have positive or negative impacts. Even
for Tesco, a big British retailer, the macro environment is very important.
 The demographic factors are very important for macro environment. This
demographic factors have a big influence on the business. All other the world
are developed countries and other countries less developed. For countries
which are well developed, the demographic factors are influencing the quality
of the products and also the demand of products is bigger. If demographic
factors are not well developed, the country is earning less money from the
sales.
 The economic factors are also very important for macro environment of a
business. There are two mainly economic factors which can affect an
organization: the demand of products and services and the supply of
products. If a business has a high demand of products, the business will earn
more profit, but if the business has a low demand of product it is possible that
the organization will go breakdown.
 Other forces that can affect the macro environment of Tesco are the natural
forces. This factors can have a positive or a negative impact. The natural
resources which are available are affecting the business developing. These
resources can affect the business’s production.
 The technological factors are affecting the macro environment of the
organization. If Tesco wants to survive on the market, the business must be
able to update all the time the technological factors. Tesco had implement
self-check-out to attract more customers. Also, the online shopping are used
by more and more people.
 The political factors implemented by the government can affect the macro
environment in a positive and also a negative way. If the government will help
Tesco with loans, governmental assistance or other legal factors, then the
government has a positive impact. The political factors have a negative
impact on Tesco, when the taxes are very high.
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 The social and the cultural forces can also impact the environment of a
business. Tesco is developing its products and services based on customer’s
needs. If the products of Tesco, are what people want, then, the business will
earn more money (Schaltegger & Wagner, 2017).
PESTLE analysis
PESTLE analysis is used to analyses the macro environment of a business. In
the next section is used PESTLE analysis on Tesco. In figure 1 is represented PESTLE
analysis.
 Political factors: The political factors are helping the government lows to
analyze the environment of a business. Also, the political factors can give
another view for Tesco on establishing their condition. The political factors have
a big influence on exporting and importing the products in an efficient and
effective way. There are various political factors which can affect the environment
of Tesco, as business, such as: tax and economic policy, different rules and
regulations of employment laws. Brexit situation creates for Tesco uncertainty in
UK but also in other countries where Tesco operates. Tesco proved that the
organization can adapt to legislation of different countries. Despite this
uncertainty caused by Brexit, Tesco proved that the business can operate
further.
 Economic factors: The economic factors from a country can have a big
influence for a business. If the economic factors are well developed, then, Tesco
will increase their productivity and the business will have more profit. The
economy of different countries from all over the world is affected by Covid-19.
Because of Covid-19, lots of people lost their jobs so their earnings are smaller
now. So, they will spend less money for shopping. If people didn’t buy, the profit
of Tesco will go down.
 Socio-cultural factors: These factors are very important for the environment of
Tesco. The macro environment of Tesco can be influenced in a negative and
also in a positive way by the socio-cultural factors. If the socio-cultural factors are
diversified, Tesco will produce as well more products to satisfy the customer’s
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needs. In last year’s Tesco was trying to make some changes and to meet the
new demands of customers. One example of this changes is that Tesco is selling
halal meat to their Muslim clients. Also, Tesco introduced kosher items for Jewish
clients in UK stores.
 Technological factors: The new technology can help the business to increase
the production of products. Also, the new technology can help Tesco to reduce
the cost of production, so, the organization will have more profit. Thanks to new
technology, Tesco introduced the Clubcard, which had a great success for its
customers. Also, Tesco introduced the self-checkout service which is helping the
business to reduce some costs (Tesco, 2020).
 Environmental factors: The environmental factors can give information about
the customers’ needs and desires, needs which can be switchable according the
season. Tesco is encourage the customers to use the site Tesco.com to make
their shopping. The drivers of Tesco are using fuel-saving to reduce the costs.
 Legal factors: Every business, small or big, must follow the government laws if
they want to have an efficient business. If Tesco is following the government
rules, the customers will have a good image about the business. Tesco cannot
pay its employees with less than the minimum wage. Also, Tesco is not selling
alcohol to underage clients. (Cook, 2016).
Figure 1. PESTLE analysis
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Demplates, (2020)
The internal strengths and weaknesses of specific businesses and
explain their interrelationship with external macro factors. Understand
the organizational purposes of businesses
Strategic capabilities of on organization
The strategy of a business is about linking the business’s resources and also
competences with the external environment for achieve the strategic capabilities of a
business. The resources of a firm can be tangible and intangible. The tangible
resources represent the physical things and also the financial assets. The tangible
resources of Tesco are, for example, the 6800 shops, £63,911 billion revenue (Tesco,
2020). The intangible resources are skills, the technology, reputation of a business.
The intangible resources of Tesco can be a good reputation among its customers, a
large knowledge of retailing.
A business must have resources which are valuable and unique to have
competitive advantage. The resources of a business must be valuable, rare, inimitable
and also organizational supported (Grant, 2005)
There is a difference between capabilities and core competences. Capabilities
means the steps which a business must do to survive. Tesco needs to create a friendly
environment for its customers for having more clients. Thanks to capabilities a business
can survive in front of its competitors. Core competencies describe the ability of an
organization to create a chain of activities. For doing this, the business must be capable
to combine its resources and capabilities to create a link which must be strong and
inimitable (Johnson et al, 2008). Tesco’s core competences are about value of
products, customer services and also the range of products (Tesco, 2020).
Value chain of an organization
The value chain means the activities from an organization which conduct to a
new product or service. There are five primary activities and another four support
activities which define the value chain.
1. Primary activities:
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a. Inbound logistics: Tesco wants to make the distribution system more
efficient. Also, is trying to implement a new quality control procedure which
is better in order to prevent damaging goods.
b. Operations: All the activities from Tesco are service oriented. Tesco is
trying to maintain the stores open 7 days per week, on opening hours with
its shelves full with products.
c. Outbound logistics: Tesco wants to improve its car parks, the personal
from tills for maximize its profit and gain more customers.
d. Marketing and sales: Tesco is using ‘Clubcard’ to offer discounts to its
loyal customers.
e. Service: Tesco wants to improve its problems with the customers which
are not satisfied.
2. Support activities:
a. Infrastructure: Tesco is focusing its planning functions on controlling its
cash and costs.
b. Human resource management: The business is increasing its training
schemes to develop new knowledge. Tesco will invest more in its
customer service.
c. Technology development: The organization manifest a control on its
suppliers. Tesco identifies the customers’ needs using its customer data
system.
d. Procurement: Tesco wants to focus on its information about its
communication (Tesco, 2020).
SWOT analysis
The internal and external analysis for any business can evidence all the factors
which are affecting the business. After the analysis of internal and external factors
Tesco is knowing its strengths and weaknesses. After this, the business must plan a
strategy to reduce the weaknesses (Mohamedand and Lashine, 2012).
Some of the strengths and weaknesses of Tesco are:
 Strengths:
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o Tesco has products which have a good quality which can satisfy all the
customer’s needs. If the customers are satisfied, the people will have a
good image about the business
o Tesco is trying to deliver their products and services on time to customers.
Also, Tesco’s suppliers are doing all the best to ensure the business with
the right materials and products.
o Tesco is the leader on British retailer stores in front of its competitors:
Asda, Sainsburys, Morrisons, M&S.
 Weaknesses:
o Tesco failed in US and in Japan: Tesco closed their stores from US and
Japan in 2012, after 5 years of operations in US and 9 in Japan.
o After the Brexit referendum, Tesco had a decline of 9% of profit (Tesco,
2020).
Every business has strengths and weaknesses. These strengths and
weaknesses are influencing the macro environment of a business. The external
environment of a business can affect more an organization than the internal
environment. Not all the time the managers of a business can identify a problem from
macro environment of the business and apply a good strategy on time. If the business
knows its strengths and weaknesses the managers can apply an efficient strategy to
reduce their weaknesses and grow their profit.
A good manner to analyze the environment of a business is to use SWOT
analysis. SWOT analysis identify the business strengths, weaknesses, business
opportunities and also its threats. By using SWOT analysis, the managers of a business
can find the opportunities of their business on the market. Also, they can identify the
business threats.
On macro environment of a business are many factors which can affect the
organization. The political factors can be a threat for a business. Also, the social factors
can affect a business in a positive and also in a negative way. The social factors are
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important because without society, people, a business cannot exist. The corporate
social responsibility can affect the business in a negative way. Every factor can affect
the environment of an organization. The economic factors, social factors, and also
technological factors can create problems and also opportunities for a business.
Regarding the political factors, this ones can be strengths and weaknesses depending
the situations. The economic factors can affect the national and also the international
environment of a business. This factors are related with the decisions making by the
managers. In conclusion, the weaknesses and the business strengths are linked with
the macro environment of an organization (Na & Lee, 2017).
By applying SWOT analysis on Tesco, the managers can find their strengths,
weaknesses, opportunities and threats:
 Strengths:
o Tesco is the biggest retailer in UK. Tesco has the higher revenue in UK,
higher than its competitors.
o Tesco is the leader on market share: Tesco is the popular supermarket in
UK.
o Tesco is geographical diversified: Tesco has stores in Europe, Asia and
North America. Tesco has around 6800 stores in UK and other 14
countries.
 Weaknesses:
o Failure from US and Japan: Tesco closes its stores in America and Japan
in 2012.
o Not very good performance for some countries: In some countries, Tesco
is not very well developed. Some experts said that market research for
entering on the market wasn’t enough.
o Drop of profit: In 2018, Tesco had a decline of profit due to Brexit
Referendum.
 Opportunities:
o By promoting the sale of fresh food, the sales of vegetables and fruits
growth at Tesco
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o Alliance with other brands: If Tesco will develop an alliance with others
businesses, they will have more products which will attract more clients.
o Joint ventures: Tesco has the possibility for joint ventures is some
countries were the business has not so much influence and is not gaining
profit comparative with other countries.
o The online shopping: Tesco encourage customers to make online
shopping. By using the online shopping and also the delivery services,
Tesco will grow.
 Threats:
o Brexit situation: If UK is not part of European Union, the cost of services
can be higher.
o Competition: Tesco has other competitors who are doing all them can to
beat Tesco and to become the biggest retailer in UK.
TOWS analysis
After SWOT analysis, Tesco can make another analysis of internal and external
environment. This is TOWS analysis. TOWS analysis is using the information from
SWOT analysis. This analysis is combining the internal and external factors to create
different strategic information. In figure 2 is represented the TOWS analysis.
 By combining strengths with opportunities, the organization identify a
maxi-maxi strategy, used to maximize its opportunities using its strengths.
By being the leader of the market share, Tesco can start growing organic
food and sell them using its name and the position on the market (S2-O1).
 Weaknesses and opportunities are used as a mini-maxi strategy. The
drop in profit of Tesco can be due to the focusing on fresh and organic
food (W3-O1).
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 A maxi-mini strategy is using the organization strengths to minimize the
threats. By being the leader of market share, Tesco can use the
information about its competitors to maintain its position (S2-T2).
 Mini-mini strategy is used to minimize weaknesses and avoiding threats.
The drop in profit of Tesco can be because of its competitors (W3-T2)
(Tesco, 2020).
Figure 2. TOWS analysis
Medium (2020)
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Conclusions
Running a business, it’s not all the time easy. In present, the government laws,
some regulations and other policies can affect the environment of a business. But, the
modern technology, media can help the developing of business.
A business can find and improve its weaknesses by developing a SWOT analysis
on the internal environment of the business. Also, the SWOT analysis can provide
information about the business strengths, weaknesses, opportunities and also about its
threats. SWOT analysis can be run in every business, doesn’t matter if is small or large,
if it is a public or private organization. The information obtained with SWOT can be
analyze using TOWS matrix.
PESTEL analysis is used to help business on analyzing the macro environment
of the organization. There are different factors which can affect a business.
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