Analysis of Business Organisations and their Operations

The assignment provides an analysis of business organisations, categorizing them into public, private, and voluntary sectors. It also explores the differences in size and scope among various organisations. The importance of conducting a SWOT analysis and PESTLE analysis for internal and external environment assessment is highlighted. The assignment discusses the role of micro and macro factors in business operations and how they can impact an organisation's profitability.

Business
Environmental
Analysis

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisations..................................................................1
P2 Size and scope of different type of organisations.............................................................3
TASK 2............................................................................................................................................4
P3 Relationship between different organisational functions and how they link to
organisational objectives and structure..................................................................................4
TASK 3............................................................................................................................................5
P4 Positive and negative impacts the macro environment has upon business operations.....5
TASK 4............................................................................................................................................7
P5 Internal and external analysis of specific organisation in order to identify strengths and
weaknesses.............................................................................................................................7
P6 Strengths and weaknesses interrelate with external macro factors...................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment refers to the internal factors of organisation and external factors
that affect the operations of an organisation. The internal factors which influence a business
organisation are employees, shareholders, suppliers, customers while government policies,
economic conditions, technology, rival business entities constitute external factors (Anıl and
Ficici, 2017). The present report is based upon General Motors operating in Detroit, Michigan,
America which manufacture, designs and sells vehicles and their parts. This report includes
different types of organisations, their size and scope. Also it highlights the interrelationship
between different functions of an organisation. Along with that, the macro factors and their
strengths and weaknesses in context of business is covered.
TASK 1
P1 Different types and purposes of organisations
The various types of organisations that conduct operations in a country are public, private
and voluntary organisations. The purpose and legal structure of these organisations are explained
below:-
Public Organisations- Those organisations that are wholly or partially owned, managed
and controlled by government and other related agencies are known as public organisations.
These enterprises work to deliver goods and services for the benefit of public (Burayidi, 2013).
This sector provides wide range of services like infrastructure, transportation, health, education
services etc. Crown Prosecution Service is a public prosecuting agency in England and Wales
that conducts criminal prosecutions.
 Legal Structure: Public enterprises are partially or totally controlled by
government. Government are of 3 types namely local, state and central
government. On the basis of type of government running and managing the
enterprise, public organisations are broadly classified into 3 types-
(a) Central organisation: This is an organisation which is managed and
controlled by Central Government.
(b) State organisation: This type of organisation is owned, run and controlled by
the State authorities.
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(c) Local organisation: In this organisation, the administration and controlling
authority is Local Government.
 Purpose: Crown Prosecution Services (CPS) is a public prosecuting agency
which prosecutes criminals in England and Wales. The major responsibilities of
CPS are providing legal services and advices to investigative agencies including
police during criminal investigations.
Private Organisations- These are those organisations that are run, managed and
controlled by individuals, firms, companies and institutions (Charfeddine, 2016). Private
organisations are mainly incorporated for profit making by selection of appropriate
organisational structure and creation of loyal customer base. General Motors is a company
located in Detroit, Michigan, America involved in manufacturing, designing and distribution of
vehicles and its parts.
 Legal Structure: The legal structure of private organisation is as follow:
(a)Sole proprietor- It is an entity fully owned and managed by one person known
as sole proprietor.
(b)Partnership- It is a formal agreement between two or more parties to conducts
operations of business together. Partnership comes in two ways: General partnership and limited
partnership.
(c)Company: A form of organisation made up of various individuals which do
not offer its shares to public and runs for the profit motive is called company.
 Purpose: General Motors is a company that deals in manufacturing and
distribution of automobiles and its parts. The fundamental purpose of GM is to
encourage workforce in delivering their best for achievement of organisational
goal and provide products and services of superior quality to customers.
Voluntary Organisations- It is a group of individuals who voluntarily enter into an
agreement to form an organisation to achieve the desired common goal. Such organisation
include not for profit, non government organisations and trade unions (Hacioglu, Dincer and
Celik, 2012). UNICEF is a voluntary organisation that renders social and development assistance
to children and mother in developing countries.
 Legal Structure: Legal structure of voluntary organisations is:-
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(a)Unincorporated Association: This structure is ideal for small groups with short term goals,
less funds and which do not intend to acquire property or employ staff.
(b)Trust: Trust is an arrangement where trustee holds the right to property for the benefit of
beneficiary.
(c)Limited Organisation: This structure of voluntary organisation is where the number of
members or their share in organisation is limited.
 Purpose: The main purpose of these enterprises is the accomplishment of the
common goal laid behind their formation. UNICEF is a United Nation agency that
provides social and developmental help to children and mother in developing
countries.
P2 Size and scope of different type of organisations
Public, private and voluntary are the three types of organisation whose size and scope
may vary in accordance with their scale of operations. The discussion about various forms of
organisation is given below:-
Public Organisations- Those enterprises which conduct operations within partial or full
control of government are public organisations (Hussin and et. al., 2017). Crown Prosecution
Services is a non-ministerial department. It prosecutes criminal cases in England and Wales
where investigation is conducted by police or any investigation authority. Its size and scope is
defined below:-
 Size: CPS operates across England and Wales with 14 regional teams involved in
criminal prosecution. Each of these 14 teams is headed by Chief Crown
Prosecutor. It has around 6000 staff members.
 Scope: CPS has a scope of making use of digital technology in their operations
for faster flow of data within and outside the organisation.
Private Organisations- Those enterprises which work independent of government
intervention in ownership and control of their operations are private organisations. General
Motors headquarter in Detroit, Michigan designs, builds and sells cars, trucks and automobiles
parts worldwide.
 Size: Company employs 207,000 people across six continents out of which
140,000 are hourly employees and 67,000 are salaried. GM provides 158 facilities
worldwide. Company produces vehicles and its parts to satisfy customers in over
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120 countries around the globe. It is number one company in terms of vehicles
sold in two of its most potential markets, US And China.
 Scope: Company hires potential and skilled employees. Its employees speak more
than 50 languages and live in 23 different time zones. Thus, the enterprise has a
scope of expansion across various other countries of globe where company has
yet not delivered services (Otoo and Drechsel, 2018).
Voluntary Organisations- These are those enterprises which are voluntarily formed by a
group of individuals for accomplishment of common goal. United Nations International
Children's Emergency Fund (UNICEF) was created with an aim to provide emergency food and
healthcare to children in countries devastated by world war.
 Size: UNICEF operates in 190 countries and territories to save children’s lives, to
defend their rights and to help them develop from the stage of early childhood to
adolescence.
 Scope: UNICEF can consider expanding its business in locations where they have
not explored and given contribution for upliftment of children.
TASK 2
P3 Relationship between different organisational functions and how they link to organisational
objectives and structure
Every organisation tends to create a working structure where the authority and
responsibilities of every individual and function in a business entity is clearly defined. In context
of General Motors, enterprise follows a corporate culture where the organisation is sub divided
into units and functions like Finance, Marketing, HR, Research and Development etc. The
interrelationship between these functions is explained below:-
Human Resource and Finance Department: HR department of General Motors is
responsible for hiring potentially skilled and technically knowledgeable personnel to ensure no
default in the services delivered by company across the globe (Toedt, 2014). For this, it needs
funds which will be sourced by the Finance Department. Employing technically viable
workforce will ensure delivery of quality goods and services at global level and thus more
revenue generation for company.
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Research & Development and Production Department: Research & Development
department of General Motors develops an understanding of the latest desires, needs and
preferences of customers. Also this function gains an insight into the improvements needed in
the products and services rendered by company in past. R&D function provides this information
to production department so that they can develop products as per the requirements of consumers
and carry out developments and improvements in them if required. This helps the company in
remaining aligned with the needs of public and thus aims at improving the brand position in
market and generation of high revenues.
TASK 3
P4 Positive and negative impacts the macro environment has upon business operations
The management of General Motors has to consider both micro and macro factors during
the course of its operations. These factors can have positive as well as adverse effects. The macro
environment factors that affect GM can be explained by using PESTLE Analysis as well as
Porter Five Forces. PESTLE analysis is explained below:
PESTLE Analysis
Political Factors: These factors indicate the extent of government intervention in
operations of a business. Such factors are policies, rules and regulations, laws & legislations
made by government.
 Positive: Political stability in USA imply growth opportunities for the enterprise.
Also, company abides by laws relating to custom duties, embargo, quotas and
trade regulations.
 Negative: General Motors faces the threat of governmental promotion of public
transport and other alternatives in US. Company can overcome this by keeping an
action plan for such situations (Vasilcovschi and Georgescu, 2012).
Economic Factors: Those factors that affect the economic conditions of a country
comprise environmental factors like inflation rates, interest rates, foreign exchange rates etc.
 Positive: Favourable economic conditions of country ensures high disposable
income for people and thus increased demand and revenue for company.
 Negative: GM gets affected by fuel price fluctuations and relative demand of
customers. Fluctuations in prices of steel have also impacted manufacturing
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process. Company can overcome this by maintaining adequate reserves of fuel
and steel for future needs.
Social Factors: Social factors include demographics such as population, occupation, age
etc.
 Positive: GM understand the need of customers and provide high end vehicles
according to their preferences keeping in mind their social status.
 Negative: A change in customer preferences can cause a shift in demand for
products of the company.
Technological Factors: Over time, there have been significant changes in technology
like automation of automobile industry, digitisation process etc. These constitute technological
factors.
 Positive: Automation of machines and use of robots will assist General Motors in
providing advanced vehicles, using latest designs in manufacture of automobiles
and its parts.
 Negative: High use of technology can cause difficulty for employees to
understand the processes and hamper their productivity. Company can tackle this
by providing training to the workforce.
Environmental Factors: According to the current environmental condition, companies
are very considerate about factors like Co2 emission, petrol and gasoline etc., because these are
limited resources and it is imperative to efficiently utilise them.
 Positive: Since 1994, GM has been conducting operations in a way that reduces
emissions of factory. Company has taken environmental pledge of CERES
principles which comprises of 10 codes of conduct for entity (Warkentin,
Sugumaran and Sainsbury, 2012).
 Negative: Adverse climatic conditions may result in late delivery of automobiles
and its parts. Company can handle this by developing such channels of
distribution which are not affected by climate.
Legal Factors: Legal factors include the laws and legislations made in relation to health
and safety laws of country.
 Positive: GM abides by custom, safety and employment laws along with
'Automobile Recycling Law'.
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 Negative: Violation of laws set in market results in penalty as well as bad image
for company.
Porter Five Forces
Threat of new entrants: (Weak)
It is difficult for new companies to enter automotive industry due to the large fund
needed as investment. Also, large amount is needed to be spent for hiring skilled workforce and
training them which gives an edge to General Motors to enjoy the brand position in market.
Bargaining power of suppliers: (Weak)
The bargaining power of suppliers in this industry is quiet weak as there is high
probability of substitution of products if customers think that they get the same features in a less
price thus posing threat to General Motors.
Bargaining power of buyers: (Moderately strong)
The customers of automotive market are generally price sensitive and are not at all
hesitant in switching to alternate brands if the deal they offer seems alluring, this poses threat for
General Motors. Yet company tries to maintain customer loyalty by maintaining the quality of
vehicles and offering latest and innovative features in cars manufactured by them.
Threat of substitutes: (Weak)
As companies like General Motors have already established their customer base to whom
their vehicles are easily acceptable and gains high satisfaction, thus, threat of use of alternate
modes of transport is very low.
Competitive Rivalry in the industry: (Very strong)
As there are a large number of automobile companies in the world, thus the competition
in this industry is very high which is a matter of concern for companies like General Motors who
are expected to come with latest features and innovation in every new model.
TASK 4
P5 Internal and external analysis of specific organisation in order to identify strengths and
weaknesses
SWOT analysis is a powerful tool for analysing macro versus micro environment which
supports to strategic planning within an organization (SWOT analysis. 2018.). It stands for
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internal factors such as organizational strength and weakness as well as external factors which
covers by opportunities and threats. In respect of General Motors, explaining SWOT analysis
below:
Strengths Weaknesses
 General Motors has diversified
portfolio for their products with
different subsidiaries which assist to
geographical presentation.
 Company is focusing on smart
technologies through innovative
activities in designing and developing
process of goods.
 Moreover, General Motors established
environmental friendly policies which
fascinating to potential customers.
 In recent years, several vehicles are
recalls due to faulty auto-mobile parts
which had impact negatively on its
GM's image and decreased profit share.
 During generating underfunded
problems, financial positions are
directly affected in General Motors
enterprise.
 Company is more dependent on U.S.
Sales for generating maximum revenue.
Opportunities Threats
 Company is growing at global level in
automotive industry, so here several
chances to receiving maximum
opportunities from potential market.
 Secondly, market has surplus demand
in electrical and fuel vehicles which are
leading to more production to fulfil
GM's customer requirements.
 GM enterprise has re-entered in US
market with an agreement so this is
another expected door top increasing
profitability.
 Extreme level of competition through
rivals which highlighting many threats
for General Motors such as market
share, margin and so on.
 An auto-mobile industry affects when it
runs business plan globally by
following stringent governmental laws
such as competition law and
environmental legal obligations.
 Moreover, General Motors influences
by exchange rate fluctuation in different
countries.
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P6 Strengths and weaknesses interrelate with external macro factors
Macro factors are the external factors which affect operations of an entity such as
political, economical, social and technological. In context with the General Motors, company
needs to analyse and interrelate the strength and weakness of such macro factor such as:
Political
Strength- The main strength of the political factors such as strong relation with the inter-
governmental bodies, easy availability of the resources etc. This will create positive roles of the
company in the country where they are operating their business (Charfeddine, 2016).
Weakness- This factor would affect the decision making and independent functioning,
policies and process of the general motors. Company needs to implement the structure to take
their own decision making.
Economical
Strength- This factor plays an effective role in deciding the price of the commodity,
interest rates and growth rate of the company. In this, General Motors have strongest position in
the context of taking the economical decision making.
Weakness- High inflation rate can affect the working process and management of an
organisation. If rate of inflation is high, there could be chances of loss of job of employee in the
General Motors.
Social
Strength- Social factor such as people’s influence, different taste and preferences can
affect the decision making of General Motors. Social factor would help in the welfare and
development of the people as well as society which when considered by General can increase
their revenues as well as profitability.
Weakness- In context with the General Motors, social factors can lower down the morale,
values and vision of the company. Different choices and preference can affect the production
process of the company and thus affect the overall sales and profits. (Burayidi, 2013).
Technological
Strength- In context of General motors, adaptation in the technology can influence the
buyers behaviour to buy products or services. Updated technology can engage the customer's
mind, interest and thought into the purchase decision.
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Weakness - Updated technology can raise the prices of the product or services. As a
result, it can affect the purchase behaviour of an individual as it may affect their budget or cost
of purchasing the products of General Motors. This will affect the demand of vehicles
manufactured by company thus impacting the overall profitability of company.
CONCLUSION
From the above report, it has been analysed that organisations are categorised into three
categories namely public, private and voluntary. It is on the discretion of company to select the
form of organisation in which they want to conduct operations. It is also observed that various
organisation differ from each other in terms of their size and scope. It has also been concluded
that every business organisation operating at global level need to consider the micro and macro
factors for effective conduct of business operations. Enterprise can use SWOT analysis for
internal analysis and PESTLE for external environment.
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REFERENCES
Books and Journals
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Routledge.
Charfeddine, O. B., 2016. Business environment-aware management of service-based business
processes (Doctoral dissertation, Université Paris-Saclay).
Hacioglu, U., Dincer, H. and Celik, I. E., 2012. Economic approach to conflict issue: Investment
in post-conflict situation for international business. International Journal of Business
Administration. 3(5). p.1.
Hussin, N., and et. al., 2017. Strategic Information Use (SIU) for Strategy Formulation in
Malaysia Business Organizations. Journal of Informatics and Mathematical Sciences.
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Otoo, M. and Drechsel, P., 2018. Resource Recovery from Waste: Business Models for Energy,
Nutrient and Water Reuse in Low-and Middle-income Countries. Routledge.
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metering of a provisioned application in a cloud computing environement. U.S. Patent
8,589,312.
Toedt, M. ed., 2014. Data Revolution: How Big Data Will Change the Way of Doing Business?.
Epubli.
Vasilcovschi, N. and Georgescu, S., 2012. TRANSFORMATIONAL LEADERSHIP AND THE
ECONOMIC COMPETITIVENESS IN SHIPPING INDUSTRY TODAY. Analele
Universitatii Maritime Constanta. 13(17).
Warkentin, M., Sugumaran, V. and Sainsbury, R., 2012. The role of intelligent agents and data
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Online
SWOT analysis. 2018. [Online]. Available Through: <https://www.marketing91.com/swot-
analysis-bentley/>.
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