Analysis of Organizational Structure and Business Environment

The provided document is a detailed report on organizational structure, categorizing businesses into public, private, and voluntary enterprises. It also discusses the use of SWOT analysis for internal evaluation and PESTLE analysis for external examination. The report covers various aspects of business operations, including size, scope, purpose, and legal structure.

BUSINESS & BUSINESS
ENVIRONMENT

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..................................................................................................................................5
P3 Relationship between different organisational functions and how they link to
organisational objectives and structure..................................................................................5
TASK 3............................................................................................................................................6
P4 Positive and negative aspects of macro environment........................................................6
TASK 4............................................................................................................................................8
P5 Internal and external analysis of specific organisation in order to identify strengths and
weaknesses.............................................................................................................................8
P6 Strengths and weaknesses interrelate with external macro factors...................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is a collection of various factors, out of which some of them may
not be in control of organisation but they influence the performance, profitability and growth of
entity. It can also be said that these are the internal and external factors that affect the operations
of an organisation. The internal factors influencing a business entity are employees, suppliers,
shareholders, customers whereas the external factors comprises of government policies,
economic conditions, technology, rival business entities, laws and regulations (Charfeddine,
2016). The present report is based on General Motors which is an American multinational
company that manufactures, designs and sells vehicles and their parts. The enterprise is
headquartered at Detroit, Michigan, America. This report discusses about the different types of
organisations along with their size, scope and legal structure. Also, it includes the
interrelationship between various functions of an organisation. Along with that, the macro factors
and their strengths and weaknesses in context of business is highlighted in the report.
TASK 1
P1 Different types and purposes of organisations
Various types of organisations carries out operations in an economy. Such entities are
public, private and voluntary organisations. The purpose and legal structure of these
organisations are discussed below:-
Public Organisations- These are the organisations that are partially or wholly owned,
maintained and controlled by government and other related entities. Public organisations work
for the welfare of people and deliver products and services to render benefits to society (Hussin
and et. al., 2017). The organisations belonging to this sector provides wide range of services like
education, communication, infrastructure, transportation and health services. For instance,
Crown Prosecution Service is a public prosecuting organisation situated in England and Wales
which conducts criminal prosecutions.
 Legal Structure: Public organisations are those that are wholly or partially run by the
control of government. Now, government in an economy are generally of 3 types which
are national, state and local government. The legal structure of public enterprises depend
upon the kind of government running, managing and controlling it. Thus, public
organisations are broadly classified into three categories:-
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(A) Local organisation: The major administration and controlling authority of
these organisations is Local Government.
(B) State organisation: This is an organisation which is owned, managed and
controlled by the State authorities.
(C) Central organisation: These are those organisations that are managed and
controlled by Central Government.
 Purpose: Crown Prosecution Service (CPS) is a public prosecuting agency that conducts
criminal prosecutions in England and Wales. The entity prosecutes those criminal cases
upon which investigation has already been carried out by police and other investigation
organisations (Sood and Sukthankar, International Business Machines Corp, 2013). Their
major purpose and duty is to ensure that criminals are prosecute for the offense they have
committed and offenders are brought to justice.
Private Organisations- These are the organisations that are owned, run, managed and
controlled by individuals, group of individuals, firms, companies and other financial institutions.
Private organisations are generally incorporated for the purpose of profit making. For starting a
private enterprise, a suitable organisational structure is selected and then the operations are
conducted with an aim to create a loyal customer base (Otoo and Drechsel, 2018). For instance,
General Motors is a multinational company headquartered in Detroit, Michigan, America. The
company designs, manufactures, markets, and distributes vehicles and vehicle parts. Also, it sells
financial services.
 Legal Structure: The legal structure in relation to private organisation is
explained below:
(a)Sole Proprietorship- It is an entity which is totally owned and managed by
one person known as sole proprietor. There is no legal distinction between owner and business
enterprise.
(b)Partnership- It is a written agreement between two or more parties that agree
upon conducting business operations together with an aim of making profit or any other reason
priorly mentioned in the contract. Partnership is broadly classified into two types, namely,
General partnership and limited partnership.
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(c)Company: It is a form of organisation that comprises of various individuals
which do not offer and issue shares to public by way of Initial Public Offer. These entities run
for the sole motive of profit making.
 Purpose: General Motors is an American multinational company dealing in
manufacturing, designing and distribution of automobiles and its parts across the globe
(Hacioglu, Dincer and Celik, 2012). The fundamental purpose of this company is to hire
talented and competent workforce and then directing their behaviour towards
accomplishment of organisational goals. Their primary focus is upon customer
satisfaction by delivering services that are best to their potential.
Voluntary Organisations- This is an organisation that comes into action when a group
of individuals voluntarily enter into an agreement to form an entity with an aim to achieve a
common desired goal. The objective behind formation of these enterprises is generally not profit
making. Such organisations include charitable trusts, foundations, religious corporations, not for
profit and non government organisations and trade unions (Burayidi, 2013). For instance, Oxfam
is a confederation comprising of 20 independent charitable organisations which are working
towards elimination of poverty across the globe.
 Legal Structure: The legal structure of voluntary organisations is explained
below:-
(a)Unincorporated Association: It is an organisation created by signing of an
agreement between a group of individuals who come together for a reason other than profit
making. The members of such organisations are personally responsible for any contractual
obligation.
(b)Trust: Trust is an arrangement between three parties where trustee has the
right to property for benefits of beneficiary.
(c)Limited Organisation: This is a form of voluntary organisation which is
limited in terms of number of members or their share in organisation.
 Purpose: Oxfam works towards the eradication of poverty. The major purpose of
this organisation is to create reliable solutions to the problem of poverty. The
vision of company is a world without poverty.
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P2 Size and scope of different type of organisations
The various types of organisation that conducts business operations within an economy
are public, private and voluntary organisations. The size and scope of such organisations may
vary in accordance with their scale of operations. The discussion about size and scope of various
forms of organisation is below:-
Public Organisations- Those enterprises which conduct its operations under full or
partial control of government are called public organisations (Anıl and Ficici, 2017). Crown
Prosecution Services is a non-ministerial department which prosecutes criminal cases in England
and Wales wherein the initial investigation has already been conducted by police or investigation
authority. Its size and scope is explained below:-
 Size: CPS conducts its operations in England and Wales. The organisational
structure is comprised of 14 regional teams which are involved in criminal
prosecution. Each of these 14 teams is headed by Chief Crown Prosecutor. The
organisation employs 6000 persons.
 Scope: CPS has a scope of employing the process of digitalisation in their
operations to ensure faster flow of information within and outside the
organisation.
Private Organisations- The enterprises that conduct its operations without much
government intervention in ownership, management and control are referred to as private
organisations. General Motors headquartered in Detroit, Michigan designs, builds and sells cars,
trucks and automobile parts across the globe.
 Size: GM has a staff of 207,000 people across six continents of the world out of
which 140,000 are hourly employees and 67,000 are salaried. Overall, the
company provides 158 different kinds of facilities all across the globe. Company
manufactures vehicles and its parts to gain loyalty of customers in over 120
countries around the world. The company tops in two of its most potential
markets, US And China where it sells the highest number of vehicles.
 Scope: Company hires only skilled and competent employees who possess the
potential of taking the enterprise to more heights in terms of services delivered to
customers. Its employees speak more than 50 languages and live in 23 different
time zones. General Motors has a high scope of growth and expansion across
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various countries of the world where it has yet not reached the customers for
delivering services.
Voluntary Organisations- These are the organisations which are formed by a group of
individuals who voluntarily come together for the accomplishment of a common desired goal.
Oxfam is operating on the same principle and they work for upliftment of poor people.
 Size: Oxfam is conducting its operation in around 14 countries where they work
towards ascertaining various social problems faced by people and aiming at
eliminating the same. A number of volunteers are a part of Oxfam and they are
helping the company in providing services for the social welfare and upliftment of
people.
 Scope: Oxfam can think of expanding its business in terms of offering its services
in relation to eradication of poverty in countries where they have not explored yet.
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 of management in a business entity is clearly
defined (Vasilcovschi and Georgescu, 2012). With reference to General Motors, the company
has adopted a corporate culture it is sub divided into departments and functions like Finance,
Marketing, HR, Research and Development, IT etc. The interrelationship between these
functions is explained below:-
Human Resource and Finance Department: HR department of General Motors are
accountable for hiring talented, skilled and competent employees who possess adequate
knowledge to perform the professional tasks with an ease. Also, it is imperative that the old
employees are given training so as to update them about the latest technology being used in
operations of company. For this, HR department needs funds which are sourced after evaluation
by the Finance Department of entity. Employing technically potential employees who can
perform towards delivering quality services ensure high revenue generation for company.
Research and Development and Production Department: Research & Development
department of General Motors carries out research for ascertaining the behaviour of customers
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and understanding their needs and wants from the organisation. Also, with the help of this
function, company gathers knowledge about the latest technology and the updation needed in
existing products to gain a competitive edge in market. R&D department provides this
information about products and the requirements of customers in terms of improvement to
Production department who in turn analyse the information to incorporate any changes required
in the products and services.
TASK 3
P4 Positive and negative aspects of macro environment
The top 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 on
the working of company. The macro environment factors that affect GM are explained below:
Political Factors: These factors reflect the extent of government intervention in
operations of a business. Such factors are policies, rules and regulations, and laws & legislations
made by government of a country.
 Positive: USA has a stable government which imply growth and expansion opportunities
for the enterprise (Toedt, 2014). Also, company conducts its operations abiding by the
laws and regulations made my company. These laws relate to custom duties, embargo,
quotas and trade regulations.
 Negative: Government in US promote the use of public transport and other
alternatives which pose a serious threat to General Motors. Company can cope
with this situation by keeping an action plan for such situations.
Economic Factors: These are the factors that affect the economic conditions of a
country. It comprises of factors like inflation rates, interest rates, foreign exchange rates etc.
 Positive: Favourable economic conditions of US ensure that the disposable
income of people is high. Thus in turn increases the market for products of
General Motors.
 Negative: A number of factors like fluctuations in prices of fuel and steel and
relative demand of customers affect the operations of company. Keeping
sufficient reserves of steel and fuel for future use by company can be seen as an
effective measure to deal with this.
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Social Factors: Social factors include the trends in society and demographics such as
population, occupation, age etc.
 Positive: As per the social status of various customers, company provides high
end vehicles to them ensuring an effective service delivery aimed at gaining larger
customer satisfaction and loyalty.
 Negative: A change in trend or customer preference can cause the demand of
automobile and relative parts to fall. Company can handle this by continuously
communicating and networking with people to make them understand the
importance of the products of company for people.
Technological Factors: Updation in technology with a change in environment of
business conducting operations are referred to as the technological factors (Toedt, 2014). These
include automation of automobile industry, innovation, digitisation process etc.
 Positive: General Motors can largely impact the industry by use of automation
process in case of machines and use of robots in operations of company like
designing and manufacturing. This will ensure the perfection of designs executed
and delivered to people.
 Negative: Updating the processes of company with the use of technology and
automation can cause hindrances to employees in terms of restrained productivity.
This may happen at times due to staff not being able to understand the complex
processes that the company engages in. Company can tackle this by providing
training and adequate knowledge to the workforce.
Environmental Factors: Every business organisation is required to understand the need
of adopting environmental friendly techniques in operations of company. These include factors
like carbon footprints, Co2 emission, petrol and gasoline etc., as these are all limited resources
and it is essential to use them effectively so as to save them for future generations (Warkentin,
Sugumaran and Sainsbury, 2012).
 Positive: Since 1994, entity has been conducting operations in economy in a way
that aims at reducing the carbon footprints and emissions of factory. Company has
also taken an environmental pledge of CERES principles which comprises of 10
codes of conduct for conducting operations in order to work in a manner that
benefit the society.
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 Negative: An adverse change in weather and climate of country may cause
hindrances in delivery of automobiles and its parts. Company can deal with this
situation by building effective channels of distribution which do not get affected
by climatic conditions of a place.
Legal Factors: Legal factors include the laws and legislations made in relation to health
and safety laws, employability laws etc. which a business need to follow whole conducting
operations in an economy (Burayidi, 2013).
 Positive: GM ensures that it follows all the regulations in relation to custom,
health and safety and employment laws of country along with 'Automobile
Recycling Law'.
 Negative: Violation of laws set in market can lead to high penalty for company
and pose a threat to brand positions and survival of company in the long run.
Company can deal with this by ensuring that it abides by all the laws.
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 the internal environment of an
organisation (Hacioglu, Dincer and Celik, 2012). The acronym SWOT stands for strength,
weakness, opportunities and threats. In respect of General Motors, explaining SWOT analysis
below:
Strengths Weaknesses
 General Motors has diversified
portfolio for their products with the
help of different subsidiaries which
assists the company in managing
operations in various geographical
locations.
 Company is focusing on smart
technologies through innovative
activities in designing and developing
 In recent years, several vehicles of the
company are recalled due to faults in
automobile parts which had adversely
impact negatively GM's image and
brand position in market and also
decreased profit share of company
relatively.
 During generating underfunded
problems, financial positions directly
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process of goods.
 Moreover, General Motors makes use
of environmental friendly techniques in
its operations which arouse the interest
of potential customers.
affect General Motors.
 Company is more dependent on U.S.
market for generating maximum
revenue.
Opportunities Threats
 Company is growing at global level in
automotive industry, so here several
chances to receive maximum
opportunities from potential market are
available for company.
 Secondly, market has surplus demand
in electrical and fuel vehicles which are
leading to more production and raised
demand for the company.
 GM enterprise has re-entered in US
market with an agreement so this is
another expected door to increasing
profitability for entity.
 Extreme level of competition through
rivals which highlight many threats for
General Motors such as market share,
margin and so on.
 An automobile industry gets affected
when it runs business plan globally by
following stringent governmental laws
such as competition laws and
environmental legal obligations like
sustainable development.
 Moreover, General Motors influences
by exchange rate fluctuation in different
countries.
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 factors (Otoo and Drechsel, 2018). In context with
the General Motors, company needs to analyse and interrelate the strength and weakness of such
macro factor to gain knowledge of the key areas of improvement explained below:
Political
Strength- The main strength of political factors are maintaining 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 and ensure increased stake
and brand position in market.
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Weakness- This factor affects the decision making and independent functioning, policies
and processes of 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 rates can have a large impact on the working process and
management of an organisation. If rate of inflation is high, there could be chances of loss of job
of employees in General Motors.
Social
Strength- Social factors such as influence, different taste and preferences of customers of
a country can affect the decision making of General Motors. Social factor would help in the
welfare and development of country as well as society.
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.
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.
Weakness- Updated technology can raise the prices of the particular product or services.
As a result, it can affect the purchase behaviour of an individual because it may influence their
budget or cost of purchasing the products of the General Motors.
CONCLUSION
From the above report, it has been analysed that organisations are broadly classified into
three categories namely public, private and voluntary enterprises. Also, it has been analysed that
various organisation operating in an economy differ from each other in terms of their size, scope,
purpose and legal structure. It is upon the choice and preference of individuals or group of
persons to select the form of organisation which they want to incorporate and where they want to
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conduct operations. Also, it is observed that an enterprise can use SWOT analysis for internal
analysis and PESTLE analysis for external check.
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REFERENCES
Books and Journals
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Routledge.
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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.
Sood, A. and Sukthankar, V. K., International Business Machines Corp, 2013. Real-time license
metering of a provisioned application in a cloud computing environement. U.S. Patent
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Toedt, M. ed., 2014. Data Revolution: How Big Data Will Change the Way of Doing Business?.
Epubli.
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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
mining in electronic partnership management. Expert Systems with Applications.
39(18). pp.13277-13288.
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