types of business organizations PDF

Introduction
This report elaborates the details about different types of business organizations such as
public, voluntary and private enterprises. Their major objectives and operational purpose will
be discussed in a brief manner. The assignment will explore the details regarding the legal
structure that are followed by these organizations. The impact of external and internal
business environment on the operational activities as well as the decision making process of
Marks & Spencer will be discussed. The strengths and weaknesses have been discussed in
order to develop beneficial strategies for the company. The importance of coordination and
interrelationship between the different functional departments of M&S will be explained in a
detailed manner.
LO 1
P1 Explain different types and purposes of organizations; public, private and voluntary
sectors and legal structures for the chosen organizations.
Organization
An organization is a group of people with a specific purpose such as a business or a
government department (Investment Lawyer, 2005).
In the present scenario, different types of organization are facing quite tough competition in
the marketplace. The market is being saturated day by day and the competition is growing at
an exponential rate making it tough for the organizations to sustain in the market. Thus, it is
highly significant for an organization to analyze the business environment to sustain in the
market full of competition. The different types of organization are public organizations,
private organizations, and voluntary organizations. The purposes of these organizations differ
from one another that are mentioned below in details.

Public sector:
The public sector comprises of the firms, which are state-owned or government owned. The
organizations categorized under public sector owned and directed by the government of the
country. The main purpose of the organization associated with the public sector is to provide
the people of the city with good quality products and services (Bouckaert et al., 2016). The
firms operating in the public sector are focused on meeting the requirements of the people of
the country and the profits made by the organizations are taken by government or ploughed
back for investment. For example, Network Rail is organization in public sector.
Private sector:
The private sector composes of the firms that are owned and operated by an individual or
groups of individuals. The main purpose of the firms operating in the private sector is to
generate profit for the company and give it to the owner of the firm (Hayter, 2015). The
organizations in the private sector are independent of the government of the country but
have to follow and obey some legal rules and regulations to run their business in the country.
For example, Marks and Spencer is Private Sector Company.
Voluntary sector:
Voluntary sector are quite similar to the public sector. The voluntary sector composes of the
organizations looking forward to meet the requirements of the society and its people. The
main purpose of organizations operating in voluntary sector is to look after the welfare of the
society and enrich the society. The organizations do not aim to make profits and are
independent of the government and follows charity-based approach (Ncvo.org.uk, 2018). For
example, Amnesty International is an organization in voluntary sector.
Legal structure:
Sole Proprietorship:

Sole proprietorship is the least synchronized form of a firm with minimum legal start-up cost.
The firm is owned by one individual and the profits generated are tariff as private income
(Managementhelp.org, 2018). The major demerit is “unlimited personal liability” the owner
might face like claims, debts, and taxes against business. For example, Moore and Co is under
Sole Proprietorship.
Partnership:
Partnership business is simple to form and is able to deliver additional managerial and
financial resources. The partners can borrow funds, hire individuals, and operate business.
However, the profits made are again excised as personal income and the partners are liable
personally for taxes and debts. For example, Social Chain is a partnership company.
Limited Partnership:
It is a special agreement and permits the partners to neglect liability of personal asset.
Specialized income tax rules are implemented for Limited Partnership. For example, Gibson
Dunn is a partnership firm.
Limited Liability Company:
It comprises of more than one individual that gives the owners privacy of personal assets
whilst permitting the owners being taxed. Investment is done based on exchange for
ownership interest percentage. Each member is equally liable for any kind of taxes or debts
(Managementhelp.org, 2018). For example, Marks and Spencer is a LLC.
P2: Explain the size and scope of a range of different types of organizations chosen for the
purpose.
Public sector Private sector Volunta
PurposeThe main aim of this type of business
organization is to provide enhanced
These firms are focused at improving their
performance in order to increase their revenue
These
working

services to the local citizens. For
example, Network Rail offers railway
transportation benefits to the citizens
of UK.
generation process. For example M&S try to analyze
the business market an introduce services that will
allow them in gaining profit.
Amnest
recogni
commu
issues.
Size Network Rail is a Medium sized based
business firm. This organization is
credited to provide employment to
around 37,000 workers in UK (Network
Rail, 2018).
M&S is considered as a large business enterprise.
They have around 84,939 dedicated employees
working to improve their business
(Marksandspencer.com, 2018).
Amnest
organiz
than se
the glob
Table 1: Difference between Private, Public, and voluntary sectors
(Source: Created by the learner)
Micro Small Medium
Definition: These are small structured organization
consisting of nine or less than nine employees.
The estimated balance sheet of these firms is les
then 2,000,000 Euros, the employees are
dedicated towards maintaining the sheet
(TheCompanyWarehouse.Co.Uk, 2018).
These are also known as
small-scale business
enterprises that are owned
by partners or individual
owner. The employee
number of these firms is
then 50 and they work to
achieve their estimated
annual target (theOECD,
2018).
This company
capable of recruitin
50-250 employees
order to achieve the
estimated targets an
revenue (theOEC
2018).
Objectives These firms are focused to maintain the
equitable distribution of the entire national
income. They are dedicated to provide
employment to large-scale population at the
lowest possible investment.
The employees of these
firms are responsible to
maintain an equal balance
between their profit
generation and the
They are expected
maintain their annu
budget. They a
focused to increa
their productivity an

expenditure costs of their
operational activities.
revenue generatio
within the allocate
budget an resources.
Table 2: Size and scope of different types of organizations
(Source: Created by the learner)
LO2
P3 Explain the relationship between different organizational functions and the ways they link
to organizational objectives and structure chosen for the purpose
The organizational objectives of Marks and Spencers can be enlisted as follows:
 To provide quality products and services to the customers in minimum time and
reasonable price
 To regain the position of market leaders in the retail sector
 To earn greater revenues and returns on their investments
 To hire and retain highly experienced and efficient work force, for the development of
the organization
Marks and Spencer’s needs to satisfy the customers immensely as well as train and retain
their work force, for meeting all the organizational objectives effectively. The organizational
structure is an important factor in maintaining satisfaction of the employees since it defines
the ways in which the employees are dealt with and managed, by the management of the
organization (Argyris, 2017). The organizational structure of Marks and Spencer’s had been
tall initially; hence there were different hierarchies through which the information passed
from the employees to the management and vice versa, which elongated the response time
and limited the creativity as well as participation of the employees in the executive decisions
adopted by the company (Businesscasestudies.co.uk, 2018). Currently, the focus of the
management has turned towards employee retention and they have realized the potential as

well as the value of the feedbacks given by the employees. Thus, they have changed the
organizational structure to flat, in order to lower the response time as well as encourage the
employees to play a significant role in the executive decisions of the company
(Businesscasestudies.co.uk, 2018). This helps the employees to feel associated with the
company and motivates them to stay loyal. Lowering the response time also helps in
addressing the grievances of the customers promptly and thus, increases customer
satisfaction. Thus, the organizational structure helps Marks and Spencers to meet their
organizational objectives successfully.
The interrelationships between the different departments of Marks and Spencer’s:
Human resource- The human resource department is responsible for recruiting and training
new employees, as per the requirements of the various departments, for the development of
the organization, marks and Spencer’s in this case. The HRM department of M&S requires
collaborating with all the other departments of the company, for knowing the specifications
regarding the quality and kind of candidates that are to be trained or recruited for the
purpose in the company (Colourpoint.co.uk, 2018). The collaboration becomes easier in an
organization with a flat organizational structure.
Finance- This is one of the critical departments of M&S, since the allocation of the financial
resources to the different departments determines the functionality of the organization. The
records of the finances available for the different departments to execute their functions are
maintained by this department, which makes planning the processes easier for the company.
Marketing- The marketing department of M&S is responsible for conducting marketing
surveys to gather information regarding the demands and requirements for the customers in
the market and their effective collaboration with the operations department helps in
planning all the steps to be adopted by M&S in order to meet the demands of the customers.
The marketing department is also responsible for promoting the products and services among
the customers so that the sales of the company can increase. For this, the department needs
to collate with the financial department, for gauging the available finances for the purpose of

promotion. On the other hand, its effective collaboration with the sales department is
necessary, for implementing the promotional offers as advertised by the marketing
department as well as prepare the employees for the estimates sales figures (like engage
more employees during the rush hours, when discounts are provided on the goods). The flat
structure increases the degree of collaboration and interaction among all the departments as
well as minimizes the time of transfer of information from one department to another
(Colourpoint.co.uk, 2018).
Sales- The effective collaboration between the sales and the finance department at M&S aids
in the process of effective record maintenance by the finance department, about the sales
figures and the revenues earned by the company. The flat organizational structure allows the
department to orient and train their employees as per the notions of the departmental
leaders, for dealing with the customers with increased efficacy. For this purpose,
interrelationships with HRM and Operations department are also required.
Merits of the interrelationships
The clear differentiation and distribution of specific tasks among the different department
makes the functioning of the organization easier and their effective collaboration helps M&S
in realizing the organizational goals effectively
The interrelationships increases the efficacy of the processes, like the finance and the sales
departments can together devise some discount plans, for luring the customers, after
understanding the demands and requirements of the customers through the surveys carried
out by the marketing department (Corporate.marksandspencer.com., 2018)
Demerits of the interrelationships
The responsibility of each of the department increases, since the functions of the other
departments depends on their functions, like the surveys carried oyt by the marketing
department

The process of decision-making slows down as all the departments are dependent on each
other for their activities and thus, measuring the outcomes of a change implemented in the
systems becomes a tedious process as well
LO3
P4: Identify the positive and negative impact the macro environment has upon the business
operations, supported by specific examples for the chosen organization.
Macro environmental analysis will allow the management of M&S to understand the external
factors and their impact on their operational activities. They factors may have a positive or a
negative influence on their business.
PESTLE analysis of Marks and Spencer
Political: The decision of the government of UK to exit EU may generate certain negative
impact on the business activities of M&S. It was evident that the previous trade agreement of
the government benefitted huge business hubs such as M&S, Asda, and Tesco as they
received free flow of resources as well as labours from all across the globe. After the proposal
of BREXIT is implemented, the policies are expected to change that might affect the
operations of M&S. Lack of proper direction, vision and coupled with increasing cost of
operations, M&S will be facing a negative influence in context of political aspects.
Economical: Stable economy is one of the most beneficial factors for M&S. The prospering
economic conditions of UK influence M&S in a positive manner. It is observed that the per
capita GDP of UK is increasing that will help the business firm in increasing its sales assisting
them in earning enhanced profit. The citizens of UK possess a per capita GDP of around 29000
GBP, thus they have the power to spend increased money n business firm that is providing
them with superior quality of products thus, enhancing the sales and income of M&S
(ons.gov.uk, 2018). As Marks and Spencer served their consumer with quality services, they
can expect an increase in their sales.

Social: Marks and Spencer provides their consumers with a variety of products and services
such as clothing, accessoriness, home decors, groceries and more. It is noted that the clothing
line of the organization is comparatively less trendy and lack celebrity endorsements. Leading
firms such as Zara, H&M and more are making use of celebrity endorsements in order to
reach out to potential clients. The food section of the company sources their products from
well-known organic farms that allow them in enhancing the health conditions of their
consumers. The healthy eating habit of UK people will be beneficial for the company as they
will be inclined towards purchasing organic products to maintain their health condition. Thus,
social aspect of the external factor is beneficial for M&S.
Technological: UK is a technologically update country consisting of all the latest
advancements. The technologies allow the organization in interacting with their consumers.
M&S is able to reach out to a wide consumer base with the help of internet and their e-
commerce website. Online shopping is increasing in UK, which is beneficial for M&S as they
are able to sell their products online. The company makes use of popular platforms such as
Twitter, Facebook and more to advertise and promote their products and services and grab
the attention s of their consumers.
Legal: There are a number of regulations created by the UK government that are to be
followed and implemented by all the business firms that are operating in the country.
Similarly, M&S is abides by the legislation and follows the regulations such as health and
safety act, work time regulations and more to provide benefits to their employees. The legal
aspect has a positive impact on the operations of M&S as it allows them to function as per
the law of the country can also help them in reducing the employee turnover rate.
Environmental: Most of the citizens are aware about the damage that is done to the
environment due to the operational activities of huge industries. The customers are inclined
towards organization that make use of eco-friendly substances and take initiative to protect
the environment (Rangan et al., 2015). M&S has a number of sustainable practices that assist

them in improving the environment of the country. They have a number of CSR policies that
assist them in contributing towards the society and the environment.
LO 4
P5: Conduct an internal and external analysis of specific organizations in order to identify
strengths and weaknesses for the chosen organization.
SWOT analysis is the method that allows the management of M&S to gain detailed
information regarding the strengths and weaknesses of their firm. They can analyse the
results in order to formulate beneficial strategies to enhance their business performance.
SWOT analysis of Marks and Spencer
Strengths
Marks and Spencer is a popular brand having a positive image in the UK retail
sector. This helps them in grabbing the attention of their target consumers
(Martínez et al., 2017).
The organization performs a number of CSR activities, practices sustainable
practices that help them in building a positive image in the local community, and
allows the firm in gaining awareness.
Weaknesses
The company makes u
advertisements. They la
their clothing section.
Rising food prices result
services of the company.
Opportunities
The management can take initiative of implementing self checkout system in their
stores that operate 24 hours
They should try to open new stores in growing economies
They can joint new ventures with new companies that are gaining popularity in the
market.
Threats
They face threats fro
Morrison’s, Asda, Tesco a
Increasing sales and popu
the most common and gr
M&S.

Table 4: SWOT analysis Marks and Spencer
(Source: Created by the learner)
P6: Explain how strengths and weaknesses interrelate with external macro factors for the
chosen organization.
The internal and external factor analysis of M&S can be used in order to enhance the decision
making process of the management. It is evident that due o the proposal of BREXIT there are
high chances that the operational activity of the company will be hampered due to alteration
in the present regulation. However, M&S is a popular brand of United Kingdom that has a
strong customer base. The management of the company can use the popularity and expand
their business firm in new developing economies. This will be beneficial for them as they will
be able to attract consumer due to strong brand image and lack of competition. The brand
lacks to cope up with the current designs in trend in their clothing section. In order to
overcome the problem the management should try to associate with leading designers and
conduct business with them. They can incorporate latest technologies in order to increase the
efficiency of their work and understand the current trend in a more precise way.
Conclusion
This assignment helps in understanding the business operation of M&S. The various external
as well as internal factors and their impact on the business activities of the company have
been discussed in this report. The difference between the micro, medium and small business
firm has been explained. The details regarding the purpose and objectives of different types
of business firms have been explored. The report reveals about the significance of
interrelationship between the various functional departments of retailers such as M&S. The
learner will be able to gain detailed information and knowledge regarding the factors and
aspects that play vital role and have significant impact on the business of the firm.