Contents INTRODUCTION...........................................................................................................................1 PART 1............................................................................................................................................1 Different types of organisation....................................................................................................1 Relationships between different functional areas along with its advantage and disadvantage.. .3 PART 2............................................................................................................................................4 Internal and external analysis to strengths and weaknesses of organisations..............................4 Interrelation of strengths and weaknesses with external macro factors......................................8 CONCLUSION..............................................................................................................................10 REFERENCES..............................................................................................................................12
INTRODUCTION Business environment is majorly determined like an aid of whole intrinsic and extrinsic component that has oblique influence on determination devising of firm. These components affect potential of company to manage effective customer relations. For this document, the selected private enterprise is Zara that is leading Spanish apparel retailer and generally specialise in to fast fashion (Belas and et. al., 2018). It offers several products like clothes, home product, footwear, beauty product and accessories etc. The document will considered information about different kinds of organisation, relationship among different functional areas with its pros and cons. Further, it will explain about PESTEL and SWOT analysis and the interrelation of strengths and weaknesses with macro and micro environmental factors. PART 1 Different types of organisation There are mainly three kinds of company that are defined as under: Public sector: It is referred as entities which developed for administrating process and policy as well as operates demands which help a government to accomplish their goals. One of the appropriate examples of this is NHS; it was incorporated in 1948 within Wales, England and others. It majorly renders healthcare service to their patient according government policy and laws. Purpose: The main motive of this specific public venture is to facilitate high standard of competent and excellence facilities to their patients and service taker. Along with this, its purpose is to great quality care which is safe, focused and beneficial to patient. Size: In NHS, there are 106,430 doctors, 285, 893 nurses and health care visitors are employed with about 30,000 management bodies and others. It is a large sized company. Scope: It largely provides their facilities to more than 64.6 million people in UK (Hamilton and Webster, 2018). In current era, they are searching to explore their large number of facilities where they are already operating such Wales, Scotland, Northern Ireland and England. Types of public sector organisation: Departmental undertaking:It is mentioned to be one of the tradition types of public sector firm which is operated, executed and financed by other government venture. 1
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Public or statutory corporation:It is a type of enterprises that include within existence of Parliament special act. The main goal of it is to ensure wellbeing of community. Legal Structure: NHS is Public corporation which is developed with some form of special parliament funded support (Čepel and et. al., 2018). The national authority offer them total support facilities for generate more public service option such as medical test, treatment etc. Private sector:It is commences a essential economical part of nation. These kinds of company are run by sole proprietors, entities and unit of individual in term of partnership. For example, Zara is a private company and leading Spanish apparel retailer and basically specialises into fast fashion. Purpose: The main aim of private venture is to acquire profit and be a growth entity in potential market. The key purpose of Zara is to manufacture latest designer garments that attained consumer needs. Size: In this firm, there are approx 176,611 employees make their contribution in running the business. Scope: Respective Company is a global firm that runs in to 88 nations across the world. Types of private sector organisation: Sole proprietorship: When an organisation by an individual then it is acknowledged as sole proprietorship where their owner shares entire beneficiaries and costs by them self. It is also considered to be the tradition and simplest form of executing business. Partnership: When two or more than people are executed collectively with intent to earn desired profitability and development is acknowledged as partnership agreements that considers sharing of profits, capital progression etc. Legal Structure: Zara comply public limited company legal framework and this is listed on London Stock Exchange. Moreover, it is a limited liability venture that shares can be sold and traded to customers. Voluntary sector:It is majorly formed with aim to support and advance develops community without goal to earn profit (Brennan, Canning and McDowell, 2020). For example, Oxfam, it was incorporated in 1942 and wants ro develop global poverty, disaster and others. 2
Purpose: The key aim to cooperate by offering primary liberty and rights to needed people and society. The main aim of the venture is to improve a lasting solution for scarcity and inequality (Hans, 2018). Moreover, participating in global change movement for improving future that is safe and free from poverty. Size: Oxfam is medium sized firm which facilitates health services in UK to solve poverty, pro-migration and other. Along, it has approx 10,000 people who contribute on fighting against poverty in crosswise 90 nations. Also, they work into 20 independent charitable companies in to nation. Scope: It execute hard to fight towards poverty in across 90 nations and want to develop global poverty, disaster and other, It is also a global venture which operates in number of locations of different countries across world. Types of voluntary organisation: oUnincorporated association: It is a unit of two people which is combined by mutual understanding for legal aim to conducted an appropriate goal or not. It does not have any legal right and a separate entity. oCharitabletrust:It ismainlyformulatedtoaccomplishsubstantialsocietal advantages for individual. It also acknowledged as unchangeable trust which is framed for charitable purpose. Legal Structure: This venture is unincorporated in unincorporated association that was framed with an agreement between several individuals and group for intent to execute towards injustice activities and poverty. Relationships between different functional areas along with its advantage and disadvantage. In company, several sections are executing to collect in reference to attain their aims in effective form. Entire these operational function activities are based on its organisational structure (Gaganis, Pasiouras and Voulgari, 2019). Zara utilise hierarchical organisational structure where communication flows differ in one functional unit to others. The basic cause toward this framework is large and several layers where different departments are executing at diverse areas. Marketing and HR: In Zara, both functions play an effective role. HR division help marketing venture in filling the vacant position of this department by hiring skilled employees. Along with this, firing, retaining and rewarding workers so that they perform their work 3
appropriately. Whereas marketing play an effective role for endorsing firm’s services in to target market and analyse consumer’s needs regarding services (Halbert and Ingulli, 2020). Both execute together in respeectove venture to measure marketing staff demands after organise process of hiring where skilled people are hired to attain business goals. Advantages and disadvantages:It assists Zara to publish its products in effective form through skilled workers and help in attaining set objective. But sometime both divisions acknowledge each other need that affects Zara operations unfavourably. Finance and marketing: Both function in Zara execute together to attain enterprise’s growth options after efficient marketing evaluation. In specific context, finance function offer them required fiscal support as per market division needs. Whereas marketing unit execute for finance to analyse fund raising opportunities. Whole these activities aid Zara to measure market development regions where they may operates its new shops in simple form. Advantages and disadvantages:Due to having effective relation among marketing and finance function, the organisational goals can be achieved in effective manner. But due to lack of fund marketing function cannot capable to execute its operations like promotion and other which affect efficiency of firm. PART 2 Internal and external analysis to strengths and weaknesses of organisations PESTEL analysis of Zara Political-Government policies of taxation, licensing and other for controlling venture. Zara is a global venture, so there execution is influenced by laws and political actions of country. Positive impact:In UK, stability in political environment is the factor which favourably impacts Zara in form of running business internationally and develop consumer base. Negative impact:Government has formulated employ law which supermarket should offer mix of employment that is lower and huge recompense, flexible (Brotspies and Weinstein, 2019). Therefore accomplish need of several individual belonging to section that are student, middle and lower group of people. Economical-This aspect consider components such as economic development, interest rate, inflation, and deflation, currency rate and many more. Positive impact:In UK, the country has developing GDP that beneficial for Zara to 4
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make development in its business. Negative impact:Fiscal organization like banks, make modification in their interest rate for managing fund which create negative impact in term of business expansion. Social-It consist demographic components, needs, demands, culture, trends and beliefs as well as changes in consumer preferences etc. Positive impact:In UK, consumer prefers to buy products from supermarket where they can get all things at one place (Calabrese and et. al, 2018).It helps Zara in developing in customer base. Negative impact:In current time changes are occurred in trends and fashion so taste and preferences of target audiences are also changed which unfavorably affect Zara in term of its more production of wastage. Technological- It considers, advance technology, R&D, technical innovation and artificial intelligence etc. Positive impact:In UK, customer prefer online shopping due to less time and it also favorably influence respective company in term of increase number of consumer. Negative impact:In term of high use of internet, it is being determined that online delivering of crucial facts can be utilised through hackers regarding Zara which affect its revenue. Environmental- It considers ecological factor like weather, climate, environmental laws and many more. Positive: In Zara, the administration of the venture utilise wastage reduction activity and also determined to join the deal to minimise their carbon footprint that frame a positive influence over atmosphere. Negative: Zara is a fast fashion brand so that they rapidly jump on trend that increase the level of wastage and unfavourably affect business sustainability (Jevšenak, 2019). Legal- It refers to regulations and legislation which are developed by government for business ventures. Positive: In Zara, the administration follows employment and consumer protection law for effective running of business. Negative: The enterprise has been charged of stealing designs and clothing concepts form other ventures which affect its image and position in particular market. 5
PESTEL analysis of NHS Political- The political environment in the nation is affecting at NHS, such things that are favourably and unfavourably influence the political atmosphere of NHS are as: Positive: The business of NHS is positively affected by political stability situation of UK (Krajnakova, Navickas and Kontautiene, 2018). Negative: the administrators of NHS are not capable to concentrate on long term plan becausetheregularchangesareoccurredinpoeticalenvironmentwhichaffect development of enterprise. Economical- It consist economic development, interest rate, employment and unemployment rate and many more. Positive: In UK, government frame certain measures to handle economic crash so undercutting the budget measure favourably influence this venture to deal financial issues. Negative:DuetoCOVID19pandemicandBrexit,thecostofcommoditiesare maximised which unfavourably affect NHS business during purchasing. Social- Social environment of the country in NHS is exist will analyse in the change that they need to make. The impact of few modifications is as: Positive: NHS is determined to be situated in the locality so that people can reach the hospital when they need urgent care. Negative: Due to corona virus pandemic, patents are maximised and due to limited capacity of employees the firm negatively affected. Technological- Technology is budding quickly and the NHS should implement it so that they can stay ahead in the competition. Positive:TechnologyfavourablyinfluenceNHSinformofprovidingsurgical instruments and creative machinery associated to medical facilities. Negative: High utilisation of technology in form of administrating patient and consumer data can unfavourably affect the firm (Luiz, Ganson and Wennmann, 2019). Environmental-Eachcompanyislegallyandethicallyresponsibletocontributetothe environment within they survive. Positive: NHS uses disposable surgical instruments so that no harm is caused to the environment. 6
Negative: The current corona virus crisis influence the workplace of the company in form of generating stress and stress on employees. Legal-The laws and legislations that are included by NHS for its efficient operating. The influence of them as: Positive: The NHS has to produce the accounts every year so that the government can manage a track of the taxes that pay and the profits that they earn (Kokodey, Gnezdova and Lomachenko, 2018). Negative: Modification in laws and government rules generate unfavourable influence over business of NHS and expectations of patients. SWOT analysis of Zara StrengthWeakness Zarahasapproximate2000stores across different parts of world Zara is one of biggest Spanish retail brands Zarahaseffectivesupplychain managementprocessinitsfunctions like operations and manufacturing are vertically integrated. Zara uses very minimal advertising and marketing techniques as compared to its competitors. There is high competition and that is leading to limited market share &fats brand switching (Popescu and Popescu, 2019). OpportunitiesThreats Therearemanydifferentglobal markets that can be explored by Zara. There is opportunity in expansion in e commerce and online marketing. Apartfromclothing,footwear, handbags, accessories, perfumes there can be other product segment where Zara can expand such as electronics or superstores. Therearefakeimitationsthatare affecting brand image of Zara. Thereisveryquickswitchingof consumers is taking place because of large number of competitors in industry to which Zara belongs. Economic turn-down because of events such as COVUID-19 virus has affected the sales of all brands as people are focusing towards necessities and it is 7
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going to impact upcoming future sales. SWOT analysis of NHS: StrengthWeakness National health services are a public funded healthcare system in England. It is second largest single payer health care system in world. NHS is providing health care services toallEnglishresidentsandalso residentswhoarefromdifferent regions of UK. They are offering most services free of cost at point of use to their customers. Thereisfinancialissuesbecauseof most services are offered free of cost that includes emergency treatments & treatments for infectious diseases that is free for most people including visitors (Katz and Green, 2018). OpportunitiesThreats NHS is a public funded organisation. There is a opportunity that there can be expansionbyusingsomeprivate sourcesoffundingtoincreasetheir sources of finance. Thereareotherinstitutionssuchas private health care that are running to NHS. They are catering to needs of 8 percent of population this is a support of services of National health services. Any other institution like this can be establishedforprovidingsupportto National health services. NHS is funded from general taxation andthereisverysmallcontribution from national insurance payments. Fees is levied according to changes taking place in Immigration Act 2014. so such frequent changes can impact the whole policy structure in which NHS is based (Belas and et. al., 2018). 8
Interrelation of strengths and weaknesses with external macro factors International among macro and micro factors of ZARA Political:Strengths: In UK, there is political condition that positively impacts Zara in term of global business expansion. Weaknesses: In UK, national authority modifies policy and laws which affect the administration of respective venture’s business (Hamilton and Webster, 2018). Economic: Strengths:The situation of inflation in UK assist Zara to gave effective range if consumer to buy goods. Weaknesses:Unemployment rate of respective venture affect profits because individual power shift to reprehensible goods. For it, they will not require to purchase commodities from different cheap outlets. Social: Strengths:Online shopping option help in developing profits and customer base. Weaknesses:The venture provides goods and services at affordable cost that outcome in to people that products may not be of effective quality. Technological: Strengths:Within company, purchasers are offered great tech experience and deposit by online form like card and other options. Weaknesses:E-commerce is due to development of internet which affect the sales and profits of Zara. Environmental: Strengths: The management of Zara work towards waste minimization and reduction of carbon foot prints. Weaknesses: Due to fast fashion venture the waste maximize that affect environment and financial condition of it (Čepel and et. al., 2018). Legal: Strengths: The venture effectively follows employment laws which help in effective running of venture. Weaknesses: Copying clothing design and concepts affect its images due to break 9
intellectual property rights. International among macro and micro factors of NHS Political: Strengths: Political stability is one of the key factors which favorably influence NHS and be strength of it. Weaknesses: Lack of assets and inflation due to Brexit are some weakness of NHS (Brennan, Canning and McDowell, 2020). Economical: Strengths: The firm offering its facilities at reasonable cost which develop its financial situation. Weaknesses: Lack of assets and diverse economic laws, NHS under stress to reduce pay of its worker which increase turnover of workers. Social: Strengths: Cause of having more patients for its good services, the brand image and market position of firm develop. Weaknesses: The firm do not manage the demand cause of increasing population. Technological: Strengths: NHS has been able to use technical machinery to provide effective and speedy healthcare services to patients. Weaknesses: Ineffective administration of training influence the utilisation of technology through workers in their medical facilities. Environmental: Strengths: Thefirmutilizesdecomposableandrecyclablematerialinitssurgical materials. Weaknesses: NHS is a great participator to the toxic waste that is collecting throughout the world. Legal: Strengths: The company appropriately follow law due to which its business records in term of accounting statement are accurate and tracked by the government (Hans, V.B., 2018 Gaganis, Pasiouras and Voulgari, 2019). 10
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Weaknesses: Patients who are unhappy and unsatisfied with the health services of NHS are taking their complaints in legal level (Halbert and Ingulli, 2020). CONCLUSION From the above discussed aspects it can be concluded that there are different objectives and legal structures of organisations. There is always a interrelationship present between functions of organisation and their link with structure of organisation. External environment always consist of factors that can lead to both positive and negative impact on business functions. For this PESTLE analysis is the most appropriate framework that can be applied in order to get insights of the different factors that are part of this macro environment. Political and legal factors are affecting majorly and strength can be used for purpose of dealing with external strengths that can be depicted by determination of interrelationship between such factors. 11
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