Different Types and Purposes of Organizations

This article discusses the different types and purposes of organizations, including public, private, and voluntary sectors. It also explains the legal structures of these organizations. The size and scope of various types of organizations are explored, along with the relationship between different organizational functions and how they link with the organizational objectives and structures. Additionally, the article discusses the positive and negative impacts of the macro environment on businesses.

Business and the
Business Environment

INTRODUCTION
Business is determined as economic or company system at which products and services
are exchanged for earning money and market shares. In respect of this business environment is
considered as summation of external as well as internal elements that impact on a company
negatively or positively (Bob, 2020). For all business ventures it is necessary to conduct proper
business and maintain proper business environment as which aid in achieving predetermined
target as well as aim successfully at competitive marketplace. Company taken for respective
project is ALDI which a private company is working in retail sector. It is introduced by Karl and
Theo Albrecht in year 1946. Its head office is positioned at Germany as well as they offer
grocery and household essentials. Moreover, project will also include two more companies for
the comparison i.e. NHS which is public company and Oxfam which is a voluntary firm. Topics
covered in this report are different kinds, size and scope of company, interrelationship among the
various functions in a company. In addition to this it will also include positive and negative
aspect of macro environment as well as it also explain about inside strength as well as
weaknesses of respective business as well as interrelation with external aspects of macro
environment.
TASK 1
P1. Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures
Private venture: These organizations are privately owned ventures forge structure by
which it possesses by the suitable number of investors, like Aldi which is a German based global
discount supermarket chain that has its stores in around 20 countries and founded in 1946.
Purpose: Their purpose or motivation is to boost its benefit, creates straightforwardness
in revealing and picking a right hierarchical structure to work their business. They can be sorted
out as Sole Proprietorship, association and partnership.
Legal structures: partnership, association and sole proprietorship are said to be the
different legal structures that are followed by private ventures. Basically, it is required for these

organisations that are coming under private sector would require to take licence from parliament
of United Kingdom in order to conduct any sort of business practice.
Public venture: These are the organizations that are openly deals within the market and
also possess their functions through probable share of stocks (Erasmus, Strydom and Rudansky-
Kloppers, 2016). For example, NHS is the publicly funded healthcare organization since 1948
and has been funded from the general taxation.
Purpose: Their motivation is to change the economy, development of financial
foundation, spread awareness among individuals, give great worth administrations and ideal
usage of accessible assets.
Legal Structures: Basically, the legal structure of public organizations are divided among
three different sections and these are local, state and central level. Political powers specifically
runs the organisations that are coming under public sector. Moreover, it can also be said that it
incorporates different business exercises which are coordinated by them and have command over
business. Government at different levels has the ability to establish laws for the entire nation,
interestingly with neighborhood governments. Organizations who are worked by focal
government need to take consent from them to work and before taking significant choices.
Voluntary Organization: These are the organizations that collect information from
people in order to understand the probable structure in order to achieve their goals and targets.
For instance, Oxfam which is confederation of 19 independent charitable organizations put
emphasis on the mitigation of global poverty.
Purpose: Their point is to Connect individuals and associations, develop and improve
chipping in, fortify deliberate association. They work for social government assistance or
society, work for poor and, NGOs destitute individuals, mature age and.
Legal Structures: Specifically, there are two different types of legal structures followed
by voluntary organisations. It is a sort of good cause which is controlled by gathering of
individuals, are trustees. It is represented by trust deed which is increasingly adaptable in light of
the fact that there is no legal system. Trustees for this association are not chosen, they are
delegated by the board. To set up a trust, the gathering individuals need to settle on an

understanding in composed structure which is called as trust deed and speaks to that an
association is legitimately beneficent.
Difference between Profit, Not-for-Profit and Non-Profit Organizations (NGOs)
Basis Profit Organisations Not-for-Profit
Organisations
Non-Profit
Organisations
Meaning An advantage
affiliation is contains
about the getting
money masterminded
similarly as
overseeing things and
organizations through
customers income
driven justification.
This affiliation is
similarly insinuates
as non business
component, not
income driven
affiliation. It is an
affiliation committed
to separating a shared
view point (Fabuš,
2017).
Non advantage
affiliation is similarly
one of the blend work
assignment in which
it includes the
working features
which isn't entitled as
money making yet to
give some
development which
brings social work
not income driven
expectation.
Objectives The objective of
advantage affiliation
is basically to oversee
thing to people
gaining money and
there is exclude any
social explanation.
The objective of Not
income driven
affiliation is too not
procuring money
dismissing that by
consuming and
propelling the social
government help
towards the overall
population.
The objective for Non
advantage affiliation
is the having a social
work or which has
excluded the money
making or circle
factor (Prajogo,
2016). To contribute
something for the
overall population.

P2 Explain the size and scope of a range of different type of organisations.
Size of a business organisation refers to the scale of operations and the busines activities of
that organisation (Van Looy and Van den Bergh, 2018). Different factors can be used to
determine the size of a business organisation such as capital employed, number of employees,
turnover etcetera. On the basis of number of people employed, business organisations can be
classified into four different types which are:
Micro-business organisation: Organizations with less than ten people as employees are
termed as micro-business organisations such as sole proprietorship.
Small-business organisation: Organisation which has more than 10 but less than 50
employees are small business organisation such as partnership firms.
Medium-business organisation: Organisations which employs more than 50 people but less
than 250 people are termed as medium-sized organisation such as public and private sector
companies (Hillary, 2017).
Large-business organisation: Organisation which employs more than 250 people are
termed as large-scale business organisations such as private-sector and public-sector
multinational companies.
Basis Aldi NHS Oxfam
Objectives and goals They have necessities
to offer the top
quality kinds of help
towards the
customers (Foss and
Saebi, 2018).
Having a significant
degree of
beguilement similarly
as other framework
factor to guaranteeing
for giving the best
and latest examples
information as much
figure to the world.
As it sort of NGO
and it controls
through government
and targets are to
propel the social
causes and gives the
improvement towards
the overall
population.
Market share The market share of
aldi is challenged by
NHS deals at the
global level and
The bit of the pie of
Oxfam is having 50

Lidl and currently its
share rose by 13.2%
to 14.1%.
provides its
healthcare services to
worldwide under the
guidance and
instructions of
government and
analyzed that it has
around 9.6% market
in UK as the part of
its open survey.
above branches
worldwide and it
having less bit of the
pie.
Growth and
sustainability
The advancement
pace of right
currently premise is
arranged by around
3.2% which is
differentiate and the
4% on present year of
2020 as they are
foreseeing to develop
their area and
business.
As through the
general records the
advantage rate was
around 11.2% and
turnover is 104
million euro.
The Oxfam having
the drawn out turn of
events and
dauntlessness to the
extent progressing of
social government
help (Hamilton and
Webster, 2018).
TASK 2
P3 Explain the relationship between different organizational functions and how they link with
the organizational objectives and structures.
Every organisation consists of different functions and departments which are essential for
business activities of the company and are interrelated. Relationship between different functions
within the organizational context of ALDI Ltd. is being discussed as follows:
Production Function:

Production function refers to the process of manufacturing goods and services in an
organisation by conversion of raw materials into finished goods. Production function is vital for
accomplishment of business objectives of ALDI Ltd. and it relates with the other organizational
functions of the company. For example, production and sales function are interrelated since the
goods are produced and designed according to the information provided by sales and marketing
department of the company with respect to key trends in the market (Felipe and McCombie,
2014). Similarly, production relates with finance function of ALDI Ltd. to determine the cost of
products and the market price at which the products should be offered in the market to increase
profitability.
Sales & Marketing Function:
Sales and marketing function refers to the comprehensive set of activities which include
personal selling, advertising, promotions etcetera which are aimed to increase the sales of the
product and services in the market. It is important function for achieving the business objectives
of ALDI Ltd. since it determines the amount of revenue which comes into the company and
influences every other activity (Arnett and Wittmann, 2014). For example, sales department of
ALDI Ltd. works in harmony with the finance function to determine expenditure on selling
activities and meet the financial targets of the company.
Human Resource Function:
It refers to the process of managing and controlling employee performance in the
company to achieve the highest level of operational productivity which is very crucial for
achievement of business objectives of ALDI Ltd. HR Function is related with every other
function of the organisation (Storey, 2016). For example, controlling the productivity of
employees by HR department helps the production and selling department to achieve better
results by increase employee productivity and efficiency.
Hence, it can be evaluated that different organizational functions and departments are
interrelated and are vital in determining the success and accomplishment of goals and objectives
for any business organisation.
Organisational Structure:

Organisational structure can be termed as the system which determines and outlines how
tasks and functions in an organisation are directed towards attainment of organisational goals and
objectives (Ashton, 2004). It describes the reporting relationships between the superiors and
subordinates in an organisation. There are primarily three different types of organisational
structure:
Functional Organisational Structure: Under functional structure, organisation is divided
into different departments based on the major functions such as sales, marketing, production
etcetera. Employees are formed into groups based on matching skills and tasks. Each department
has a functional head who is usually an expert and specialist in that functional area.
Divisional Organisational Structure: Under divisional structure, the organisation is
divided into different divisions which are either based on products or geographical area. Every
division has its own functional departments such as IT, marketing, finance etcetera. It is suitable
for organisations with diverse product ranges or market areas.
Matrix Organisational Structure: It is a combination of two or more types of
organisational structures. For example, in an organisation which is divided based on the products
and each division has a functional head for separate functions, it can be said that matrix
organisational structure is being followed.

Figure 1: Organisational Structure
(Source: https://careers.aldi.us/org-chart)
ALDI Ltd. implements an effective form of matrix organisational structure. It helps in
accomplishment of organisational goals and objectives since every division essentially has a
functional supervisor or head with expertise that can be used to increase productivity in that
particular area or function. It also helps in sharing highly skilled employee across different
division in the same function and presents an opportunity for employees to enhance their skill
sets and qualities. Matrix organisational structure is suitable for ALDI Ltd. since the company
operates in a diversified range of vertical product-lines in different geographical areas and this
structure helps the management in effective monitoring and supervision of each functional
department in every distinct division (Clement, 2013).

TASK 3
P4 Positive and negative impacts of macro environment
Macro environment is considered external factors which are uncontrollable in nature so it
is essential for company to understand it and develop decision accordingly. For this a firm
management may conduct several activities such as PESTEL analysis. PESTEL analysis of
determined as framework through which a company can conduct scanning of factors related to
external environment(Brennan, Canningand McDowell, 2020). Factors of respective model are
political, economical, social, technological, environmental and legal. In respect of ALDI they
can PESTEL analysis to know their external environment factors according to which they can
develop strategies as well as they also determine factors strengths and weakness, below
explanation of this is given:-
Figure 2 PESTEL Analysis
Source: PESTEL Analysis, 2020
Political factor
For ALDI it is essential to update as well as change their strategies according to political
factors or decision of nation which conducting and expanding business operations and functions.
it is so because through it they get ensure that all operations are conducted properly (Contractor
and et. al., 2020).

 Positive – The positive aspect of this is related to United Kingdom political condition
which is stable which help ALDI in conducting business smoothly in nation as well as it
will also help in gaining high competitive advantage at the marketplace successfully.
 Negative – Whereas the negative aspect is there are number of political factors which
impact on decision making as respective company not able to follow which affect their
market value.
Economical factor
There is inflation take place in United Kingdom due to Brexit and due to same market get
rose to approx 2.9 percent in 2019 may. Due to this respective retail company need to change its
decision as well as strategies so that they can survive in the market successfully.
 Positive – The positive impact of this is that purchasing behaviour of a customer totally
depends on their economy condition so by changing decision according to economy of
UK respective company able to attain their desire goal successfully.
 Negative - On the other hand, if economy condition is not good then customer conduct
less purchasing which impact on company profit as well as employees moral negatively.
Social factor
For every company it is essential to consider society while developing decision as that
will help them in developing effective decision and sustaining at marketplace for long time
(Draijer, 2020).
 Positive - ALDI conduct several programmes which help society in development such as
their aim is to teach nearby 1.2 million poor children by the end of 2020 as that will help
them in attaining high competitive advantage. Societal factor is considered as positive as
that will provide this retail company opportunity to grow their business effectively at
different location.
 Negative - On the other hand, negative impact is that need, demand and expectation
change regularly due to which company need to change or update their decision
accordingly for sustaining in market.
Technological factor

Respective retail firm adopt as well as implement innovative and new technology which
help them in performing their work more effectively with minimum wastage. Moreover it will
also help them in supply chain management at the store properly.
 Positive – The positive impact of technological factor for ALDI is that they able to
perform their duties in effective manner as well as they also able to save time, resources
by minimizing wastage properly.
 Negative – On the other hand, it also has several negative impacts such as it leads to
unemployment in the society which directly or indirectly leads to increase in the crime
rate.
Environmental factor
In order to adopt environmental factor in effective ways respective retail company start
supplying their vegetable, fruits, dairy products and so on from the local British producers as
well as farmers (Newman and et. al., 2020).
 Positive - This is so because through it they able to support local people and leads to
environment sustainability. This has positive impact on the respective company as they
follow proper as well as reliable legislations related to the environment which enhance
their goodwill at the marketplace successfully.
 Negative - On the other hand it has some negative aspect such as considering each and
every law related to environment legislation is expensive for company which enhances
their budget.
Legal factors
It is essential for every company to consider each and every legal aspect which is
announced by government of nation or state. In respect of supermarket industry there are various
companies facing issues related to the food and dairy products scandal which impact on their
goodwill (Sinha, 2020). But by following legal consideration respective company is conducting
their business in legal manner and able to avoid situation of scandal.

 Positive - The positive impact of this is that they able to develop strong goodwill and
market value which increase job satisfaction among employees which leads to their
retention for long time.
 Negative - On the other hand the negative impact of this is that there are number of legal
legislation which is not possible for respective company to follow each and every.
By analyzing all the factors of PESTEL analysis ALDI management able to develop
proper strategies and plan which help them in attaining desire goal and objective successfully.
TASK 4
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
SWOT analysis is considered as strategic planning technique or tool which helps a
company or a person to determine their strength, weakness, opportunity and threat related to the
business competition or planning of project(Vilčekováand et. al., 2020). By conducting SWOT
analysis a company able to understand situation properly and develop decision accordingly.
SWOT Analysis of ALDI Ltd:
SWOT Analysis of ALDI Ltd. is being done in the following section to analyse the
internal strengths and weakness of company as follows:
Strengths:
 Discounted products
 High market share in UK
 Supply-chain management Strong base of financial resources
Weakness:
 Low-cost strategy and reduced
profitability
 Poor market research
 Limited international presence
Opportunities:
 Online sales and technology Joint-ventures in international markets
Threats:
 Increasing competition from
supermarket giants
 Legal complexities
Strengths of ALDI Ltd:

ALDI Ltd. is one of the biggest and most popular discounted grocery retail store in the
domestic markets of United Kingdom which is one of its biggest strengths. The company enjoys
a high share of revenue in the domestic markets and has a large base of customers. Effective
supply chain management has helped the managers of ALDI Ltd. to increase the profitability of
the company’s operations and make additional use of sales promotion tools (Putranto, 2018). The
company also has a huge base of financial resources accumulated as a result of profitable
operations over the years which is biggest strength of ALDI Ltd. It is one of the biggest private
employer and has a highly-skilled team of human resources. A wide range of own private label
brands in another important strength of ALDI Ltd.
Weakness of ALDI Ltd:
Due to the low-cost strategy followed by ALDI Ltd., the profitability of the company has
reduced below the industry average which is another weakness of ALDI Ltd. Ineffective and
poor market research has been the weakness of ALDI Ltd. which has been the reason for its poor
operational markets into many new markets. A limited presence of ALDI Ltd. other than EU
countries is also one of the biggest weakness of the company.
Opportunities of ALDI Ltd:
The management of ALDI Ltd. has an opportunity to improve the operational
performance of company in the markets where it is performing poorly by entering into joint
ventures with already established grocery supermarkets and brands (Schmid and et. al., 2018).
There also exists a huge opportunity for the management of ALDI Ltd. to increase its revenue
using online sales platform by making investment into latest technological developments and
innovations which have been the highlight of this decade.
Threats of ALDI Ltd:
Increasing competition in the industry in which ALDI operates is one of the most
significant threat for the management of ALDI Ltd. which needs to be mitigates by strategic
policy formulation as it might reduce the share of the market and revenue held by the company
(Mitchell, 2015). Due to widespread operations in many countries and different legal rules and
regulations in each business territory, ALDI Ltd. faces the threat of legal complications and the

company has also faced lawsuits in past which makes it imperative for management to employ
considerable resources for scanning the legal horizon and preventing company from any legal
threat.
Hence, it can be evaluated that ALDI Ltd. has many strengths such as strong financial
resources and domestic presence and many weaknesses such as failed operations in some
countries which create external opportunities and threats for the management of the company
which needs to be considered.
SWOT Analysis of Sainsbury’s:
Sainsbury’s is another retail grocery brand based out of United Kingdom which provides
stiff competition to ALDI Ltd. Strengths and weakness of Sainsbury’s with an analysis of the
external opportunities and threats are being described as follows:
Strengths:
 Effective expansion strategy
 Effective promotions Wide range of products
Weakness:
 High rate of customer turnover
 Low rate of profitability
Opportunities:
 International expansion Diversification and product
development
Threats:
 Increasing competition
 Shortage of skilled labour
Strengths of Sainsbury’s:
From a local shop selling limited products to a retail grocery store chain with wide range
of products and services, expansion strategy implemented by the management of the company
has proved to be a great strength. The company offers products for all needs and demands of
customers which increases the target customers for the company (Fatricia, 2016). Moreover,
effective marketing and promotions of the company is another strength which has helped to
increase sales over the past years.
Weaknesses of Sainsbury’s:

Sainsbury’s, despite implementation of customer loyalty programs, experiences a high
rate of customer turnover which is the biggest weakness of the company. Also, the profit margins
have declined over the last few years for the company below an industry average which is
another crucial weakness that needs to be eliminated (Guo and Wang, 2019).
Opportunities of Sainsbury’s:
Free trade agreements provide an opportunity to the management of the company to
expand to international markets and reduce the dependence on domestic market for revenue and
profits. Moreover, changing customer demands also present an opportunity to diversify vertically
by product innovation and development and improve competitive position in the industry.
Threats of Sainsbury’s:
Increasing competition in the industry by supermarket giants such as TESCO, ALDI,
LIDL etcetera is a major threat to the long-term profitable operations of the company which
needs to be mitigated by the management by strategic policy formulation. Along with this,
shortage of skilled labour also presents a threat for the company to continue smooth operational
activities.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
Political Factors:
Political factors for ALDI ltd. such as Brexit and the uncertainty of market conditions in
Britain relate with the internal strengths and weakness of the company.
Strengths: As a result of Brexit, high share in the domestic markets of United Kingdom acts as a
strength for ALDI Ltd. as it helps in increasing the amount of revenue generated from domestic
markets.
Weakness: For example, due to unstable economic conditions in Britain, limited international
presence as a weakness of ALDI Ltd. creates a much worse impact on the operations and
profitability of company.
Economic Factors:

Economic factors such as taxes, inflation rate or level of household income in an
economy affect the operations of an organisation and relate with the strengths and weakness of
the company.
Strengths: For example, due to increasing inflation in Britain, the management of ALDI Ltd. has
the ability to offer its products which are of good quality and very competitive pricing as a result
of low-cost strategy and increase the market share in United Kingdom.
Weakness: In the world economy, demand for goods of high quality has increased due to
increasing disposable income and due to high-discount strategy adopted by ALDI Ltd., products
of the company are sometimes perceived as cheap and of inferior quality which is a weakness for
the company.
Social Factors:
Social factors such as changes and trends in consumption behaviour relate with the
internal strengths and weakness of an organisation.
Strengths: For example, the management of ALDI Ltd. can consider the internal strength of
huge base of financial resources to diversify its product ranges as per the changing needs of
customers such as entering into the market of healthy food products to promote healthy eating
habits of consumer (Otieno, 2018).
Weakness: Demands and needs of consumer are changing more rapidly than ever and in addition
to this, the poor market research of the company makes it more difficult to meet customer
expectations for ALDI Ltd. which is another weakness of the company.
Technological Factors:
This decade has witnessed one of the biggest wave of technological changes such as
opening of new sales platform i.e. online sales and the management of ALDI Ltd. can consider
its strengths and weakness with respect to implementation of technological changes and
innovations in the company.

Strength: The management considering the strong base of financial resources of the company
has decided to invest in technological advancements and developments in the company. It
provides strength to the company’s operations.
Weakness: Due to limited international presence, access to latest technological innovations and
development is restricted and limited for ALDI Ltd. which is another significant weakness of the
company in context of technological factors.
Legal Factors:
Increasing legal complication and rules by government of different countries in which
ALDI ltd. operates has to be strategically dealt with by the management of the company. Legal
factors relate with the internal strengths and weakness of the company.
Strength: For example, the team of highly skilled employees can be deployed by the
management of the company for scanning the legal horizon and conducting business operations
as per the rules and regulations (De Haas, Herold and Schäfer, 2020).
Weakness: Post Brexit, changing rules and regulations act as a weakness for ALDI Ltd. to adapt
to these legal changes and ensure that operations of the company are not conflicting with any
legal obligations or rules.
Environmental Factors:
The management of ALDI Ltd. has to invest the huge base of financial resources into
green-technology and achieveing sustainability in the operations of the company. Increasing
environmental concerns such as global warming and emission of greenhouse gases has put the
onus on companies like ALDI to reduce the amount of carbon footprints which involves
substantial investment and change in existing operations of the company.
Strength: Considering the large base of financial resources held by ALDI Ltd., it is more
convenient for the company to invest into green operations and improve the sustainability in the
company and create positive impact on nature which provides strength to the company.

Weakness: Manufacturing process of products sold by ALDI Ltd. has a major adverse impact on
the nature which is another weakness of the company in association with the environmental
external factors.
Hence, it can be comprehend that external environment factors and strengths and
weaknesses of ALDI ltd. are interrelated and the management needs to consider both the aspects
before implementation of any strategic decision in the organisation.
CONCLUSION
By analyzing above mentioned points it can be determined and conclude that for every
company it is essential to conduct effective business as well as maintain proper business
environment because through that they can attain their desire goal successfully. Moreover,
maintaining proper business and business environment help an organization management in
developing strategies properly for the attainment of target effectively. In respect of this
management need to analyze business environment factors which can be internal as well as
external as that will help in decision making as well as evaluating opportunities at marketplace.
An individual can conduct or start its business in different sector i.e. private, public and
voluntary, nature will be depend on the aim, products and services. In addition to this they also
need to conduct market analyze for which SWOT and PESTEL can be used as well as their
strengths and weaknesses also need to evaluate properly.

REFERENCES
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