Types and Purposes of Organisations; Size and Scope of Different Types of Organisations

This article provides an overview of the different types and purposes of organisations, including public, private, and voluntary sectors, and their legal structures. It also discusses the size and scope of different types of organisations, such as micro, small, medium, and large organisations. The article covers topics such as the meaning of a business organisation, types of business organisations, difference between micro, small, medium, and large organisations, and the scope of different types of organisations.

Business and the
Business Environment

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures......................................................................................................................3
P2, Explain the size and scope of a range of different types of organisations............................6
TASK 2..........................................................................................................................................10
P3. Explain the relationship between different organisational functions and how they link to
organisational objectives and structure......................................................................................10
TASK 3..........................................................................................................................................14
P4. Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples..............................................................................14
TASK 4..........................................................................................................................................16
P5. Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses..........................................................................................................16
P6, Explain how strengths and weaknesses interrelate with external macro factors.................18
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20

INTRODUCTION
A business is a mixture and setting of events and certain commercial activities which are
performed by the entity and the individuals in it for attaining the final objectives according to the
legal structures and other operational guidelines. Business environment refers to the
surroundings of a company in which it is working including both the internal and external factors
which has a huge influence over the business (Alotaibi and Liu, 2017). The report is divided into
two parts, the first section acknowledges different types of organisations existing in the market
with their purposes and legal structures. Along with it the size and scope of different business
organisations are also discussed with the help of a comparison table and organisational structures
are identified according to the scope and sizes and the interrelationship of different functions
existing in the organisational structures are also examined. The second part of the report is
developed on Tesco where the Macro environment of company is evaluated for identifying their
positive and negative impacts the external business environment. More over the internal
strengths and weaknesses are also evaluated with the help of SWOT analysis framework for
identifying the future opportunities and threats associated with Tesco. The company is a
multinational supermarket store which was established in 1919 by Jack Cohen and headquartered
in England UK.
TASK 1
P1. Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures.
Meaning of a Business Organisation:
A business organisation for the term business organisation is defines the structure and
objectives of a company. Basically the term business organisation describes the structure and the
pathway of a company which helps it to meet all the predetermined objectives and goals. In
general businesses are designed and created with a focus on two particular aspects that is of
earning profits and moving towards growth or improving the society and spreading awareness in
people and making the world a better place. Therefore, numerous types and categories of
business organisations are present in the market according to their structure and the objectives.
Various types of business organisations are defined below with appropriate examples.
Types of Business Organisation:

 Sole Traders are also known as sole proprietors which are a legal setup where the
business is owned and controlled by a single person and the individual is not separate
from the business. That means the individual running a sole proprietorship holds
personally liable for all aspects of the business including finances and other risks. Any
profit that is earned by different business activities belongs to the business owner along
with it all the debts and risks are also bear by the owner as well (Alotaibi, 2016).
 Partnerships are a business arrangement and Enterprises owned by two or more people.
The relationship between the partners is governed and regulated by partnership
agreement which specifically defines the scope and structure of the partnership along
with specifying the respective responsibilities for each partner. In the partnership
agreement the terms are involved in relation with the profit sharing ratio and distribution
system, investment obligations of each partner and also the loss sharing ratio. For
establishing a partnership at least two parties are necessary.
 Private Sector organisation are often small privately held businesses who are limitedly
liable by shares as the business is small and privately-owned therefore only small number
of shareholders around 50 in the united kingdoms are associated with the entity. Along
with a private entity is not allowed to trade their shared publicly and cannot list their
shares on any stock exchange. For example, TESCO
 Public Sector Organisation are limited liability companies who are allowed to sell and
trade their shares freely in the stock market with the help of any appropriate stock
exchange available and they are also subject to minimum capital requirements £50,000 in
the United Kingdom. a publicly owned organisation is responsible for filing their
financial returns and financial records every 12 months and in United Kingdom it is very
important that the businesses have their trading certificate from Companies House before
trading the shares and “PLC” has to be included in their name. For example British
Airways Plc (Springer and Cham.Hillary, 2017).
 Not for Profit Organisation are those companies which are set up with the purpose that
is not related with financial gain and earning profit as the name suggest. The not for
profit organisations are differentiated from profit organisations on the basis of their
primary agenda of bringing change in public by benefiting the society and not generating
private profits from the business. For example, Transparent Hands

 Non Governmental Organisation are most commonly known as NGO that operate
independently from the state or government. The NGOs or non governmental
organisation still receive money from the state but they operate without representation
from the government. The World Bank has identified non-governmental organisations
into two to separate groups known as operational NGO and advocacy NGO. For example,
NCVO.
Difference in Types of Business Organisations:
BASIS PROFIT
ORGANISATION
NOT FOR PROFIT
ORGANISATION
NGO’s
PURPOSE The purpose of a
profit organisation is
just to deal within
their production
services for earning
enough money to pay
of their expenses and
their business
profitable (Batocchio,
Ghezzi and Rangone,
2016).
The purpose of a not-
for-profit organisation
is to promote social
causes and welfare for
making the society
better and efficient for
everybody living in it.
The purpose of a non
governmental
organisation that is
also known as NGO is
working for social
cause that do not
include or involve any
earnings of financial
gain which the
purpose of
contributing their part
towards the society.
SET UP FOR A profit organisation
is developed and
generated for
conducting business
activities where the
exchange offerings in
return with money.
A not for profit
organisation is it
created and setup to
promote art, research,
science, commerce
and other useful
purposes.
On the other hand an
NGO or a non
governmental
company works for
the betterment and
upliftment of the
society and economy
by bringing awareness
of Human rights
women parliament

extra in the public
(Talamini and et. al.,
2013).
GOALS Tesco is the best
example of a profit
organisation the main
goal and aim of it is to
become the market
leader and maintain
its position in global
markets by
sustainable means.
Transparent hands is a
not for profits
company and holds
the first position in
top Five Trust
organisations in UK.
Its goal is to provide
healthcare services to
all those who are in
need. It is considered
as the easiest way for
saving people’s lives.
NCVO is an NGO
established with the
aim of helping all
voluntary
organisations to
flourish and move
further for making
bigger difference in
the society by
working together.
LEAGAL
STRUCTURE
Legal structure of
Tesco is easy and
flexible as company is
working with flat
hierarchical structure
providing it ease and
better competitiveness
in the marketplace.
The legal structure of
NPO’s are little
complex as
Transparent Hands
have to make sure to
comply with all legal
laws and regulation
provided by
government in order
to acquire prescribed
grants and rebates.
The legal structure of
a Voluntary entity like
NCVO is also
complex as most
countries have strict
laws and regulations
for such businesses
for reducing any
malpractices under the
name of an NGO.
P2, Explain the size and scope of a range of different types of organisations.
Difference between Micro, Small, Medium and Large Organisation:
BASIS MICRO SMALL MEDIUM LARGE

ORGANISATIO
N
ORGANISATIO
N
ORGANISATIO
N
ORGANISATIO
N
Meaning The micro entity
refers to a small
business that
employs a small
number of people
operating with
less than can
employees and
with a little
capital.
A small business
organisation for
example Ella’s
Kitchen is
independently
owned business
including small
number of
workers and
seeking to
enhance the
business for the
long term by
increasing sales
volume.
The medium size
organisation is a
business entity
holding not more
than £36 million
of business
income early and
on an average £18
million balance
sheet total (Belas
and et. al., 2018).
For example,
NCVO.
The large
organisations like
British Airways
is an organisation
where there are
more than 250
people working in
the company and
operations are
taking place on a
higher standards
with large amount
of capital
investment from
internal and
external investors.
Goals/
Objectives
The aim of micro
business is to
fulfil all the basic
requirements of
the entity to term
affordable
consumers.
The motive of
Ella’s Kitchen is
to reduce the
utilization of
capital and for
conducting the
business activities
by utmost
utilisation of
resources.
The objective of
NCVO is to
involve the
employees in the
work and
operations and
also the
multinational
bodies in their
businesses which
increasing their
possibility of
growth at a faster
The objectives of
British Airways
are decided by
their legal
structure and
according to their
management
strategies. It is a
profit
organisation the
sole motive of the
company is to
enhance their

pace (Triaa,
Gzara and Verjus,
2016).
profit levels on
regular basis. But
on the other hand
if the organisation
belongs to not for
profit or non
governmental
sector then the
motive is of
social awareness
and enhancement
of society.
Level of
activities
The level of
operations that
are conducted in
micro business
are are very tiny
as the resources
and capital
present are in
limited.
The activity level
of Ella’s Kitchen
and its operations
are also of a
smallest level
more specifically
in a particular
City where the
business is
established
(Chaouk, Pagliari
and Moxon,
2020).
The NCVO
covers a larger
area of operations
and higher level
of activities as the
area covered is
large.
Most of the large
organisations
deals on a very
higher level their
activity standard
are huge and they
operate
internationally as
well rather than
just focusing
towards the
domestic market.
British Airways
also operates on
higher level
accomplishing
higher goals
undertaking huge
activities.

Number of
employees
10 or less 50 or less 250 or less More than 250
Scope of Micro, Small. Medium and Large Organisations:
SCOPE MICRO
ORGANISATI
ON
SMALL
ORGANISATI
ON
MEDIUM
ORGANISATI
ON
LARGE
ORGANISATI
ON
Number of
Products and
Services
The micro
businesses mostly
focus over one or
two products and
services due to
lack of
investments and
exposure.
The offerings of
Ella’s Kitchen
enterprise also in
smaller numbers
because of the
small all business
exposure and
awareness in the
market.
The offerings of a
medium sized
business are more
than a small or
micro business as
the individual
holds appropriate
investments from
external units
allowing them to
diversify.
A large business
organisation like
British Airways
is a multinational
company dealing
in several
industries and in
numerous
product lines
holding
operations in
different markets
attracting
separate customer
base
(Chattopadhyay
and Bhawsar,
2017).
Organisational
Functions
Only one or two
functions are
involved in a
micro business as
the entity is
managed and
The functions
involved in
Ella’s Kitchen
are also three in
number as
business is
There are several
functional units
involved in a
medium size
business because
of the higher
In British
Airways there
are numerous
functions as it is
important for the
business to hold

independently
owned by the
individual.
owned by an
individual as a
sole proprietor.
number of
employees as
compared to
micro and small
Enterprises.
appropriate
function for each
activity for the
growth and
attainment of all
the objectives.
Demand and
Supply
The demand and
supply of micro
Enterprises are
moderate as the
businesses are
responsible and
add value to the
economy and
boost purchasing
power of people
improve income
and creates jobs
opportunities.
The demand and
supply of small
Ella’s Kitchen
are also high as
these are the
businesses
supporting the
economy and
help the country
improve the
quality of life by
working for the
people in
developing
countries.
NCVO demand
and supply
depends upon the
marketing
activities and the
speed of supply
along with it also
belongs to the
economy and the
market in which
the company is
dealing.
The demand and
supply of a large
British Airways
depends upon its
expansion plants
and its supply
chain.
Scope of
Growth/Expansi
on
The scope of
growth and
expansion of a
micro business
organisation is
very low as the
the operations are
tightly focus and
face difficulties
in growing into
The growth and
expansion scope
of Ella’s Kitchen
is high if the
business is
earning profits
and running
smoothly
(Fernandes,
2017).
NCVO have a
very large scope
of expanding and
growing as the
company gets
appropriate
exposure and
develops business
connections.
Medium size
Scope of growth
and expansion of
British Airways
is huge as the
entity has enough
amount of money
to invest in their
expansion plans
along with it they
have other

any larger
Operations.
businesses can
take help of joint
venture
agreement and
licensing to grow
and move to
wider markets
and even to
international
markets.
resources as well
which helps them
in moving
forward and
growing faster.
TASK 2
P3. Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
Meaning of Organisational Structure:
An organisational structure refers to a system that highlights the ways certain activities are
directed and conducted in a business setup for achieving the goals and objectives and moving
towards growth. It also determines the flow of information in the business between different
levels present within the company (Virglerova, Dobes and Vojtovic, 2016).
Types of Organisational Structures:
 Functional Structure is organisational structure which is useful in organising and
controlling workers as they are grouped according to their specific knowledge and skills.
It is designed vertically that each department with specific roles are assigned for one
product or service.

 Divisional Structure is a type of structure that groups each function into a division and
each division contains all the necessary resources and functions within it to support the
specific product line or the operation that is geographical separated.
 Matrix Structure is a combination of functional structure and divisional structure
uniting these structures to provide a balance to the company. In matrix organisational
structure there are two change of command and the teams needs to report to two
managers or bosses (Guo-rong, 2018).

Types of International Organisational Structures:
 Global Company Structure all primary design to organise the global operations based
on separate functions product orientation is considered secondary buy the form using
global function division structure. The complexity arises is to manage the multiple
product lines as a production and marketing are not integrated.
 Multinational Company Structure portraits structure of a single company which is
established by a treaty and governed by international aspects of compliance.
 Transactional Company Structure is divided according to the allocation of resources
as the goal and motive of the entity is to comply with the strategic elements of globally.
Management structure of Tesco:

Functions of Tesco and their interrelationships with other functional units and company’s
objectives:
Tesco is a multinational organisation holding several functional units specific objectives
that contributes to the ultimate objective of the company and make it a success along with
helping it in moving towards growth and expansion. There are numerous functions in Tesco
which are interrelated with each other and to the company’s objective (Hamilton and Webster,
2018).

 Marketing Function is a team that is present in Tesco focusing towards spreading
awareness in market about the offerings of Tesco as a supermarket and as a retailer. The
objective of marketing department of Tesco is to enhance the brand awareness and image
in the minds of targeted audience and attracts the largest amount of customers. These
objectives of the marketing department contribute towards the sales targets of Tesco and
therefore interrelate with the sales department.
 Human Resource Function of Tesco is responsible for bringing the best and the most
expert talent in the company for conducting different activities according to the skill sets
and according to the requirements of the organisation. the Human resource Department is
interrelated with all different operational units of Tesco as the people are the one who
execute all the plans and takes Organisation towards its objectives (Hillary, 2017).
 Finance Function is responsible and plays a role where the team manages all the
financial transactions of Tesco making appropriate financial decisions involving working
capital decision investment decision and many others. the finance department and the
objectives of Tesco is interrelated as the company make appropriate use of the financial
resources with the help of the team as the finance department is responsible for allocating
appropriate budgets to other departmental units and also for developing annual records
according to the accounting guidelines.
TASK 3
P4. Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
The Macro environment of an organisation refers to the external factors and influential
elements that are existing in the business surrounding which has a large influence over the
company’s operations and decision making. The PESTLE analysis framework is considered as
the best tool for identifying the positive and its negative impacts macro environment has over the
business operations. The external environment analysis of Tesco if conducted with the help of
PESTLE as well as these factors are considered the key drivers of change leading to describe the
opportunities and threats in context of the business (Hilton and Platt, 2018).
 Political- The Company is operating in more than 12 to 15 countries of large market that
leaves it exposing too many political factors that can affect the operations and objectives.

The European Union referendum is becoming a risk factor for investors in Tesco which is
imposing a negative impact on the business. Along with it the unstable government in the
United Kingdom is also improving a threat for the company political issues that are rising
due to it.
 Economic- The current economy of the world is suffering due to the outbreak of
coronavirus and as Tesco is a UK based organisation the company also have to face the
negative economic implications of BREXIT that recently took place. Therefore it is
implied that economic factors are also not in favour of Tesco as the domestic market that
is the United Kingdom is facing to economic crisis in the current scenario which is
affecting the business and profit margins of Tesco.
 Social- The consumer shopping trends are constantly changing and becoming dynamic
over the period. it is becoming very difficult for Tesco to identify and determine the
buying behaviour of people. These fluctuating shopping trends and the rapidly changing
demands for goods and services by the customers is making Tesco to face several
problems.
 Technological- The digitalisation and technological advancement brought several new
opportunities for Tesco in relation with improving their customer services and enhancing
the trust of consumers in the brand. The technological factor imposes positive impact on
the business of Tesco as in current scenario as well where almost the whole world is
under lock down due to coronavirus it is easy for Tesco to be connected with the
customers and conduct their business activities of retailing easy. The technological and
digital devices provided Tesco and opportunity to take safety initiatives and to be close to
customers by providing them everything on their doors steps in humans by just few clicks
(Johnson, 2015).
 Legal- In a business legal environment and factor focuses over the areas where changes
law and which can affect the business performance and its objectives. Currently the legal
structure and system of United Kingdom is not stable as the political parties and
government is not stable due to the result of BREXIT. The laws are regularly changing
and the new laws are becoming very difficult for companies like Tesco to impose because
of the complexities and uncertainty of results. So, the legal factor also does not impose
any positive impact on the business of Tesco.

 Environmental- The new external factor that is recently identified and imposing huge
influence over businesses is of environmental elements. This is a positive factor for the
company because Tesco is committed two renewable resources and working towards
generating hundred percent of its electricity for running the business. Along with it Tesco
also promised to reduce their carbon footprint by 50% at the end of 2020. Tesco is also
increasing its consumers to shop with digital means for saving huge cost and time and the
Van drivers who are delivering the goods to people are motivated and strictly instructed
to only use fuel saving routes for making deliveries. As well as these drivers are also
instructed for collecting any unwanted plastic bags from customers for recycling it.
TASK 4
P5. Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
SWOT of Tesco
STRENGTHS WEAKNESSES
 The biggest strength that is considered
in the current scenario for Tesco is its
 Failure in the United States and
Japanese market is the most

leading market share of around 28%.
Tesco is the biggest grocery retailer in
the United Kingdom and considered as
number one supermarket also it stands
on the 4th position in the world as well
on the basis of their sales and revenue
compare with other supermarket chains
in Great Britain (Preuss, 2017).
 Tesco is holding a thriving global
presence along with the tag of leading
market share as Tesco has around 6800
stores in almost 14 countries that too
apart from European and North
American markets. In Asia as well the
company has a huge market share and
geographical diversification.
influential weakness of Tesco. In recent
years Tesco expanded its business
operations to US and Japan but now
these stores are shut down as a
company was not able to export their
operations and execute their plants
effectively in international waters..
 In 2018 Tesco suddenly changed its
club card without any information to
its customers which make them very
furious and unhappy from the
organisation. As the company is
dealing in Retail industry it is not a
good sign that the customers are not
happy and it's easy for them to switch
brands I move to other supermarkets
for shopping.
OPPORTUNITIES THREATS
 By looking at the current situation of
the world economy and more
importantly of the United kingdom the
largest opportunity that is available in
front of Tesco is of alliance with other
brands. The company has been
partnering with other brands which
perfume of growth and success and this
is a very good opportunity for it rather
than expanding in other new
international markets on their own.
 Online shopping stores are also very
efficient opportunity as nowadays
 BREXIT deal where British exit from
Europe is holding serious impacts on
businesses and as well as on Tesco. The
main threat arises because in European
countries Tesco have several businesses
and operation setup which is affected
and negatively impacted because of
commencement of BREXIT(Saleem,
2017).
 Another that is been imposed on Tesco
due to an unnatural condition that is the
outbreak of coronavirus. This is a
deadliest disease which force did all

people are ignoring any contact with
outsiders which are helpful for the
company. Tesco already has a mobile
application for online shoppers and it is
time for it to invest more in online
marketing and shopping for attracting
and keeping close with the customers.
different countries in the world to go on
a complete lockdown for keeping the
people safe but the economy is been
ruined and affected negatively. all the
business from small level to the large
are facing use losses and problems in
surviving in the market with such
situations.
SWOT of Sainsbury
STRENGTHS WEAKNESSES
• Varied, wide market company that greatly
enhances profit margins.
• The capital structure is extremely flexible.
• Many trade policies of Asda, Tesco, Amazon
etc. generate lower employment challenges.
• Reduced-margin, competitive food company.
OPPORTUNITIES THREATS
• Online supermarkets and simple to persuade
of potential path.
• An extension of the international economy by
online partnerships.
• Influences of BREXIT price levels.
• High amount of commitment in foodstuffs
and food service (SWOT analysis of Sainsbury,
2019).
P6, Explain how strengths and weaknesses interrelate with external macro factors.
For understanding the interrelationship of strengths and weaknesses with external macro
factors that is the opportunities and threats the TWOS model is utilised. The framework focuses
over identifying and explaining the interrelationship between factors for Tesco.
THREATS OPPORTUNITIES WEAKNESSES STRENGTHS
 The recent
executions of
BREXIT deal
bringing
 Alliances
which other
brands is the
opportunity as
 The failure
that took place
in the US and
Japanese
 Tesco is the
market leader
holding the
largest Market

numerous
complexities
for businesses
including
Tesco (Sarsby,
2016).
 The economy
is affected due
to coronavirus
in packing
businesses the
most.
Tesco is also
slowly
adopting the
strategy for
growth and
better
expansion
helping in
facing the
coronavirus
situation easily
as in few
operations
burdens are
reduced.
market is
leading the
organisation to
a productive
set of
resources and
lack of
liquidity.
share and the
position of the
number one
supermarket
store in the
United
Kingdom and
The Fourth
position in
around the
world on the
basis of
revenue and
sales standards
(Somers,
2019).
CONCLUSION
By considering the above information and discussion in the report it is analysed and
concluded that business environment is a mixture of internal and external factors that impact the
business of companies existing in it along with its overall performance. In relation with
considering the business environment there are several different types of businesses exist in the
market holding separate scope and sizes according to their legal structures and their objectives.
The ownerships are divided into private public and voluntary organisations and the sizes of these
companies are divided into micro, small, medium and large Enterprises. The second part of the
report is the external and internal environment analysis of a public company. The PESTLE
analysis is conducted in order to analyse the positive and negative impacts of several factors and
in addition to eight SWOT analysis also performed for identifying the strengths and
opportunities of business to respond in relation with the external environment. At the end the
interrelationship of internal strengths and weaknesses of entity are identified along with the
impacts on the external factors and on the business of the organisation as well.

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