Business and Business Environment: Types of Organizations and Their Functions

This report provides an overview of different types of organizations, including public, private, and voluntary sectors, and their legal structures. It explains the size and scope of different types of organizations and the relationship between different organizational functions and objectives. The report also identifies the positive and negative impacts of PESTLE factors on business operations. The subject is Business and Business Environment, and the course code and college/university are not mentioned.

Unit 1 - Business and
Business Environment

TABLE OF CONTENT
PART 1............................................................................................................................................3
INTRODUCTION ..........................................................................................................................3
P1 Explaining different types and purposes of organisations; public, private and voluntary
sectors and legal structures..........................................................................................................3
P2 explaining the size and scope of a range of different types of organisations ........................5
P3 Explain the relationship between different organizational functions and how they link to
organisational objectives and structure .......................................................................................7
PART - B.........................................................................................................................................9
P4 Identifying negative and positive impact on business operations..........................................9
P5 Internal and External analysis to identify the strengths and weaknesses.............................12
P6 Interrelation of external factors with strength and weakness...............................................14
CONCLUSION .............................................................................................................................16
REFERENCES..............................................................................................................................17

PART 1
INTRODUCTION
As we all know that understanding business environment plays a vital role in the success
of any business. Basically, it is a collection or sum of all external and internal factors which
includes customers, staff members, suppliers, management and government, social trends etc. the
present report will be based on business environment in which it is going to cover an overview of
different types of organization. The study will provide information about vision, mission,
business objectives, size and scope of the organization. At the end, the report will also provide an
information about different functions, its impacts on business structure and their interrelationship
including benefits and drawbacks.
P1 Explaining different types and purposes of organisations; public, private and voluntary
sectors and legal structures.
An organisation is a group of people working together to achieve business success and
goals. It can be any union, corporation, charity where people work hard as per their skills and
knowledge so that they can easily make good market position (Canel and Luoma-aho, 2018).
Every business organization needs to follow rules and regulations then only they can work
effectively. There are different types of organization such as partnership, sole proprietorship,
public limited companies, private limited companies, LLC etc.
Public sectors
This type of business organization are not for profit government owned which offers
various services to people so that they can avail it anytime (Bisogno and Donatella, 2021).
Basically, this type of sectors are established for the purpose of social support and providing
betterment of the society. In other words, this type of organisations are set up for a purpose other

than that of financial gain. Talking about major purpose of public sector is that it provides
effective services which can help people in every aspect. This type of organisation deliver great
services and quality products without concentrating on generation of profits. Example- Unilever,
BBC and Barclays plc. Lets understand this by taking any example of BBC.
BBC- The best example from which one can easily understand about public sector is
BBC- British broadcasting corporation. The organization offers graduates training in production,
technology, journalism and business through its new talent schemes. Hence, it is said that it is
delivering a positive contribution towards the society (Abdi and Makiabadi, 2019).
Legal structure- talking about its legal structure, it is a statutory corporation for culture, sport,
media and digital.
Private sectors
This type of organisations are established for generating profit, it can be corporation,
company, business. Basically, this company is operate in the private sectors which means that
they are owned by group people or individuals. In other words, this type of sectors are not owned
by the government. The main purpose of private sector is to provide customers with quality
products and services and also earn profit to survive and continue business operations. As we all
know that job opportunities are very high in the private sector because people want to achieve
growth quickly having large scope in the market relating to fields like operations, marketing,
finance and human resource. To be successful, the private sector needs follow authorized laws
and regulations.
Bestway group - The best example of private company is Bestway group provides
various types of industries that are successfully working under the business. This firm is a private
organisation that has a wide scope in the market with almost 125000 independent retailers
working and 64 caterers that are dedicated towards work.
Legal structure- this private company has achieved massive popularity in the industry by
making significant changes in the business environment that are very important for the success of
business.
voluntary sectors
This type of sectors are established for carrying out social activities which is undertaken
by some specified purpose but not for profit. Basically, it is run by people who want to support

other people and provide benefits to them. This kind of supportive individuals do not get paid for
running the organization.
Macmillan Cancer Support- The best example of voluntary sector is Macmillan Cancer
Support which is one of the leading and largest British charities in the UK. This organization is
established to provide specialist health care, financial support, information to needy people who
are affected by cancer. It also focuses on campaigns for better cancer care of patients and look at
the emotional, practical and social impact cancer can have (Limb, 2022).
This organisation follow flat organizational structure the reason behind that is there is no
middle management. With the help of its team, the organisation support people who are suffering
from cancer having almost 7700 healthcare professionals across the UK working for the
betterment of people.
P2 explaining the size and scope of a range of different types of organisations
 Micro enterprises- This type of organisation plays an important role for the success of
economy. It refers to a small business that employs few people who want to achieve
something in life. To establish such type of organization less than 10 lakh investment is
needed. There are less employment level available in micro enterprises. This type of
organization operates with the support of fewer than 10 people. With the help of little
investment and capital loans from commercial banks the micro companies can establish
their business.
 small and medium enterprises- Basically, it is a type of organisation which are non
subsidiary, independent firms which employ fewer than a given number of employees.
Nowadays, small and medium-sized enterprises creates new job opportunities for the
people who want to make career in the market where competition is high (Álvarez
Jaramillo, Zartha Sossa and Orozco Mendoza, 2019). This type of companies are
contributing good amount of GDP which helps economy achieve success.
 large enterprises- talking about this type of enterprises the large companies have at least
5000 staff members having annual turnover more than 1.5 billion euros. This type of
organisation produces the majority of total revenue which helps them achieve success as
compared to others.
BBC

size and scope Talking about size of BBC, there are almost 22000 staffs in total working
together for the success in the field for broadcasting. Out of these staffs 19000 are in public
sector broadcasting who work hard for the betterment of people (Canel and Luoma-aho, 2018).
 Vision- To serve all the audiences through the high quality and services which educate
entertain and inform.
 Mission- To provide high quality output to people and serve them to increase public
interest.
 Objectives- The main objective of BBC is to deliver services which is beneficial for
public purposes.
 organisational structure- The company follows hierarchical structure where different
levels of authority are available with a chain of command. This is how they are able to
connect with each other or you can say connect multiple management levels within the
company.
 Legal structure- it is a public limited company
 Stakeholders- managers, employees, shareholders, customers, suppliers and local
community.
Bestway group
Speaking about size of Bestway group, there are almost 28000 people working across the
world as per their skills and knowledge divided into various departments. Because of them
company achieves 4.2 billion turnover. They have 125000 retail independent stores and more
than 60 warehouses across the nation. Types of products which are offered by this group are in
the industry like banking, pharmacy and retail.
 Vision- vision statement of the company is to provide the support of finance and
materials to people
 Mission- mission of Bestway group is to provide advance education to the people who
really need it.
 Legal structure- it is a private limited company
 Stakeholders- suppliers, shareholders, retailer’s and customers are the shareholders of
the Bestway group.
Macmillan Cancer Support

Macmillan Cancer Support being a voluntary based organisation requires low investment
costs but seeks to work hard to provide the best possible support for people living with harmful
disease called cancer (Bainbridge, 2020). They also seek to work with a wider goal of reducing
cancer at global level for the betterment of society. Thereby they are working in all areas for
social services. The company has supported more than 2.4 million patients who are affected by
cancer. Not only this, the charity organization work day and night to offer them support related
to financial cancer support and practical support through services.
 Vision- to be the leading voluntary organization offering care and comfort for people on
their cancer journey.
 mission- the main mission of this organisation is to reach as much as patients to support
them and fight against disease.
 objectives- the main objectives of this organisation is to improve the lives of people who
are affected by cancer.
 organisational structure- flat organisational structure is followed by Macmillan cancer
support
 stakeholders- donors, government, doctors, volunteer, director, fundraisers and trustees
are stakeholders of Macmillan cancer support.
P3 Explain the relationship between different organizational functions and how they link to
organisational objectives and structure
There is increment in the competition from various other organizations within the industry which
produces FMCG products, this results in increment of risks. To overcome the risks associated,
companies hire various departments and these departments plays a significant role to main a
reputed position of the organization.

FACTSHEET
Following are some departmental functions of Unilever Public Limited Company: Marketing – Marketing department plays an important role in the functioning of
Unilever. It helps to develop cordial relations with customers and other businesses. The
department uses different tools and techniques of marketing to deliver a strong brand
image and maintaining a position in the market. They organize various marketing
campaigns which allows the company to find new markets. Use of cost effective
marketing techniques are used by the company. Social media involvement helps to
build brand loyalty and maintain stability. It is the policy of the company to approach
each customer and helping them solve their problems instead of forcing them to buy its
products. Finance – Finance department of the company maintains all the expenditures incurred
and other legal obligations of the company to manage the entire investment process of
the organization. It is done in order to maintain overall profits of the company. The
company focuses on effectively improving its finance team to achieve their maximum
potential to achieve the objectives of the company. Finance required for day to day
functioning of business operations are all managed by the finance department of the
company. Human Resource – They are the greatest assets of the company. Their work is to carry

out strategic management effectively in their internal work processes. This helps in
utilizing the resources efficiently. Their focus is on introducing best recruitment policy
to hire skilled employees to add on the company's benefit and help to increase their
productivity. The department is precious and a source of competitive advantage. It
helps in enabling the organizations to deal with the external challenges faced by the
organization.
 Operations - operations of Unilever are involvement in retail products having shorter
shelf life because the demand among the consumers is high and the another reason is
product deterioration. It includes products which are perishable and includes smaller
products like household products and fashion products. Operational department of the
company seeks to look at the overall production process of the company. They provide
smooth and efficient services to their customers in order to meet their demand and
fulfil the ever-changing needs of the consumers.
Advantages of organizational functions are: Specialization – The organizational function helps to achieve specialization benefits in
the operations. Scope of expansion – It offers wider scope for expansion and does not face problem of
limited capabilities of a few line managers.
 Higher efficiency - As the department and employees perform specialized products,
this helps to achieve higher efficiency.
Disadvantages of organizational functions: Complexity – The organizational function is a slightly complicated and cannot be easily
understood due to its various technicalities. Limited perspective – Functional manager creates work boundaries and thinks only in
the interest of his own department.
 Delay in decision making- There is lack of coordination among the executives of the
functional department which causes delay in decision- making.

PART - B
P4 Identifying negative and positive impact on business operations
PESTLE analysis
This part is based on Unilever, PESTLE analysis of Unilever indicates the impact of political,
economical, social, technological, legal and environmental factors that impacts its day to day
business operations:
Political Factors
Political factors affects the performance of Unilever. The impact of government on the firm
plays a major role in its performance. Factors which affects Unilever are: Political stability of most countries – Political factor regarding the political stability of
most of the countries acts as opportunity for Unilever. For example: Political stability in
the United States reduce the challenges that the company has to face for implementing its
strategies in the country (Sołoducho-Pelc and et.al., 2020). Political issues in the European union – Issues in the European Union acts as threats to
Unilever as it creates potential threat against the company's operations in the region's
consumer goods market Growing free trade relations – Growing free trade relations with other countries specially
developing countries acts as opportunities to Unilever.
Economical Factor
Performance of Unilever depends upon the situation of economies around the world. Economic
factors that affects the operations of Unilever are: Increasing wages – Increasing wages in developing countries acts both as opportunity as
well as a threat to the company. Opportunity can be defined as the increment in the
spending power of people that comes with increasing cost of operations which creates a
threat to Unilever. High Growth of Developing Countries – Developing countries grow in terms of market
size and value which can benefit Unilever and it can expect business growth. For
example, China presents major growth opportunity for the company. Economic stability of developed countries – Economic stability of other countries helps
Unilever for gradual but steady growth in its business operations.

Social Factors
Social trends and issues affects the business performance of Unilever. Following are the socio-
cultural factors which affects the business operations are: Rising health consciousness – Unilever ensures that it should grow through products that
fulfil the growing needs of consumers for healthy products (Jose, 2021.). Rising environmentalist behaviour – Rising environmentalist behaviour acts as an
opportunity for Unilever to attract more customers by improvement in the environmental
impact. For example, the company can reduce the energy consumption by adopting
energy-efficient technologies. Gradual reduction in gender inequality – Company can experience higher sales on
improving incomes among female consumers worldwide.
Technological Factors
Unilever depends on the technology to widen its customer base. Following are the technological
factors that affects the business operations of Unilever: Rising business automation - This factors helps Unilever to enhance its operational
efficiency. For example, new business operations equipment helps to enhance inventory
monitoring to make the distribution process more efficient. It can also act as threat to the
company as it increases the competition of other firms even the small markets. Rising R&D Investments – Rise in investments in the research and development
department of the company can increase the competitive advantage of other firms
operating in the industry. Decreasing cost of transportation – Decreasing cost of transportation will allow other
firms to transport their goods to other location with more ease. Therefore, it acts as a
threat to the company.
Legal Factors
Unilever must follow the rules and regulation prevailing in the market to reduce the barriers to its
customers good business. Following are the legal factors which affects the business operations of
Unilever: Increasing complexity of environmental regulations – Unilever can focus on maintaining
a good image of its company by matching the social responsibility of the company with
environmental regulations (Chernobay and et.al., 2020).

 Strengthening international patent laws – This factor can facilitate the growth of the
business . For example: new patent laws in the developing countries helps to reduce the
patent issues which Unilever has to face. Strengthening consumer laws – The factor of strengthening the consumer laws act as an
opportunity to improve the customer quality service and product quality standards.
Environmental Factors
Ecological trends and conditions influence macro environment of Unilever. Following are the
environmental factors that affects the operations of Unilever:
 Business environmentalist – Rising interest in business environmentalist creates
opportunity for the company to improve its environmental programmes to attract
consumers who are concerned about the environment.
 Sustainability - Company can enhance its sustainability programmes to remain
competitive in the industry. For example: product innovation can help to increase
efficiency.
 Increasing complexity of environmental programmes – This factor act as an opportunity
to the company to improve its competitive edge through corporate responsibility.
Positive and Negative impacts of macro-environment
Macro-environment are the factors which affects the business operations from outside
boundaries. These kinds of factors affect the business operations at a macro level that is at a large
level and increases its share in the market. It is a process through which firms can identify the
competitors and can remain sustainable in the market. Macro factors assist Unilever to identify
the pricing policy of different organizations and this allows them to set prices according to the
prices offered by their competitors.
Positive impact of the macro environmental factors clearly defines the market position of
Unilever and tells about the perception of customers towards the company. Management is able
to identify the competitors in the market that can influence its operations and get a better control
over it. In order to raise the capital, management of the organization can easily identify the stake
holders for the organization (Abu-Rumman, 2021). It allows the company to compare their
performance with the performance of their competitors.

Negative impact of macro environment is that without proper analysis of macro-
environmental factors, management may not be able to take the proper judgement. Wrong
analysis of the factors may affect the overall profit of the company. Another factor is that the
management of the company sometimes is not able to identify its competitors which leads to the
loss of market share.
P5 Internal and External analysis to identify the strengths and weaknesses
SWOT analysis
SWOT analysis indicates the strength, weaknesses, opportunities and threats to a business.
Following is the SWOT analysis of Unilever:
Strengths
 Unilever has a global market share as it operates in many countries around the world
which creates a brand image among the consumers all around the world.
 The company has a wide base of portfolio brands which allows them to maintain a
position in the market.
 The R&D department of the company is invested in a way which brings innovation in the
products according to the preferences of the consumers.
 The company uses strategies that wins the heart of their consumers who are interested in
using its product. Because of the company's unique distribution process and flexible pricing, the company
creates a distinct competitive advantage.
Weaknesses
 Unilever operates in a market where there exist a cut-throat competition. The other
global giants like P&G and Nestle and also the local players never fails to challenge the
dominance of the company.
 There are people in other parts of the world that uses products which are natural and
uses traditional forms of products. The company's products can be easily replaced with
its substitute products prevailing in the market acting as a weakness to the company. There is limited diversification for the business and Unilever is weak because of this
reason. The company cannot diversify its business outside the boundary of consumer
goods industry.

Opportunities
 With the introduction of Globalization, preferences among the consumers are changing
and they are opting for western lifestyle (Tien, 2019). This creates tremendous
opportunities for Unilever to diversify their customer base by offering them products
according to their needs.
 Consumers are shifting their preferences to healthier products and it is the opportunity for
Unilever to make use of it by creating a product segment that is meant for the consumers
who are health conscious. Innovation in the existing and the yet to be launched products
can be specially made for the customers who are very much conscious about their health. Majority of the population in the world is influenced by the social media and this can be
an opportunity if the company can shift towards social media from other sources. This
will reduce the cost making the company efficient.
Threats
 The global economic crisis prevailing in the world has reduces the profitability of
Unilever like many other FMCG companies. The disposable incomes of the consumers
has reduced thus resulting in the decrease of spending power of the consumers, that is
they are buying less.
 Unilever being a big brand and has a high dependency on the retail stores thus creating a
threat to the company. Big stores of retail business are establishing their own private
label brands which makes it difficult to remain competitive in the market (Valente and
et.al., 2019).
 Unilever has launched Ayush Lever because of the recent growth in the use of Ayurveda
products. Company ensures to combat this threat in a long run.
 Competition is high in the market. Many competitive brands like Nestle, P&G and others
makes it difficult for the brand to remain sustainable in the market. The competitive
brands are continuously launching new products and keeping the price competitive which
is nothing less than a major threat to the organization.
P6 Interrelation of external factors with strength and weakness
Sometimes, organizations are affected by external macro factors and these factors are
linked with the strengths and weaknesses. Many organizations are not often able to identify the

various factors that affect the decision of the management directly or indirectly. These factors are
identified with the help of external macro factor analysis (Kpoku, 2021).. Strengths and
weaknesses are factors which gives power to the company. If the analysis of these factors is done
properly then efficiency and effectiveness can be achieved. Strength and weakness are
interrelated to each other and have to be carefully examined in order to achieve increment in
external macro factors. Macro factors can positively as well as negatively affect the functioning
of the company.
Macro factors are analyzed through pestle analysis which shows various factors like
political, economical, social and others that influence the functioning of day to day operations.
For example: political factors affects the business politically like government pressure thus
weakening the organization. PESTLE analysis provides Unilever the opportunity to evaluate the
external factors and find suitable approaches to overcome any kind of barriers. These factors
includes competitors policy, changes in the market, policies of government, other legalities etc.
SWOT analysis is the best approach to identify the internal and external factors in the
organization (Wilson and et.al., 2018). It is important for Unilever to identify the strengths and
weaknesses to evaluate the issues faced by business to achieve the prescribed goals.

CONCLUSION
To conclude, business environment is a wide topic where one can understand about the
range of different types of organisations to compete the business in international market. From
the above report it has been concluded that vision, mission, size, scope and products are some
important points which helps company to improve their market position in the competitive
world. Furthermore report has summarized various functions of the business through finding out
benefits and drawbacks of interrelated functions. In the second part of the study, it has concluded
about the external macro environment factor which can impact business, it has been done via
using model like pestle analysis. In addition, it has also concluded about micro environment
factors which can impact the performance of company, it is understood through model known as
SWOT analysis. At the end, by presenting critical reflection, the study evaluates the influence to
decision-making process.

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