Business and Business Environment: Types of Organizations and their Purposes

This report discusses the types and purposes of organizations in the business environment, including public, private, and voluntary sectors and their legal structures. It also covers the size and scope of different types of organizations, the relationship between different organizational functions, and the impact of macro environment on business operations with specific examples. The report analyzes the advantages and disadvantages of interrelationships between organizational functions and the impact on organizational structure.

Business and Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................4
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures......................................................................................................................4
P2 Explain the size and scope of a range of different types of organisations.............................5
M1 Analyse how the structure, size and scope of different organisations link to the business
objectives and product and services offered by the organisation................................................7
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.......................................................................................7
M2 Analyse the advantages and disadvantages of interrelationships between organisational
functions and the impact that can have upon organisational structure........................................9
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples................................................................................9
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organisation..........................................................................................10
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses..........................................................................................................11
P6 Explain how strengths and weaknesses interrelate with external macro factors.................12
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision
making.......................................................................................................................................14
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
The environment in which business is operating consist of internal and external factors both like
employees, needs of customer and expectations, supply and demand, management, government
activities, social trends and economic changes. Various forms of business exist in the
environment depending upon the nature, size and many other factors. It also comprised of certain
trends in business that is emerging as a change in fashion of working. The report below will be
prepared in context to BP PLC which is a multinational oil and gas company of UK and it is a
public limited company listed on London stock exchange(Al and Hussain, 2018). It is vertically
integrated and is present in every area of oil and gas industry. The report will therefore cover the
types of organisation that exist in the business environment and also describing about its size and
scope. The report will also cover the relation between different marketing functions to the
objective of organisation. In-depth details about the positive and negative impacts on the macro
environment by illustrating the same. The report will further cover the deep analysis of internal
and external factors of the BP PLC for examining the strength and weakness associated with it
and along with this report will also provide the inter relation of internal and external factors.
TASK
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures
There exist distinct types of organisation whose purpose vary. Discussing each one in detail-
 Public organisation: These organisations are owned by the government and operates on
the basis of money gained from taxes. This is basically not for profit organisation and
includes schools and hospital to roads and bridges. It provides some services that is
considered as vital for the society(Alsufyani and Gill, 2021). BP PLC itself is a public
organisation .
Purpose- the main aim of BP PLC is to prevent the concentration of control related to economy
and growth with respect to private monopolies. Thus these kind of enterprises also aims to
provide public at large.
 Private organisation- This is run by the individual or the companies rather than any
government entity. This can be sole proprietorship, business owned by two or more

private individuals, small and mid size enterprises and also the corporations and
multinationals.
Purpose- These enterprises plays a major role in development of a country. One of the report
suggests that about 60% of the gross national product in country comes from private sector. The
main objective is to earn profits. The industry also increases capital formation within the country.
 Voluntary sector- It is also referred as third sector, civil society or not for profit sector.
These organisation have some differentiating feature that distinct it from private sector.
In these enterprises, there is no role of local and national government(Anton, 2019).
Charities form of organisation covers the major area in the voluntary sector. There exist
around 165000 charities in UK.
Purpose- The primary purpose of voluntary sector is to create an era of social welfare rather than
thinking about making profits. The way in which voluntary sector achieve their purpose is by
performing wide range of activities and advising the groups related to certain matters. The
existence of these kind of organisation is for some specific purpose like the fulfilment of social
purpose.
Legal structure of organisation- The legal structure of business is the basis for any business
start up. Neglecting this can expose an organisation to some legal formalities in context to BP
PLC may have to pay additional amount and also may bring on some personal liability.
Legal structure of Private sector- Sole traders, partnerships and companies.
Legal structure of voluntary sector- it is in the form of trust that is governed by trust deed that
outlines the goals of trust and involves the name of trustees and about the administration of
same.
P2 Explain the size and scope of a range of different types of organisations.
It has been observed that in an economy not all organisation operate with the aim of making
profit but when business aim so, it is not required for them to operate on the large scale than
includes huge workforce(Antonacopoulou and Georgiadou, 2021). These organisation can be
micro, small, medium or large. The points that differentiates these businesses are the employees
working, number of owners, market share they have and also its legal status.
 MICRO ENTERPRISE- they are the small businesses which sells goods or services to
local area or local market. They are mostly financed by micro credit.

Size- For micro enterprises workforce accounts for about 10 employees with the turnover of less
than $ 2 million.
Scope- The main aim of micro enterprises is to provide employment on wider level in the
economy that is distinct from the formal sector. Another aim is the escalation of trade and
industries in the economically backward area.
 SMALL ENTERPRISE- these enterprises does not require big investment to conduct its
operations and lesser technologies is used. They have the single owner and control of
management is under him(Arnould, Morel and Fournier, 2020). They are associated with
the utilisation of easily available resources.
Size- The workforce accounts for about less than 50 employees and turnover is less than $ 10
million
Scope- It is to cover the activities that come in field of own range. This can be labour intensive
and requires less civilised technologies. The other varieties in this form of enterprises are
manufacturing activities, retailing activities, financial and construction activities. With reference
to future scope of small enterprises government has further announced the reservation policy.
 MEDIUM ENTERPRISE- They are the independent and privately owned business and
its investment in plant and machinery does not exceed to 50 crore
Size- quantum of personnel accounts for about less than 250 employees and turnover of less than
$ 50 million.
Scope- the inclusion with respect to scope is not limited to investment opportunity and private
equity funding but it also includes support for innovation and invention and marketing and
promotion for UK market.
 LARGE ENTERPRISE- this provide development in infrastructure in big volume,
requires huge manpower, capital requirements and also raw material in wide
quantity(Baudot, Dillard and Pencle, 2020).
Size- Personnel accounts for about minimum 5000 employees and turnover of more than 1.5
billion.
Scope- it includes economic growth for the market and generates foreign currency in hige
quantity and also create employment opportunities for million of people.
In context to BP PLC, there exist 60000 employees that means this comes under the category of
large scale enterprises and is a public company and conducting its operation with the net income

of around $18.08 billion and equity of around $90.44 billion. Products offered consist of
petroleum, natural gas and motor fuels. It also has various service stations in UK.
M1 Analyse how the structure, size and scope of different organisations link to the business
objectives and product and services offered by the organisation
There exist the relation between objective pursued by the organisation and the structure of
organisation. The leaders and managers of an enterprise is able to gain an overview of roles and
responsibilities associated with different functional areas(Carayannis, Ilinova and Chanysheva,
2020). A well articulated organisational structure help in early achievement of objectives and
also get to know in detail about the product and services offered by them. Organisations are
differentiated on the basis of its area of operations and also the goals aimed by them. The
distinctive feature can be its size also.
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
Business function are the activities that an enterprise operates to run the business successfully. In
context to BP PLC business functions includes production, sales, marketing and research and
billing. There exist the relationship between organisational structure and function.
 Marketing- this department works by taking into consideration like the satisfaction of
needs of customer, value creation and also to maintain long term relationship with them.
This works with other function like finance, operations and human resource so that success
associated can be enhanced in a way-
1. To involve competent workforce who owns the responsibilities for the implementation of
programs and strategies associated with the marketing
2. To confirm that required inventory is available when the customer needs them
3. It also helps in setting the correct prices by using the knowledge of cost of production.
4. For ensuring that amount is available with the enterprise to run the programs of
marketing like promotions.
 Finance- this department is responsible for handling the corporate money that includes
the management of cash flows and provide the report on same. This department of BP

PLC provides the surety that enough amount is available with the company that supports
in conducting the operations effectively
Therefore the finance department of BP PLC is required to cooperate with other department as
well in order to run its operations smoothly-
1. Having a qualified staff with the accounting and finance skills
2. Proper allocation of funds as per the plan prepared on training and development and
promotion and daily expenses
3. The type of finance strategy considered at the time of planning of the purchase of capital
goods or a plan to make an investment for project(Drempetic, Klein and Zwergel, 2020)
4. Understanding of sales targets is required from the department of marketing to ensure
that BP PLC is making enough profits
 Human Resources- the HR department of BP PLC is very competent in its business.
This department combines with other functions like marketing, operations and finance
with the objective of -
1. To make sure that BP PLC is available with enough resources that does not impact the
cost of production and will also not ruin the business process
2. To correctly and timely handle the disciplinary issues and complaints with respect to
employees
3. To comply with the rules and regulations in context to personnel relates to its health and
safety.
Organisational structure- it is the format that describes the way in which the activities of
business are directed towards the achievement of goals. Activities referred above comprises of
rules, roles and responsibilities. There can be Functional structure, Divisional structure and
Matrix structure. In context to BP PLC, the structure mentioned above has the link with the
functions of organisation in some way or the other. Functional structure separates department- this structure is adopted by most of
organisation and as per this functions of organisations move intro separate department
and that is reported to managers of department which is directed to someone higher
above the post of manager.

 Divisional structure comprised of enormous branches- this is associated with the
widespread of functions across different branches. This is pursued by BP PLC as it
consist products in different lines which requires division of it in different group of
functions. Matrix structure aids in providing flexibility- This form of structure provides flexibility
in the distinct business functions. As per this employee of organisation on the basis f
function department such as marketing or finance but in contrast it can also be assigned
task under different managers.
M2 Analyse the advantages and disadvantages of interrelationships between organisational
functions and the impact that can have upon organisational structure
Every function of organisation consist some pros and cons with respect to its working. There is
the difference when function is performed individually and when in relation with other functions.
The benefit of linking of different organisational functions is that it provides the number of skills
and opportunities all together and it impacts the organisation positively(Ganguly, Talukdar and
Chatterjee, 2019). Major disadvantage that is observed in relating different functions is the arise
of conflicts, a department with low growth and poor communication.
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
Macro environment of business can be examined of BP PLC though PESTLE MODEL. This
will also reflect the positive and negative aspects of the external environment. Factors affecting
the external environment of BP PLC includes-
 Political factors- These factors get affected through the action and policies of
government. Along with taxation policies related to the company it also includes trade
disputes and policy initiatives. With reference to BP PLC the impact of politics is very
huge in determining the progress of oil business. For the sake of getting benefits from
these factors, company has been funding the political campaigns. Some areas of company
gets influenced through the operational decision making strategy.
 Economic factors- these factors are expressed in financial terms and includes interest
rates, employment rates, inflation and exchange rates. This factor demonstrate the way
for BP PLC to reach the strategic decision. In the recent scenario inflation rate rises to
next level that has affected the operational cost to increase from the current level and the

higher growth of national income have increased the demand of products offered by BP
PLC.
 Social factors- this has a direct impact on the commercial activity of the business.
Determinants of this factor are demographic considerations, trends in lifestyle, beliefs of
consumer and changing attitudes towards the working condition. Due to increase in
population at high rate will automatically rise the demand of oil products of BP PLC in
the upcoming years(Gupta and Sharma, 2018). This also means that as people will
become more aware with respect to environment concern BP PLC is required to change
the nature of its product.
 Technological factors- the use of technology is very significant in any business
environment and change in same should be taken into account. The disturbance that can
be emerged due to constant change in technology is unpredictable for BP PLC. BP PLC
therefore has implemented the system of secure IT to control and monitor the movement
of oil for the purpose of flow of oil via big pipelines.
 Environment factors- This includes elements like carbon footprint, change in climate,
impact of weather events and natural resources. Seeing the present era, people are more
concerned about sustainability of environment and it has also been observed that
authorities that are responsible for maintaining the environment issues are obligating that
a major reduction in environment is because of the companies. The performance of BP
PLC get affected by attitude of consumer with respect to change in climate that has also
impacted the products offered. Legal factors- These factors emerge from the regulatory environment that impacts
economy at large. It includes regulation of industry, licences and permit and laws relating
to protection of employment and consumer. These factors are majorly affecting BP PLC
because one of the recent incident related to the age discrimination has affected the
operations of company significantly.
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organisation.
Despite facing various challenges BP PLC is potential to attract the investors by having
remarkable profits. Company has used the PESTLE model in order to get the in depth
understanding of the external environment of business. This is very important for the successful

conduction of operations(Holgado, Macchi and Evans, 2020). This analysis will also brief about
company's position in the industry, its growth perspectives and risk face by them. Therefore the
examination of external factors will open the doors of opportunities existing in the external
environment.
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses.
In order to analyse the internal strength and weakness of organisation that is the internal analysis
will be done with the help of SWOT analysis in context to BP PLC. With the help of this
analysis, company is able to understand about its lacking and opportunities existing in the
business environment. It has been observed that strength and weakness of company can be
controlled but the threat and opportunities are uncontrollable as it exist outside the business.
 Strength- it provides the description about the area where company excel at and
differentiate from the competition like strong brand, loyal customer base and use of
innovative technology
 Weakness- This restrict the organisation to perform best. This is the area where
organisation needs to enhance itself for the purpose of remaining competitive. It includes
high level of debt and inadequate supply chain
 Opportunities- They are the positive factors which provides an organisation with the
feature of competitive advantage(Kroh, Luetjen, Globocnik and Schultz, 2018). It
includes increased level of sales and expanded market share.
 Threats- These factors have the capacity to negatively impact the organisation. It
includes rising cost, increasing competition and stringent labour supply.
SWOT analysis of BP PLC-
STRENGTH
 BP PLC is conducting its operations
with variety of brands that has helped
the company in creating a diverse
portfolio and increase revenue level
 Due to strong brand loyalty, BP PLC
has been able to take part in other
market and industries(Martinsuo and
WEAKNESS
 Due to various oil disasters, caused a
damage to environment that negatively
impacts the management of company
 Due to the existence of some dishonest
employees and executives, there has
been the major loss to company and has

Geraldi, 2020)
 By detailed understanding of the
customer it serves and strong relation
with them, BP PLC is able to provide
the customer as per the demand
somewhat declined its brand image
 The focus of BP PLC is on the energy
sector but it results in depletion of
natural resources the consequences of
which company will face in long run
OPPORTUNITIES
 By investing in research and reposition
strategy, BP PLC have the potential to
become the leader in alternative source
of fuel and energy market like solar and
hydrogen power
 BP PLC has the opportunity in
partnering with the developing
countries for solving the infrastructure
issues
 also BP PLC can focus on the
development of its subsidiaries that are
outside the scope of petrochemical
focus
THREATS
 issues related to environment will
continue to arise that is the threat for
BP PLC and non formalization of
corporate social responsibilities
 If BP PLC continue to neglect poor
safety practices, that it will continue to
face lawsuits and penalties.
 Major threat to BP PLC is from Shell
and Chevron as they are solving
environmental issues in better way.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
It is very important to know the influence of strength and weakness on the external factors to
determine the current scenario of BP PLC. The interlinking is described below-
 Political factors- these factors provide the impact on business operations by involving
elements like political disturbance or political instability. The strength and weakness
associate with this factor is mention below-
Strength
Though the primary business of BP PLC is oil
and gas, but its expansion in other areas like
lubricants and energy has empowered it to
Weakness
The only focus of BP PLC is on energy sector,
thus not present in non energy sector have long
term impact on the firm

manage the risk associated with diverse
operations
 Economic factors- these factors provide their impact in terms of finance. These factors
are easily quantifiable and can be compared easily with other factors as well(Simetinger
and Zhang, 2020).
Strength
Due to presence of strong customer base and
have the potential to retain them for the longer
period of time, BP PLC enjoys huge profits
and benefit of increased revenue
Weakness
As the company is facing some losses as per
the recent scenario, it has become difficult for
BP PLC to bring the investors on the ground
 Social factors- these factors are of utmost importance as it describe about the ongoing
trend and culture outside the business world.
Strength
Due to the presence of BP PLC in diversified
market, it is easy for the company to track and
keep a record of the trends that are existing as
well as about the culture
Weakness
As the company BP PLC was involved in
number of scandals, it has negatively impacted
its social image
 Technological factors- These factors provide the company with the use of most
innovative and upgraded technology that helps BP PLC to keep ahead from its
competitor in terms of usage of more advanced form of technology(Wei and Chen, 2020).
Strength
By performing activities in different countries
like Europe, North America, Africa and South
America, BP PLC has access to all
technologies that will upgrade its way to
produce the oil and gas
Weakness
With the use of outdated technology in some
countries, it has cause the BP PLC in
technological disruption

 Legal factors- this expose the organisation to face the fines and penalties by neglecting
the regulations of the sector and the market where BP PLC is conducting its
operations(Szabo and Webster, 2021).
Strength
As the BP PLC have the strong brand image, it
does not face complex legal procedure and
penalties
Weakness
Due to diverse field of operations, BP PLC is
unable to follow and implement the rules and
regulations of different country quickly that
sometimes lead to negative publicity.
 Environment factors- these factors have the serious impact on the working of BP PLC
because the environment in which it is operating needs to be considered before initiating
the operations.
Strength
BP PLC while operating in different country
has prior concern regarding the following of
environmental standards in order to operate
effectively and efficiently .
Weakness
Directly or indirectly BP PLC is harming the
natural resources because of several issues
faced by it with respect to production of oil and
gas
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision
making.
The use of SWOT analysis in examining the business environment of BP PLC plays a major role
in making effective decision for the business(Vitolla, Raimo and Rubino, 2020). Because of the
factors like strength and weaknesses that are internal to organisation are very crucial for the
purpose of making decision. Company is very serious when considering these factors as it
depicts the capability to seize an opportunity(Zammel and Najar, 2022). This analysis will help
in responding to new trends and in implementing the new technology appropriately.
CONCLUSION
Business environment of BP PLC comprised of internal and external environment both. Each
factor affects the operation in some way or the other, that means it can be positive as well as
negative. The report prepared above has dictated the the interrelation of external and internal

factors and the type of organisation that exist in the business environment. It may vary on the
basis of size and scope and the nature.
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