Types and Purposes of Organizations in Business Environment

This report covers several types of organisation along with their purpose of operations in the industry. Size and scope on which different kinds of firm work and the functions and interrelation of the functions in the organisation.

Business and Business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1. Different types and purposes of organisation...................................................................1
P2. Size and scope of different types of organisation............................................................2
P3. Link between different types of organisational functions................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business environment refers to the surrounding of business in which it operates. This
surrounding is further classified in two parts that is external and internal environment.
Business organisations are of different types and every kind of organisation is impacted by
the macro and micro environment. This report covers several types of organisation along
with their purpose of operations in the industry. Size and scope on which different kinds of
firm work and the functions and interrelation of the functions in the organisation.
MAIN BODY
P1. Different types and purposes of organisation
The organisations are majorly divided into three parts on the basis of ownership and type
of operations carried out in the business. These three businesses have their own set of purposes
to work in the industry (Contractor and et. al., 2020). These three types of organisations are
discussed below with an example:
Public organisations- These organisations are owned and managed by the government of UK. In
this type of business, government owns majority of the operations of the business (Nikodijević,
2021). Revenue generated by these businesses are considered as the property of the government
of the country. An example of UK based public organisation is BBC, their operations revolve
around the broadcasting of activities.
 Purpose- The main purpose of public organisation is to provide the best quality of
services to the customers and that too at a minimal price. Their another purpose is to
increases productivity ratio of the country. Legal structures- Public organisation's legal structure are decided on the basis of bodies
that are operating. This legal structure is further classified into three bodies, which are
discussed below:
Central government: Public sector organisations whose operations are managed by the central
authority of the country fall under this category. Their legal structure is compiled according to
the rules of ruling party in the parliament. The legal structure of these companies are often rigid
and fixed.
State Government: Operations and businesses managed by the state authority are known as state
government owned organisations (Hock-Doepgen and et. al., 2021). State government owns full
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control and authority of these organisation which means that the legal changes and structure are
decided by the the state authorities.
Local government: The organisations whose operations are managed by the local government are
considered in the category of local government owned businesses. The legal structure of these
organisations are decided by the local figures.
Private organisations- These organisations does not depend on the decision of the government,
they are fully owned by people (Cherunilam, 2021). This sector runs on the decision of their
owners and the revenue generated from these businesses goes in the pocket of private players.
One fine example of private organisation is J.D Sports, they deal in the products and services in
supermarkets.
 Purpose- The sole purpose of private organisation is to earn profit. The inception of
these industries are done to earn money form the market. Legal structure- Their legal structure is dependent on the type of ownership the
company is in to
Sole proprietorship: This type of organisations are owned and managed by a single person. A
single person is entitled to all the risks and profits associated with the business. That person can
decide the pattern of working in the organisation accordingly.
Partnership: These type of organisations are owned and managed by two people. These people
share the profits and the risks equally or on the basis of partnership form. The legal framework in
the organisation is decided on a mutual consent of these two peoples.
Voluntary organisations- These organisations exist for the welfare of society. They follow
several techniques and methods to benefit the people in general (Newman and et. al., 2020.
Example of voluntary organisation that operates in UK is National Council for Voluntary
Organisation (NCVO).
 Purpose: This is a social service and the main purpose of these organisations is to do
welfare of society so that they can elevate from the problems. Legal structure: This can be classified in the following ways :
Unincorporated Association: These organisations work on the basis of social welfare so they do
do any kind of activity which causes financial or mental problems to the people.
Trust: They establish feeling of trust in the people as they don't take any kind of money for their
services.
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P2. Size and scope of different types of organisation
Every organisation has different kind of scope and size in the industry, they all have
different goals and objectives set (Palalić and et. al., 2021). Scope is basically the potential of the
business to grow further in the future and size is the level of operations conducted in the
business. Size and scope of the respective type of organisations are discussed below:
Public sector organisations: BBC is considered as world's largest broadcaster, they have
a huge base of employees working in several countries. Their potential to grow in the
broadcasting industry is also high as they have a lot of competitive advantage in this field.
Size: BBC has a workforce of more than 35000 people who works in several countries. They are
expanding their operations into new countries.
Scope: They have huge scope as this industry is expanding day by day and BBC provides several
services such as radios, channels and online services.
Private sector organisations: J.D Sports is a large supermarket which deals in products
and services like jewellery, clothing and financial services.
Size: J.D Sports is a big firm that has a huge number of employees. Their workforce is around
85000 employees which give them a competitive edge in the industry. Their structure of
employee is diversified as they hire people from different backgrounds and countries.
Scope: Their scope of expansion and growth is high as they are starting to capture a majority of
the market which will help them in future to increase their operations around the globe.
Voluntary organisation: This type of organisations does not have much scope. National
Council Voluntary organisations is considered:
Size: Their operational size is big enough as they have expanded their operations in to several
cities and their member count has increased to around 14000 people.
Scope- Scope in the field of voluntary organisation is narrow as not every person is willing to
contribute to the business.
P3. Link between different types of organisational functions
Organisation functions are distributed to several departments according to their functions
and abilities to perform in the organisation. Functions like marketing, finance, HRM and
operations are distributed to different departments in the organisations (Vo and et. al., 2020).
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These functions works hand in hand and ensures that the working in the organisations becomes
smooth. J.D Sports and their functions are discussed below:
Human resource and marketing: The job of marketing is to analyse the market trend
and promote the products of the organisation (Sebestova and Lejková, 2020). Whereas the HRM
is responsible for recruiting and selecting employees in the organisation. HRM and marketing is
interconnected as the human resource manager hires people in the marketing department and
ensures that the right people are recruited according to their marketing and qualification skills
Finance and Marketing: Finance team is responsible for managing the funds of the
organisation. They are entitled to allocate funds to activities and functional departments
according to their requirement. Finance team makes sure that the marketing team is enough
funded to execute the operations related to promotion.
Production and research department: Production department is responsible for
conducting production activities in the firm and research department is responsible for analysing
the demand of the consumer and making sure that the new product is good enough to sustain in
the market. They are inter related as the production department works on the findings of the
research department and the other department is entitled to collaborate and work together for the
research that needs to be conducted in the organisation.
CONCLUSION
From the above report it can be concluded that there are several types of organisation in terms of
ownership and operations, each one of them has their own scope and growth prospect. The
functions in the organisation are inter related, these help in smooth functioning in the
organisation. Every organisation in the industry has different scope and growth, this depends on
the level of operations of the business. Further PESTLE and SWOT helps the organisation in
analysing the micro and macro environment of the business. Strengths are helpful for the
organisations in dealing with the challenges and the company who is able to overcome their
weaknesses has more scope of expansion in the industry.
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REFERENCES
Books and Journals
Contractor, F.J and et. al., 2020. How do country regulations and business environment impact
foreign direct investment (FDI) inflows?. International Business Review. 29(2).
p.101640.
Cherunilam, F., 2021. Business environment. Himalaya Publishing House Pvt. Ltd.
Palalić, R and et. al., 2021. Impact of networking and business environment on student
leadership styles. International Entrepreneurship and Management Journal. 17(1).
pp.447-475.
Nikodijević, M., 2021. Implications and challenges of using driver-based budgeting in
contemporary business environment. Trendovi u poslovanju. 1(17). pp.49-57.
Newman, C and et. al., 2020. Corporate social responsibility in a competitive business
environment. The Journal of Development Studies. 56(8). pp.1455-1472.
Vo, X.V and et. al., 2020. Local business environment, domestic CEOs and firm performance in
a transitional economy: Empirical evidence from Vietnam. Economic Analysis and
Policy. 66. pp.236-249.
Hock-Doepgen, M and et. al., 2021. Knowledge management capabilities and organizational
risk-taking for business model innovation in SMEs. Journal of Business Research. 130.
pp.683-697.
Sebestova, J. and Lejková, M., 2020. Business Competencies Within Unstable Business
Environments. In Developing Entrepreneurial Competencies for Start-Ups and Small
Business (pp. 41-58). IGI Global.
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