Types and Purposes of Organizations and their Business Environment: A Case Study of Nike Inc.

This report explains the various types and purposes of organizations, their legal structures, and their business environment. It includes a case study of Nike Inc. and covers PESTLE analysis to identify macro environment factors impacting business operations. It also includes SWOT analysis to identify internal and external factors affecting the organization. The report concludes with the interrelation of strengths and weaknesses with external macro factors.

Business and the
Business Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Explain the various types and purposes of various organizations; Public, private and
voluntary sectors and legal structures. .......................................................................................3
P2 Explain the size and scope of a range of various types of organization................................5
TASK 2............................................................................................................................................7
P3 Explain the relationship between different organizational functions and the way in which
they link to organizational objectives and structure....................................................................7
Relationship between different business functions of an organisations:....................................8
Organisational Structure:............................................................................................................8
TASK 3............................................................................................................................................9
Identifying the macro environment factor which have positive and negative impacts upon
business operations:-...................................................................................................................9
TASK 4..........................................................................................................................................11
Internal and external analysis of organisation in order to identify the Strengths and weakness:
...................................................................................................................................................11
Interrelation of strength and weakness with external macro factors.........................................13
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business is referred to a set up that is established with an aim of earning profits in the near
future. Each business has its specific structure and rules as per their legal status. The various
legal status for business set ups are sole proprietorship, partnership, limited liability organization,
etc. Each business has its business environment specifically. Business environment is referred to
the surroundings of a business organization that directly or indirectly has an impact upon the
business operations (Barr and et .al., 2018) . Business environment are of two types namely
Internal business environment and external business environment. Internal business environment
is referred to the internal elements from within the business that affect the business operations
such as employees, managers, etc. The external environment is referred to the components that
are outside the business that and its impact upon the operations can not be controlled by the
business. The following report cover the information about the different types of legal and
organisation structure along with their size,scope, mission, vision and many more. This whole
report is based on the NIKE .Inc. which is a multinational brand of America. This is a public
listed company founded in January 25, 1964 by Bill Bowerman and Phil Knight.
TASK 1
Covered in factsheet
TASK 3
Identifying the macro environment factor which have positive and negative impacts upon
business operations:-
PESTLE analysis:
The Pestle analysis mat be define as a framework which are used by the companies in
order to identify the external factor which have have a grate impact on the different functions of
the business. The Pestle analysis of the Nike Inc. is explained below:-
 Political Factor:- This factor had a grate impact on the working of the company. This
comprises tax rate, political stability, political interference and many more. As Nike Inc.
is a multinational brand then, they have to work according to the rules and regulation of

each country, because different countries have different rules(Hamilton and Webster,
2018).
◦ Positive impact: the political stability of the government of US is very high and due
to this they don't make changes in their policies and programmes on regular basis. So
the Nike Inc. posses smooth functioning of their business operations because of their
long term policies.
◦ Negative impact:- Sometimes company have to import their raw material from
outside countries. The import duty change on regular basis and because of the regular
change in this, sometime cost of product also increase.
 Economical factor:- This economic factor directly impact on the working of the
business. This includes wages, cost, gross domestic product of the country, profit,
growth rate, unemployment rate and many more. The Nike Inc. is required to focus on
the variable interest rate and wage rate of the countries. The value of the currency is
differ from country to country.
◦ Positive impact: if the different resources like labour, electricity, funds etc. are
available for the Nike Inc. in a very effective manner then they can operate their
business smoothly(Kiseľáková and et .al., 2019) .
◦ Negative impact:- if the skilled labour are not available and the fund are available at
the high rate then the company cannot conduct their business properly and ultimately
out from the market.
 Social factor: This factor is related to the change in consume behaviour trends, change I
fashion and preferences of the customer, rate of population, perception values, desire and
many more. In context to Nike Inc., the company have to maintain the quality of their
goods and services according to the need and demand of their potential customer. The
factor which affect the company most is change in preferences and behaviour of the
consumer.
◦ Positive impact:- if the Nike Inc. make and design their products according to the
need and demand by keeping quality factor on top then, the company operate their
business functions smoothly and don't face any problem.

◦ Negative impact:- if the Nike Inc. don't make any changes and innovate their product
and services according to the requirement of the marketplace then they cannot grow
in the market and ultimately sales of the company goes down.
 Technological factor:- This factor not only brings new benefits for the company but
also help the organisation in developing their goods. The Nike Inc. have to focus on
adopting new technology and machinery which not only reduces the cost of production
but also help in producing excellent quality of product.
◦ Positive factor:- if the company brings new technology in their production line, then
this help the Nike Inc. in capturing the large market base because of fulfilling the
demand of the customer in a very effective manner.
 Legal Factor: These factor are totally related to the laws, rules and regulation which are
made by the court of law related to the welfare of the employees and the members of the
societies. In relation to Nike Inc. If the laws changes by the ministry then this directly
impact on the working of the business operation.
◦ Positive impact:- if the company wants to operates their business functions in a very
effective manner and don't want to get disturb by the council then Nike Inc. have to
follow the laws design by the council.
◦ Negative impact:- if the company don't follow the rules and make any mistake
which are not right in the eyes of law then, they have to beer the consequences.
 Environmental factor:- This include those factor and laws which are directly related to
the protection of the environment(Koišová and et .al., 2017). This comprises dumping
and environmental conservation laws. In relation to Nike Inc., the company have to
operates its functions by not harming the environment.
◦ Positive impact:- if the company properly follow the CSR policies and combustion
policies in their production method then can operate their business in a very smooth
manner.
◦ Negative impact:- the company have to pay the penalties and can loss their image in
the market if they don't protect the environment.

TASK 4
Internal and external analysis of organisation in order to identify the Strengths and
weakness:
Swot analysis is used in order to identify the internal and external analysis of the
organisation. The SWOT analysis of the Nike Inc. are as follows:-
Strengths
 The brand value of the Nike Inc. in the
international market is very strong and
the strategies or tactics which are used
by them in the marketing their product
is act as a strength for the company.
 The company has a huge market share
all across the globe because of
managing and hosting the sports events
at the international level. This help
attracting the more consumer base for
the Nike Inc.
Weaknesses
 With the immense use of high rated
technology and innovative machinery
by the Nike Inc. sometimes the rates of
the product goes high which is
generally not accept by the consumer.
 The company face the stiff competition
in the marketplace. Due to which
consumer easily switch their preference
to the other brand and this result in
losing the customer for the Nike Inc.
Opportunities
 The company can promote their
product by hiring famous personalities,
film stars and sports person as a brand
ambassadors of the organisation, which
result in acquiring the more consumer
base(Krajnakova, Navickas and
Kontautienė, 2018) .
 The Nike Inc. have the opportunities to
tie up with the different sports club and
international events all across the
globe. This not only help the company
Threats
 Change in the different policies like
increase in the tax rates in UK, directly
impact on the sales of the company and
to over come from this company have
to decrease their profit margin.
 The main rivals of the Nike Inc. is
Adidas and Admiral sports wear. These
brands are equally famous in the
market and preferred by the consumer.
Due to this there is less chance of
increasing the market share.

in capturing the more market base but
also help in developing the image in
hearts and minds of the consumer.
Interrelation of strength and weakness with external macro factors
 Political:- the company can make their strategies and policies for a long period of time
because of the high rate of political stability in US. This result in smooth functioning of
the company.
 Economic: the resources are available for the company in a very effective manner in US
like availability of skilled labour and funds at low rate. Nike Inc. have a god chance to
grow in the international market and give tough competition to their rivals.
 Social:- as the company produce good quality of products and offer their goods all across
the globe. This helps the company in winning the hearts and mind of the consumer which
ultimately improves the brand image(Miftari, 2018) .
 Technological:- This factor is act as a weakness for the company. Developing in
technology result in increase the cost of goods. This reduces the customer base and
market share.
CONCLUSION
From the above report it is concluded that different types of organisations have different
goals and objectives. The different types of business are voluntary, private and public which
includes different scope, size and structure. The above report concluded that Nike Inc. follow the
hierarchical organisational structure which help the company in better communication with the
employees and achieve a good position in the marketplace. This report also concluded that it is
very important for the organisation to identify the external factor and internal factor which have
a huge impact on the operations of the different business functions. The company have to face
lots of consequences if they don't properly focus on these factor. And also how these internal
factor is relate to the macro factor.

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