Business and the Business Environment

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
P1- Different types and purposes of organizations......................................................................3
P2-Size and scope of different types of organizations.................................................................4
P3-Relation between different organizational functions and their link with structure and
objectives.....................................................................................................................................6
P4- Impact of micro environmental factors on the operations.....................................................7
P5- Internal and external analysis of the specific organisation in order to identify the strength
and weakness...............................................................................................................................8
P6- How strength and weaknesses interrelate with the external macro factors.........................10
Macro ........................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business refers an activity of making money by buying and selling products for different
purposes. Business environment is sum of both internal and external factors like political, social,
economic, customers, employees and others (Čepel and et.al., 2018). This present study is based
on Sainsbury’s that is the second largest chain of supermarkets in the UK, founded by John
James in 1869.This present study is going to show impacts of internal and external
environmental factors on performance of company. It will analyse impacts of external
environmental factors like political, social, environmental and others.Further, it will also discuss
impacts of organizational structures like hierarchical, flat and others. Different structures have
advantages and disadvantages and affect flow of information. Different types and size of
structures also have different legal entityand as per the legal entity and structure they have to
follow rules for protecting themselves against lawsuits.
P1- Different types and purposes of organizations
Private:All those companies that are being owned by individuals are known as private sector
organizations. They are being run for earning money and making profit. Profits that are being
generated are being divided and benefited to owners, shareholders and investors. In regards to
financing it can be said that these organizations are financed by private moneycollected from
shareholders and bank loans. It is one of the main parts of economy. All organizations of private
sector are privately owned and for profit businesses (do Monte, 2017). It may be sole traders and
partnership enterprises. Revenue generated by such organizations is being divided among
business owners and shareholders and some amount is reinvested in business for earning more
profit by satisfying customers’ needs.Sainsbury’s is private sector organization as it is owned and
controlled by groups of people rather than the government.
Public: It consists of those companies that are being owned by the government. The main
purpose of such organizations is to provide services and goods to people for their beneficial and
improvement of living standard. Such organizations are being run by the government and money
is being raised generated from revenue from local people. Whatever amounts they earn are being
re invested in business for providing better services to people. Unlike private organizations, these
organizations do not focus on making profit and distributing money or revenue among owners
and partners. It may be public limited and public (El-Ghalayini, 2017). Example of public
limited company is HSBC.
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Voluntary: It is also not for profit organizations that are run as well as owned voluntarily by
trustee and people who want to help people and join such organizations voluntarily. Main aim of
such organizations is supporting vulnerable and needy people that cannot help themselves and
require help of others for living a better life. So, overall it can be said that such organizations
work for helping out community. For operating business they require money that is being
collected from donation and gifts. Profits are being regenerated in voluntary sector of
organizations and it can also be run and known as social enterprises. American Red Cross is
humanitarian organization that provides emergency services or assistance to people, affected
from disaster and is in need (Liao and Huang, 2016). Examples of voluntary sectors are, Cancer
Research UK, The National Trust, Oasis International Association, Wellcome Trust.
Legal structure
The legal entities are organisation that has legal rights and responsibilities including tax filing.
There are two most important requirements for enterprise to be complaint with the low, first its
policies need to be consistent with laws.
The legal structure or requirement of public limited is that liability of each member is
unpaid amount on their shares. It has separate legal entity from its members and the company is
owned by Board of Directors. Minimum 2 shareholders are required, issue shares to the public to
value of £50,000, it registers with companies house, at least 2 directors – one must be individual,
have qualified company secretary. Examples of public company are, royal dutch shell, Unilever,
HSBC, tesco, vodafone, BHP, national grid etc.
Legal structure for private company is it is treated separate entity and alos register as
taxpayer. It has separate life from the owners and duties and rights are also separate. The
shareholders are the owners of the company. Managers of private company may be shareholders.
Examples of private company are, Swire, Arnold Clark, Dyson, Bestway group, JCB, 2 sisters
food group etc.
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