Business and Business Environment

This presentation provides an overview of the business environment, including the types of organizations, their motives, and areas of operation. It also discusses the size and scope of different organizations and the legal structures in the private, public, and voluntary sectors. Find study material and solved assignments on Desklib.

Business and Business
Environment
(TASK1)

INTRODUCTION
In today’s modern world, environment of business can be defined
as combinations of various factors which affect operations of a
company either internally or externally. It includes attributes like
changing in technology; instability of government, taxation
policies, business ethics and more which impact on industrial
functions in both positive and negative manner.

Types of organisation

Comparison between three organisation
Basis of
comparison Profit
organisation Non-profit
organisation Not-for-profit
Meaning These kinds of
enterprises are
mainly work for
improving
standardisation of
people and their
society. Basically,
main motive of such
firms is to generate
high revenue and
used to offer
products or services
as per requirement of
people.
Firms in this type of
sectors do not work
to earn profit.
Executives of these
associations are used
to provide services
to people as per their
needs not demand.
They used to raise
funds from various
governmental and
non-governmental
sources.
Associations under
this sector used to
earn more and more
money through
various process. But
they are different in
the sense that it
donate all money
whatever they earn
to charities or firms
who provide food
and shelter to needy
and poor people.

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Motive Earn maximum
profit as well as
get high return
on investment
To provide
effective
services to
customers as per
their
requirement
The main motive
of not-for-profit
organisation is to
increase
profitability in
order to provide
funds to other
companies who
work for social
reformation
Are of
operations
These
organisations are
run their
business in
national and
international
market both.
These
companies are
operate business
in limited area.
Comparatively
very large
occupied

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There are three types of sectors that an economy of a nation
has and these are described beneath:
Public Sector: Government of a country takes entire
responsibilities to run public enterprise in a proper way.
Whatever profit and revenues earned by these firms is
distributed among people of organisation who are working in
their organisation. Generally, firms under public sector have a
large business as well as number of employees. Along with
this, these associations are earned revenues through receiving
taxes from citizens and other private firms. Therefore, it is
mandatory for people of a country to fill return on taxes on
regular basis.

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Private Sector: Companies under private firms are mainly concern on
earning more and more profit either by manufacturing or delivering
products at marketplace as per needs and demands. Any person
under this sector can establish own business in an easy manner. But
before open an outlet, owners are required to follow all legal rules
and regulations to run business in a legal manner. In addition to this,
companies under this sector can operate business either in large or
small scale as per capital they have.

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Voluntary Sector: Enterprises under this sector are used to make
improvements in standard of people by providing them food, shelter
and clothes. They give these services to people of a country without
any means of exchange. For example: NHS of UK provides various
services to help people on zero prices.
Purpose of this sector: Reform society as well as provide healthy
atmosphere for people of UK and some other countries is the main
objective of such companies in this sector.

Size and Scope of different organisation
It has observed that in UK, there are various enterprises are running in
marketplace which has different working style, scope, aims and sizes.
It can be described as:
Micro Scale: This type of company generally has less number of
employees which is near about 5. It includes departmental stores,
single outlets, cafe shops and more. Therefore, they earn usually less
profit and required less capital to launch business. The main purpose
of such entrepreneurs is to earn livelihood in a proper way. In context
with objectives, entrepreneurs at micro scale do not generate much
profit. Therefore, carry out business activities to improvise living
standards of own family. They concern more on providing security of
members of their house.

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Small scale: Under this section, companies do not have more
than 50 numbers of employees. Along with this, these
organisations have to pay heavy taxes as per governmental
rule. According to statistical point of view, in United
Kingdom SME’s are contributed more in providing
employment to its people. The main purpose of these
associations is to enhance profitability and expand business in
a proper way.

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Medium Scale: In this section, companies have more than 50 workers as
well as earn more as compared to small companies. Apart from this,
these organisations are also needed to pay tax. As government has set
rules and conditions and levied taxes according to profitability.
Objective of this type of enterprise is to move business at international
level in order to sell goods and services to various clients in a profitable
way. For this process, they need to merges their business with other
companies.
Large Scale: Such type of companies are operating their business on
large level, therefore, earn more revenue which is approx 25 million
dollar to infinity. Along with this, these enterprises have large number of
employees. These enterprises are focused on enhancing GDP of a
country.

Legal structures of organizations
Private Sector: Legal structure of private firms are
classified on two main concepts- sole traders and
partnerships.
 Sole Proprietorship: Business are run by single owners
who is responsible for entire debts.
 Partnership: Under this structure, two or more business
partnership make agreements to share liabilities and
profitability as per investment ratio.

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Public Sector: Legal structure of public organisations can be
divided as per:-
 State government: It shares political rights for making
authorised decisions of business as well as take responsibility
to create state legislations.
 Local government: This segment of public organisation looks
out on completing basic demand of people on affordable
rates. It takes responsibilities to restructure the structure also.

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Voluntary sector: Legal structure of this organisation can be
stated as:
Trust: It generally considered as commercial banks which
take responsibility to manage investments and funds.
Unincorporated governance:Under this sector, sector people
share interest instead of profitability. Therefore, it is also
called non-profit association.

CONCLUSION
From the above mentioned report it can be concluded that business
environment is set of internal and external factors which directly
affect the overall performance of the company in positive and
negative manner. For this, it is important for manager to effectively
analyse as well as assess all the factors in order to attain the positive
results which directly contributes in attaining better success at
market place.

REFERENCES
Babatunde, Bayode O., and Adebola O. Adebisi.
"Strategic Environmental Scanning and Organization
Performance in a Competitive Business
Environment." Economic Insights-Trends &
Challenges 64. no. 1 (2012).
Bansal, Pratima, and Andrew J. Hoffman, eds. The Oxford
handbook of business and the natural environment.
Oxford University Press, 2012.

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