Business Environment: Analyzing Structure, Objectives & Functions

This report provides an analysis of the business environment, focusing on organizational structure, size, scope, and objectives, with a specific reference to Admiral Sportswear. It discusses different types of organizations (private, public, and voluntary sectors), their legal structures (sole proprietorshi...Read More

Unit 1 Business and business environment
Introduction
Business environment includes people management in more elements which are manageable as
well as unmanageable by the commercial organisation. All such practices include the
opportunities including the weaknesses and threats of the company. The following report is based
on the Admiral. The following report will discuss about the several management kinds together
with size, structure, scope as well as of stakeholders. Moreover, to this, it also focuses on the
relationship among various organisational operations with their link to the structure and the
purpose of the business.
P1 Explain different types and purposes of organisations
A place where a group of people is working to accomplishing the goals and objectives of
organisation is known as business organisation. In order to performing the business operations in
an effective and efficient manner, it is necessary to set up a proper and systematic structure of
organisation. Discussion of different types of business organisations are given below along with
the purpose and legal structure:
Private Sector: The business organisations which have been owned and managed by the private
individual comes under private sector. Less interference of government has been analysed in such
organisations. Mainly the private sector business organisations focus on the maximization of
profit by dealing with goods and services. Example of private organisation is Adidas, as they are
also performing business operations for the purpose of gaining profit (Wong, Sinnandavar, and
Soh, 2021).
` Purpose: The major aim of private business organisation is to raise the profitability and
productivity of organisation. Gaining the higher profit is the main purpose of such organisations.
In order to generate the higher revenue, such type of organisations provide higher quality products
to their customers. Their product quality is playing an important role in generating higher profits.
Legal Structure: Private organisations are performing business operations in
several legal structures. Some of them are given below:
 Partnership: It refers to the legal and formal agreement which have been
established between two or more than two persons who are agree to be co-
owners and distributing the responsibilities along with profit & loss for the
purpose of performing business operations.
 Sole Proprietorship: It is defined as a business organisation in which a
single individual is responsible for managing and performing all the
operations of organisation. A small amount of capital is required to start
sole proprietorship.
 Corporation: It is defined as the legal entity which has been created by the
shareholders for the purpose of earning profit by performing several
operations. It has been created by following the legal procedure which is
called as incorporation.
Public Sector: Government of a specific country is considered as the owner of
public sector organisations. This sector raises funds from political parties and
government for the purpose of performing business practices. Decision making
authority in this sector is provided to the government. Example of public
organisation is JD Sports (Ozguven, Gao,. and Tayeb, 2021).
Purpose: Main objective of public sector business organisations is to
provide good quality goods and services to the general public. Welfare of society
is the first priority of such organisations.

Unit 1 Business and business environment
Legal Structure: Public organisations are performing the business operations with
several structures. Some of them are given below:
 Local Government: It cover those organisations which have been managed by the local
government. All the rules and regulations related to the business operations have been
developed by local authority. Central Government: The business organisations which have been run and managed by
the central government comes under this structure. It is necessary for these organisations
to perform the business operations by applying the laws which have been passed by the
central government.
 State Government: It include those business organisations which do all business practices
by following the laws and rules developed by the State Government. These organisations
target the customers of a specific state.
Voluntary Sector: It defines the organisations having the main purpose of creating the social
impact rather than the earning profit. There is no any involvement of national and local
government have been analysed. Example of voluntary organisation is Sports England. It
performs the business operations only for the purpose of meeting the needs and demand of people
living in the society.
Purpose: The major objective of voluntary organisation is to solve the problems and
issues of people of a specific society by providing them goods and services. Social Welfare is the
main purpose of this organisation (Volodkevich, 2021).
Legal Structure: legal Structure of Voluntary organisational sector is given below: Charity: Those voluntary organisations which collect funds from charity to
perform business operations. This charity has been used only for the welfare of
society.
 Trust: Under this organisational structure, trustees collect funds for the purpose
of performing the business operations in an effective and efficient manner.
P2 Size and scope of different types of organizations
Division of organisation develop several types of business organisations, which
are given below:
 Micro Enterprises: It refers to the business organisation which have been
started with a small amount of capital and a few employees. The
involvement of number of employees is decided for this sector is 0-9 with
the annual turnover of not more than 2 million. It plays an important role
in promoting the regional development by reducing unemployment. It
does not involve high use of technology at work place which result in the
growth of income opportunity along with the reduction of costs. Sports
England is performing business operations on a small scale and it is
managed by the local government involving less employees. The scope of
micro enterprise is huge as it covers a wide range of activities which
involve less advance technology.
 Medium Enterprises: It refers to those business organisations which
perform the functions on a large scale as compared to the micro enterprise
by involving more than 10 employees but less than 49. The annual
turnover of such organisations lies between the 2 million and 10 million. It
focusses on the improvement of sales of organisation. Mainly, these
business organisations work under the manufacturing and retail industry
sector. Scope of this organisation is constantly focusing on the
innovation. Medium enterprises continuously bring some changes in their
products for acquiring the scope of organisation (Stefan, ed., 2021).
 Large Enterprise: It refers to the business performing their operations on
a large scale with the involvement of 50 to 250 employees. Its annual sales
of large enterprise are approx. 250 million. Mainly it includes those
organisations which are performing their operations in international
market. JD sports is the best example of large enterprises as it is working
in several countries. This business organisation is dealing with the sports
accessories.

Unit 1 Business and business environment
M1 Analyse how the structure, size and scope of different organisations link to the business
objectives and product and services offered by the organisation.
Size, structure and extent of a business organization is connected with the goals of organization. It
has been analyzed that a good organizational structure helps the business organization in setting
the targets. All the business organizations develop their goals and objectives according to their
size. If the size of organization is found as huge and the management can invest high amount in
projects, then the organization can develop the high targets and objectives. However, every
organization has some common objective that is serving customers and earns profit, but the profit
level differs with the size. For instance, JD Sports is performing their business operations in
several countries. The company set huge targets as their objectives because of their large size. The
objectives of Sports England are small because of small scope of organisation.
Organization set their business objective by revising the scope of business. If the scope of any
organization is to serve national customers, then they will set business objective accordingly.
Whereas, if the organisation is serving to the international customers then they will set their
business objective accordingly. According to the product and service, an organization set their
structure, size, and scope.
P3 Relationship between organisational functions and how they relate to
objectives and structure
All the divisions in the business divisions are interrelated with each other
and the growth which depends on that . In context to Admiral, it is one of
the largest sportswear firm and main goal of the company is to gain more
revenues and manage appropriate communication and coordination in the
company and its respective divisions. In context to the respective company
it is mentioned below briefly:
 Human Resource Division – The division of the human resource
means to the area in which the main duty is to recruit and hire
potential individuals and gives effectual training as well as
development campaigns to those people. The department of the
human resource operates with the coordination with other
departments in accordance to know about the several job vacancies
in their area in order to hire the needed people based on their talent
as well as job profile.
 Finance – The role of the finance division is to make the
organisation's financial statements and gain more investors in order
to make them invest in the company. This division of the company
links to the sales, supply chain, production and marketing division
in accordance to understand their approximated and actual need of
the capital for their practices (Smith, 2021).

Unit 1 Business and business environment
 Marketing – The marketing division is majorly accountable for promoting
firm's services and products that is being produced by the manufacturing
department. This department has a connection with the finance division
and human resource department as well. As the human resource division
gives effective employees to them and the department of finance allocates
them capital for implementing plans and practices.
Organisational Structure:
The organisational structure of any firm has a essential position in the
company as because it shows the regulations, rules, structure, hierarchy of
management and other authentic data. The several kinds of organisational
structure are mentioned below briefly:
 Hierarchical Organisation – In this type of the structure, the
management focus on separating all the operational departments from the
top to bottom in which all the people in the company needed to report
their superior of their department. The Company following this kind of
organisational structure which is in the shape of pyramid and in it the
CEO is on the top position and after that board of directors and other
higher-level members of the company (Sinha, and Ola, 2021). This
organisational structure has its own advantages as well as disadvantages
as it permits the workers of the firm to have the appropriate understanding
about their division, associates and their job roles. Apart from this, as
because of the appropriate chain usually it becomes more difficult for the
workers to make the immediate decisions.
 Matrix organisation – In this structure there are no superiors as well as no
boss hierarchy in which the workers can report to any associates in the
company whenever they want. This kind of structure is applied on the
extremely varied company in which the level of working is more and it
takes more time to follow the appropriate chain. The structure is more
advantageous as it allows seniors to choose the workers for the specific
work that is based on the skills of the workers and need of the task. It also
leads to the possibilities of the conflict among the workers.
The firm Admiral Sportswear, follows the hierarchical type of the structure
in which all the workers are needed to report to their seniors. It is beneficial as it
does not lead to any kind of miscommunication as well as confusion and moreover
all the workers are clear with their responsibilities and task (Phillips, 2021).

Conclusion
From the above report it has been concluded that the business organisation
has been classified in several types having different purpose and scope. On
the basis of size, organisations are divided into three types which are
explained above. Along with this, it is also analysed that all the business
operations are assigned to different departments and all the business
functions have an interrelation among all of them.
References
Books and Journals
Carracedo, P., Puertas, R. and Marti, L., 2021. Research lines on the impact
of the COVID-19 pandemic on business. A text mining analysis.
Journal of Business Research, 132, pp.586-593.
Cug, J. and Cugova, A., 2021. Relationship between Earnings Management
and Earnings quality in the Globalized Business Environment. In
SHS Web of Conferences (Vol. 92). EDP Sciences.
Davidson, D.D. and Forsythe, L.M., 2021. Business in the Contemporary
Legal Environment. Wolters Kluwer Law & Business.
Degravel, D. and Tun, C.H.M., 2021. Burma Drinx Group (A): Strategizing
for CEO Succession in a Family Business. FIIB Business Review,
10(1), pp.16-32.
Galletta, S., Mazzù, S. and Naciti, V., 2021. Banks' business strategy and
environmental effectiveness: The monitoring role of the board of
directors and the managerial incentives. Business Strategy and the
Environment.
Galloway, T.L., Kuhn, K.M. and Collins-Williams, M., 2021. Competitors
as advisors: Peer assistance among small business entrepreneurs.
Long Range Planning, 54(2), p.101929.
He, J. and Ortiz, J., 2021. Sustainable business modeling: The need for
innovative design thinking. Journal of Cleaner Production, 298,
p.126751.
Kurpayanidi, K.I., Abdullaev, A.M. and Khudaykulov, A.S., 2021.
Unit 1 Business and business environment
M2 Analyse the advantages and disadvantages of interrelationships between organisational
functions and the impact that can have upon organisational structure.
Advantages:
Inter employee relationship between the several functions of organisation helps the business
organisation in maintaining the cooperation at work place.
It also establishes a strong relationship among employees which leads to the increase in
effectiveness in business operations.
It makes the process of sharing information easy within the organisation among various
departments.
Disadvantages:
Each and every employee of different branches know the job roles and responsibilities of other
branches. Hence, the employees can use the important information to harm the other branch.
It also results in the higher competition between various functional branch.
Admiral Sportswear is following hierarchical organisational structure under which all the
departments have been classified separately. Interrelationship among all the departments make
the effective organisational structure. It makes the communication process easy and effective.
On the other hand, the organisations following matrix organisational structure,
interrelationship among departments create a messy organisational structure.