Arcadia Group Case Study: Business Structures and Functions

Desklib offers solved assignments and past papers to help students succeed.

Business & the Business Environment
1

Table of Contents
Introduction......................................................................................................................................3
LO1: Organization’s Types, Size and Scope...................................................................................4
LO2: Organisational Functions........................................................................................................9
LO3: MACRO Environment.........................................................................................................12
LO4: Micro Environment..............................................................................................................16
Conclusion.....................................................................................................................................17
2

Introduction
This study will help to understand the different sectors in the business along with the internal and
external factors that affect the business operations. They put shed lights on the details of a
particular organisation that is the Arcadia group. The pestle and SWOT analysis has been done
describe the various factors that affect the business environment.
3

LO1: Organization’s Types, Size and Scope
 Introduction
Organisations are bodies that aim in processing the business of a commercial venture.
They are the legal formation of the business that is to be carried out. Organisations work
to provide the right quality of goods and services to the customers. They identify the
needs of the customers and then fulfil it. All the organisations carry the same framework
as in the formal structure, the specific objectives and the aim, the utilisation of the
resources, need for the right decision, and regulations in the legal prospect. The
organisations are divided under the three main divisions: Private, Public and Voluntary
sectors.
Types of organisations
A. Public Sectors Organisations
Public organisations comprises of the entities that is owned and operated by the
government. Their main agenda of existence is to provide products and services to the
citizens. These organisations do not aim for the generation of the [profit but if they do these
profits are utilised for the well-being of the sector. These organisations functions under the
immediate control of the government (Kearney, 2018). The government of the state or the
central can control the enterprise in this sector. The public sector organisations have to
serve people from all the sections of the society. The British Army is an example of the
public sector organisations.
B. Private sector organisations
This sector of the organisations helps in building the economy of the country. The
individuals own the companies and not the government of the bodies of the government run
these businesses. These are larger as in the free enterprise. They aim at providing job
satisfaction along with the generation of the employment. In the business world, these
organisations hold many powers and prestige (Topprguides, 2018). Their objectives are to
increase the shares in the market. The work of the private sector is centred in providing the
goods and services to the customers for earning profits or maximizing the profits. They
make profit to survive among the tough competition. These organisations also have a share
4

on the part of the social responsibility. They have to satisfy the customer through their
service and products. Arcadia Group Ltd. is an example of the private sector organisation
(Arcadiagroup.co.uk, 2019).
Types of private sector organisations:
 Sole traders
The sole trader or proprietorship is the type of the private sec6tor organisation where the owner
has the profit share all to him. The sole trader employees other people to carry out the business in
the organisation
 Partnerships
The partnership is where there are two or more than two owners to the business. There is a deed
between the two partners that is authenticated by law. The legal structure of the partnership
allows the distribution of the profit among the partners according to the share mutually decided.
It holds the amount that is invested by each partner or just one partner. The decision making
process depends on the partners.
 Companies
The companies have their own set of legal structure and status. The legal status of the comp-
any should be clear to the directors and the shareholders for the effective working of the
organisation (Pavs.org.uk, 2019). Companies can be private or public according to the
functioning or the shares owned. The legal structure holds the objectives and the arrangement
of the audit distribution.
 Franchising
Franchising is the type of business where the owners sell their idea or business to other buyers.
They run the business in the name of the original business. Just the format of the business is sold
to another. The legal structure of the franchising is decided by the franchisor. The royalty earned
through the venture is owned by the franchisor.
 Licensing
5

Licensing is all about getting a legal permission to open a business in particular region, area or
country.
C. Voluntary sector organisations
In the voluntary sector organisation the duty is undertaken to cater to the needs of the
people which otherwise was unfulfilled. They are non government and work towards the
purpose to benefit the society and enhance the living standard. Basically there are three
main forms of the legal structure. ACEVO is an example of the voluntary sector .The
unincorporated association, a trust and the companies limited by the guarantee are the types of
the legal structure of the voluntary sector. There are types of the voluntary sector
organisations the NGO and the NPO. The operational area of the NGO is large whereas the
NPO has limited area of operation (Lewis, 2016). NGO works towards the objective of the
enhancing of the society and the NPO works in promoting the art, commerce, science,
commerce or for any other useful purpose.
Scope and Size of an Organisation
 Briefly explain the meaning of organisational scope
Organisational scope means the objectives and the requirement to achieve those
objectives of the particular organisation. The scope allows the managers to estimate the
cost along with the time required to complete the task. Organisational scope is related to
the larger area and dimension of growth within the organisation.
 Factors that determine the size of an organisation
Six main factors determine the size of the organisation. They are Entrepreneurial skill,
managerial ability, availability of finance, availability of labour, nature of the business
and the extent of the market. The size of the organisation may also be affected by the
country it is in.
Entrepreneurial Skills
The entrepreneur holds this skill of resourcing and initiating a plan of action. The whole thing
depends on capability of the entrepreneur and his ability to judgements. The abilities of the
entrepreneur decide the amount of finance will be available for the business operations. The
skills of the entrepreneur will allow him to expand the business and decide the objectives of the
6

business. A high proficient entrepreneur will be able to grow and increase the size of the
business.
Managerial Ability
Managers make the work in the organisation easy as they routine the task in the course of action.
The dimensions of the business can grow if there are efficient managers in the organisation. The
allocation of the task requires great skills (Jenkins, 2015). Managers monitor the functioning of
the organisation and hence the organisation can expand with efficient managers at all levels. The
organisation can grow and extend its business policy with the assistance of trained and dedicated
managers.
Availability of Finance
The funds are the most important aspect in the growth of the business. If there is ample amount
of finance available to the organisation it becomes easy for the organisation to increase its size.
The finance helps in determining the functioning level inside the organisation (Gitman et al.,
2015). The development of the organisation can be mobilised with the effective use of the funds.
Availability of Labour
The labour or the staff are plays the major role in the organisation. They form the integral part of
the organisation. The availability is impor6tant along with the expertise the labour holds. The
organisation needs to have the right amount of skilled labours so that the increase in the size of
the organisation is in a simpler form.
Character of the Business
The nature of the business decides the expansion of the business. The business should be of the
idea of increasing return then the business is fixed to grow (Blackwells.co.uk, 2019). If the
returns are more than the investment the size of the business is sure to increase. If the returns are
constant then the firm will not grow and have little scope to increase the size of the business.
Extent of the Market
7

The market size is an influencing factor in increasing the size of the market. If the market size is
large then the firm will have an opportunity to expand its business (Chatzoglou, 2016). The
extent of the market decides the business of the organisation at the international level. The
organisation who sells their products only in the local market where the scope of growth is lower
then the size of the organisation will not increase.
 Scope of different organisations
Local company: It has scope in the local markets only
National company: The scope is defined only in the specific country where the company
is currently operating.
International Company: This Company has a huge scope as it can function at the
international borders.
Multinational Company: A multinational company has a wider scope as it can operate
in many regions building infrastructure in the areas of operations.
Global company: The scope of the global company is restricted if compared to the
multinational company. There the products and services are limited and so the scope of
growth is less of the global company.
M1-An analysis of how structure, size and scope of organisations affect their objectives and
the products and services they offer
The public sector organisation work for the Welfare of the citizens without the aim of achieving
any profits. They work to provide product and services that the private sector fails to provide.
British army tend to provide safety to the citizens of United Kingdom. The private sector has just
one motive and that is to earn profit. Arcadia group functions to deliver product and services
according to the demands of the customer in return to earn profits. The voluntary sector
undertakes the responsibility to provide the people the right kind of life. ACEVO aims in
assisting the people by making a change in the society.
8

LO2: Organisational Functions
 Define and briefly explain what organisational functions are?
The organisational functions or the functions of the business is an essential process that holds a
set of activities that need to be carried out in the various departments or areas of an organisation.
These functions are divided into specialised areas such as the accounts the marketing the
production, human resource, sales, research and development, operations, and accounting. This
organisational functions help in the proper management of the organisation.
 Provide an explanation of the relationship between different organisational
functions
Production
In an organisation the production depends on the resources that are available. There are many
such factors that contribute in the production of the goods and services. This factors may consist
of the availability of labour, the design, the capital invested, and the accessibility of the required
information.
Research
It is necessary for the organisation to be updated to the current market scenario. Moreover the
company has to modify the product and eliminate the monotony of goods and services (Sekaran,
2016). The research and development department serves the purpose of enhancing a product or
launching a new product through to certain collection and analysing of data.
Marketing
After the research, the marketing team will identify the target customers and set a channel of
distribution for the goods and services produced (Baker, 2016). The marketing department looks
after the promotion, packaging and advertising of the goods.
Human Resources
9

Every organisation functions smoothly because of the Human Resource Department. This
department ensures the quality of the functioning within the organisation. They provide policies
and motivation to the employee for the effective working of the organisation.
Finance
The finance is the most important part in any organisation. The nature of the business operations
depend on the availability of the finance. All the organisational functions are interrelated and
dependent on the finance department.
Explain how the functions are linked to organisational objectives and structure
The organisational functions are linked to the objective and structure because each department
depends on the rest of the department for the problem functioning. The department of production
is dependent on the research and development along with the finance department to carry out
their job. The marketing department along with the sales department looks after the trade of the
goods produced. Human Resource Department has to provide the right quality of employee to
cater to the various needs of the organisation. This way it is easy to achieve the required
objectives.
 If you are changing any function in the structure of the chosen organization: what is
the function and why you think it needs to be changes
I would preferably make modifications in the finance department. Recently many stores
had to close own because of the improper flow of cash and documentation of the legal
documents (Butler, 2019). It would have to plan and strategize well to avoid hindrance at
work.
M2. An analysis of the advantages and disadvantages of interrelationships between
organisational functions and the impact that can have upon organisational structure
The interrelationship has few advantages and disadvantages. In the Arcadia Group the
interrelationship brings high team spirit. Good communication will enhance the production of the
organisation. There are certain disadvantages too. There have been flaws in the decision making
10

process (Cao, 2015). Staffs were found to be wasting time but getting too much involved with
the other department.
D1-A critical analysis of the complexities of different types of business structures and the
interrelationships of the different organisational functions
The interrelationship may have many advantages but it also brings along many disadvantages.
The first disadvantage organisation has to bear is proper communication among the entire
partner. The interrelationship will need regular monitoring of the work so that the business can
be made dynamic. The employees will have to match the standard for office department to work
co-ordinately. In Arcadia the management has to cater to the needs of all departments for the
proper functioning of the business operations.
11

LO3: MACRO Environment
 Briefly explain what macro environment is and its role or importance to a business
success.
Macro environment in business means that after those are uncontrolled and has that effect
on the organisation (Khilji et al., 2015). The Macro environment affects the decision
making process overall performance of the organisation and the strategy planning of
management. Macro environment helps to identify the competition in market. This
affects the success of the business in a large way.
PESTEL Analysis
PESTEL is a tool that helps to identify and analyse the impact of external factors on business
environment. Nandonde (2019) asserted in their study that with the help of this external analysis
tool, an organisation can make estimation of their profitability and risks that might occur in
future. Based on that they can mitigate their risks beforehand and implement the business
strategy properly in the market.
 Political Factors:
Political factors are the one that deal with understanding the government related policies,
regulations and else that might affect in both positive and negative way. Some of the examples of
political factors are political stability, corruption, health and safety regulations and else.
 Positive Impacts
It has been found that the government has made regulation that any product delivered to the
customers must be labelled in terms of cost, location, place and process of manufacturing goods
and special tip to use the product (gov.uk, 2019). These impacts in positive ways for fashion
retail companies as they have evidence that it abide by rules of government.
 Negative Impacts
After Brexit, stability of the government is still being threatened in terms of integrity and
inadequacy (Grubb, 2019). Due to this reason, the retail industry has to face issues as they have
12