Analysis of Aviva PLC: Business and Business Management Report [4897]

This report provides a detailed analysis of Aviva PLC, a British multinational insurance company. It begins with an introduction to business environments and the purpose of the report, followed by an explanation of different types of organizations (private, public, and voluntary) and their legal structures, using Aviva and the British Heart Foundation as examples. The report then examines the size and scope of these two organizations, comparing their employee numbers, assets, market share, and sustainability practices. It explores the interrelationship between various functional departments within an organization, including Human Resources, Finance, Marketing and Sales, and Operations and Production, highlighting their roles and interdependencies. The report also includes a PESTEL analysis of Aviva, assessing political, economic, social, technological, environmental, and legal factors. A SWOT analysis is conducted for both Aviva and the British Heart Foundation, followed by a discussion of how micro and macro factors impact decision-making and business objectives. The interrelation between SWOT and PESTEL factors is also examined, concluding with a summary of the key findings.

Khalid Ramzan
S0272665
Unit 1: Business
and Business
Management
[4897]

Contents
INTRODUCTION...........................................................................................................................3
Explanation of different type and purpose of organization with their legal structure.....................3
Size and Scope of two different organization..................................................................................5
Interrelationship Between Different Functional Department of organization.................................6
Human Resources Department....................................................................................................6
Finance Department.....................................................................................................................8
Marketing and Sales Department.................................................................................................8
Operations and production...........................................................................................................9
Macro Analysis (PESTEL) of Aviva Private Limited...................................................................10
Political Factor...........................................................................................................................10
Economic Factor........................................................................................................................10
Social Factors.............................................................................................................................11
Technological Factor.................................................................................................................11
Environmental factor.................................................................................................................12
Legal Factor...............................................................................................................................12
SWOT Analysis.............................................................................................................................13
SWOT of Aviva.........................................................................................................................13
SWOT of The British Heart Foundation....................................................................................14
Impact of Micro and Macro Factor on Decision Making and Business Objectives of organization
........................................................................................................................................................15
Impact of Macro Factor on Business Objective and Decision Making.....................................15
Impact of Micro Factor on decision Making and Business Objective.......................................15
Interrelation between SWOT an PESTEL Factors........................................................................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Business environment can be defined as those internal and external factors that can affect
business. These factors can affect performance of business. So company must lay special
emphasis on all external factors that is going to affect business. Present report will lay emphasis
on Aviva. Aviva plc is a British multinational insurance company headquartered in London,
United Kingdom. It has about 33 million customers across 16 countries (Turnbull and Haddud,
2018). Company also have been listed in London Stock exchange. The purpose of these
assessment is to develop critical knowledge of the organization and its functions that are
interrelated to each o.ther Present report will lay emphasis on various type of enterprises and on
their purpose. Assignment will also lay focus on the size and scope of different type of
organization. It will also provide organizational structure of Aviva and will also explain their
inter-relationship with other functional units. Report will also lay emphasis on the macro
environmental factors which can affect business. It will also explain SWOT analysis of two
different business.
Explanation of different type and purpose of organization with their legal
structure.
There are various types of organization and also these firms have different purposes. This
includes following:
Private organization- Organization contains a number of units created by company to
handle company operations that help achieve goals. There are including several kind of business
that is run by an individual to generate profit. This structure mainly concentrate on the desire of
customers and wants. After that measure satisfaction of customers for their different types of
products. An organisation can be categorised into different types of sectors like sole Private,
public and voluntary sectors (Eller, Fischer and Diedrich, 2016). There are defined different
sectors and their purposes -
A profit organisation are businesses that use a variety of plan of action to generate a
profit. The main goal of the company to make money as conflicting to a non profit organization
which focuses on a goal like support to community and is afraid with money only much as
necessary to keep the organization operating. For instance, Aviva is a British multinational
insurance company which is being engaged in making profit, attaining and retaining large
number of consumers. (Armeanu, Istudor and Lache, 2015).

Purpose – The main purpose of the Aviva is to provide international savings, retirement
and insurance benefits to the consumers of company and also to their shareholders, communities
and employees working with them.
Legal structure- It has been analysed that Aviva is being engaged in following various laws,
rules and regulations. Like for example they make sure that every employee in company is being
provided with safe and secure environment so that they can create employee loyalty.
Not for profit organisation (Public) – These types of organization that do not earn
profits for its owners. All of the money earned by or donated to a not for profit organization is
utilised in pursuing the organization's objective and keeping it running. Not for profit
organization consider as tax exempt charities and other types of public services and they are not
required to pay most taxes. For instance, Crown Prosecution service is the public agency that is
being engaged in doing criminal prosecutions that to in England and wales (Michalski,
Illustration 1: Organizational Structure of Aviva PLC

Rutkowska-Podołowska and Sulich, 2018). This organization is run and directed by public
prosecutor.
Purpose - The purpose of crown prosecution service is to give advices that are legal to
police forces working in England and Wales. This can be done by them during course of criminal
investigation. (Buxel, Esenduran and Griffin, 2015).
Legal structure: It has been analysed that firm is being listed in London Stock exchange. It
has also been analysed that various laws rules and regulations has been followed by crown
prosecution service. Like for example the extradition Act 2003 is being followed by the public
organization. In this they provide extradition services within England and Wales.
Non-governmental organisation (Voluntary) – It is a non profit, citizen based group that
operations independently of government. These types of organisation also known as civil
societies that are organised on national and international level to serve particular social or
political purpose and are coordinating rather than commercial in nature (Erasmus, Strydom and
Rudansky-Kloppers, 2016). For instance British Heart foundation is a voluntary organization
which supports those people who are suffering from heart attack. It also funds those circulatory
diseases and also the individuals who are at risk of it. Purpose - The aim of British Heart
Foundation is to improve the health condition of people who are suffering from chronic heart
disease. They support these people to enhance their quality of life. This voluntary organisation
supply goods and services into different areas like inclusive education, health and livelihoods.
Through three approaches focus on these areas like social inclusion and gender, social
accountability and Resilience.
Legal structure: The British Heart foundation is being engaged in providing equal
employment opportunities in their voluntary sector to both men and women. This has supported
them in retaining employees and also this feature of company has created employee loyalty and
belongingness.
Size and Scope of two different organization
Basis Aviva The British Heart Foundation
Size It has been analysed that Aviva
has total number of employees
which are 29,600. They also
The British Heart Foundation has
total number of employees which are
3000. Also they have top 10

have £289.9 billion assets under
management
competitors
Scope The Scope of Aviva is to provide
best retirement and insurance
benefits.
The scope of the British Heart
foundation is that they are currently
funding over 1000 research projects.
There main focus is on
cardiovascular research. They are
aiming to also invest in Research
Excellence
Market share Aviva has been expanded their
market in Hong Kong, India,
France, Canada, Cofco and many
more areas.
The British Heart foundation has
been ranked 32 for promoting health
and quality service. They have also
been serving their services globally.
Profit share From the annual report of
company it was identified that
firm has made profit of £ 3.12
billion
From the annual report of company it
has been analysed that they have
generated profit of £22.9.
Sustainability It has been analysed that
company is making use of CSR
so that they can create their
goodwill
The British Heart Foundation has
been involved in making effective
use of resources so that future
generation do not face problem
Growth Company has been involved in
expanding their market share and
also enhancing their profitability
aspects.
It has been analysed that the
voluntary firm is growing internally.
They have been engaged in
providing training and learning to
their employees.
Interrelationship Between Different Functional Department of organization
A business organization is consisted of various functional departments that are important
for high performance of company in the global market. Each functional department is allotted
with different operation on basis of their expertise (Eling and Schaper, 2017). Main functional
department of business organization are- Human Resources Department, Finance Department,

Marking and Sales Department, Operation and Production Department. These all departments of
organization are interrelated to each in order to improve their improve the market performance of
company.
Complexities of different type of business structure: Rules and regulations which are imposed
in organizational structure can hamper the working of employees. There might occur chances
that there are employees who have miss- communication in between them. This will lead to
lowering down efficiency of workers.
Inter-relationship of marketing with HR: in this HR department of company is engaged in
hiring efficient employees which are being attracted to effective marketing.
Human Resources Department
Human resource management is one of the most important department of organization
like Aviva PLC. The main work of HRM department is to deal with various people that are
connected and associated with the business of company. Main function or HRM are divided in
two categories that are known as managerial functions and other one are operative functions.

The managerial functions of HRM are for performance of organization in international
market. HRM need to communicate with other departments of company for better
communication of data and information to improve the operational capability of company. For
example in business planning, market research HRM have to deal with sales ans marketing
department. For the purpose of people management in organization Human Resource
Management have to deal with all other departments of organization (Khan and Quaddus, 2015).
By achieving effective interrelationship with other department they will be able to meet
organizational goals and objective. This interrelationship is also important for this interrelation
gets complex with bigger and complex organizational structure.
Advantages
1. Improve people management on the work place.
2. Improve communication between various departments.
3. Help in workforce related issues in company.
Disadvantages
Illustration 2: Functions of HRM
(Source: Human Resource Management, 2019)

1. It is a time Taking process
2. Needs Extra resources to maintain this inter-relationship.
Finance Department
The role of finance department in Aviva PLC is to manage all the matter related to fund
management in organization. The main work and objective of this department is to manage
monetary issues and management with in the organization that includes budgeting process, cash
flow handling and fund allotment (Mawejje and Okumu, 2016). To meet the objectives of
organization related to finance this department have to communicate with other department.
With the complex structure of Organization this interrelation becomes more complex. This
interrelation is basically consists of communication related to monetary issues and transactions.
Advantages
1. Improve the preciseness of company budget.
2. Reduce the risk of financial crisis and failure in organization.
3. Help in fund allotment process.
Disadvantages
1. Time consuming process.
2. Make budgeting more complex.
3. Increase work load of employees of Finance department.
Marketing and Sales Department
It is one of the main department of business organisation that handle the promotion
activities of organization that are related to the product and services of Aviva PLC. The functions
of this are also associated to the collection of market data and deliver information to the
consumer about the services and products of company (Huang-Horowitz, 2015). For example
marketing and sales department of company communicate the market report with other
department of organization. On the basis of this information sharing operations of marketing
department other departments take respective action to complete the market objective of Aviva
PLC . This interrelation is all about the sharing of market and departmental information with
other organization. On the small scale this interrelation is simple and on higher level this process
is more complex and lengthy process.
Advantages
1. Provide better market handling to organization.

2. Help the organization to improve their business practices per the market demand.
3. Reduce the chances of market failure.
Disadvantages
1. It causes irregularity in production of goods and services that affects the performance of
organization.
2. It is a time consuming process that can affect the performance of organization.
Operations and production
The operation and production department of Aviva is responsible for better and effective
profitable production of product and services. This department of organization is responsible for
the effective production of the company product and services in order to meet the market
demand of company product. In order to manage the speed of production and manufacturing of
product is depended on the information that is provided by other departments. For example the
production of goods depends on the market demand data that is provided by the marketing and
sales department. For continuous production of product and services, production department
have to maintain connection with finance and management of organization (Petrescu and
Petrescu-Mag, 2016). This is how the production department of Aviva PLC maintain relation
with other department in order to maintain supply chain objectives of organization to the market
place. For the hierarchy and matrix structure this interrelation have higher degree of controlling
and monitoring.
That is how various functional department of Aviva PLC are interconnected to each other
in order to meet the business of organization and it also help to reduce the complexity of
organizational structure.
Advantages
1. Data related to market demand help them to adjust their operations to improve the
sustainability of organization.
2. Reduce the cost of production by making demand based production system.
Disadvantages
1. Affect production capability of production department.
2. It needs continuous communication with other departments which is complex process.

3. The organizational structure used by Aviva PLC is Vertical Hierarchy. There are
different advantages and disadvantages of this type of organizational structure.
4. Advantages-
5. Have clear line of authority.
6. People have well defined role in organization.
7. Good for better control.
Disadvantage
1. Large communication gap between employees.
2. It is rigid structure for creative working.
3. Less flexibility in organization.
Illustration 3: Organizational Structure of Aviva PLC

Macro Analysis (PESTEL) of Aviva Private Limited
PETEL analysis is used by the organization to know the external factors of business
environment in order to evaluate their impact and influence of their conditions. It is generally
considered as a process or a tool that is used by business organization before creating or planning
their business strategy (Prajogo and Oke, 2016). The main factors that are consider in PESTEL
analysis are- Political Factor, Economic factor, social and cultural factor, technological factor
environmental factor and legal factor. ,the main objective of the Pestal analysis to study the
external environment to know it impact of this factor on decision making and operations of
company.
Political Factor
There are some political factors are need to be considers in order to make effective
policies and strategies to successfully operate in market place. The factors like stability in
political scenario, risk of military invasion, corruption in financial area, changes in government
policies like taxation policy and pricing policy can affect the business of Aviva PLC in United
Kingdom market. For example the Brexit is a considerable factor that can affect the business
operations of Aviva PLC in UK market (Makarova and Polyanin, 2015). UK is 6th largest
economy around the world so it could be larger advantage for company. The impact of political
factor are both positive and negative for Aviva.
Positive Impact- The pricing policy and taxation policy of UK is too easy and it is effective for
Aviva to gain higher profit with simple taxation and pricing policy.
Negative Impact- Brexit is major issue for Aviva PLC in UK market because there is bit
uncertainty in UK market that can cause negative impact of business of Aviva.
Economic Factor
There are many advantage of stable national economy for a particular company. Aviva
PLC is an insurance company so the impact and influence of Economical factor is huge on their
business practices. The impact of Brexit and change in national and international economy,
changes in taxation policy can influence the business of Aviva PLC (Ricciardi, Zardini and
Rossignoli, 2016). It has both positive and negative of economical factor on the financial
steadiness of their business.
Positive Impact- The Pricing policy and taxation policy of UK s very effective for different
business organizations. The taxation policy made by government is comfortable for business