Business Environment: Structure, Size, and Scope Analysis

This report delves into the complexities of the business environment, examining different organizational structures and their interrelationships with various functions. It explores how the structure, size, and scope of an organization are linked to its objectives, differentiating between public, private, and...Read More

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
Complexities of different types of business structure and interrelationships with organizational
functions. How structure, size and scope of organization link to business objective and
explanation of public, private and voluntary sector and their legal structures............................3
Advantages and disadvantages of interrelationships between organizational functions and
impact on the structure of the organization..................................................................................6
PESTLE analysis .......................................................................................................................8
SWOT analysis .........................................................................................................................10
CONCLUSION .............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment means those aspects which are in the business. It includes people,
management and the outside environment which can be affect the production. Government,
customers, technology are outside of the business but can affect the business. They influence the
functions of the company. Ford is the multinational automobile company having its headquarters
in Michigan. Henry ford founded this company. Ryan air is the airline company founded in 1984
having its headquarters in Dublin. National health service is a voluntary company and funded by
the public, situated in UK. Then after some time through general taxation it is funded. They
provide health services to the people free of cost. This study will discuss the complexities of
different types of organizational structure and interrelationships of different organizational
functions and how the structure, size and scope of different organizations link to business
objective and explanation of different size, types and scope of organization fall under public,
private and voluntary sectors and also explain its legal structure. Further, explain the advantages
and disadvantages of interrelationship between organizational functions and the impact on the
organization and how they link to the organizational objectives. Application of PESTLE to
support the macro-environment and SWOT analysis is done of two organizations.
Complexities of different types of business structure and interrelationships with organizational
functions. How structure, size and scope of organization link to business objective and
explanation of public, private and voluntary sector and their legal structures.
Complexities of business structure:
Industry complexities: it included the complexities of products, services and processes which are
there in the company. It depends on business to business. A company which deal in technology
have to face much complexity as compare to bakery company (Komljenovic, Loiselle and
Kumral, 2017).
Stakeholders: it includes shareholder, employees, public, consumers, government, suppliers etc.
they are the challenges of the company. They can influence the decisions of the company.
Company have to think about them before making any policies or strategies.
Design complexities: every business operate differently and have different designs or processes.
Some have complex or some have easy designs. This can influence the company.
Interrelationships of different organization functions:
Marketing and human resource department:

Marketing department influenced by the human resource. HRM department hire employees for
marketing department. They should hire such employees who have marketing knowledge and
posses marketing skills. Human resource also asks the marketing teams that what kind of skill
they are required so that they hire accordingly. HR transfers the salary of marketing team and
also give knowledge about the incentive plan if run by the company.
Marketing and finance department:
Finance department have all the monetary control. They make the budgets for every activity.
They forecast the company's future and know the true financial position of the company. Finance
department give budget to the marketing team, and they have to carry their activities under that
budget only. Marketing team require budget because they carry promotional activity for the
product of the company. Finance department do not only make budget for marketing but for
every department they have to prepare budgets.
Finance and human resource department:
Finance department deal with the finances and human resource department deals with workforce
of the company. Finance department dependent on HR for the hiring of such employees who
have financial skills. HR also require budget for doing promotions and advertisement for the
vacancy. Finance team make budget. Budget are made by them according to the importance of
the work. They give good budget to HR because they know that they deal with hiring of
employees so right employee selection is very necessary. If wrong employee got selected then
that can incur huge loss because cost is there when hiring and giving training to employees.
Research and development and marketing department:
Marketing department tell the research and development team about the demands of the market.
Rnd team works on that and make such innovative products which increases the market share of
the company. Innovation is very important nowadays. If company want to be in the market for
the long run then innovation is must because customer want to buy new things, and they get
attracted towards different products. Marketing also help rnd in their research process because
they deal directly with the customers, so they know what are their preferences.
Structure, size and scope of organizations link to business objectives and products/services:
Structure and size of the company is directly related to the goals of the company. If the company
have good organizational structure then only they will target high objectives. In the organization
if there are such employees who do not know about their roles then it will become difficult for

the company to reach towards its objectives. Based on the size also company forms their
objectives. If company have the scope to become large from medium size organization then they
have to make such products and services who are in the demand and can attract good customer
base.
Public sector:
Government run this type of companies. They provide services to the public and use the
resources in such a way which can give benefit to the society. Ford is the public company. These
companies are generally big in size. Company manufacture such automobile which are
comfortable and can give the public their value for money. They provide a wide range of cars in
the market. Their aim is not only to make profit, but they also consider public while making their
policies. There are such type of government companies also where 51% of the share is hold by
the government and rest by other company. Legal structure of the public company owned by the
central or state government. They make goods for police, public infrastructure etc.
Private company:
Private companies are those which are owned and controlled by private people. Their objective is
to make profits for the company. It has no interference of the government. Ryan air is the private
company. It is the airline company. These companies can be in partnership or can solely owned
as well. Their scope is to maximize the profit and increase the market share. They can be small,
medium or large companies. Legal structure is handled by the owner of the company. Profits
which are made by such companies give benefit to the owners, investors and shareholders
(Tabory, 2019).
Voluntary company:
Voluntary companies are form to serve the society. Their main motive is to solve the issues of
the societies and not to make profits. They want to make this world a better place to live.
National health service is a voluntary organization. They help the people who are of old age or
people who do not have money so that treatment can be done. They provide free of cost service
to those people. These companies are funded by charity or donations. They are also known as the
non-profit organization. They work selflessly without thinking about any benefit. Legal structure
of voluntary companies fall under the government social welfare. They work on world issues like
global warming, cancer issues etc. their size can be large or medium or small. It can work on
local, national or international level as well. NGO's are also come under this sector only.

Advantages and disadvantages of interrelationships between organizational functions and impact
on the structure of the organization
Every organization operates differently and are influenced with the organizational structure.
Organizational function have the link with organizational structure. There are various
organization function which are different in different organization, which are as follows:
Planning:
Planning is the important organizational function. It is the guidelines which have to be followed
while doing any task (Čepel and et.al., 2018). Planning study the factors which can influence the
activities of the organization which will implement in the company for the effective results. Such
strategies should be chosen while doing the planning in which there be the study of all the
alternatives which are available and the best one should select which provide success to the
organization. In the organization planning is done on the basis of the size and structure like in the
sole proprietorship the planning scope is limited as all the decisions are taken by only the owner.
In partnership firms there is done detail planning as compare to solely owned business. Partners
plan according to the activities which held in the company. In big companies planning plays a
vital role. Planning is undertaken for the forecasting. In the planning companies make various
policies in which they include the profits and objectives of the company. Companies also make
budgets which comes under organizational structure (Jansen, 2020).
Management:
Management is one of the important organization function. Strong management build good
organizational structure and help to achieve the objective of the organization. Management
makes policies which are required to run the company. Management do transparent
communication. Sometimes when lack of proper communication is their by the management then
that can cause confusion and delay in completion of the project. Proper communication is
necessary, to reach towards the organizational goals. It also leads to effective performance and
increases the productivity of the employees. Management takes all the decisions of the company.
In the solely owned business, management is regulated by owner, in the partnership firm
management is controlled by all the partners and in big companies management is handle by the
experts because they have to make complex decisions (Bertacchini, Dalle Nogare and Scuderi,
2018).

Administration:
Administration execute all the task very effectively in the organization. Tasks can be of different
types in which decision-making has a vital role. In the sole proprietorship administration is
completely handled by only one person which is owner of that firm. In the partnership firm
decisions related to administration is taken by partners after the discussion. They evaluate all the
alternatives and selected the best one (Muroyama and Lechler, 2017). Administration plays a
great role in the organization. Strong administration represents strong organization. Disadvantage
is that if there is any confusion with anyone and if not solved on time can lead to wrong
administration decisions. Timely delegation of responsibilities is very important. Leaders should
not take all the work on their head because it can delay the task and their team members will also
not able to learn anything. Delegation of the responsibilities will increase the overall
performance of the organization.
Control:
Controlling is one of the main function of the organization. In this there is a control on all the
activities of the organization (Farah and et.al., 2020). Controlling is done by taking various steps
by the management. Disadvantage is that if controlling is not done on time or efficiently can hurt
the brand image of the company. In the solely owned firm all the controlling is done by the
owner itself and in the partnership all the control is done by all the partners over the business.
Big companies have tools and techniques for controlling and monitoring the organization.
Companies have objectives and goals which are very important and have to be achieved.
Hierarchy structure:
in this structure, employees are assigned particular group based on their skills and the nature of
task. Grouping of the employees are based on function, geography and product. Thay are
grouped according to their performance, how they had performed in the previous task. Also
grouped according to the region from which they belong. If any company making many products
or services then they assign group to the employees according to the products or services they
have.
Matrix structure:
in this organizational structure, a grid or matrix is set up whi9ch is absent in the traditional
hierarchy structure. In this employees with the same skills can be assigned different projects and
they have to report that project manager only (Belás and et.al., 2019).

Horizontal structure:
this organizational structure is mostly used by the start up companies and small companies.
Large companies cannot use this structure because they have many employees and projects.
PESTLE analysis
Pestle analysis is the tool which is used to analyse and monitor the environment which is
external to the organization but impacts the functioning of the organizational. It is concerned
with scanning the political, economical, social, technological, environmental and legal factors of
the organization. It is a strategic tool for identifying macro environment by market research. The
following is the Pestle analysis of Ford and Ryanair.
Political factor – The political factors are those government factors that impact the organization.
In other words influences of the government policies and laws on the business. These factors
include tax policy, trade restrictions, corruption etc. The political factor that impacted ford is
Brexit and Ford is vulnerable to this decision. As the organization have transferred its control of
supply chain all over Europe therefore any changes in the government policy may impact the
functioning of Ford and the plant situated in Dagenham. This agreement of Brexit can make the
production of Ford in UK little unfeasible and it a negative impact of political factor that affect
the functioning of Ford (Perera, 2017). Due to this impact the company has to increase the prices
of their finishes vehicles in UK. But there are some positive impact of political factors such as
the organization is getting government support in terms of technological innovation and also
making efforts for international trade agreements and developing infrastructure. In case of
Ryanair there was not much impact of Brexit on their functioning but was impacted greatly by
Covid-19 as tourism was almost put to an end. But the market is again gaining the customers but
it has a long way to go.
Economic factor – The economic factors are those which determine the economy's performance
and which may directly or indirectly impact the working of the organization. These factor
include interest rates, exchange rates, unemployment rates, disposable income of the people etc.
these factors do impact the demand and supply curve of the organization and also have a great
impact on purchasing power of the consumers. The economic factors that have positively
impacted the functioning of Ford is the growth in United States. Also growth rate in developing
markets has a positive impact on Ford as they can expand their markets in the developing
markets. Another positive impact of economic factors is currency getting stronger. As due to

Covid-19 there are many positive and negative economic impact on Ford and Ryanair such as
unemployment rates have been high in the pandemic period but also it has also reduced the
disposable income of the people this is a negative economic impact on the company.
Social factor – The social factors includes the cultural, trends, demographics etc of the society.
The norms, population, growth rate, age distribution of the area in which they operate. The
positive impact of social factors on Ford is increasing demand for hybrid and electric auto
mobiles as also which are eco-friendly. This acts as an opportunity for Ford to expand their
customer base by producing these types of cars. Increasing wealth gap impacts both positively
and negatively to Ford. Therefore, the company should make efforts to focus more on innovation
to satisfy the need for their customers and adapt to the changing trends in the market. The trend
of travelling has a positive impact on Ryanair as they mainly focus on business and leisure
travellers (Prichinet. and Le Duc, 2020). But due to Covid-19 this trend has been reduced and it
has negatively impacted Ryanair as people are travelling less. There is opportunity again for the
company as tourists are again booking flights for vacations and holidays.
Technological factor – The innovations in technology, new ways of producing, distributing and
communicating are the factors that pertains to technological factors. These are the factors that
impact the organization in many ways as in case of Ford, increasing use of mobile computing,
investments in autonomous cars do impact the company both positively and negatively. As
people are also demanding high tech cars which is having Bluetooth, Wi-Fi, and other advanced
technology therefore company can attract the customers by adding into their cars. But a negative
impact is there are many competitors in the market providing various features which are hi-tech.
In case of Ryanair they are planning to invest in Boeing 737 max jets to get a ahead of
competitors. And also using digital platforms like mobile and website to improve their customer
experience. But this factor also have negative impact as they are targetting business and leisure
travellers and due to convenience of video conferencing and video calling people travel less.
Legal factors – The legal factors are certain laws that impact the functioning of organization.
The laws may be related to health and safety, data protection etc. Ford is impacted by
environmental protection laws and also increasing safety regulations as they have to include and
adopt these laws to operate. These laws acts have a positive impact on the functioning of Ford as
adopting these laws also enhance their Corporate social responsibility. Also following
intellectual property rights have a positive impact on the company as they get the benefit and

advantage of their unique products and innovations. The company can also improve their product
design while following the safety laws. But these laws also have a negative impact on Ford as if
the are not able to put up to the standards of safety and quality then they will not be able to sell in
the market. These legal laws have impacted negatively to Ryanair as they have been subjected to
lawsuits. And also due to Brexit it may require the company to comply with the laws of both UK
and EU.
Environmental factor – These are also macro factors that impact the functioning of the
organization and consist of weather, climate, pollution level etc. the climate change and due to
this change in the tends of people shifting to environmental friendly vehicle and also low-carbon
emission vehicles can increase the sales of Ford if they are offering such vehicles. But also these
factors have negative impacts as the resources are becoming scare therefore prices of oil is
increasing and this adds on to the cost for customers therefore sales can also decline (Düerkop.
and Huth, 2017). In case of Ryanair this factors has a negative impact as transportation industry
accounts major contribution to greenhouse gasses emission and due to this reason airlines are
been criticized by many people. The positive aspect is that they can attract customers by
undertaking environmental initiates and by conducting CSR can also promote their brand.
SWOT analysis
SWOT analysis is the technique to identify the strength, weakness, opportunity and
threats of the organization and further utilizing this analysis for decision making. This tool is
generally used for strategic planning and brainstorming.
Strength – Strengths are the factors which are internal to the organization and the company can
get a competitive advantage from these factors. The factors in which Ford excels is that they
have a good global recognition in the auto-mobile industry and they also have a good research
and development committee that launches new feature as the organization is committed to
develop new models and features. Their diversified networks, wide product and service portfolio
gives them an edge over other competitors (Vlados, 2019). They also serves various groups
which several models and features by taking care of their customers needs and wants. The global
supply chain of Ford makes this factor a strength for the company. By taking use of their
strengths the company can attain their business objective of serving the customers by making
their lives better by the transportation reasonable and accessible. The strengths of Ryanair is that
they have a low-cost business model and also they have a broad fleet. Their shares are also

performing good at stock market that makes them even more attractive and acts as a strength.
They also focuses on innovation and also on low fares. By taking use of the strength, Ryanair
can fulfil their business objective and can take decision to establish itself as a leading passenger
airline which have affordable fares.
Weakness – Weakness are also internal to the organization and because of this the company may
suffer losses. The weakness of Ford is their operations lack productivity and also there is lack of
performance on the part of vehicles (Sarsby, 2016). The brand has a poor reputation as compared
to other competitors. The dependence on certain markets acts as a weakness for the company.
The manufacturing and production of Ford vehicles incur greater cost as compared to the other
competitors therefore this acts as a weakness for them. They also have a very slow innovation
process this gives other players an edge to overtake the market. By identifying the weakness the
company will be able to work on them and can fulfil their objective of keeping basic functions in
the vehicle which is expected. The weakness of Ryanair are they are due to controversial
situation in which the top authority goes against the rule of social distancing and said it is stupid
to maintain social distancing in case of airlines (Gondek, Boessenkool and Star, 2018). Also the
pay to employees are not adequate therefore their employees goes on strike. The company is also
laying off people which is creating a bad reputation in the minds of people. By analysing their
weakness and making efforts to overcome it the company takes various decisions to fulfil their
business objective.
Opportunity – Opportunities are the external factors that can give the company a competitive
edge over. The opportunities in the way of Ford are there are various markets in which the
company can increase its customer base and tap into developing countries. Also a trend of social
media has given another opportunity to increase their brand visibility. As the trend in the market
is also shifting towards self-driving cars therefore it creates a greater opportunity for Ford to
produce such vehicles and models. Adopting to the eco-friendly and technology driven cars are
also an opportunity for the company and also it helps in enhancing their CSR activities. The
Ryanair has many opportunity in terms that they can improve their customer services through
they can maintain their customers loyalty. To get a competitive advantage the company also have
an opportunity to buy new aircraft. The government is providing assistance in Covid-19 situation
and this is the opportunity for the company (Wongchuig-Correa and et.al., 2020). As their shares
are doing well in the stock market therefore they can take the advantage of this opportunity and

can increase the sales and prices to earn greater profit. By tapping these opportunities the firm
will be able to take decision to achieve their business objective.
Threats – Threats are the external factors that can hamper the functioning of the organization and
have the potential to harm. The factors that can impact Ford in a negative way are greater
competition in the industry and cut throat competition between them. Also the price rise of raw
materials and inputs are the great threat to the company as this will lead to increase prices of
vehicles and they may loose customers in the process. Ryanair also faces some threats such as
there are certain government regulations which are not in favour of the aerial company (Madar,
2018). Also, restrictions due to Covid-19 is a threat to the company. By analysing these threats
the companies will be able to take effective decisions and achieve their business objective.
CONCLUSION
It can be concluded that there are various complexities of different types of business
structures and have interrelationship between the functions. The link between the structure, size
and scope of different organizations and the business objectives and product and services offered
by the organization is also analysed. Explanation of different types of organizations such as
public, private, voluntary organization is also presented. Advantage and disadvantage of the
interrelationships between the organizational functions and their impact on the organizational
structure is also analysed. Pestle analysis was also done to analyse the macro environment of the
organizations and also the positive and negative aspects of the external environment
demonstrated. Lastly Swot analysis was conducted to determine the strength, weakness,
opportunity and threats that justifies the decision-making.

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