Business Environment Analysis: Types, Purposes, Size, and Scope

This report provides an overview of various types of organizations within the business environment, including public, private, and voluntary sectors, and their legal structures. It explains the purpose of each organization type, highlighting their operational differences and contributions to society and the economy. The report also analyzes the size and scope of micro, small, medium, and large enterprises, using Nike Inc. as an example, detailing the relationship between different business functions such as marketing, human resources, finance, and operations. Furthermore, it discusses how these functions link to organizational objectives and structure, emphasizing the importance of a hierarchical structure for effective communication and loyalty within the business.

Business and business Environment
P1 Explain the various types and purposes of various organizations; Public, private and voluntary sectors
and legal structures.
Public Private Voluntary
Definitio
n
Public organization is
referred to an organization
that is established with an
aim of serving the needs of
a community. These
organizations are not
mainly or basically for the
profits or economic
development of the
organization. These
organizations fulfil social
purpose.
Private organization is referred
an organization that is formed
under a sole proprietorship,
partnership, agency or
corporation with an aim of
earning profit. These
organizations are solely
governed, owned and operated by
individuals or a group of
individuals and have no role of
government in the operational
process of the organization.
Voluntary organization is referred to
an organization that is non-profit
driven, autonomous as well as non-
statutory that is operated and owned
by the individuals that are not paid
for operating the business. These
organizations are mutual and have an
aim of generating profit for the
organization rather than considering
social needs.
Purpose The purpose of the public
organizations is to deliver
various foods and services
for the community or the
region(Möller, Nenonen
and Storbacka, 2020) . The
organizations are basically
run and owned by the
government and their
subsidiary organizations.
The various services
delivered by the public
sector enterprises are the
military, public
infrastructure, police,
public transits, etc. with an
aim to make conditions
better for the society.
Private organizations are
operated with the purpose of
earning profits in the market. The
private sector organizations also
have a huge contribution in the
growth and development of a
country and region. The private
sector organizations help in
generating per capita income that
leads to enhancement of GDP of
a country.
The main purpose of voluntary
organization is to provide benefits to
the society in order to enhance or
enrich it without expecting profits in
return. The aim of voluntary
organization is to create wealth for
the society and contribute towards it
improvement as well.
Legal
structure
s
Central Government:-
the organisation which fall
under this category
manage, controlled and
funded by the central
government of the country
by collecting tax and
treasury.
State Government:-
The firms which fall under
this category usually
manage and controlled by
the particular
department(Radović-
Marković, Salamzadeh and
Vujičić, 2019) . The central
government also involved
their decision but at the
limited level.
Local Government:-
The organisation which fall
under this category are
usually manage and
controlled by the municipal
authorities. They generate
the fund and revenue from
the local communities.
Sole proprietorship:-
These organisation are usually
controlled and manage by the
single person which is called as
owner of the firm. The holder
of the sole proprietorship firm
is responsible for all the
liabilities which include losses,
debts and many more of the
organisation.
Partnership firms:-
These firms are usually manage
and controlled by the two or
more persons which are known
as partners. An agreement has
been signed between the
partners in which they agreed
to share the profit and losses of
the organisation on the equal
bases or by in deciding ratio.
Unincorporated Associations:-
These associations are
incorporated by two or more
persons who have a common
purpose. These persons bound
together to achieve a common
objectives and each person
have their own responsibilities
and obligations.
Trust:- This may be define as
an associations which are not
legally bind by the laws. The
members of the trust are known
as the trustee and they are
incorporated mainly to solve
the problems and issue of the
societies. The each and every
member of the trust are
responsible and libel for all the
actions(Rialp-Criado and
Komochkova, 2017) .
P2 Explain the size and scope of a range of various types of organization.
There are various types of organizations that can be considered in the study. The various types
of organizations that are discussed are micro enterprises, small enterprises along with the medium and
large enterprises (Belas and et .al., 2019). Scope and Size for each of the organization type is discussed
below along with the examples of each.

Basis Micro enterprises Small enterprises Medium and large
enterprises
Size The term micro enterprise is
referred to the various small
business organization that have
a low employment level along
with low investment capital
also (Gavurova and et.al.,
2017).
The small enterprises are
owned and operated by
the independent owners.
The small enterprises
have a motive of
employing workers in
small numbers in order to
develop their business in
long run. The motive of
small enterprises is to
increase the volume of
sales in order to generate
better revenues along
with better profits.
The medium and large
enterprises consist of
employees that work on the
basis of voluntary
memberships along with the
various multinational
organizations(Tien and et .al.,
2021). The multinational
organizations help the
medium enterprises to
enhance their growth at a
rapid pace.
Nike Inc.:-
Background:- Nike Inc. is a multinational sportswear company and headquarters of the organisation is
located in Beaverton, Oregon, U.S. The company was founded in 1964.
Product and services offered:- the company offers different types of sports wear and equipment. The
company also deals in sports shoes and any kind of services related to sports (Belas and et .al., 2018) .
Size: the company provide employment to the people around 76,700 all across the globe and the turnover of
the company is around 37.4 billion $.
Scope: the company manufacture excellent quality of sports equipment which are mainly used national and
international sports person.
Vision: The vision of the company is to expand their business and cover more market share. The company
wants to dominate the sports market.
Mission: the main aim of the organisation is to produce and offer best quality of product to their customer
because the product are mainly used by the famous personalities of sports.
capture the more market area.
Stakeholders: the stake holders of the Nike Inc. are the players, shareholders, board members, partner etc.
Business Objectives: the main motive of the company is to earn more and more profit, along with this,
capture the more market area.
P3 Explain the relationship between different organizational functions and the way in which they link
to organizational objectives and structure.
The increasing competition and the risk in the retail sector have made it important for Nike to
maintain a suitable image of their own in the market(Bruijl, 2018). The various organizational functions of Nike
can be properly linked with the objectives and structure of the organization.
Marketing- Marketing is one of the most crucial component of the business operations that help the
organization to have a strong and healthy relationship with the clients as well as the businesses. The marketing
function of Nike works on building a strong brand image of the organization with the help of active
participation in aspect of publicity and interaction with the help of tools and techniques.
Human resource- The function of Human Resource aims to bring out various effective strategies in order to
enhance the efficiency of the business and its operations. The human resource of Nike focuses upon recruiting
and selecting the employees with the highest potentials for the betterment of the organization. The hiring of
suitable candidates will help the organization to increase the productivity of Nike and make it easier for the
organization to achieve the organizational targets(Cyphert and et .al., 2019) .
Finance- Finance function of Nike helps the organization with various revenues and expenditures taking place
in the organization. The finance function requires the organization to use its finances in the most optimum way
in order to invest effectively while earning better profits.
Operations- The Operations function at Nike will help the organization to monitor the production process of
the organization. The continuous monitoring and guidance will help the organization to bring out effective and
efficient work process in order to meet with the goals and objectives of the organization along with the aim of
customer satisfaction.
Relationship between different business functions of an organisations:
The human resource department of organisation is responsible for recruiting and selecting an
appropriate workforce for the different department of the business. They manage the people and staff according
to the need and requirement of the marketing, finance and production department of the business.
The marketing department of the company is responsible identify the market trends and carries out the
market research. They found the need and demand of the potential consumer so that the production department
of the company design and make the goods and services according to the requirement of the market(Dierkes and
Coppock, 2017)
The finance department is responsible for managing and setting the budgets for the marketing department. So
that marketing manager know how much they can spend on the promotion and the advertising. They also
manage the budget for training and development programme arrange for the employees of the organisation.

Organisational Structure:
Organisational structure may be define as a framework which not only outline the different roles for the employees of the organisation but also allot some responsibilities to them. With the help of these structure a
company can achieve their objectives and goals in a very effective manner. In respect to NIKE Inc. the organisational structure which is followed by the company is given below:
Hierarchical Structure: This is the most commonly used structure which are followed by the different types of the companies. In this organisational structure the management of the company divide their business functions
into the different levels of organisations from top to bottom like a pyramid. Each subordinate of the company is required to report their boos or superior. The CEO of the company is placed at the top level and them board of
directors and so on. The NIKE Inc. followed the Hierarchical organisational structure in which each and every employee of the organisation is required to report their superior. This structure not only promote the loyalty in
each department but also encourage the healthy communication within the business(Escaleras and Chiang, 2017) .