Business Environment: Organisation Types, Scope, Functions and Factors

This report provides a comprehensive analysis of the business environment, focusing on different types of organisations such as private, public, and voluntary sectors, with examples like ALDI and TESCO. It examines the scope and size of these enterprises, highlighting the relationship between organisational functions and structure. The report also discusses how the structure of an enterprise affects its activities and overall quality, emphasizing the importance of flexibility. Furthermore, it touches upon the influence of HR, production, sales, and marketing on the business, stressing the need for adaptability to changes in the business environment. The report is supported by references to books, journals, and online sources, offering a detailed overview of the business environment and its various components.

Business and
business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different type of organisations with their purposes.........................................................1
P2. Different type of enterprises with their scope and size....................................................2
TASK 2............................................................................................................................................3
P3. Relationship between functions of organisation and its linked with structure of enterprise 3
TASK 3 & TASK 4..........................................................................................................................6
Covered in PPT.......................................................................................................................6
REFERENCES................................................................................................................................6

INTRODUCTION
Business environment is a combination of all internal and external factors in which business
conducts its commercial activities. All these factors affect the activity of enterprise in both;
positive and negative ways (Chavis, Klapper and Love, 2011). For achieving success and
smoothness in operations, it is important for every manager to identify all factors and their effect
on business. By doing this firm can make better business strategies and can achieve efficiency in
its operations. ALDI is one of the biggest grocery retailer in the world is taken to studied under
this. Present report involves information based on different types of enterprises including private
and public along with stating their purpose, size and scope as well as legal structure.
Relationship of different functions of organisations and structure & objectives of business are
also mentioned. Along with this, internal and external analysis is conducted in this report to
identify firm’s strengths and weaknesses.
TASK 1
P1. Different type of organisations with their purposes
Following are the main types of enterprises:
Private sector: These types of organisations are controlled or owned by private
individuals or groups. Main and the only purpose of these type of enterprises is to generate high
profits for example ALDI.. Following organisations come under this category: Sole trader: Under this only one individual run or operate the activities of business. That
person bear all losses and gains generate form business operations. One of the main
advantages of this type of business is freedom to take business decisions. Limited source
of finance is the main disadvantage of this. Partnership: Under this, two or more than two persons undertake business activities.
Here, work load is divided among all partners of business along with profits and losses.
Huge amount of finance can be raised in partnership which is one of its biggest
advantages. However, disadvantage of the same is that profit is divided among all
individuals included in enterprise activities. Public sector: These organisations are controlled by the government either totally or
partially (Commander and Svejnar, 2011). Government has the power to take all
important decisions of these businesses. Under this, firms sell their shares to public at
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large for raising finance and to perform various business activities for example TESCO
plc.
 Voluntary sector: In this, some individuals come together for running business
operations just for solving the social problems of large number of public. Sometimes,
they are also known as not-for-profit organisations (Eckardt, 2012). Oxfam is one of the
examples of this type of business which does a lot of effort for removing the poverty.
P2. Different type of enterprises with their scope and size
Scope of firm and its activities largely depend on its size. Larger the size of business
wider the scope will be and smaller the size small will be the scope of its activities. Scope of two
different companies ALDI and TESCO can be understood by the following differentiation:
Company's Name ALDI TESCO
Type of company Private Public limited company
Industry Retailing Retailer
Headquarters Germany England
Number of locations 10366 stores More than 6553 stores
Products Supermarket Supermarket, Hypermarket,
Superstore
Revenue €53 billion £55,917 million
Operating income €13 billion £1,280 million
Net income €3 billion £(54) million
Number of employees 42000 approx. 476000 approx.
Subsidiaries Trader's Joe Tesco bank
Tesco mobile
Tesco Ireland
Tesco Kipa
Teaso Family Dinning ltd.
Scope and purpose of different enterprises
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Main purpose of sole entrepreneurship start business or undertake business activities just
to generate large number of profits year.
When two or more than town persons underrate a commercial activity with the aim of
generating revenues is known as partnership. Main purpose of this type of business is to capture
a larger market share. As more people are involved under this type of business so scope of this is
also wide.
Public enterprises are the one which are controlled by government. Profit earning is not
the only purpose of this type business enterprises. They start business activities just to solve the
social problems of the people or social welfare.
TASK 2
P3. Relationship between functions of organisation and its linked with structure of enterprise
Structure of organisation depends on its size, the sector in which business perform its
activities including public, private or voluntary and number of employees working in it.
Organisational structure of TESCO
Organisation structure of TESCO is hierarchical reflecting large size of business and its
activities. Under this type of organisational structure, positions are divided into many parts to
ensure the efficiency and smoothness of business operations. People at the top position have
higher responsibility and authority (Eisenberg and Miller,2012). At present, company has 10
board of directors including CEO and chairman. In stores of the firm, there are four management
layers which sometimes create bureaucracy and disturb the flow of communication across
various layers of management. For removing this, manager of firm should give consideration on
increasing the flexibility and try to reduce the layers of management.
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Structure of enterprise affects the activities of business and its quality. Structure of firm
should be flexible enough so that necessary changes can be done by the top management
according to situations.
Organisation structure of ALDI
ALDI is one of the discount supermarket chains that is mainly divided into two parts
including ALDI NORD and ALDI sud (Hamilton and Webster, 2015). At present, company
follows a decentralised organisational structure in which lower managers are skilled and capable
enough for taking business decisions. All these lead to the success of organisation proves ALDI a
good decision maker.
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Relationship between different organisational functions
Production, sales, marketing following are the basic functions of every of enterprise.
Execution of these functions is largely depend on the structure of enterprise. It can be understood
by the following points: HR department: Human resource department and activities of this department affected
by the structure follow by they enterprise. For example having more decentralised
business structure save the time of ALDI in taking decisions related with the day to day
operations of business (Jayeoba, 2012). In the hierarchical organisation structure it delay
the decision taken in business.
 Production: Every enterprise select or choose a different process for producing final
goods. This activity is choose according to the structure of enterprise.
Type of organisation and its structure affect the activities of enterprise. Which affect the
success and failure of business operations. Structure of every enterprise should be enough
flexible so that changes can be done in this according to the changes arise in business
environment.
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Type of organisation and its structure affect the activities of enterprise. Which affect the
success and failure of business operations. Structure of every enterprise should be enough
flexible so that changes can be done in this according to the changes arise in business
environment.
TASK 3 & TASK 4
Covered in PPT
REFERENCES
Books and journals
Chavis, L.W., Klapper, L.F. and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Eckardt, M., 2012. The European Private Company: Do we need another 28th private company
law form in the EU? On regulatory competition of corporate law.
Eisenberg, T. and Miller, G.P., 2012. The English versus the American rule on attorney fees: an
empirical study of public company contracts. Cornell L. Rev.. 98. p.327.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Jayeoba, F.I., 2012. NEED-GOAL INTEGRATION AND ORGANISATIONAL TYPES;
IMPLICATION FOR INDUSTRIAL RELATIONS. European Scientific Journal. 8(19).
Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp.
108-123). Palgrave Macmillan UK.
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Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp.
108-123). Palgrave Macmillan UK.
Krishnan, A., 2013. Culture As a Successor of Quality Initiatives: A Review. International
Journal of Social Science. 2(1). p.53.
Love, V.J., 2011. Private company accounting: A concept whose time has come. The CPA
Journal. 81(2). p.16.
Macdonald, R., 2012. Unilever. A Strategic Analysis.
Madsen, D.Ø., 2016. SWOT Analysis: A Management Fashion Perspective.
McDonald, M. and Wilson, H., 2011. Marketing plans: How to prepare them, how to use them.
John Wiley & Sons.
Mojaveri, H.S. and Fazlollahtabar, H., 2012. Designing an integrated AHP based fuzzy expert
system and SWOT Analysis to prioritize development strategies of Iran agriculture.
Revista de Management Comparat International. 13(1). p.117.
Myers, M. and Korsmo, C., 2014. Appraisal Arbitrage and the Future of Public Company M&A.
Rankin, M., Windsor, C. and Wahyuni, D., 2011. An investigation of voluntary corporate
greenhouse gas emissions reporting in a market governance system: Australian
evidence. Accounting, Auditing & Accountability Journal. 24(8). pp.1037-1070.
Welford, R., 2013. Hijacking environmentalism: Corporate responses to sustainable
development. Routledge.
Online
business environment. 2017. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>. [Accessed on
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Organizational Structures. 2017. [Online]. Available through:
<https://www.tutorialspoint.com/management_concepts/organizational_structures.htm>
. [Accessed On 24th July 2017].
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methodology.net/tesco-organizational-structure/>. [Accessed On 24th July 2017].
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