BTEC HND: Exploring Organisation Types, Size & Scope in Business

This report provides an explanation of different types of organisations operating in the UK, focusing on their nature, scope, and size. It categorizes organisations by sector (private vs. public), commercial interest (profit vs. non-profit), size (large, medium, small), and legal structure (sole traders, partnerships, companies, franchises). The report compares private and public sector organisations, using National Health Services (NHS) and ASDA as examples, highlighting their ownership, purpose, funding, control, and working environment. It also classifies employers according to size, detailing the employee numbers for both NHS and ASDA. Furthermore, the report discusses the differences in organisational scope between non-profit and for-profit entities, emphasizing the purpose, ownership, income distribution, and control mechanisms. Finally, it examines different organisational structures, including hierarchical, horizontal, and matrix structures, and applies these concepts to ASDA and NHS, explaining how their chosen structures align with their objectives.

Business & Business
Environment
LO1 Explain the different types, size and scope of organisations

Introduction
 Organisations are designed on the basics of labour and
management. The success of the organisation in achieving its
objectives depends on the nature, scope and size. Different types
of organisations operate in the UK according to different purpose
as discussed and presented in this presentation.

Different types of organisation
 Sector classification
 Private sector organisations, public sector organisations
 Commercial interest
 Profit-oriented organisations, Not-for-profit organisations
 Size oriented classification
 Large scale, medium scale, small scale
 Legal structure
 Sole traders, partnerships, companies (private limited, public limited), franchise

Comparison between private sector and
public sector organisations
Comparison
Basis
Publics Sector Private Sector
Ownership The government or
government bodies
Individuals or
companies
Purpose To serve the country’s citizens To earn profits
Funding Public revenue Individual investments
Government
control
Full control Less government
interference
Working
environment
Comparatively relaxed Competitive

Difference between private and public
organisations with example
National Health Services
(NHS)
Asda
National Health Services
England is government operated
and publicly funded
organisation.
Asda is a subsidiary company
of American retail giant
Walmart.
It is regarded as the world’s
largest health
service provider.
Walmart is the world’s largest
retailer and Asda is the second
largest superstore of the UK.
The purpose of the organisation
is to provide healthcare services
to all people.
ASDA's mission is “to be
Britain's best-value retailer and
always exceeding customer
needs”.

Classification of employers according to
size
 Micro business - less than 10 employees
 Small business – 10 to 49 employees
 Medium business – 50 to 249 employees
 Large business - more than 250 employees
 Both NHS and ASDA are large scale employers in the UK.
 NHS employs 1.4 million staff members across all the hospitals in England as
compared to Asda which has more than 180,000 employees in its 631 store locations.

Different organisational scope
Non-profit organisations are different from for-profit organisations in following
ways:
 The purpose of non-profit organisations is to focus on providing benefits
to society and not to earn profit.
 Public ownership and not owned by individuals or companies
 Income is re-distributed back into the organisation’s fund and not provide
any dividends
 Control of these organisations lies with government board or directors
appointed by the government.

Different organisational scope
 Asda’s business purpose is to make goods and services more affordable for
everyone. Respect for the individuals, strive for excellence and service quality
for customers are the moral values that helps to summarise the company’s
beliefs and to take decisions.
 On the other hand, NHS has the purpose to provide affordable healthcare
services for all people irrespective of class, age or wealth. There is not any
profit motive but to offer free, equal and the best quality medical treatment.

Different organisational structure
 Organisational structure refers to how the employees are organised within the
firm and how they relate to each other. The organisational chart represent the
organisational structure by showing who has the authority over whom.
 According to the aims and objectives there are three different types of
organisational structure:
 Hierarchical structure
 Horizontal structure
 Matric structure

Different organisational structure
 The organisational structure of ASDA is hierarchical. There are fewer people at the top
management level who makes strategic decisions. This structure helps the organisation
to work according to the objectives as the span of control for managers is few people.
Also it helps to stay organised by having one person send a direct message to everyone
making sure they all are working and being sensible according to the organisational
goals.
 NHS is a traditional bureaucratic organisation and has hierarchical structure The
organisation works in layers, with the higher layers having more authority than those
below them. The advantage of this structure for NHS is that every role is clearly
defined. Decisions can be made quickly by those at the top of the organisation.