Business Environment Report: Organizations, Functions, and Objectives

This report provides an in-depth analysis of the business environment, focusing on different types of organizations, including public and private companies, partnerships, and franchises. It examines the purpose, size, and scope of these organizations, using examples like Natwest and Tesco. The report delves into the legal structures of various business entities, highlighting their advantages and disadvantages. Furthermore, it explores the relationship between various organizational functions and how they contribute to achieving business objectives. The report also covers the voluntary sector and its stakeholders. Overall, the report offers a comprehensive understanding of the business environment and its key components, offering valuable insights for students studying business development.

Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different purpose and type of organisations..........................................................................1
P2. Size and Scope of various types of organisation..................................................................5
M1...............................................................................................................................................8
TASK 2............................................................................................................................................9
P3 Relationship among various functions of an organisation and its link with objectives and
structure of firm...........................................................................................................................9
M2.............................................................................................................................................11
D1..............................................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
All the external and internal factors that affect the activities of a business including its
employees, suppliers and customers is known as business environment. Identification and
evaluation of these elements is necessary for planning the future actions of an organisation. It
includes some external forces and factors which re beyond the control of an enterprise and effect
its functioning. This include customers, suppliers, competitors, political and social factors. Some
internal elements are also included in this which remain under the control of a company.
Organisation structure, nature of business activities, culture, employee's skills all come in
internal environment (Chavis, Klapper and Love, 2011). All this affect the execution of a firm's
operation that's why it is very necessary to identify them. This study help manager in making
effective strategies regarding the business. NATWEST a private bank which is operating on
international level with 4400 offices and TESCO a public limited company, based is UK which
deals in number of grocery products is taken under this report for study. Various type of business
enterprises working in different sectors with their scope and organisation structure is mentioned
in this report. Main functions of an enterprise and their relationship with other organisational
functions is all detailed in this.
TASK 1
P1 Different purpose and type of organisations
An enterprise shows a formal structure of responsibilities, authorities and relationships
among various functions through which set objectives are achieved. Make large number of
profits is one of the main purpose of every type of organisation. For this, firms do research to
identify the needs of customers and than offer them the same to fulfil their requirements.
Operations of a company largely affected by its structure, size and nature of its activities
(Commander and Svejnar, 2011). Companies who operate on a big level generate more revenues
and get more affected by the factors exist in the business environment. Further, main purpose
and type of organisations can be understood by the points stated below:
 Public limited company: Organisation whose activities are regulated by the government
of country is knows a public limited firm. Company make and offer innovative products
to its customers for satisfying their needs and wants with the aim of earn profits. Shares
are issued by these firms to general public to raise funds and this type of company has
limited liability. A PLC's stock is offer by these companies to general public which can
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be acquire by anyone either privately or during trade on stock market. It is mandatory for
these firms to use the abbreviation PLC after name of the firm. This inform the investors
or any other person that company is a public one and is large also.
These companies are formed like any other firm, two or more people form this and fill
article of association which describe main purpose, capital and membership of the company. A
limited company have limited liability towards its shareholders. To get listing on the London
Stock exchange it is very necessary that firm should fulfil the following requirements: Firm must
be registered as a public company, it must have minimum £50. 000 authorised share capital. For
smooth functioning company held a meeting every year called annual general meeting in which
all the shareholders take part. Shareholders give their advice and approval on important decisions
of firm. TESCO is an example of a public company.
Legal structure of a public company is as follows:
General government: This is further divided into following parts: Central government: This is apex body of government which control every activity of a
nation. Collect tax and print money is one of the main responsibility of this. But in UK
both state and central government share the same powers. State government: Activities of a particular state is regulated by this government.
Various activities are done by this to control the education activities in a state and this
government also encourage the education of children.
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 Local government: Regulation of activities of a small area like a city or town is done by
this government. Small amount of authority is given to this type of government to solve
the issues.
Private company: Organisations which are controlled by private individuals is known as private
organisations. Profit making is one of the main goals of these organisations. For this they employ
skilled workers for execute business operations (Eckardt, 2012). These firms drive down the
prices of their products and services for attracting more customers and to get competitive
advantage. NATWEST is an example of this. Legal structure of a private company can be
understood by the following:
Main type of private business organisations in UK are: Sole traders: This is one of the most common business ownership found in almost every
area. More than 60 % sole traders are operate in UK. Fast decision making and close
contact with all the employees and customers is one of the main advantage of this. No
complicated paperwork is required in this (Eisenberg and Miller, 2012). Sole trader suffer
all losses and gains of the business. But there are some disadvantage of this. As a sole
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trader an individual take all the decisions regarding the business which sometime take
long hours. He individual is liable to provide funds for the business operations. Partnership: When two or more individuals start a business to get some financial returns
than it is known as partnership. Partnership act 2002, decide the maximum number of
partners in a business. One of the one advantage of working in partnership is that
individuals share their skills which decrease the workload and enhance the effectiveness
of business operations. This is basically formed by signing a written document called
partnership deed. This document contain information such as name, address, age, share of
profit of every partner and many more. This support the decision making process of
enterprise remove the grounds of rise conflicts at workplace.
 Companies: A company is owned or regulated by number of shareholders who appoint
directors to give direction to the business activities. Chief executive is one of the senior
officer of company who has responsibility to take major decisions about the business.
Specialist managers are appointed by the firm to handle the operations of company to
behalf of board of directors.
A company is a legal body which and has separate entity from its owners. Shareholders put their
funds in the company by buy its shares. A company can be either public or private. In private
company shares can be sell and buy with the permission of board of directors. One of the main
advantage of a company is that large amount of finance can be raised easily with short duration
of time. These type of companies put the word Ltd after their company's name. Franchise: In UK more than half retail outlets are operating under this category.
McDonald is an example of this. This is becoming popular day by day in the country. It is
a process of selling the use of 'good ideas' to other individual or company. Owner of the
brand called franchisor grant permission to sell a good under a particular name in a
certain area. Franchisee who take out the permission give sum amount of money to the
franchising company (Hamilton and Webster, 2015). In this materials are one of the
important part of business. Under this franchisee is liable to buy an agreed percentage of
supply from the franchisor to generate large number of revenues and to maintain the
quality of products. In this franchisor take a percentage of overall sales of the company
without take any risk or without being involved in the day to day operations of business.
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By selling under a popular brand franchisee enjoy the local monopoly. Training is given
by franchisor in this and franchisee take most of the profits generated. Voluntary sector: These are the organisations which are formed and controlled by some
individuals with the aim of doing social development. Main purpose of these is to enrich
and improve the society. Social wealth is the main focus of these firms rather than create
material wealth. Many activities of different categories are included in this which affect
the various aspects of a society. Common statement which can be used for these type of
firms this or separate form the government and exist or do various efforts to make a
different or unique society rather than to make profits. In UK there are different type of
organisations sector. OXFAM is one of the example of this. Various efforts are done by
the firm to remove poverty and company focus to fulfil basic needs of poor people.
Following are the main stakeholders of a voluntary sector: Beneficiaries: These are the individuals who get benefit form the services deliver by the
firm and the one who are interested to run the enterprise. Funders: Government agencies, individuals, charitable trust or corporate groups provide
their funds to these organisations to cover the expenses. Volunteers: Individuals who give their time and support day to day operations of a
company are known as volunteers. Trustees: These are the individuals who provide strategic direction to the business
activities. Staff: Individuals who get salary for their work is known as staff members.
 Partners: Today there are number of enterprises who partner with voluntary
organisations to deliver specific services. One service is delivered by number of partners.
All these are the main type of organisation exist in business environment.
P2. Size and Scope of various types of organisation.
Every business existing in the business environment some size and scope. In every
country there is a set criteria according to which the company is judged that whether it is small,
medium or large. There are various factors on which size of the organisation is decided and these
elements can be total number of employees, its operations which it is performing to earn the
profit and other than this its market reach and share may decide its size. For running a business
there are certain challenges which are faced by the different leaders of these organisation. It is
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known that small firms which are formed for creating any innovation and those organisation
which are considered large enough are meant for the operational efficiency. For running an
enterprise or a start-up it is quite different from running a large scale business and the diverse
organisation. It is observed that those firms which are large needs more people to work with
them and have to deal with lots of people at a workplace. The managers have to control various
departments who are specialised in doing certain task for them so that they can attain competitive
advantage over their rivals if they properly maintain the workforce. There are various differences
between the organisation having different sizes and these are based on the certain factors and
elements. Organisation politics tends to play a lesser role within the large organisation as
compared to the smaller ones (Jayeoba, 2012). In may happen that smaller start-up's owner may
have long standing personal relationship with the other staff or the partners who have some share
in the firm. One of the element which differentiate a smaller and large organisation is the way
they are controlled and what hierarchical structure they follow. As large companies have more
number of people thus they will have more hierarchy. The teams of the firm may be working
through a tower without overarching understanding of the nature of the business. They allow
their employees to work according to their experience or skills which they know but when things
goes out of hand than they are not allowed to work on criteria which limits on particular field. In
the small scale there is a flat structure so it is easy to contact directly to the decision makers as
they are not far away from them. Small business have a scope that they can change and can make
quick decisions related to the products and customers and this gives them an advantage over the
large scale companies. In large size organisation they take decision in sub-committees because
they have enough time to see the the reaction of their potential customer and employees who are
working with them. It is observed that in large sized firms only those employees try to look for
the employment who are looking for job security and in the small size those people try to work
who wants to work with the different area and are looking for better growth. In the small scale
necessaries of the employees tends to be low then the large scale (Klapper, Lewin and Delgado,
2011). The biggest difference between the small scale and the large scale is of the culture which
they are following. The start-ups know that they whatever decision they take can lead them to
dangerous situation so they does not believes in risk taking. But in the case of large they believes
in risk taking as they know that a small increase in turnover can change their business position in
the market. Small scale try to maintain and handle the existing customers but with the large scale
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this is not the case as they know that they want to expand in the market so they need to convince
new markets and their audiences.
Tesco is a public limited company who deals in grocery and general merchandise retailer.
It is the world third largest retailer when measured in terms of profit. There target market is the
countries which are part of the Asian and European continent. There are 12 countries where they
have their retail stores and their most of the market share is spread across UK with 28 percent.
They have the long history of 98 years and was founded by Jack Cohen. The company has been
successfully delivering their wide variety of products and includes products & items related to
the food & beverages, clothing and home appliances. Other than this they also give their
financial services to the customers. For running such big markets they regularly hire employees
through recruiting candidates on different position (Krishnan, 2013). Currently, they have
approx. 500,000 staff which are supporting them to fulfil needs so that they can attain goals in
certain period of time. Talking about the UK market they have been successful in handling 3739
stores and with this they are focusing on catering the family shoppers because they know with
this they can earn more profits. It is their objectives to focus on the family shoppers and if
analysed the other market their foods which includes ready meals are the finest growing areas.
According to the financial reports it is analysed that they have first time have increased their
grocery market in 5 years. Earlier their market share was 28.1% which has taken a jump of 0.2%
and reached to 28.3. The good news is that they at the same time they have defeated their
competitors who are experiencing a downfall market. The biggest issue which they are facing is
the rising prices of the food items. Tesco has a aim of adopting CSR concept as with this they are
improving their image among government and their potential customers. They know that if they
will be emphasizing on this they will see increase in their brand value. Through keeping their
social responsibility in mind they focusing on the strategies which includes climate change thus
with a aim to become a zero carbon business till 2050 (Love, 2011). There scope is extend to
their stakeholders which includes customers, employees, government, suppliers and the local
communities who are part living near their stores.
National Westminster Bank which is also referred to as NatWest Bank has been ranked
number one bank in UK. It is basically retail and commercial bank. They have a big market in
UK which can be seen through the data that they 3400 cash machines and 960 branches who
every day are catering the quality services to the customers. The best part of this is that they are
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undertaking care of their customers through giving them 24*7 hour online banking and tele
calling services. Those clients who wants some kind of assistance in banking services can
directly call the bank through phone. They have approx. 33300 staff who are making it sure that
the bank achieves their targets and objectives. Till now they are catering to almost 850000
accounts of small business and has approx. 7.5 million personal clients who has trusted NatWest
for the banking services (Macdonald, 2012). It received “Best Banking App” in year 2017 at
British Bank Awards. They are continuously putting their effort to deliver the services at faster
pace and try to satisfy almost all the clients who are trusting them.
British Heart Foundation is an voluntary organisation and as made their named as the
only body who are working on heart diseases. They are funding researches on cardiovascular all
across UK. Various professionals who was working on cardiovascular or any medical field
founded this organisation in year 1961. They started collected funds so that they can do more
research on this and can reduce heart related diseases. BHF is putting their efforts to spend
almost £100 million on the research in which scientist are continuously working on identification
the microbes or things which causes hear diseases (Madsen, 2016). To spread awareness they are
funding various education products and also spending funds on the treatment of the heart
diseases. To make sure that that most of the patients who are suffering from the heart diseases
should be cured that they have appointed almost 950 BHF healthcare workers and professionals.
This organisation has gained success in the motives which they started and today it earns a
income of almost £133 million.
M1.
There are various organisation which prevails in the market and all of them have different
structure, size and scope. These things are directly linked to their business goals and products &
services they offer in the market. While manufacturing any products they make sure that they
have enough asset to support the product. For example; NatWest bank is the largest retailer bank
so they will take care that they offer products and services for the almost all types of clients as
this way they can increase their credibility and customer base. Firms needs to set the SMART
targets through looking at the scope of the new item in the market.
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TASK 2
P3 Relationship among various functions of an organisation and its link with objectives and
structure of firm
NATWEST is a one of the world's leading international bank which offer various of
products and financial services to its customers for satisfying their needs. At present firm is
operating through more than 4400 offices ans is generating large number of profits every year .
Number of functions are executed in the firm and it is very necessary that there must be a
coordination and cooperation among all the functions because this assist the firm tos deliver
quality services to its clients (McDonald and Wilson, 2011). By bring coordination NATWEST
can better satisfy its customers and can attract more individuals towards its services. Main
functions which should be effectively perform by the NATWEST to achieve its set desired
objectives can be understood by the following points:
Product and design: Product is the final offering of a firm to its customers and it is very
necessary it should have all the features to satisfy the needs of customers and to capture a larger
market share. For this NATWEST can conduct research and survey to identify the features
individuals want in the product. Further design of the product should be simple and attractive so
that more customers can be attracted towards it and firm can generate more profits than its
competitors. Various effective strategies can be use by the company to make the production
process more effective and to achieve efficiency in it. In this way firm can offer quality products
to its consumers at affordable prices (Mojaveri and Fazlollahtabar, 2012). It is very essential that
company should have all the necessary and required resources like labour, capital, raw material
and many more. This function of an organisation is directly linked with its objectives. For
example NATWEST want to increase the sales of its products by 12 % than it can not achieve by
the company if product of firm is not attractive.
Marketing and sales: Function of marketing comes under one of the main function of
every enterprise because this is the process of communicating customers about the firm's
products and influence them to buy the same. Without this a firm can not communicate with its
customers and can not motivate them to buy its product and services. Activities of this
department get affected by the business objectives set by the top managers (Welford, 2013). For
example if a firm want to increase its market share than it can use various promotional tools or a
mix of them to influence large number of customers. If done effectively this function can
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contribute a lot in the success of the firm because this is the only function through which a
company communicate with its target audience. This function increase the effectiveness of sales
department of company by increase sale of the company. Complexity of this department affect
on the structure adopted by the company. Simple organisation structure aids effectiveness in the
activities done by this while on the opposite of this complex organisation structure create
unnecessary hurdles in its operation and increase overall cost of business activities.
Finance: No business can prolong for more period of time if they don't have funds
because it is the funds which are utilised by the organisation in order to expand their market. For
carrying out the business activities they need to do certain expenditure and more the funds they
have better able to run their business. To make things in proper order and execute all the business
plan funds can be a great help. If they will lack in the funds they may face certain hurdles in the
commercial operations which they perform. NatWest should regularly take care that they have
sufficient amount of finance available to them so that they can attain their goals in much better
way and in decided time. At NatWest Bank it is the role and responsibility of the manager who is
handling the finance to inspect all the activities and operations carried out in the Bank and
according to it they should allocate the budget. Each department should get a sufficient finance
and the manager should also monitor the actions of the departments so that they can be sure that
no funds are wasted and utilised in better way (Myers and Korsmo, 2014). The objectives and
the targets should be matched according to the finance and they should know that funds are the
biggest assets available to them. If any department requires special budget because they are
going to execute a plan which will requires more budget so they should create a presentation
asking the finance manager that if this plan will give more benefits to NatWest. In the case if
they feel shortage of money they can take loans from the centralized bank and could also invest
into the areas which can give them quick profit.
Human Resource Function: In almost every organisation today have a department
called as Human Resource and their function is to handle and manage the human resources. The
biggest function of the HR department to recruit the employees for NatWest so that they can
cater to more number of customers in less period of time. Employees can also be considered as
one of the important tool to gain success and if the workers at NatWest will work with their
efficiency and putting best efforts then they will experience new heights. While hiring new
candidates they should check their experience and should ask them that what contribution they
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