Business and Business Environment: Virgin Atlantic Report

This report provides a comprehensive analysis of the business environment, focusing on Virgin Atlantic Airways. It begins by defining different types of organizations, their legal structures, and purposes, including private, public, and voluntary sectors. The report then discusses the size and scope of organizations, using examples like The Wellcome Trust, Virgin Atlantic, and the National Health Service. It examines the interrelationship of functional areas within Virgin Atlantic and how they link to its structure and objectives. The report further investigates the impact of the macro environment, applying the PESTLE model to analyze external factors. It also assesses internal strengths and weaknesses, and how they relate to external factors. The report concludes with a critical evaluation of how macro and micro factors affect business objectives and decision-making, providing valuable insights into the complexities of the business environment.

Business and Business
Environment

Table of Contents
Introduction......................................................................................................................................1
Part One...........................................................................................................................................1
LO1..................................................................................................................................................1
Discuss distinct types of organisation along with their legal structure and purpose..............1
Define and discuss the size and scope of the organisation by distinguishing between different
types of organisation...............................................................................................................4
Discuss how the different organisation’s size, scope and structure link to the business
objectives, products and services offered by the organisation...............................................7
LO2..................................................................................................................................................8
Discuss and define relationship between different functional areas of business and how they
link to their structure and objective........................................................................................8
Analyse the advantages and disadvantages of inter-relationship between organisational
functions and the its impact upon organisational structure..................................................10
Critical analysis of the complexities of distinct types of business structure and the inter-
relationship of the different organisation functions..............................................................11
Part Two.........................................................................................................................................12
LO3................................................................................................................................................12
Identify the positive and negative impact the macro environment has over business operations
supported by specific examples............................................................................................12
Apply appropriate the PESTLE model to support a detailed analysis of macro environment
within an organisation..........................................................................................................13
LO4................................................................................................................................................14
Detailed analysis of internal and external factors of an organisation in order to determine its
strengths and weakness.........................................................................................................14
How strengths and weakness inter-related with external macro factors..............................15
Critically evaluate the impact that both macro and micro factors have upon business
objectives and decision making............................................................................................17
Conclusion.....................................................................................................................................18

References:.....................................................................................................................................19
Books and Journals...............................................................................................................19

Introduction
Business firm operate in a market with the aim of serving to the needs, desires and
problems of customer through offering them products and services as a solution to engage in
commercial activities. These business firms operate and manage their business operations in a
market environment where macro, micro, internal and external factors have a significant
influence over their level of performance and profitability in long run. It is imperative for
business firms to conduct regular analysis of these factors to get an insight of to what extent
these factors can obstruct the operational activities with the intention to mitigate the impact and
take necessary measure to deal with the anticipated and unprecedented situations (Adu-Danso
and Abbey, 2020). Virgin Atlantic Airways and International limited is a leading airline firm
founded in 1984, headquartered at Crawley, England. The objective of the report is to explain the
different types, size and scope of an organisation, interrelationship of the various functions
within Virgin Atlantic and how these functions related with the organisational structure.
Furthermore, the report also analyse positive and negative impact of the macro environment
business have, along with internal strengths and weakness of a business and their inter-
relationship with external macro environment.
Part One
LO1
Discuss distinct types of organisation along with their legal structure and purpose
Organisations can be defined as the group of people or structures run and operate
business with the aim of fulfilling specified goal and purpose. There are majorly three types of
organisation which are created and operate in the business environment for a unique purpose,
with specified legal structure, liability and to satisfy the needs of the people where it is operating.
Below mentioned is the detailed description of these types of organisations.
Private Sector Organisations
Private sector of an economy majorly constitute organisations which are owned,
managed, controlled and regulated by an individuals or group of people with the aim of
generating profit through their business operations and who share common interest and goals
(Akpan, Soopramanien and Kwak, 2020). Virgin Atlantic is a private organisation incorporated
in United Kingdom in the year 1984. This is a leading Airline company which is controlled by its
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parent company Virgin group with 51% holding and remaining 49% holding is shared by Delta
Airlines. Companies which operate in private sector are free from the control and ownership of
state government.
Purpose
Prime focus of the companies operating in private sector is to generate adequate amount of profit
through their commercial activities (Brillinger and et. al., 2020). State or central government
does not interfere into their matters and are responsible for taking managerial decisions.
Legal structure
Legal structure of organisations determines the nature and type of a business firm which
gives them a shape and structure to operate successfully in the market.
 Sole proprietorship: A sole trader or proprietorship is a type of business which is owned
managed and controlled by an individual, where all the liabilities of a business is bear by
owner. Any debts incurred by the business will be settled by the owner through selling
personal assets. Partnership: Unlike Sole proprietorship, as the name implies these business are owned
and managed by two or more people who enter into an agreement to work towards a
common goals (Cooley and Prescott, 2021). Under partnership deed, all the liabilities,
ratio of investment, profit and loss and responsibility of each partner is mentioned. Corporations: Corporations may be a profit or non profit business firm that is created as
a separate legal entity and possess the right to enter into contract, sue or be sued and pay
taxes Virgil Atlantic is a profit making corporation firm which is owned by the
shareholders and individual who have invested the money into business.
Public sector Organisation
Public sectors of an economy constitutes of a companies which are engaged in the
commercial activities by or for the government whether at regional, state or central level. These
organisations operate with the taxes generated and provide goods and services for the benefits of
the society. The National Health Service is a publicly funded health care system which
encompasses NHS England, NHS Scotland, Health and Social care in Northern Ireland and NHS
Wales under its broad umbrella name. The four systems was established in the year 1948 with
the aim of delivering comprehensive, universal and free health services based on clinical need.
Purpose
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Prime objective of public sector organisations is to ensure that every citizen gets essential
public services and make use of resources in an efficient way for the betterment of a community
as a whole.
Legal Structure
Legal structure of the private sector organisations are majorly classified into three
categories such as: Local government: Companies under this type of legal structure is run, managed and
operated by the local government and ensures that the people of local community gets
basic services (Dang, Jasovska and Rammal, 2020). Prime objective of these
organisations is to foster equality and improving the standard of living. State government: These organisations are formed, owned, managed and controlled by
the government of at state level (Elali, 2021). These companies are generally funded by
the taxes generated by the state government and make use of these funds for the
betterment of people living in a society. Central government: Organisations which are own, managed and regulated by the central
authorities and government at national level. These organisations are directed towards the
betterment of the nation as a whole. These organisations provide goods and services to a
large segment of customer and to cater their specific needs and desires.
Voluntary Organisation
Voluntary group or common interest group or associations is another name for voluntary
organisations where group of people come forwards with common interest, objectives, opinion
and belief to work towards the shared goals and purpose (Falcão, Ramalho and Nobre, 2020).
Common example of voluntary organisations is trade unions, environmental groups,
conservationist and learned societies.
Purpose
Voluntary organisations are formed with the group of people who share common interest and
work towards the common issue or problem such as environment challenges, discrimination,
unaffordable housing etc. They attain their objective through providing aid and support to the
people dealing with the problem.
Legal structure
Most common legal structure of voluntary organisations is:
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 Charitable trust: Charitable trusts are the non-profitable organisations which operated for
some social cause and reason and mange its activities through donations and charities
received for a common cause or issues (Fadaki, Rahman and Chan, 2020). These are the
irrevocable trusts which are set up to make use of assets of beneficiaries for philanthropic
purpose to benefit society and beneficiary itself. The Wellcome Trust was founded in the
year 1936, is a charitable trust foundation focused primarily on health research in
London, United Kingdom. The foundation was laid by the pharmaceutical magnate
Henry Wellcome with the aim to fund the research to improve the health of human and
animal. Company limited by Guarantee: This type of legal structure is chosen by the voluntary
sector under which staff is employed, regular contracts are made, investments are
managed and own property as the name suggests, this structure helps in mitigating the
threat of personal liabilities for the members of board. Unincorporated Voluntary Association: This type of legal structure is the simplest and
most convenient form generally ideal for the small scale activities which does not require
property to run operations and a staff to manage activities. It is formed by the group of
people who came forward and agreed to work upon a common goal, for a non
commercial such as, club, society, community organisation etc.
Define and discuss the size and scope of the organisation by distinguishing between different
types of organisation
Basis Small (The Wellcome
Trust)
Medium (Virgin
Atlantic)
Large (National
Health Services)
Size Approximately 1500 to
2000 employees are
their in this
organization.
The organisation
employs
approximately 5000
employees.
Presently there are
around 47000
consultants working
with NHS, out of
which approximately
15000 are physicians.
Scope The developing
countries like UK is the
major scope of these
The medium size
enterprises are
generally owned by a
These types of
organisations are
found majorly for the
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types of business to
grow as small business
entrepreneurs have all
the resources that are
necessities in such
countries (Gregurec,
Tomičić Furjan and
Tomičić-Pupek, 2021).
As this adds the scope of
opportunities and
development and adds
value to their financial
economy with low
business cost. The
Wellcome Trust is the
best example for small
business in United
kingdom.
single owner as their
is not much
investment needed
and also the work can
be handled by a single
person. That is the
reason why these
enterprises are sole
proprietorship. Virgin
Atlantic can be
considered as one of
the best medium sized
enterprises.
betterment of a people
and a society as a
whole. Each one of
the United Kingdom’s
health care system
works independently
but is accountable
politically to the
relevant government
such as, Scotland,
Wales, Northern
Ireland, and UK.
These types of
organisations are
regulated and owned
by government bodies
and their services are
aimed at common
masses rather than
needs of individual.
Market share The Wellcome Trust
was accounted for the
financial funding of
approximately £25
billion which made it
wealthiest foundation
across the globe and
made a spending of
approximately GBP£ 1
billion on the charitable
activities for the
The market share of
Virgin Atlantic is
estimated to be 3.1 %
of the industry’s
market share.
NHS is the largest
public employer who
employs
approximately 1.3
million staff which
comprises of
approximately 11000
doctors and rest of the
nurses.
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financial year
2019/2020.
Growth The growth of the
company is increasing
day by day as the
company is improving
its workings with the
help of digital
technology. As the
company is working
towards humanitarian
cause it is even better.
As the company is
continuous moving
towards the
betterment of the
workings and the
business of the
company. The
company is lacking in
the resources such as
capital and
manpower.
The large organisation
always has other ways
for growing socially
or economically in the
market (Hacioglu,
2020). If the big
organization wants to
be sustainable they
only need to make
sure that they are
ahead of their
competitors.
Supply and demand The WellCome trust has
made an spending of
approximately GBP 1.1
billion, which proves it
that there is huge
demand of research to
improve the health and
well being of humans as
well as animals. They
are engaged in solving
health challenges faced
by people across globe
through extensive
medical science
research.
The substitutes are
available for the
products of medium
sized enterprises and
it is necessary for
them to make their
product better then
substitutes in order to
survive in the market
(Helm, Krinner and
Endres, 2020).
NHS is providing
wide variety of health
and medical services
to the citizens of
United Kingdom,
Wales, Northern
Ireland and Scotland.
Their prime objective
is to provide
universal,
comprehensive and
free medical services.
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Discuss how the different organisation’s size, scope and structure link to the business objectives,
products and services offered by the organisation
The structure, size and scope of different companies highly influence the management,
objectives, and products and services that are offered by the company as the company is working
according to these aspects and they have a huge impact on the workings of the company
(Ibnugraha, Nugroho and Santosa, 2021). It is important for the company to look after these
aspects as they can have a major impact on the growth of the company.
In context to The Wellcome Trust, as the company is an NGO the structure of the company is
governed by a board of trustees which are responsible for the decision making in the company.
As the company is a small sized company it is not very difficult to manage it. The scope of the
company is to serve people who are in need. In context to Virgin Atlantic, the company follows
hierarchical structure which is actually suitable for the company that are providing services of
airline. It has a lengthy chain of command because the chief executive is on the very top,
followed by senior managers, then assistant managers and lastly workers. The decision making
power is in the hands of top level management. The company is a medium sized company and
the scope of the company is to serve comfortable air transportation to the customers. In context
to Unilever, the company follows product type divisional organization structure (Juris and
Cugova, 2020). The structure of the company is divided into many components according to the
product they are focusing on such as personal care products, home care products, baby care
products, etc. The company is a large sized company and is providing products under around 400
brands that are owned by the company.
LO2
Discuss and define relationship between different functional areas of business and how they link
to their structure and objective
Functional areas in the organisation can be explained as the group of people who have
same set of skill set and expertise. Like human body work is well functioned by different organs,
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in similar way business firm divide their operational activities into a functional department. One
of the prime objectives behind organising business activities into functional areas is that it
employees work in their areas of expertise which result in high productivity and efficiency of
employees at workplace (Kabongo, 2020). Another advantage is that it avoids duplication of
work through clear defined roles and responsibilities.
Inter-relationship between different functional departments
 Marketing and Research& Development: Marketing and research department in Virgin
Atlantic is crucial in determining the successful meeting the needs and demands of the
customer across globe. Marketing function of the company is concerned with identifying
the target customer, determining their needs and wants, designing and developing a
product, promotional and advertising and channel of distribution for their airline services.
Marketing functions requires a large pool of information to design and develop services
as per the needs of customer and depends largely on research and development function
of Virgin (Kamenar, 2020). Employees conduct research on market trends, prevailing
competition, competitor’s services, needs and demands, buying habits etc, through
extensive and in depth knowledge of research reports marketing function works
efficiently towards providing optimum solution to the needs of customer and building
rapport in the market. Human resources and operation management: Operation management of Virgin
Atlantic is concerned with managing and controlling the airport operations ranging from
on-boarding of passenger till their arrival or departure. There are several numbers of
employees who are effectively managing the operations of Virgin Atlantic such as cabin
crew, pilots, ground staffs, personnel for handling baggage, security personnel, ticket
staff etc. In order to maintain adequate staff members HR department of Virgin Atlantic
ensures that operational activities are effectively managed with right number of
workforce with right set of skills and expertise (Karpunina and et. al., 2020). HR
department in collaboration with operational department fill the vacant positions and
provide adequate training to employees so that they can work with efficiency and
productivity.
Link of functional areas to company’s organisational structure and objective
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Evidently, functional departments of the Virgin Atlantic constitute of sales and
marketing, technical, operations, administrations, catering, research and development and cargo
which operates as per the hierarchical organisational structure. Virgin Atlantic is a leading airline
company providing carrier flying services to the customers across United Kingdom and globe.
Activities in the organisation are divided as per the functional department where employees
under each department work with specialised set of knowledge and skills to work efficiently and
effectively. Each functional department is looked after the managers and chief executing officer
who majorly control the activities and make important decision in their respective function (LE
and LE, 2020). These entire functional departments in the company work in a unison manner
towards the common goals and objective. One of the advantages for the company to work under
functional department is to promote and develop the knowledge and skills of employees and
make them more competitive. Employees under functional department work with clear defined
roles and responsibilities towards the organisational objective which in turn helps in enhancing
the profitability, performance and productivity of employee and organisation as a whole.
Figure 1 Virgin Atlantic Airways, 2021
Source: (Virgin Atlantic Airways, 2021)
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