Business Environment Report: Asda and Organizational Structures

This report provides a comprehensive analysis of the business environment, focusing on organizational types, size, and scope, using Asda as a case study. It explores different organizational structures, including functional, divisional, matrix, and global structures, and examines the interrelationships between organizational functions such as production, marketing, HR, and finance. The report also identifies the positive and negative impacts of the macro environment on business operations, analyzes internal and external factors, and applies SWOT analysis to assess Asda's strengths, weaknesses, opportunities, and threats. Furthermore, it discusses the complexities of business structures and the interrelationships of organizational functions, concluding with a critical evaluation of the impact of macro and micro factors on the business. The report references relevant academic literature to support its analysis.

Exploring the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Explanation of different types, size and scope of organisations............................................1
TASK 2............................................................................................................................................3
P2: Size and scope of range of different types of organisations..................................................3
M1: Analysis of structure, size and scope of organisations.........................................................5
TASK 2............................................................................................................................................5
P3: Explanation of relationship between organisational functions..............................................5
M2: Analysis of advantages and disadvantages of interrelationships in functions of
organisation................................................................................................................................10
D1: Critical analysis of complexities of business structures and interrelationships of
organisational functions.............................................................................................................10
TASK 3..........................................................................................................................................10
P4 & M3: Identification of positive and negative impacts of macro environment on business
operations...................................................................................................................................10
TASK 4..........................................................................................................................................12
P5: Analysis of internal and external analysis of specific organisations...................................12
P6. Factors of internal environment interrelate with macro environment................................15
M2: Application of SWOT analysis..........................................................................................16
D2: Critical evaluation of impact of macro and micro factors..................................................16
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Business environment means a collection of individual, entities and other external factors
which may not be in the control of organisation but affect its functioning. It affects the activities
carried out by the business organisations (Aminoff and et.al., 2017). It is dynamic, complex,
uncertain, multifaceted, far-reaching in impact and relative in nature. The company which has
been selected for this project is Asda which is a British supermarket retailer dealing in groceries
and other consumer products. In this report, a detailed analysis will be made on explanation of
different types, size and scope of organisations, demonstration of interrelationship of functions in
an enterprise. In addition to this, examples to demonstrate the positive and negative influence of
macro environment will be given. Also, determination of internal strengths and weaknesses of
businesses and their interrelationship with macro factors will be covered.
TASK 1
P1: Explanation of different types, size and scope of organisations
There are various types of organisations namely profit, not for profit and non-
governmental organisations. A detailed explanation about each one of them has been provided as
follows-
A business organisation refers to one or more businesses which are controlled by a person
or a group of persons.
Types of Business Organisations-
Sole trader- A sole trader is a person who is the sole owner of business and is
responsible for all its operations (Bajwa, Shahzad and Aslam,2017). An individual operating
own grocery store can be termed as an example of sole trader. The importance can be underlined
by the fact that complete control can be retained by the owner of business. The objective is to
generate maximum profits to sustain in business and goal is to get ahead of competitors. A
grocery store will supply goods and services of general needs. The legal structure is of sole
proprietorship.
Partnership- A partnership can be termed as relationship between individuals agreeing
to share profits between them. The Berkeley Partnership LLP is an example of a partnership
firm. Partnership firm's importance lies in sharing of profits and liability between partners. The
objective here is to provide consultancy related to management. The goal is to earn a sustainable
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amount of profit. Their services involve consultancy related to management. Legal structure is
that of a partnership.
Private ltd. company- It is formed by a group of individuals with an aim of earning
profits. Barclays is an example of a private limited company (Bak, 2017). Its importance lies in
the fact that the liability of members is divided in terms of shares held by them. The purpose of
Barclays is to maximise profits. Services include investment banking services in different
countries. Legal structure is that of a company and it is formed after fulfilling many formalities.
Public ltd. company- It is a company formed by offering its shares to the public. BBC is
an example of Public ltd. Company (Haddud and McAllen, 2018). Its importance is underlined
by providing services to the public and not aiming to earn profits. The purpose of forming it is to
serve the people. Services involve providing news and information to people. Legal structure is
of a company whose shares are issued to the public.
Non-governmental organisations- These organisations are formed not with an aim of
earning profits but to add value to the society by serving its cause . Save the Children is an
example of a Non-governmental organisation. Its importance lies in the fact that it strives to
contribute to the society and not to earn profits. Its services include helping children by
providing them education and better healthcare facilities. Legal structure is that of a NGO.
Difference between types of business organisations-
Particulars Profit organisations Not for Profit
organisations
Non-governmental
organisations
Meaning These organisations
work for maximising
their profits.
They are organisations
which aim to serve
public.
These organisations
work for social causes.
Objective To earn maximum
profits and to sustain
in market.
To provide services
without earning
profits.
To contribute and add
value to the society.
Legal structure They are mostly
private companies.
They are mostly public
companies.
They are organisations
running without
interference of
government.
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TASK 2
P2: Size and scope of range of different types of organisations
Organisations can be differentiated on the basis of their different sizes and scope. They
can be either micro,small, medium or large in size (Ertz, Karakas and Sarigöllü, 2016). A
detailed explanation is given as follows-
A micro enterprise is the one which employs less than 10 people and its turnover is less
than 2 million pounds (Francis, 2019). A small enterprise has less than 50 people and a turnover
of less than 10 million pounds. A medium enterprise has less than 250 people and a turnover of
under 50 million pounds. A large enterprise has more than 250 people and a turnover of more
than 25.9 million pounds.
The size of an organisation is dependent upon number of employees, the largeness of its
operations, market reach and share.
The scope of an organisation can extend to different forms such as sole proprietorship,
partnership and joint stock company.
The market share of an organisation refers to the share it has in terms of overall sales in
the overall market.
The profit share of an organisation means its share of overall profits of a particular
industry in the market.
Growth and sustainability of an organisation means how much it can grow without
having to increase its financial leverage.
Difference between different types of organisations-
Basis Mirco enterprise Small enterprise Medium
enterprise
Large enterprise
Size Its size is very
small and it
employs less than
10 people.
Its size is more
than micro and it
employs less than
50 people.
Its size is more
than small but
less than large
enterprise and it
employs less than
250 people.
It employs more
than 250 people
and is the largest
of all enterprises.
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Scope Mostly Sole
Proprietorship.
Sole
Proprietorship or
Partnership Firm.
Partnership Firm
or company.
Company.
Market Share Limited market
share.
Market share
more than micro
but less than
medium
enterprise.
Market share
more than small
enterprise but is
less than large
enterprise.
Highest market
share of all the
enterprises.
Profit Share Limited share in
profits.
Profit share more
than micro.
Profit share more
than small
enterprise.
Highest profit
share.
Growth and
Sustainability
Low chances. Medium chances. Medium chances. High chances.
Scope
Basis Small Grocery
Store
Berkeley
Partnership
LLC
Barclays BBC
No. of products Limited products. Services related
to management
consultancy.
Investment
banking service
products.
News, other
miscellaneous
information.
Original function To provide
grocery products
to people.
Providing
consultancy
services.
Providing
banking services
to clients.
Broadcasting of
news and
information.
Demand/Supply Limited demand
of products and
services.
High demand of
services.
High demand of
investment
banking products
and services.
High demand of
services related to
news and
broadcasting.
Scope for
growth/expansion
Low scope for
growth and
Scope for growth
through
Scope for growth
through
Scope for growth
through
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expansion. expansion. Franchising. expansion in
other countries.
M1: Analysis of structure, size and scope of organisations
The structure, size and scope of organisations has a link with their objectives. These are
important factors which determine the amount of resources an organisation has to achieve their
objectives. Micro, small and medium enterprises have limited resources which can be used for
achieving objectives. While large scale enterprises have the higher flexibility and funds which
helps them in achieving growth and sustainability in the long-run. Asda which is a large-scale
enterprise enjoys flexibility in terms of resources and funds.
TASK 2
P3: Explanation of relationship between organisational functions
Different organisational functions like production, marketing, HR, sales etc. share a
relationship with each other (Ignell, Davies and Lundholm, 2017). The relationship shared by
them determines the flow of chain of command in the organisation. The explanation of each
structure in context of Asda is given as follows-
Types of organisational structures-
Functional structure-
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(Source: Functional Structure, 2018)
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Illustration 1: Functional Structure, 2018

Functional structure separates different departments on the basis of functions like finance,
marketing, HR, production etc. Asda can follow this structure if it divides its departments on the
basis of functions (Koišová and et.al., 2017).
Divisional structure-
Divisional structure divides organisation on the basis of different divisions and every
product line has its own division . Asda can adopt this structure by dividing its product lines on
the basis of various divisions.
Matrix structure-
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Illustration 2: Divisional Structure, 2014

Using of matrix structure in an organisation provides greater flexibility to work with. In it
, each employee works in a department based on function be it marketing, finance etc. Asda can
adopt this structure which will ensure that its workers are divided in teams with tasks for each
team (Neugebauer, Figge and Hahn, 2016). It will allow it to change itself very quickly
according to dynamic business environment which is ever-changing in nature.
Global company structure- This is adopted by those companies which have limited
product scope. In it, a CEO oversees the functioning of business activities which are critical for
business operations . A company like Asda can adopt this structure as it helps in achieving
economies of scale in operations which helps in maximisation of profits.
Complexities- If Asda adopts this structure it can result in complexities like distraction
from specific product requirements. It may also lead to conflicts in decision-making.
Multinational company structure- As multinational companies operate in international
markets they require adjustment with socio-cultural, technological and other factors. Asda can
adopt this structure which requires it to organise work around geography and functional
activities.
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Illustration 3: Matrix Structure, 2018