Analyzing Organizational Structures and Macro-environmental Factors

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Business Environment
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Table of Contents
Introduction......................................................................................................................................3
LO1 Explain the different types, size and scope of the organisations.............................................4
P1 Explain different types and purposes of the organisations; public, private and voluntary
sectors and legal structures..............................................................................................................4
P2 Explain the size and scope of a range of different kinds of organisations.................................6
LO2 Demonstrate the interrelationship of the various functions within an organisation and how
they link to organisational structure................................................................................................7
P3 Explain the relationship between regulatory functions and how they connect to corporate
objectives and structure...................................................................................................................7
LO3................................................................................................................................................12
Identify and explain the macro-environmental factors that influence the operations....................12
LO4 determine the internal strengths and weaknesses of specific businesses and explain their
interrelationship with external macro factors................................................................................18
P5 Conduct Internal and external analysis of particular organisations to identify strengths and
weaknesses.....................................................................................................................................18
P6 Explain how strengths and weaknesses interrelate with external macro factors......................20
Conclusion.....................................................................................................................................21
Reference List................................................................................................................................22
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Introduction
Every organisation operates in its geographical boundaries and by various techniques, some
business run under their private owners and sole proprietorship and some by partnerships. The
business organisations while operating have to take note of their external and internal factors of
the environment to operate successfully and effectively. The organisation though it is an SME or
a large organisation will be able to gain huge profits and market share if they follow right
strategies and chalk out their goals and objectives precisely to reach the top position of the
market field. The following discussion will emphasise the organisational structure of three
organisations namely Lego, UNICEF, the Bank of England, and the way they earn their profits
and manage their stakeholders and customers. The discussion will also give PESTLE and SWOT
ANALYSIS of these organisations to understand the effect of the micro and macro environment on
the operations and functionalities of the organisation.
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LO1 Explain the different types, size and scope of the organisations
P1 Explain different types and purposes of the organisations; public, private and
voluntary sectors and legal structures.
The organisational structure can be different from each other in many ways, though they look
same, they are different from one another in their structures and organisations and the revenue
they collect make them different from each other. There are mainly three types of organisations
they are the public, private and voluntary organisation. They have different sizes and scopes,
which is the main base of the discussion (Stanford, 2018). The organisations which are tall in
structure often have many interconnections between the manager and the employees and have a
very developed communication level. In the other types of organisations, which are generally
Flat, they have very minimum interconnection, and the communication level is not so advanced.
Private organisation
A private company is generally the types of businesses, which are operated, by sole owners or
proprietorship and it does not have any governance, boundaries by, and Governmental sectors.
The private organisation has its own set goals and objectives, which they thrive to access and
reach the top market position. They have their products and produce theirown products to cater
to the needs and demands of the customers they want to target (Hayden et al., 2016). Lego, being
one of the private organisations was established in the year 1932, by Ole Kirk Christiansen and is
the production house for toys and manufacturer of the plastic box.
Legal structure
The private organisations are generally owned by private owners and are operated through Sole
Proprietorship. The revenues, which are collected through the business operations of the
individual organisation, usually go to the owners and are distributed among the employees
working in the organisation.
Purpose
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The privately owned organisation are mainly strengthened in their business operations are solely
concentrating on their products and services catered to the demands of their customers. They hire
employees to their organisation for fulfilling their actions and are dependable on the revenues
collected by their products.
Public Organization
The public organisations are the one, which is under the guidance of the Governmental bodies,
and they only work for the welfare of the ordinary people and the citizens of the country the
public organisations belong. They are generally related to voluntary organisations and are not
associated with any profit earning goals and objectives like private organisations. The Bank of
England is an organisation or a bank, which has an association with the Central Government.
The Bank of England is the leading bank of the United Kingdom, and therefore many other
banks are based on it.
Legal structure
The legal association of the public organisation are related to the Governmental bodies. As Bank
of England is like Central Bank and a single unit for many banks to be based on its structures.
The Bank of England is one of the central banks of the United Kingdom, established in the year
1694, and hold the eighth position worldwide.
Purpose
The purpose of any public organisations is serving the needs of the ordinary people and working
for the welfare of the ordinary people. The Bank of England purpose is to stabilise the economic
standards of the United Kingdom. It also acts as the storekeeper for the gold and assets of the
ordinary people.
Voluntary Organization
In a Voluntary organisation, the activities are related to the service of the peoples are generally
dependent on various charity organisations to operate their charity and social events. The
voluntary organisation usually have peoples who arrange social activities and campaigns along
with the charity groups and also consist of volunteers as the working heads of the organisation.
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UNICEF is one of the voluntary organisations, which works worldwide and takes up volunteers
from the US Fund for UNICEF (Reddy et al., 2017).
Legal structure
The voluntary organisation generally is not liable to the Governmental bodies, and they operate
freely believing regarding people democratic and social life along with liberal thinking.
Purpose
It helps in organising campaigns for the needy and underprivileged, and they take support from
the charity organisations for their funding and are free from any political interference.
P2 Explain the size and scope of a range of different types of organisations.
Private organisation
Size: The private organisations can be small medium and large companies in size. They can have
a minimum of 500 employees to twenty thousand employees. Lego being a large retailing
organisation consists of 20000 employees.
Scope: The Scope of the private organisations are enormous as they are not related to any
Government body interference and the revenues and profits they earn go to the owner directly
and therefore the scope is huge for them to develop. Lego has the different range as it one of the
old establishments and has earned a lot of profit with their toys and plastic boxes and blocks.
Public Organization
Size:
The civic organisations hold managers and governors who work for their welfare of the country,
they impose on their employees, and the Bank of England consists of employees who work as
bankers and holds many employees as it has worldwide recognition and many branches are
attached to it.
Scope:
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The Scope of Public organisations are the one, which is very influenced by the Government and
it deals with the people’s democratic and socialist power so that they can serve in a much better
way for the welfare of the ordinary people.
Voluntary Organization
Size
Voluntary organisations can have a small scale or large quantities according to the operations
and the customer’s outlook on the organisation. UNICEF id a worldwide organisation that has
millions of volunteers and is supported by donations and large charity organisations.
Scope
The Scope is enormous as the underprivileged people look up to these organisations at times of
emergency and natural disasters or calamities. The disadvantage of these organisations is that
sometimes it faces a lack of funds and volunteers when it is very much needed
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LO2 Demonstrate the interrelationship of the various functions within an organisation and
how they link to organisational structure.
P3 Explain the relationship between organisational functions and how they link to
corporate objectives and structure.
The organisations have different structures, and regarding its infrastructures size and operations
they set their scopes to develop themselves for being presentable in the competitive market.
There are many structures the organisation should adapt to ease their actions, and the structures
can bring relative progress to their efforts. The lack of structure in an organisation can hamper
the business organisations progress and bring a vast breakdown if not taken a strategic way.
There are mainly four types of organisational structures. They are as follows:
Functional Structure- Functional Structures are mostly applied in the business operation of sole
proprietorship and are solely dependent on the performances of the employees and the products
they produce to accomplish the demands of their targeted customers. Small businesses mainly
choose this kind of structures to run, as it is preferable for them. Lego being a retailing
organisation follows the Functional Structure. The functional structures can have various
departments like an organisation have the Sales Department, HR Department, and Finance
Department. Therefore, each employee is assigned to the various departments of the
organizations, and they work for achieving the same goals and objectives. One of the
disadvantages of the Functional Structures is that there are communication problems as
employees are working in different departments which often lead to ineffectiveness of their
work.
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Figure 1: Functional Structure
Source: (pmstudycircle.com, 2019)
Divisional Structure- The divisional structures have been applied to the organisations, which
have worldwide recognition, and its branches are scattered all over the world with its long
history and renowned background in business operations and functionalities. Moreover,
organisations having large structures like Lego only are preferably following the divisional
structure. The Bank of England even being a base for the many banks follow a divisional
structure. The maximum advantage of this organisation is that the operations should be met with
the goals and objectives very quickly and rapidly in the desired time agenda. In here, the
employees do not work in the different segments, but they work collectively and the
communication level, is higher and is much developed in the organisations and therefore the
work is more productive. The cost and operating range are much higher than other structures,
and consequently, they can be costly.
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Figure 2: The model of Divisional Structure
Source: (accountingtools.com, 2019)
Flat Structure- These are a very different type of structure the organisations follow and are
generally applied in the corporate of the Information Technology Sectors. There are all types of
sections, segments in the Flat Structures, people are hired or appointed as per their expertise and
qualification, and the organisation maintains every position. There are senior officials, managers
and there are general employees. The advantage of these flat structures is that every employee
are treated in the working environment and they can work very productively and maintain an
ethical climate in the working environment. These can be applied to the organisation like
UNICEF, as they can appoint managers to handle the organisational campaigns but in the work
field, they have to be equal while arranging drives, working for the welfare of the ordinary
people, helping the needy, and underprivileged.
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Figure 3: Model of the Flat Structure
Source: (study.com, 2019)
Matrix Structure
The Matrix Structure is the most complicated structures of all the organisational structures and is
generally very hierarchical structure and are applied to the organisation like the UNICEF, though
being a Voluntary organisation they have a very complicated structure. The matrix structures are
also used large multinational companies and are the combination of two structures collectively.
The matrix structure supports the Functional and the Divisional Structures, and the matrix
structure represents the combination of both the structures within an organisation (Theocharis et
al.,2016)The disadvantage of this matrix structure is that it has many divisions and it becomes
risky and hectic to manage all these segments together. They have problems in the
communication system, which lead to less effectiveness and plodding progress of work. The
matrix structure faces the management of double fabric in the organisational body, which affects
the work progress. As the manager of the functional department manages the function, the
product, and the divisional manager also works at the same level, which creates confusion among
the employees along with the higher officials controlling them.
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Figure 4: The Model of Matrix Structure
Source: (study.com, 2019)
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