Business and the Business Environment: Organisational Analysis

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Business and the Business Environment
Organisational Types, Functions and Structures

Executive Summary
The present report is related to business and business environment. The prime concern
in this case was organisation types, functions and structures that includes three different
types of firms to emphasize on the dissimilarities between them. One of the
organisations, NHS had been selected for explanation of different functions in the
business and understanding the interrelationships between the functions. PESTLE
analysis and SWOT analysis had been conducted that help in understanding impact of
macro environment on company operation and strengths and weakness and interlinking
it with external factors of business entities.
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Table of Contents
Introduction...................................................................................................................... 4
LO1 Explain the different types, size and scope of organisations....................................5
Explain different types and purpose of organizations; public, private and voluntary
sectors and legal structures (P1)..................................................................................5
Explain the size and scope of a range of different types of organizations (P2, M1, D1)
...................................................................................................................................... 5
LO2: Interrelationship of the various functions within an organisation and link to
organisational structure....................................................................................................7
Explanation of the relationship between different organisational functions and their
link to organisational objectives and structure (P3).......................................................7
Analysis of advantages and disadvantages of interrelationships between
organisational functions and it’s the impact upon organisational structure (M2)...........9
LO3: Demonstration of both the positive and negative influence/impact the macro
environment has on business operations.......................................................................11
Application of PESTLE model to support a detailed analysis of the macro environment
within an organisation (M3).........................................................................................11
Identification of positive and negative impacts the macro environment has upon
business operations (P4)............................................................................................14
LO4: Determination of the internal strengths and weaknesses of specific businesses
and their interrelationship with external macro factors...................................................15
Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses (P5, M4)...........................................................................15
Explanation of strengths and weaknesses interrelate with external macro factors (P6)
.................................................................................................................................... 16
Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making (D2)..........................................................................16
Conclusion..................................................................................................................... 17
References.....................................................................................................................18
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Introduction
Various aspects influence the present business environment and have an overall impact
on the effectiveness of its performance. A business can be easily established however,
to successfully sustain, it requires proper utilization of resources and knowledge about
the changing business setting. The business environment is refers to as a collection of
numerous internal and peripheral factors such as customer, employee, supply and
demand, suppliers, management, innovation, technological development, government,
social and others (Erasmus et al., 2016). The intent of this report is to understand
diverse organizational types, functions, structure, both positive and negative impact of
macro environment on operations of business and internal and external components
that impinge on the business. The chosen companies in this report are the National
Health Service, Iceland Ltd and British Heart Foundation based on which the entire
report will be conducted.
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LO1: Explain the different types, size, and scope of organisations
Explain different types and purpose of organizations; public, private and
voluntary sectors and legal structures (P1)
An organisation can be opined to e a group or a structure that had been established
with the aim of achieving certain specific goals and objectives that ultimately lead to
profit making. In the modern business context, the features of organisations are
constantly changing based on their types. It can be seen that each type had been
established in order to satisfy the need of communities in which they are operating. The
most effective way that can be adopted for differentiating between different types of
organisations is to evaluate the goals or purpose of business. Some of them are profit
generating in nature, while others are present to help or for the well-being of society.
Based on this, there are broadly three types of organisations, public, private and
voluntary.
Public Organisation: Any organisation that has open ownership to all shareholders and
specifically found to be owned by the government is known as a public organisation.
Dumay et al., (2015) stated that shares of the company can be purchased by anyone
irrespective of anything. Thus, it is entirely dependent on the activities of the public that
are the major shareholders of the company. From the strength factor, it can be stated
that the minimum strength of such type of company is seven whereas there is an upper
limit to it. The public sector organisation is necessarily had to have Public limited
following the name of the organisation, this help in distinguishing it from other types by
just observing the name. Example of public organisation in the UK is the National Health
Service in England.
Private Organisation: Private companies are considered to be exactly the opposite of
public entities. The ownership belongs to an individual or partners that are responsible
for running the business and there is no involvement of the public. For effective
operation of this type of business, there is a requirement of minimum of two individual
which can be extended to many more members in case of requirements. The aim of a
private company is to earn profit and expand in new markets that will allow more
economic stability. An example is Iceland Ltd which is a chain of supermarket in Wales
and it has numerous stores in a different location in England.
Voluntary or charity Organisation: This type of business is completely different from the
above-mentioned corporations. The similarity in the private and public sector is to
generate profit however; this is non-profitable and non-governmental entities. The aim
of this company is to assistance and promotes the well-being of society as a whole.
According to Milbourne and Cushman (2015), charities work in collaboration with the
public sector for the benefit of the people. Various welfare organisations and
foundations fall under this category. An example of this category is the British Heart
Foundation.
Explain the size and scope of a range of different types of organizations (P2, M1,
D1)
Size and scope of business entities are an important aspect as it helps in understanding
the purpose as well as aid in the decision-making process. On the basis of these two
factors, companies can be distinguished into four categories, namely micro, small,
medium and large-sized entities. A business is considered to be microenterprise when
the business is conducted within a local area and the number of employees is less than
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ten. The investment required for such type of business is less than £11000. Thus, from
these factors, it can be found that the size and scope of this enterprise are the smallest
in nature. Small enterprise is a small business operation that requires an investment of
£28000 to £500000. The retails shops, medical stores and groceries are examples of
small enterprise that are small in nature however, its operation and scope are large than
microenterprise. The owner of this type of companies is self-regulating in nature
irrespective of the size. An amalgamation of micro and small enterprises results in
medium-sized corporation (Mackintosh et al., 2016). The number of employees ranges
from 100 to 1000and the investment of this business ranges over £6 million as per the
portfolio in the last two years. The nature of its operation is considered to be developing
as it has the capability of incorporating technological and sustainability factors within it.
The largest among all is large-sized enterprise where the annual investment is more
than £ 1 billion and the number of employee ranges from 250 to 1000.
Irrespective of the scope and size, the major objective is to generate profit and increase
the revenue. Since there are differences in the basic characteristics of these types of
enterprises, thus, it is important for the management of each company to take into
consideration and operates accordingly. The companies need to have social activities
that are known to enhance the brand name of the company and attract more customers
towards it (Flynn et al., 2015).
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LO2: Interrelationship of the various functions within an organisation and link to
organisational structure
Explanation of the relationship between different organisational functions and
their link to organisational objectives and structure (P3)
Background of Public Organisation
The National Health Service in England is a public sector organisation that was founded
in 1948 as key social changes after the occurrence of World War II. The four principles
based on which the organisation offers its services are universal, comprehension, free
and to the point delivery. It was found that the services offered include a comprehensive
range of healthcare services that are free of charge for the ordinary population of the
United Kingdom (UK). However, the provision does not include dental and optical care
treatment. In NHS, England, the patients are required to pay a nominal charge as
prescription charges. It employees over 1.3 million employees and has an arrangement
of approximately 1 million patients within 36 hours (England.nhs.uk, 2019). From this
fact, the size and scope of the organisation can be identified. The services cover from
antenatal screening, routine screening to end-of-life care. The funds of this organisation
directly come from taxation. The vision of the entity is to offer free healthcare services to
the residents of the UK in a timely manner. The mission of the organisation is to
become prime healthcare provided in the UK to better support and improved care to
patients. The business objectives involve maintaining a balance between national
direction and local support to ensure the best possible results for patients. After the
enactment of the Health and Social Care Act 2012, there was a statutory change in the
structure of the organisation that involves the closing down of Strategic Health
Authorities and Primary Care Trusts and the beginning of Clinical Commissioning
Groups.
Figure 1: NHS England
Source: (England.nhs.uk, 2019)
Background of Private Organisation
Iceland food Ltd is a private British supermarket chain. Its headquarters is situated in
Wales. The company was founded in 1970 and according to the report of 2016; it
operates in more than 800 locations. The company focuses on frozen foods such as
vegetables and prepared meals. In addition, it also offers non-frozen grocery items
required for daily household use. It owns about 2.2% of share in the food market of the
UK. The net income of the company was £ 160 million and there are more than 23000
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employees currently working in the company. It is considered as a British business that
is focused on frozen food, convenience, innovation and value. The strategy is to take
advantage of well-established strengths in order to achieve long-run profits in term of
growth and offer benefits to the shareholders, charities and communities in which it
operates. It is an iconic brand of frozen food and provides several options to its
customers such as local stores at various locations, home delivery options; wide ranges
of food options ensure high quality at a low price. The company has a legal liability of
selling the share and various responsibilities are divided within the organisation in a
divisional manner (About.iceland.co.uk, 2019).
Figure 2: Logo of Iceland Ltd
Source: (About.iceland.co.uk, 2019)
Background of Voluntary Organisation
British Heart Foundation is a charitable organisation located in the UK. The key aim of
this firm is to supply funds for research involving the circulatory and heart diseases and
risks factors associated with it. The company was formed in 1961 and is a registered aid
organization situated in the High Street, NW1. The chairperson is Doug Gurr and the
chief executive is Simon Gillespie. Initially, it was a team of medically qualified people
who were anxious about the escalating number of deaths due to cardiovascular
disease. Thus, these people wanted to extend a hand as funding in research in this field
of science. Currently, the focus of the organisation is to spend £100 million on an
annual basis for research purpose in the UK (British Heart Foundation, 2019). There are
more than 1000 projects conducted under this collaborative funding approach. The
income of the foundation in 2013 was £133 million and 950 Healthcare professionals
are attending patients in the country. Various schemes are offered to increase
awareness about heart disease and include a series of charity retail stores in England,
Wales and Scotland. The vision of the foundation is to generate a world where populace
does not suffer due to premature heart diseases. The mission is to become a leader in
fight heart and circulatory disease which causes disability and premature death.
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Figure 3: Logo of British Heart Foundation
Source: (British Heart Foundation, 2019)
Analysis of advantages and disadvantages of interrelationships between
organisational functions and it’s the impact upon organisational structure (M2)
NHS, England is a public organisation which is a part of the UK’s economy and thus, it
is governed by the government. It exists to offer healthcare services to the citizen of the
country and it has a complicated organisational structure that has six interconnecting
sections namely, Central government, providers, commission, Data and evidence,
monitoring and regulation and training and development (England.nhs.uk, 2019).
Figure 4: Organisational structure of NHS, England
Source: (England.nhs.uk, 2019)
Each of the different sections has unique roles and responsibilities and all of the
activities are directly under the provision of the Central government using the delivery of
the NHS Mandate and are found to be under the parameters of the NHS Constitution.
According to Chatwin and Ackers (2018), NHS England is an independent business
entity that is under the prerequisite of the government. The major aim is to enhance the
health outcome and offer high-quality care to the population of England. It is a clinical
organisation and has a budget of approximately £100 billion. Exworthy and Mannion
(2016) opined that organisation functions involve activities that have an impact on the
improvement of the effects on profitability. The company is focused on the expansion of
business function and activities around the world with the implementation of various
aspects that lead to the achievement of the business objective of increasing profitability.
The organisation is found to attain both structural efficiency and profitability by:
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● Offering national leaders and enhancing the quality of care
● Allocation of resources
● Monitoring the operations
● Commissioning of primary care and directly commissioning of services
Pietarinen et al., (2017) stated that the interrelation of functions and structure of NHS
help in producing an effective process of delivering services in an improved manner by
adoption of efficient technologies. For making the delivery system more effective, the
training and development had been established that help the employees to understand
the business objectives and improve the performance level of the corporation.
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LO3: Demonstration of both the positive and negative influence/impact the macro
environment has on business operations
As commented by Dunn et al., (2018), comprehensive environment factors are external
forces within the company that have an indirect influence of the operations of the
business. These factors cannot be controlled by the management and thus, the
company is thought to be incapable of exercising or practicing power over them. There
are two types of macro environmental factors that affect business, economic and non-
economic. As the business is itself an economic activity thus, it involves local, national
and international aspects. In order to recognize the positive and negative influence of
these factors on the operations of NHS, England, it is important to conduct PESTLE
analysis. According to Widya Yudha et al., (2018), this analysis is a tool that aids in
monitoring and perceptive assessment of the macro-environmental factors which are
found to have an effect on the level of the company’s performance. The factors that are
incorporated in this analysis are political, social, economic, technological, and legal and
environment.
Figure 5: PESTLE Analysis
Source: (Widya Yudha et al., 2018)
Application of PESTLE model to support a detailed analysis of the macro
environment within an organisation (M3)
Factors Description
Political Altman (2019) opined that the political
influence of England is found to have an
impact on the operations of NHS. The
rules and policies of the organisation, as
well as the administration, is not found in
tandem and it was observed during the
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election of 2010. The funding is
specifically done by the government. The
managers in NHS are not focused on a
long-term strategy that involves changing
the political environment. The government
has an influence on NHS and the political
scenario does not align with the
management and the managers are
continually changing.
Economic The transfer of money from one
organisation for a cause affects the
environment. It can be stated that NHS
needs qualified staffs and the cost of
labour is increasing at a rapid rate. Thus,
it is difficult for the NHS to spend on
economic grounds. Masoo et al., (2016)
opined that procurement and service
delivery in NHS require focus as there is
lack of a proper process that would
support more patients to be treated within
a short period.
Social The social factors of the country such as
culture, ethnicity affects the health system
to a large extent. The statistics of aging
inhabitants in the country is increasing as
a result, the healthcare services need to
be developed. Along with this, it can be
seen that the capacity of the organisation
is a critical factor. Even though the
number of employees is huge, however,
the location is not convenient. Thus,
many people are not able to access it in
case of emergency.
Another social aspect that affects the
organisation is the staffs. The diversity of
employees need to be diversified that will
allow more access to patients. Thus,
social factors are found to amplify or
decrease the patient’s access and staffs
in the company.
Technological Weaver et al., (2017) opined that
technological development in the world is
growing at a fast rate. The
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