Analyzing Business Organizations: A Comprehensive Report

Desklib provides solved assignments and past papers to help students succeed.

Business and Business
Environment

TABLE OF CONTENTS
Introduction......................................................................................................................................1
LO1..................................................................................................................................................2
P1 Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures......................................................................................................................2
P2 Explain the size and scope of a range of different types of organizations.............................3
LO2..................................................................................................................................................6
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.......................................................................................6
LO3..................................................................................................................................................8
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples................................................................................8
LO4................................................................................................................................................11
P5 Conduct internal and external analysis of specific organizations in order to identify
strengths and weaknesses..........................................................................................................11
P6 Explain how strengths and weaknesses interrelate with external macro factors..................12
Conclusion (Reflective Statement)................................................................................................13
References......................................................................................................................................14

LIST OF FIGURE
Figure 1: Organizational Structure of Morrisons.............................................................................6

LIST OF TABLES
Table 1: size and scope of a range of different types of organizations............................................3

Introduction
Business environment is largely influenced by various aspects which in turn influence the overall
performance of the business. The following report will therefore highlight various aspects of
business environment so that number of ways can be identified such that negative influence of
external environment can be minimized. The report will consider examples of various business
organizations for identifying their size, scope and type. In addition to this, interrelationship with
various functions and their linkage with organizational structure will also be demonstrated.
Further critical analysis of macro environmental factors will also be illustrated in this report. Last
section of the report will conduct external and internal analysis for assessing the strengths and
weakness of the organization. The current report will consider the example of Morrisons and
BBC.
1

LO1
P1 Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures.
There are various types of business organizations such as public, private and voluntary that are
classified or separated on the basis of their different purposes.
Public sector: These organizations are often referred to as ‘not for profit organization’ and are
mostly owned by government. They operate for the purpose of serving people in social manner.
Its main purpose is to deliver products and services to public at reasonable prices for the overall
profitability of the society. For an example, BBC operates as a public sector organization that
aims at delivering quality of media services at reasonable prices. This has contributed towards
betterment of the society (Demircioglu and Audretsch, 2017).
Legal structure: Public organizations mostly exist as limited organization and under this type of
legal structure major of the membership is managed and owned by public.
Private sector: These are for profit organizations that are owned by both government as well as
private bodies that formed either with the help of individuals or groups. Private sector
organizations form an integral part of the economy of the country. Its main purpose is to generate
profit and at the same time it is one of the major sources for generating per capita income for the
growth and development of the country. For an example Morrisons is listed among largest
supermarkets in UK and therefore it contribute largely to the GDP of the country. It has higher
focus over generating revenue so that competitive position can be attained.
Legal Structure: It exists in many forms such as franchisees, sole trader, co operatives,
partnership, as well as private and public limited companies. Franchises operate at number of
locations under the name of popular brand and Mc Donald’s can be considered as its example.
Sole traders are small business that is governed by the individual. Plumber and Hair Dressers are
categorised as sole traders (Burns, 2016). Co operatives are formed by a group of individuals
with an aim of earning profit however there is support of government to some extent. Co
operative press in UK is an example of Co operatives. Partnership is formed with the consent of
2

two or more groups or individuals and therefore they are responsible for sharing both profit and
losses. Specify has partnered with Uber for generating higher revenue. Companies can be
specified as public and private limited organizations. Both operate under rules and regulations of
government and Private Limited Organizations has higher focus over benefits of stakeholders
while Public Limited Organizations exist with no definite number of members. Public limited
firm’s shares are owned by public.
Voluntary sector: Such organizations are capable of conducting social activities for betterment
of needy people inspite of generating profit (Simpson, 2018). Voluntary organizations might be
owned by government or by the individual or group of individuals on independent basis. Its main
purpose is to enrich the lives of people within the society without any expectations for returns.
Cancer Research UK is an example of voluntary organization as it aims at conducting campaigns
that creates awareness about cancer so that such type of diseases can be eradicated from the
society.
Legal Structure: It includes Non Governmental Organizations and nonprofit organizations. NPOs
aims at improving living standard of people and do not expect profit in return however NGOs
create awareness about areas such as health, education, etc.
P2 Explain the size and scope of a range of different types of organizations.
Table 1: size and scope of a range of different types of organizations
Types of
organisation
Scope Industry and its
position in
market
Size Key stakeholders
Public Public sector organization
with the scope of gaining
business opportunities in
future. BBC aims to
acquire leading position in
telecommunication sector
by providing improved
services (Mayne, 2017)
BBC world wide
operates as a
media and
broadcasting
organization and
has attained 17%
of the market
share in the sector.
It operates with
approximately
1000 number of
employees with
£157.4m profit,
£1,042.3m of
sales in the year
2014.
Stakeholders
include
technology
partners,
customers,
shareholders,
investors,
government who
3

invest in business
for gaining higher
profits.
Private Its scope is to provide
high level of customer
satisfaction so that
profitability of the
business can be improved.
Morrisons aims at
generating higher profit so
that it can contribute
towards GDP of the
country.
Market share of
Morrisons is
approximately
consistent which
11% of the total
supermarkets in
UK.
It owns 500 stores
and revue is 1,800
crore GBP.
Number of
employees
include 105,487 at
the end of 2018
Suppliers,
shareholders, and
customers are
major
stakeholders.
Voluntary
organisation
Such type of organization
work hard for the
betterment of societies.
They focus on lowering
the business cost (Butler
and Wilson, 2015).
Cancer Research
UK is considered
at top position in
the terms of
Charity Band
Index while
creating public
awareness.
The organization
has spend £30m
in the year 2018
for creating
cancer awareness.
Fundraisers,
Patients,
corporate
partners,
Doctors are major
stakeholders.
Along with this, there are micro, small and medium and large scale organizations. Micro sector
organizations have higher focus over growth and development in future in developing countries.
Cancer research required low investment but has definite goal of eradicating cancer from the
society. Its main advantage is related to fulfillment of needs of both employees and customers
however increasing competition and financial risk is its major disadvantage. Small enterprises
have higher focus over increasing business sales by undertaking partnership with other entities
(Storey, 2016). They have advantage of control over human resources that contributes towards
customer satisfaction. Limitation is related to limited sources of finances. On the other hand
medium and large scale organization such as BBC is governed by government that aims at
helping customers by providing media and broadcasting services. It is advantageous in terms
4

strong relationship with customers, and its weakness is to difficulty in maintaining customer
loyalty and to gain fund from various sources.
5

LO2
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.
As per the organizational structure of Morrisons, CEO of the organization is responsible for
setting goals that are majorly being communicated to the vice presidents of finance and HR. For
attaining objectives related to business productivity, profitability and customer satisfaction,
responsibilities has been allocated to various departments. Organizational structure depicts the
interrelationship between various functions that will help the business to attain organizational
objectives (Organizational Chart for Supermarket, 2019).
Figure 1: Organizational Structure of Morrisons
(Source: Organizational Chart for Supermarket, 2019)
6

Organizational operation is dependent upon various such as sales, marketing, finance, Human
resource and others. Marketing is considered as one of the most important function of the
business organizations such as Morrisons that support fulfilling the needs of customers.
Marketing department gets assistance of finance department for gaining funds for the
development of marketing plan. Similarly, it communicates with HR department so that required
human resources can be hired for undertaking various marketing activities. In addition to this,
finance department is responsible for controlling the expenditures of various functional
activities. Therefore it can be said that relationship between marketing and other functions with
finance department help the organization to attain objectives in terms of positive brand image,
increased customer satisfaction and organizational profitability.
Human resource department is responsible for streamlining the internal process by utilizing
human resources in an effective manner (DeCenzo et.al.2016). HR function is linked with other
organizational functions by fulfilling the needs in terms of recruiting experts for undertaking
specific functions. This will support fulfilling the organizational objectives such as increasing
business productivity. In addition to this, operations department focuses on entire process
beginning from stocking the product to fulfilling the needs of customers by providing
appropriate product. This will help Morrisons to fulfill the objective of attaining customer needs.
Interrelationship between various departments support business to ease the flow of information
and this will help the organization to identify scope of improvement such that business can gain
profitability. However on the other there might occur the chances of leakage of confidential
information and it will therefore put negative impact on business goals and objectives.
7

LO3
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
Pestle analysis of Morrisons
Political: Political fluctuation such as Brexit has forces the government to bring changes in
regulations and policies while conducting business. Negative: Such type of political crisis has
forced the government to increase the tax rates and this affects the overall sales and profitability
of the organizations operating within the retail sector (Rastogi et.al.2016). Positive: On the other
hand government passed the policies for free trade and that encouraged Morrisons to get
products at cheaper prices and this result into increasing revenue.
Economical: Along with political fluctuation, Retail sector also experience currency fluctuation
and created. Positive: Morrisons however dealt with situations in an effective manner by
increasing the range of products. In addition to this, the organization has gained opportunity in
expanding the business in foreign markets. Negative impact was related to decreasing sales of the
organization as fluctuation in economic conditions has restricted the business to conduct free
trade because of increased tax rates.
Social: Positive: Increasing population has helped the retail sector organizations to increase the
sales, Negative: but at the same time rising awareness has restricted customers to buy various
products and that has increased their switching power. For an example, health awareness has
restricted them to buy several food products and this affects its sales (Kaur and France, 2018).
Technological: Positive: Larger investment in technology has helped the organization to conduct
business in cost effective manner and thereby increasing customer satisfaction. Negative: On the
other hand in the era of competition, Morrisons is facing difficulty in managing the pace with
other organizations while implementing the technology.
Legal: It is essential for retail sector organizations compile its business activities with laws and
regulations by government such as food safety laws, employment laws, etc. In this context,
Positive: Morrisons is effectively following the rules and this has put positive impact over
8