Analyzing Organizational Structures and Macro Environments

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Business and Business environment

TABLE OF CONTENTS
Introduction......................................................................................................................................1
LO 1.................................................................................................................................................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.............................4
LO2..................................................................................................................................................7
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.......................................................................................7
LO 3...............................................................................................................................................11
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples..............................................................................11
P5 Conduct internal and external analysis to identify the strengths and weaknesses of chosen
organization...............................................................................................................................13
LO 4...............................................................................................................................................15
P6 Explain how strengths and weaknesses interrelate with external macro factors of the
business environment it operates...............................................................................................15
Conclusion.....................................................................................................................................17
References......................................................................................................................................18

LIST OF FIGURES
Figure 1: Organisational structure of Bank.....................................................................................8
Figure 2: Line structure...................................................................................................................9

Introduction
Business environment is concerned as the total of external and internal factors that affect on the
operation of the business. Such factors influence organisation to each other and enable people to
work together that mainly affect the business. Current business is based on considering the
example of Metro bank that is one of the retail banks in the parts of UK. Report will also
consider different examples of the organisation in terms of their size, scope and key objectives.
Current report will analyse different types of organisations that have different objective and size
of operative. In addition to this, report will mainly demonstrate different functions that link with
organisational structure. Also report will discuss about conducting external and internal analysis
that impact mainly on the operations of the business. Moreover, report will develop effective
understanding of how business environment mainly affect business functioning.
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LO 1
P1 Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures
Different organisations are being highlighted below that have different purposes for having the
survival in the market.
Sole trader: It is the simple form of business that requires low capital and less resources to
setup. The business is operated with the purpose of managing daily expenses and also for making
profits. The legal structure consists of the single individual that is responsible for managing and
is also owner of the business (Hamilton and Webster, 2018). Suitable example of this might
include a local grocery shop, consultancy service, barber shop, etc.
Advantage of having sole trader is that it requires low start up cost and generally enjoys the
freedom from heavy regulation. Individual is responsible to take sole decision and own the
profits individually. On the other hand, it have disadvantage in form of unlimited liability and
sometimes face difficulty in raising capital and individual cannot offer business handling
responsibility to any other person.
Partnerships: It is the form of business where two or more people share the ownership and have
the responsibility of managing the profits and losses of the business. Purpose of partnership
covers having growth opportunity and gaining high base of customers (Prajogo, 2016). The legal
structure of the business mainly includes the involvement of two or more than two people. The
responsibility of income and losses depends on all the partners that are operating in the business.
For example, currently, Spotify and Uber work in partnership with the goal of getting more
users. Uber rides can help users to pick out Spotify list they will listen in ride.
Creative solutions, job creation and profitable outcomes are suitable advantages and also owners
are liable to bear the losses equally. This will lead to bring new idea and concept in growth of
business. Moreover, it contain disadvantage in the form of expensive or high losses. It might
give rise to power and status differences among partners.
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Private: This includes any organisation that is privately handled by the individual or group of
individuals. Its purpose includes having a profitable scenario and is not mainly government
owned (Subramanian et.al. 2016). The Legal structure of private sector can be set up in the form
of sole trader, partnerships, limited companies (public and private) and cooperatives. Ownership
of business is based on involvement of single individual and group of individual.
METRO bank is one of the concerned examples of private organisation that is handled in the
form of partnership offering banking services to customers. Its advantage includes having
limited liabilities and the business information is available only to shareholders. On the other
hand, the business has constraints in the form of following many legal requirements and is
subjected to double taxation.
Public: This includes organisation that are owned and managed under the control of the
government mainly to serve better for the society. Motive of this organisation is based on serving
citizens and making fewer profits. Legally the business is accountable to central and state
government and is funded directly by them to offer public services (Roness, 2017). The
Department for transport is public organisation that is the network of transport in UK that helps
people, business and goods to more from one place to other.
Advantage of such organisations is based on acting for public goods and resources are allocated
to improve the areas of society. Disadvantages are based on having limited funds and contain the
uncontrolled growth with some of the management issues.
Voluntary: Such organisations are the nongovernmental and non profitable organisations and
mainly known as the third sector organisations. It does have the well defined legal structure as it
is set up in the form of unincorporated association, a trust and charitable organisations. This
includes having short term goals for conducting activities for betterment of the society (Wickert
et.al. 2016). For example, American Red Cross is one of the examples of voluntary sector that
mainly provides emergency assistance, disaster relief and disaster preparedness service in US.
The advantage of such organisation mainly include the services are performed for betterment of
the society and volunteers generally takes initiatives for managing the whole organisation. Also
disadvantage occur in the form of unplanned goodwill and it does not have the guarantee of the
financial support.
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P2 Explain the size and scope of a range of different types of organizations.
Types of
organisation
Scope and objective Industry Size Key
stakeholders
Public This sector has the
objective of serving
people in terms of
providing services
mainly to the local
citizens. This includes
offering public services
mainly with the
objective of serving
better in the society
Generally
department of
transport is
leading
organisation that
mainly lies under
the control of the
government.
Generally there are
about 12,535
organisations that are
public sector mainly
in the parts of UK. It
is being assumed that
there are more than 5
million jobs provided
in this sector.
Department for
transport of London
also appoints millions
of employees with
carrying an annual
budget of £2.9 billion
(Wickert et.al. 2016)
In such type of
organisation,
there greater
involvement of
government,
investors, certain
shareholders and
also customers to
who services is
being provided.
Private The objective of such
type of organisations is
mainly making profits
and it have the high
scope of providing
creative and innovative
products to the
customers at reasonable
prices that meet with
the needs of the
customers
(Subramanian et.al.
2016).
METRO bank is
concerned as one
of the high street
banks that is
having high share
in the market that
is listed in the
London stock of
exchange with
obtaining higher
market share
In private sector there
are different small
businesses and some
large business. It is
being estimated that
small business are
counted about
2,560,910 and large
businesses are more
than 7000. The
employment in
expected about more
than 1200000 that is
about 41% (Hillary,
The business
involve
stakeholders that
are mainly
suppliers,
customers,
employees,
investors,
shareholders, etc.
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2017).
Metro bank is also
growing private
sector that have
almost 67 stores and
employees are almost
assumed about more
than 2800.
Voluntary
organisation
The objective of such
organisation is based on
bringing development
in the society and
generally profits are
kept aside. This scope
of such organisations is
based on serving
positive conditions in
the society (Roness,
2017). The business
Mainly consist of
nongovernmental and
other charitable
organisations of the
UK.
American Red
cross is one of the
humanitarian
organisations that
help in serving
services that is
regarding disaster
relief. It mainly
falls on non profit
sector serving
better for society.
The overall non profit
sector the total
number of
organisations is about
more than 88,000 and
has provided
employment of about
6% that is about more
than 20000. American
red is non profit
sector that have
thousands of
employees.
This includes the
volunteers, the
fundraisers,
victims, etc that
are the major
stakeholders.
From the above table, it can be analysed that different organisations have suitable size, scope and
objective to sustain in the competitive market. However, the size of the organisation mainly help
organisation to take decisions in terms of employment and also offering products and services to
the customers. As private sector have the huge size and scope as it directly offers those products
that mainly satisfies the needs of the consumers. Having the huge size, it offers different
innovative and creative products for the customers. In addition, public sector already has the
involvement of the government so that its services are provided in terms for operating for the
local public. Voluntary sector scope is based on serving the social objective and with this size is
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limited to only focus on the single objective of the society. However, it clarify that scope and
size of business are associated with the objective of the business.
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LO2
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.
Different organisations follow different types of organisational structure in order to have the
effective operations and achieving business objectives. However, it is suggested for Metro bank
to use the suitable structure that is explained below:
Hierarchical structure: It is one of the suitable types of chart where the activities are being
divided into different departments that play different functions of the organisation. There are
different functional areas of the organisation on the basis of this structure each of the department
will have the subordinates. Function of this structure by Metro Bank will be grouped according
to different functions that include finance, technical, HR and the admin groups. Currently, Metro
Banks follows the hierarchical structure that activities are divided as per departments and each of
the department have suitable manager and executives (Qrunig and Qrunig, 2016). Following this
chart will help Metro bank to complete different functions and for all the departments, board of
directors would be responsible to take organisational decisions.
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Figure 1: Organisational structure of Bank
(Source: METRO Bank, 2018)
Line structure: Metro Bank can also use the line structure where the authority will flow from top
to bottom. Unlike other structure, specialised and other supportive services will not take place
within the organisation. Effective communication can be maintained by the Metro Bank and
effective communication will lead to bring stability in the organisation. This is effective structure
for the bank as each of the departmental function will be separate and also team will be clearly
shown in the organisation (Rahim, 2017).
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Figure 2: Line structure
(Source: Author)
Relationship between different functions and objectives
Moreover, Metro bank have the combine objective of maximising the sales and enhancing the
level of customer satisfaction and revenues of the business. For this, it is essential to maintain the
link between different functions.
For example, for carrying out the marketing function, Metro Bank require qualified human
resources for conducting activities and also budget for marketing is mainly given by finance
department for achieving marketing function (Boxman and Flap, 2017). And overall marketing
activities will lead to achieve the objective of increasing sales and promotion of goods and
services.
In addition, to carry out the functions of finance department, it is responsible for coordinating
with the functions of other departments as it is responsible for allocating the budget to these
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