Analyzing the UK Ministry of Defence (MOD): Semester 1

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

BUSINESS AND THE BUSINESS ENVIRONMENT
1

Table of Contents
Introduction................................................................................................................. 4
LO1............................................................................................................................. 5
LO2........................................................................................................................... 12
LO3........................................................................................................................... 18
LO4........................................................................................................................... 22
Conclusion................................................................................................................ 26
Reference list............................................................................................................ 27
2

Executive summary
In the present study, different types of business were discussed according to their
scope and size. Furthermore, examples were provided for each type of business.
Different kind of legal structure has been analysed according to their benefits and
disadvantages. Both external as well as internal analysis has been conducted by the
use of SWOT and PESTLE frameworks. Moreover, by the help of these frameworks
strengths, weaknesses, opportunities and threats of MOD has been depicted. Even,
their Porter Five Forces analysis has been conducted in order to analyse the
competitiveness of the company while dealing in the market of United Kingdom.
3

Introduction
Business environment consists of some external factors, which are changeable over
time. Furthermore, the environment can consist of clients, suppliers and employees,
which are internal. Types of organisations will be explained according to size and
scope of these. Factors, which can have an impact on macro environment, will be
analysed. Internal analysis will declare strengths of the organisations and it s
weaknesses. These will be linked with macro factors. Ministry of Defence (MOD) is
the chosen company it is situated in UK. It was founded in 1964 in UK. Ben Wallace
is the minister, who is responsible and 65000 employees are working for them
(gov.uk, 2019).
4

LO1
P1 Explain different types and purposes of organisations; public, private and
voluntary sectors and legal structures.
Private organisations
Private organisations are businesses, where control lies in hands of individuals or
some group. Private organisations are numerous in number and government has no
control over their operations. These organisations have purpose to make profit in
most cases, by selling their products or giving service to public. John Lewis and
Partners is such a company, which makes profits by selling products like clothes.
This company follows a partnership type legal structure and is John Lewis and
Waitrose owns it. This legal structure gives them additional financial and strategic
help from Waitrose, which strengthens business (johnlewis.com, 2019).
Public organisations
Central or any local government controls public sector and ownership does not go to
any individual. These organisations are often publicly funded and exist to give
services to citizens. Their purpose is to serve citizens and improve their quality of
life and one such organisation is UK’s ministry of defence. MOD’s purpose is to
ensure security of UK’s citizens by providing defence services without getting any
profit. Legal structure of MOD is general partnership and 27 government bodies are
partners (gov.uk, 2019). This arrangement helps in sharing assets and legal liabilities
equally, which makes operation smoother for MOD.
Voluntary organisations
Voluntary organisations are non-profit firms, which are set by non-governmental
bodies. These organisations do not try to earn profit, rather provides free service to
people. Voluntary name implies that these organisations are autonomous and
citizens often form these. Purpose of these is to give public services, which will
benefit society and charity work comes under it. Partners in Health is such an
organisation in UK, which provides free healthcare services and their purpose is to
work as an antidote to people in despair (pih.org, 2019). This NGO follows non-
profit corporation legal structure. Rigidity of this structure provides more control
and their charitable works benefit from it.
Micro organisations
Micro organisations are miniature companies, which employs about 10 people.
These organisations operate in national boundaries. Businesses like catering
services, housekeeping comes under it and purposes of these organisations are to
bring backward areas in nation into national development. Beauty Boulevard is such
an organisation, where they employ local people and contributes to local economy
this way. However, this company makes profit by selling their beauty products
(beautyblvd.com, 2019). This company follows a partnership legal structure,
where owners are Paula Short and Rachel de Caux. This helps in distributing
liabilities equally to both of them and strategic decisions are better due to equal
participation.
Small organisations
Small organisations are companies, which employs about 10 to 50 people and
generates lesser revenue from bigger organisations. Mostly individuals own these
companies and their purpose is to contribute to economical growth of nation.
Mantons Cards of UK is a small organisation and they are strengthening the national
economy by contributing to GDP. This organisation operates under private limited
legal structure. This structure gives full control to the owner and the share of profit
goes directly to that person. The owner gets to take major decisions for this
5

company, which is a major reason for using this structure (mantonscards.co.uk,
2019).
Medium organisations
Medium-sized organisations employ 50 to 250 people usually and can have private
ownership. Purpose of these organisations may vary for different companies but
generally these organisations target to make profit. Furthermore, huge quantity of
jobs comes from these organisations and it contributes to the national economy.
West design products in UK is an example of medium organisations and they are
employing local people (callruby.com, 2019). This is helping local youth to get job
and it is improving the condition of national economy. The company comes under
private limited legal structure and Jill Nelson can use the profit share according to
her choice.
Large organisations
Large organisations has more than 250 employees working under these and can be
either private or government firms. These organisations have major role to play and
they their purpose is to dominate the market. For example, Tesco is a company,
which is dominating the retail industry in UK and known as one of the greatest
grocery retailers. Tesco is a public limited company and the organisation uses it
because this gives better access to capital. Furthermore, shareholders are able to
buy shares as well as sell it. This legal structure gives Tesco more advantage in
market (tesco.com, 2019).
P2 Explain the size and scope of a range of different types of organisations.
Organisati
on type
Name Size Scope Revenue
Private John
Lewis
and
Partner
s
This company has
about 83900
employees in 2019
(statista.com, 2019).
The organisation is a
departmental store,
which sells fashion
clothing, home ware,
electrical, gardening
materials, sports,
leisure products and
many more. They
have international
presence and
numerous amounts of
shops are spread
across different
countries. The
organisation sells their
products through
physical shops and
their official website.
Furthermore, they sell
products using some
e-commerce
platforms.
The
company
earned
10215
million
GBP in
2019
(statista.co
m, 2019).
Public MOD MOD employs 190750
warfare-trained
personnel (gov.uk,
2019). Furthermore,
MOD’s scope includes
major responsibilities.
Royal navy, British
army, Royal air force
This is not
applicable,
as MOD
does not
6

they have 57140
civilian staff.
comes under MOD.
This organisation
primarily sets defence
policies and monitors
the implementation
process. The
organisation ensures
security of UK’s
people by countering
any kind of terrorist
activity and ensuring
safety in border.
Furthermore, they
maintain relationship
with other defence
organisations of other
countries. In this
manner, they ensure
that threats from other
countries are meagre.
generate
revenue.
Voluntary Partner
s in
Health
Partners in health
have 349 employees
according to their
statistics report
(pih.org, 2019).
They provide
preferential option to
poor people in health
care. They are
establishing
relationships with
sister organisations
according to scale of
poverty. The
organisation provides
free health care
service to poverty-
stricken places like
Liberia, Rwanda and
many more. They take
house calls from sick
people and build
health systems. They
are working with local
government and
increasing capacity to
provide more care to
needy people.
PIH
generated
14870941
0 pounds
in year of
2017
(pih.org,
2019).
Micro Beauty
Bouleva
rd
The organisation
employs about 5
employees
(realbusiness.co.uk,
2019).
This cosmetics
company offers
various kinds of
beauty products. Their
main offerings are
colour cosmetics, skin
and body care
The
company
generates
60,512
pounds.
7

products. Their most
famous product is
Glitter Lips, which has
given them
international
recognition, which is a
true revolution in lip
colour. They ensure
that safety of
customers by
following legislation.
The organisation
follows continuous
process of
improvement to
ensure that their
products are best
(beautyblvd.com,
2019).
Small Manton
s Cards
About 40 employees
are working for
Mantons Cards at
present (owler.com,
2019).
The company does
not only make profit
but contributes to the
local community by
various means. They
provide high quality of
greetings card and
gifts to people. They
sell numerous types of
cards for events like
birthday, wedding,
christening. Their gifts
include willow tree,
Sara miller, Happy
Jackson and others.
They stock various
kinds of art and craft
materials.
They have
generated
2.8 million
pounds in
recent
years
(owler.com
, 2019).
Medium West
design
product
s
The company is
presently employing
more than 200
persons
(westdesignproducts.c
o.uk, 2019).
The organisation
offers about 25000
products in UK. They
manufacture, imports,
and distribute toys,
craft products,
stationary items. This
company is the only
distributor of Faber-
Castell products. The
organisation supplies
to various retailers in
42 markets in world
23 billion
pounds is
their
current
revenue
(owler.com
, 2019).
8

(westdesignproducts.c
o.uk, 2019). They
provide friendly
service to customers
and keep them happy.
Large Tesco 45000 employees are
working for Tesco at
present time
(tescoplc.com, 2019).
Tesco is a
supermarket and their
primary products are
groceries. It includes
foods like bakery,
frozen food and baby
products.
Furthermore, they
have a clothing
division called F&F,
which sells clothes for
men, children and
women. There is a
banking service called
Tesco bank. This
provides credit cards,
mortgage and
insurance services.
The organisation has
expert professionals,
who make experience
of customers great.
Tesco
generated
44908
million
pounds at
the year of
2018
(statista.co
m, 2019).
Table 1: Size and scope of different organisations
(Source: Created by the learner)
9

LO2
P3 Explain the relationship between different organisational functions and how
they link to organisational objectives and structure.
Figure 1: Hierarchical structure
(Source: Maduenyi et al., 2015)
Hierarchical structure
Hierarchical structure is most common and here every employee is grouped with
every colleague. Additionally, there is a supervisor for each department in this case.
There are three types of groupings, which is done according to function, geography
and product. In function grouping method, employees are grouped according to their
functioning. Employees are grouped according to their region in Geographic
grouping. If a company offers various types of products or multiple kinds of services
generally groups employees according to their offerings. Main advantage in using
this is that chain of command is clear to everyone and it increase organisational
performance but drawback comes due to poor flexibility of this structure (Maduenyi
et al., 2015).
10

Figure 2: Matrix structure
(Source: Pakarinen and Virtanen, 2016)
Matrix structure
Grids or matrix can be used to identify reporting relationships in this kind of structure.
This is not a traditional hierarchy and employees having similar skills have to report
to multiple managers. For example, an employee may respond to senior manager at
office while working at headquarters. However, an employee might have to report to
a project manager if that person is working in a different area. Advantage comes as
resources can be utilised equally and coordination in functional department is
possible (Pakarinen and Virtanen, 2016). However, it is proven to be
disadvantageous, as this structure is quite complex to work in.
11

Figure 3: Horizontal structure
(Source: Nene and Pilla, 2019)
Horizontal structure
This structure is mostly adapted in small organisations and newly formed companies.
Middle management is significantly reduced, which is the main important factor
about this. Employees are included during decision-making and they have high
amount of independence while doing it (Nene and Pillay, 2019). If a workforce is
highly trained, then they can be productive by involving themselves in process of
decision taking. The top position consists of management team, which sometimes
consists of the owner. Second layer contains leaders and third layer usually consists
of team members. Advantage of using this structure is that it gives employees
greater freedom but it can be disadvantageous due to contradictions between
departments.
12