Business & the Business Environment: A Comprehensive Report

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Business & the Business Environment

Table of Contents
Introduction..............................................................................................................................3
LO1: Explain the different types, size and scope of organisations......................................4
P1: Different types of organization: public, private, voluntary sectors and legal
structures..............................................................................................................................4
P2: Explain the size and scope of a range of different types of organisations................5
LO2: Demonstrate the interrelationship of the various functions within an organisation
and how they link to organisational structure.......................................................................7
P3: Explain the relationship between different organisational functions and how they
link to organisational objectives and structure.................................................................7
References.................................................................................................................................8

Introduction
The aim of the research is to learn the types of businesses and the impact of stakeholders on
that business. Further, we are going to research about the strategies and planning to satisfy
the stakeholders. The discussion will be the detailed information about the inner and outer
factors of the organization. Also, the discussion will be about the influence of these factors
are used to increase the competition. Every organization has its strengths and weakness.
The discussion will be about the strengths and weakness and how these are related to the
outer environmental factors.

LO1: Explain the different types, size and scope of organisations
P1: Different types of organization: public, private, voluntary sectors and legal
structures
Profit and Non-Profit organization (NGO)
Profit organization Non-profit organization
Definition Profit organization is legal
organization where the profit
is for an individual. The
organization operates so that
the owner can earn the profit
(Surbhi, 2018).
Non-profit organization is the
organization which working
for the society. The money
generated by this
organization goes for the
development of the society.
Motive They are a self-motive
organization. The money
generated is used by the
owner.
The money generated by this
organization is used for the
development of the society
(Surbhi, 2018).
Management The organization is managed
by Directors, Partners, etc.
These organizations are
managed by charitable trusts,
committees and government
bodies, etc.
Revenue Sales of goods and services
(Surbhi, 2018)
donations and investments,
etc.
Financial Statement Income Statement, Cash flow
and Balance Sheet
Balance sheet, Income and
Expenditure A/c and Receipt
and Payment A/c (Surbhi,
2018).
Money earned Profit is transferred to capital
account (Surbhi, 2018).
Surplus is transferred to
Capital fund.

Source: (Sampitroda, 2013)
Micro, small and medium-sized organization (MSMEs)
MSMEs, comprises of micro, small and medium-sized organization. MSME contains the
maximum of labour and their contribution in the GDP. According to World Health
Organization (WHO), a small firm with only 10 employees is known as micro organization.
Medium-sized organization is known as the firm who employs from 10 to 250 employees.
But, the contribution of the MSMEs is less productive in the market. This is because small
companies don’t get much opportunity in the big market. Also, they are less productive in
comparison to the large-scale industries (Wto, 2019).
Forms of business: sole trade, partnership and private limited companies
Sole trade is a business which is owned by an individual. This is most cheap and simple form
of business. A person who has owned a business individually can take many benefits like-
fund raising and little investments (Sindhuja, 2019).
When two or more person is involved in the profit-sharing of the business, they are known as
partners. A partner shares the profit and losses among themselves. This sharing is done either
equally or according to the ratio decided by the partners. Partnership can help in the
expansion of the business. Partnership brings more resources and investments.
Private Limited companies are flexible and easy to handle. Private Limited companies are
eligible not to share their information with anyone outside the business. Also, these
companies guarantee privacy. Also, the profits earned by the company are used by the owner
and no-one else (Sindhuja, 2019).

P2: Explain the size and scope of a range of different types of organisations
Size of any organization tells about the number of employees, source of revenue, resources of
an organization. On the other hand, the scope tells about the market approach, growth and
target audience of any organization.
Size and scope of Profit and Non-profit organization
As discussed earlier, profit organisations are those which are operated by an individual. The
profit earned is used by the owner itself. The objective of profit organization describes the
current position in the market. The target audience of the profit organization depends upon
the business they are in. If the business is in automobiles, then the target audience will be the
people who love cars and other automobiles.
On the other hand, talking about the non-profit organization, the objective of the organisation
is to develop the society. The money generated in these organizations is used for the
development of the society. There is no target audience in non-profit organization. They work
on a single mantra- help the one in need.
Size and Scope of MSMEs
The MSMEs refers to the micro, small and medium-sized organization. The contribution of
MSMEs in the market is lesser according to the big companies. Maximum of country’s
population works in MSMEs. Around 40% of the totals workforce operates MSME in
developing countries and 50% in developed countries (Wto, 2019). The target audience of
MSME seeks better opportunities and audience. The market approach of MSME is to gain
more opportunities in order to increase the production and growth in the market.
Size and Scope of Sole Trade, partnership and private limited companies
Sole trade means the business which is owned by the individual. It is the most simple and less
expensive form of business. This form of business is acceptable where:-
- Small amount of money is needed
- Less risk is involved
- Size of the business is small
- Personal contact is needed
- Business scale is small

Partnership means the sharing of profits between two or more owners of a business. The
profits are shared either equally or in the ratio the partners have decided. Partnership gives
way to more resources and investments. Partnership is enabled in order to share the
responsibility between the partners (Sindhuja, 2019).
Private Limited Companies are those companies which owned privately. The profits and
losses are beard by the owner of the company. Private Limited companies offers privacy. The
documents cannot be distributed without prior permission. Their target audiences are not
limited. Anyone can apply in a private limited company. The marketing is done by the sales
of goods and services (Sindhuja, 2019).

LO2: Demonstrate the interrelationship of the various functions within an
organisation and how they link to organisational structure.
P3: Explain the relationship between different organisational functions and how they
link to organisational objectives and structure
An organization performs some fucntins for the growth and development. The common
fucntions are operating, marketing, human resource management, financial service and
warehousing. But, the basic fucntions of an organization are planning, organizing, staffing,
leading, controlling and motivating. The organizatinal functions are important because they
offer smooth planning of the organization. Also, the responsibilities and roles of the
employees are segregated. The planning is also important to maintain the productivity of the
organization. For the organizational functions to work, an organization needs to plan for each
and everything. Once the plan is implemented, organize the staff. Segregate the staff and
make them work according to their skill and qualities. Choose a team leader for each
department. The role of the team leader will be to manage his/her staff. He/she will also give
day-to-day activities to the manager. In order to complete a specific task, it is important to
motivate the staff. Encouragement and motivation of the employees results in the growth of
the organization (Sherman, 2019).
The relationship between the organizational functions and their link to organizational
objectives and structure is a point to be discussed. Organizational fucntions create a huge
impact on the growth of an organization. Following are the points which explains the above
structure:-
Organizational Structure Separates Department
Yes, organizational structure segregates the department. This move is applied in order to
reduce the workload among the employees. The work is divided among the employees. This
way the employee will concentrate on the work assigned to them. Also, there will clear
communication between the mangers to the leaders to the employees. Also, organized
working allows smooth working and the targets will be easy to achieve as well (Sherman,
2019).

Matrix Structure Allows Flexibility
Under matrix structure, each and every employee has to work according to function-based
branch. It means they work under a department which is headed by a leader and manager.
This allows flexibility in the working of the employees.
Divisional structure has many branches
Every department has different types of working. After the segregation and division, the
working of each department is dependent on the team leader. The marketing, HR, sales,
finance, etc., changes. The benefit of the different section is that each section is managed and
controlled. Also, there is smooth working of the department. The segregated group works
smoothly and without any pressure. Also, this results in the steady growth of the organization
(Sherman, 2019).
Go through the Charts
Sometimes, the staff may have a problem in proposing a structure. In that situation, you can
see the organizational structure. The organizational structure tells about the working of the
structure. It tells who will write the information, who will communicate with the upper
department. The chart also shows the division of the organizational staff and the operating
functions.

LO3: Use contemporary examples to demonstrate both the positive and
negative influence/impact the macro environment has on business
operations.
P4: Identify the positive and negative impacts the macro environment has upon
business operations, supported by specific examples.
Macro Environment factors are those factors which affect the economy as a whole. These are
also known as the external factors for any organization. The factors which are included are:
Political, Economic, Social, Technological, Environmental and Legal.
Source: (Sketchbubble, 2019)
Every organization is affected by the external factors. These factors directly and indirectly
affect the inside environment of the organization.
Political Factors- Political change means the changes in the policies and regulations done by
the Government. Political factors means changes in the taxation, subsidies, trade or changes
to maintain the stability of the neighbours (Sketchbubble, 2019).

Example- changes in the government regulation can increase the tax rate in some
organization, while it can lower for some. The decision will directly impact the organization.
Economic- economic factors have a great impact in the expansion of the business. Economic
factors like Gross Domestic Product and Gross National Product, Inflation, Globalization,
Exchange Rates and Finance Rates (Sketchbubble, 2019).
Example- changes in the economic factors like GDP affect the organization. With the
increase in the GDP of a country, the positions of the organization become more stable in the
foreign market.
Technological Factors- technological factors mean the change in the technology in the society
impacting the change in the company. The technological factors are the change in the quality
and pricing, improvement in the network and coverage, licenses, research and development.
Example- Advancement in the technological instruments in an organization helps in the
growth of the business. The new and advanced technology reduces the manual work. This
makes the target, easy to achieve (Sketchbubble, 2019).
Environmental factors- Seeing the negative impact of globalization on the environment, many
companies are now involving in the environment sustainability program. The companies are
now producing goods and services with environment-friendly resources. Some organization
uses forests, seas, oceans and farming for producing their raw materials. For the better
production, companies are now investing in the natural resources as they are limited and will
get extinct. The conservation is important (Sketchbubble, 2019).
Example- companies like McCain, Harbour cheese, etc., are involved in environmental
sustainability. They produce components using low carbon gases. Also they are training
many farmers about the production of the crops. This helps in maintaining the environment
sustainability.
Legal factors- legal factors are those which are related to the health and safety, taxation,
employment rates, etc. The legal factors shape the organization. They provide a definite
shape to the organization. It also shows how the law affect the organization and the behaviour
of the consumer (Sketchbubble, 2019).

Example – if the consumer rights are being abandoned by the organization, then the
consumer can easily file under the Consumer Law, which protects the rights of the consumer.
It also protects the consumer from getting exploited.
SWOT Analysis
Source: (Businessinsurance, 2019)
SWOT analysis is the abbreviation of Strengths, Weakness, Opportunities and Threats. It
means to examine the inside strengths and weakness of the business and outside threats and
opportunities (Hovardas, 2015).
Strength of NLCCE is to make a better profile for the other business. This way, they are
creating more employment opportunities for the fresher. Also, they are helping other business
grow in the market. The main aim behind this action is to generate more connections of
business in the market (Hovardas, 2015).
Weakness of NLCCE is that due to economic and technological changes, the company is not
able to adapt quickly. Changes in the government policies and guidelines, trade policies make
the work slow. The company needs to analyse the changes and then implement (Hovardas,
2015).
Opportunity is to make the business popular by creating profile for other business. People
will come to NLCCE for creating a better business profile. This way, maximum will know
about NLCCE (Hovardas, 2015).