Business and Business Environment: An Essay and Case Study

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BUSINESS AND BUSINESS ENVIRONMENT
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Contents
INTRODUCTION...........................................................................................................................3
SECTION 1: ESSAY.......................................................................................................................4
TYPES OF ORGANISATIONS..................................................................................................4
SIZE AND SCOPE OF ORGANISATIONS..............................................................................5
ORGANISATION STRUCTURES AND FUNCTIONS...........................................................7
RELATION OF FUNCTIONS TO OVERALL ORGANISATION MISSION AND
OBJECTIVES............................................................................................................................11
SECTION 2: CASE STUDY.........................................................................................................12
PESTLE ANALYSIS................................................................................................................12
SWOT ANALYSIS...................................................................................................................14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17
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INTRODUCTION
The dynamics of businesses like size, scope, purpose, industry and type are basically what make
them unique in their operating markets. On the basis of these aspects, business units can be easily
differentiated and even examined in accordance to needs. So, considering the subject of business
and business environment, this work will aim to provide a profound background and
understanding of different businesses and their environments. Here, the different type of
organisations will be examined with their size and scope to understand their way to operate. In
addition to this, it will also illustrate the relationships with stakeholders and impact on decision
making from their wider external environment. Overall, the unit will be helpful for audience to
choose their own specialisation in future and pursue a successful professional career.
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SECTION 1: ESSAY
The working business entities are different from each other as they may belong to different
fields, purpose and sectors and hence they serve differently to their stakeholders. In general,
there are three major categories (sectors) in which they are segmented; public, private and
voluntary mentioned below.
TYPES OF ORGANISATIONS
Public Sector Organisations (Government) – these are generally government organisations
which work for the people in areas like infrastructure, medical, transportation, defence etc. for
example National Healthcare Services in UK. These organisations work with the finance from
people and spend same on them again for betterment in future. The major purpose of these firms
is to facilitate basic services to common people.
Mission – to facilitate the services that people want to use
Vision – enable healthier and more independent life for people with high quality and seamless
services/care
(NHS UK, 2019)
Private Sector (For Profit) – they are the organisations which work to earn high profits and ran
by individuals or a small group of people. They works in retail, IT, merchandise, FMCG,
banking, telecommunication etc. Since, they need to have better relation with their customers;
they are centrally focused in almost all cases. The variety of the products and services is wide
and available to all and one of the example is John Lewis Partnership.
Mission – serve people by acting with integrity and judgement
Vision – do right, do more that we take, be ourselves and we not me
(John Lewis Partnership, 2019)
Voluntary Sector (Non-Governmental/NGO’s) – this type of organisations are NGO’s and
generally serve people only for their interests without any intention to earn from them. The
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purpose is to take care of old, orphan, poor etc. in order to balance the society. One of the best
example of NGO in UK is Partners in Health.
Mission – to enhance the wellbeing and health of partners, members, patients and community
Vision – provide health as it could be with affordability as it must be with trust and relationship
building
(Health Partnership, 2019)
Table 1: Difference between profit, non-profit and voluntary organisations
Criteria Profit Non-Profit Voluntary
Ownership Ran by individuals or a
small group of people
Majorly ran by
government
Government, a trust,
group of individuals
Purpose Purpose is to earn
profits and expand
Motive is to serve
people
Motive is to serve
people without any cost
Size Ranges from small to
large
Large Generally small and
moderate
Products and
services
Large variety like
medical,
transportation, IT,
retail, merchandise,
FMCG, hospitality
Medical,
transportation, security,
infrastructure
Medical, food,
education etc.
Source: [Author’s work]
SIZE AND SCOPE OF ORGANISATIONS
Regardless of the type of organisation, they are also categorised on the basis of their sizes and
their future scope. Basically they are bifurcated into micro, small, medium and large firms.
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Micro – very small with 0-9 employees and generally are the established small shops or new
ventures. They have great scope in future as they can establish, refurbish, innovate and serve
better to the common people in large variety of business fields.
Small – with 10-49 employee base and are categorised as growing firms. Since, they are growing
firms, they are hot points that can capture new people, area or fields with growing initial phase
Medium – grown, experienced, somehow financially balanced serving people with more than 50
employees, which may consist of two or more physical stores or centres. For instance, in terms
of UK, they possess great potential and hence are supported by government also in order to serve
better and grow to create a better share to the economy of the whole country
Large – with 250+ employee base, possible working globally and work for future betterment, in
addition to this, their scope majorly depends on their rate of revenue generation but if balanced,
they can establish more potential firms.
(Parliament of UK, Rhodes, 2018)
Figure 1: Businesses by size
Source: [Business statistics; Rhodes, 2018]
From the above image, it can be predicted that these firms (SME’s) are accountable for a large
portion of the economy in UK in all the sectors and needed to be encouraged in order to attain
better results in future. In UK, the SME’s collaboratively holds a market share of 99.9% with
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turnover of £1,994+ billions and in accordance to their growth and sustainability, they are vital
for the overall economy.
ORGANISATION STRUCTURES AND FUNCTIONS
In accordance to the sizes, scope and type of organisations, the management decides their
structure of working and are shown below:
Hierarchal – The model is the maximum widely recognized authoritative outline kind. There are
more than one models which might be developed from this model. In this structure, employees
are assembled with each mentor having one clean director. The grouping is finished depending
on multiple factors, for that reason several fashions got from this; like product, demographics
and functions. That is the predominant method of organization amongst large associations. For
example, businesses, Governments, and sorted out religions are quite a lot of levelled
associations with more than a few degrees of the executives, energy or professional.
Figure 2: An example of hierarchal structure
Source: [Nishadha, 2019]
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Matrix – On this constitution, the announcing connections are snared as a lattice, or network,
rather than inside the normal order. It is a sort of authoritative administration wherein people
with an indistinguishable learning are pooled for work assignments, prompting two or three
administrators to answer to. For delineation, all designers might be in a solitary building division
and report back to a building boss. Yet, these equivalent designers are additionally appointed to
unmistakable activities and perhaps answering to those test supervisors as great. As a result, a
few architects could must work with two or three chiefs in their activity position.
Figure 3: An example of matrix structure
Source: [Nishadha, 2019]
Flat/Horizontal – This is a hierarchical graph kind frequently embraced by way of little firms
and new companies in their starting period. It is just about elaborate to make use of this
mannequin for larger organizations with numerous duties and workers. Probably the most
massive factor about this structure is that countless degrees of middle administration are worn
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out. This empowers representatives to decide on choices quickly and autonomously. Due to this
fact a good-prepared workforce can also be regularly gainful by means of legitimately
accomplishing the fundamental management process. This services admirably for little firms
given that work and exertion in somewhat group are reasonably easy.
Figure 4: An example of flat structure
Source: [Nishadha, 2019]
Network – It envisions every inside and outside connections among supervisors and top-degree
organization. They are not least difficult substantially less various levelled but rather are likewise
more decentralized and more adaptable than different structures. The thought in the back of the
network constitution is established on informal organizations. Its structure relies upon open
discussion and dependable buddies; each internal and outside. The system structure is viewed as
agiler than various structures considering the way that it has few tires, more control and posterior
buoy of decision making. Utilizing a network authoritative constitution is normally a
disadvantage since of its multifaceted nature.
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Figure 5: An example of network structure
Source: [Nishadha, 2019]
Transnational – A transnational corporation is an association that is stressed with the universal
production of things or contributions, outside speculations, or deals and resource the board in
more than one country.
International – A worldwide association (MNC) has comforts and distinctive property in as a
base one country as opposed to its residence nation. Such organizations have working
environments or potentially industrial facilities in uncommon nations and generally have a
concentrated head spot of occupation the spot they facilitate world organization. Exceptionally
goliath multinationals have spending plans that surpass those of numerous little global areas.
Worldwide organizations are generally known as transnational, worldwide or stateless
organizations.
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Global – this is an institution which has global branches and vital command in a gigantic number
of the nations. It is likewise known as international company. It needs to be noted that it is not
the identical as a privately situated group promoting its gadgets all around or to exceptional
countries.
RELATION OF FUNCTIONS TO OVERALL ORGANISATION MISSION AND
OBJECTIVES
The aforementioned structure is what that makes the firms more potent and stand tall in their
diverse and dynamic operating markets. In addition to this, the functions of the organisations like
production, sales, marketing, HR, research and others related to the overall mission and
objectives so as to attain the better results in the business and make the best out of their available
resources. It can also be stated that they needed to be addressed according to the mission and
objectives of the business which elaborates the success rate of the business and hence profit
generation in coming future. Companies develop their functioning as per the needs of the
markets and customers, which helps them to overcome from the challenges within the business
and eventually attain their objectives.
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SECTION 2: CASE STUDY
PESTLE ANALYSIS
The environment which is external to the business entity can be analysed with the help of Pestle
analysis. The opportunities and threats for the business are examined by the management for the
further growth and development of the company. This can be done by the pestle analysis tool
which has six major factors that is political, economic, social, technological, environment, and
legal factors (University of Stirling, 2018). Following is the Pestle analysis of the retail industry
which includes the factors which affect the operations within the retail industry.
POLITICAL
The factors like regulations and policies of the government of the particular sector affect the
functions of the industry. The components which affect the purchase and sale of the retail
products are analysed in the political factors (Metzger, 2014). There are a number of issues faced
by the retail industry due to the political factors such as tax regulations, policies, political
stability, regulations regarding the consumer protection, rights of the employees, safety
regulation act, rate of interest, monetary policies, environmental regulations, etc. The
management make decisions in the company by keeping in mind these political regulations.
ECONOMICAL
The retail industry is also affected by the economic factors and situations of the country in which
the industry is situated. Structure of economy effect the flow of demand and supply of the
retailing products. The economic situation of the country along with the change in the economic
stabilities of the nation affects the working within the retail industry. The rate of foreign
exchange, economic recessions, buying and selling pattern of the consumers, supply of retailing
products, profit, and sale of the retail industry, etc. are some of factors of the economy which
affect the sale and growth of the retail industry (University of Stirling, 2018).
SOCIAL
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