Business and the Business Environment Analysis Report - Unit 1 BBE

This report provides a comprehensive analysis of the business environment, focusing on three organizations: ALDI (private), NHS (public), and Oxfam (voluntary). It begins by differentiating between various organizational types, including private, public, and voluntary sectors, detailing their legal structures, purposes, and objectives. The report then examines the size and scope of these organizations, considering factors such as market share, growth, and geographical reach. Furthermore, it explores the interrelationship between different organizational functions, such as production, sales and marketing, human resources, and finance, and how they contribute to achieving organizational goals. The report also delves into organizational structures, specifically the matrix structure employed by ALDI. Finally, the report discusses the positive and negative impacts of the macro environment, incorporating PESTEL analysis to assess the external factors influencing these businesses. The report is based on the assignment brief provided, including all the required tasks.

Business and the
Business Environment

INTRODUCTION
Business is determined as economic or company system at which products and services
are exchanged for earning money and market shares. In respect of this business environment is
considered as summation of external as well as internal elements that impact on a company
negatively or positively (Bob, 2020). For all business ventures it is necessary to conduct proper
business and maintain proper business environment as which aid in achieving predetermined
target as well as aim successfully at competitive marketplace. Company taken for respective
project is ALDI which a private company is working in retail sector. It is introduced by Karl and
Theo Albrecht in year 1946. Its head office is positioned at Germany as well as they offer
grocery and household essentials. Moreover, project will also include two more companies for
the comparison i.e. NHS which is public company and Oxfam which is a voluntary firm. Topics
covered in this report are different kinds, size and scope of company, interrelationship among the
various functions in a company. In addition to this it will also include positive and negative
aspect of macro environment as well as it also explain about inside strength as well as
weaknesses of respective business as well as interrelation with external aspects of macro
environment.
TASK 1
P1. Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures
Private venture: These organizations are privately owned ventures forge structure by
which it possesses by the suitable number of investors, like Aldi which is a German based global
discount supermarket chain that has its stores in around 20 countries and founded in 1946.
Purpose: Their purpose or motivation is to boost its benefit, creates straightforwardness
in revealing and picking a right hierarchical structure to work their business. They can be sorted
out as Sole Proprietorship, association and partnership.
Legal structures: partnership, association and sole proprietorship are said to be the
different legal structures that are followed by private ventures. Basically, it is required for these

organisations that are coming under private sector would require to take licence from parliament
of United Kingdom in order to conduct any sort of business practice.
Public venture: These are the organizations that are openly deals within the market and
also possess their functions through probable share of stocks (Erasmus, Strydom and Rudansky-
Kloppers, 2016). For example, NHS is the publicly funded healthcare organization since 1948
and has been funded from the general taxation.
Purpose: Their motivation is to change the economy, development of financial
foundation, spread awareness among individuals, give great worth administrations and ideal
usage of accessible assets.
Legal Structures: Basically, the legal structure of public organizations are divided among
three different sections and these are local, state and central level. Political powers specifically
runs the organisations that are coming under public sector. Moreover, it can also be said that it
incorporates different business exercises which are coordinated by them and have command over
business. Government at different levels has the ability to establish laws for the entire nation,
interestingly with neighborhood governments. Organizations who are worked by focal
government need to take consent from them to work and before taking significant choices.
Voluntary Organization: These are the organizations that collect information from
people in order to understand the probable structure in order to achieve their goals and targets.
For instance, Oxfam which is confederation of 19 independent charitable organizations put
emphasis on the mitigation of global poverty.
Purpose: Their point is to Connect individuals and associations, develop and improve
chipping in, fortify deliberate association. They work for social government assistance or
society, work for poor and, NGOs destitute individuals, mature age and.
Legal Structures: Specifically, there are two different types of legal structures followed
by voluntary organisations. It is a sort of good cause which is controlled by gathering of
individuals, are trustees. It is represented by trust deed which is increasingly adaptable in light of
the fact that there is no legal system. Trustees for this association are not chosen, they are
delegated by the board. To set up a trust, the gathering individuals need to settle on an

understanding in composed structure which is called as trust deed and speaks to that an
association is legitimately beneficent.
Difference between Profit, Not-for-Profit and Non-Profit Organizations (NGOs)
Basis Profit Organisations Not-for-Profit
Organisations
Non-Profit
Organisations
Meaning An advantage
affiliation is contains
about the getting
money masterminded
similarly as
overseeing things and
organizations through
customers income
driven justification.
This affiliation is
similarly insinuates
as non business
component, not
income driven
affiliation. It is an
affiliation committed
to separating a shared
view point (Fabuš,
2017).
Non advantage
affiliation is similarly
one of the blend work
assignment in which
it includes the
working features
which isn't entitled as
money making yet to
give some
development which
brings social work
not income driven
expectation.
Objectives The objective of
advantage affiliation
is basically to oversee
thing to people
gaining money and
there is exclude any
social explanation.
The objective of Not
income driven
affiliation is too not
procuring money
dismissing that by
consuming and
propelling the social
government help
towards the overall
population.
The objective for Non
advantage affiliation
is the having a social
work or which has
excluded the money
making or circle
factor (Prajogo,
2016). To contribute
something for the
overall population.

P2 Explain the size and scope of a range of different type of organisations.
Size of a business organisation refers to the scale of operations and the busines activities of
that organisation (Van Looy and Van den Bergh, 2018). Different factors can be used to
determine the size of a business organisation such as capital employed, number of employees,
turnover etcetera. On the basis of number of people employed, business organisations can be
classified into four different types which are:
Micro-business organisation: Organizations with less than ten people as employees are
termed as micro-business organisations such as sole proprietorship.
Small-business organisation: Organisation which has more than 10 but less than 50
employees are small business organisation such as partnership firms.
Medium-business organisation: Organisations which employs more than 50 people but less
than 250 people are termed as medium-sized organisation such as public and private sector
companies (Hillary, 2017).
Large-business organisation: Organisation which employs more than 250 people are
termed as large-scale business organisations such as private-sector and public-sector
multinational companies.
Basis Aldi NHS Oxfam
Objectives and goals They have necessities
to offer the top
quality kinds of help
towards the
customers (Foss and
Saebi, 2018).
Having a significant
degree of
beguilement similarly
as other framework
factor to guaranteeing
for giving the best
and latest examples
information as much
figure to the world.
As it sort of NGO
and it controls
through government
and targets are to
propel the social
causes and gives the
improvement towards
the overall
population.
Market share The market share of
aldi is challenged by
NHS deals at the
global level and
The bit of the pie of
Oxfam is having 50

Lidl and currently its
share rose by 13.2%
to 14.1%.
provides its
healthcare services to
worldwide under the
guidance and
instructions of
government and
analyzed that it has
around 9.6% market
in UK as the part of
its open survey.
above branches
worldwide and it
having less bit of the
pie.
Growth and
sustainability
The advancement
pace of right
currently premise is
arranged by around
3.2% which is
differentiate and the
4% on present year of
2020 as they are
foreseeing to develop
their area and
business.
As through the
general records the
advantage rate was
around 11.2% and
turnover is 104
million euro.
The Oxfam having
the drawn out turn of
events and
dauntlessness to the
extent progressing of
social government
help (Hamilton and
Webster, 2018).
TASK 2
P3 Explain the relationship between different organizational functions and how they link with
the organizational objectives and structures.
Every organisation consists of different functions and departments which are essential for
business activities of the company and are interrelated. Relationship between different functions
within the organizational context of ALDI Ltd. is being discussed as follows:
Production Function:

Production function refers to the process of manufacturing goods and services in an
organisation by conversion of raw materials into finished goods. Production function is vital for
accomplishment of business objectives of ALDI Ltd. and it relates with the other organizational
functions of the company. For example, production and sales function are interrelated since the
goods are produced and designed according to the information provided by sales and marketing
department of the company with respect to key trends in the market (Felipe and McCombie,
2014). Similarly, production relates with finance function of ALDI Ltd. to determine the cost of
products and the market price at which the products should be offered in the market to increase
profitability.
Sales & Marketing Function:
Sales and marketing function refers to the comprehensive set of activities which include
personal selling, advertising, promotions etcetera which are aimed to increase the sales of the
product and services in the market. It is important function for achieving the business objectives
of ALDI Ltd. since it determines the amount of revenue which comes into the company and
influences every other activity (Arnett and Wittmann, 2014). For example, sales department of
ALDI Ltd. works in harmony with the finance function to determine expenditure on selling
activities and meet the financial targets of the company.
Human Resource Function:
It refers to the process of managing and controlling employee performance in the
company to achieve the highest level of operational productivity which is very crucial for
achievement of business objectives of ALDI Ltd. HR Function is related with every other
function of the organisation (Storey, 2016). For example, controlling the productivity of
employees by HR department helps the production and selling department to achieve better
results by increase employee productivity and efficiency.
Hence, it can be evaluated that different organizational functions and departments are
interrelated and are vital in determining the success and accomplishment of goals and objectives
for any business organisation.
Organisational Structure:

Organisational structure can be termed as the system which determines and outlines how
tasks and functions in an organisation are directed towards attainment of organisational goals and
objectives (Ashton, 2004). It describes the reporting relationships between the superiors and
subordinates in an organisation. There are primarily three different types of organisational
structure:
Functional Organisational Structure: Under functional structure, organisation is divided
into different departments based on the major functions such as sales, marketing, production
etcetera. Employees are formed into groups based on matching skills and tasks. Each department
has a functional head who is usually an expert and specialist in that functional area.
Divisional Organisational Structure: Under divisional structure, the organisation is
divided into different divisions which are either based on products or geographical area. Every
division has its own functional departments such as IT, marketing, finance etcetera. It is suitable
for organisations with diverse product ranges or market areas.
Matrix Organisational Structure: It is a combination of two or more types of
organisational structures. For example, in an organisation which is divided based on the products
and each division has a functional head for separate functions, it can be said that matrix
organisational structure is being followed.

Figure 1: Organisational Structure
(Source: https://careers.aldi.us/org-chart)
ALDI Ltd. implements an effective form of matrix organisational structure. It helps in
accomplishment of organisational goals and objectives since every division essentially has a
functional supervisor or head with expertise that can be used to increase productivity in that
particular area or function. It also helps in sharing highly skilled employee across different
division in the same function and presents an opportunity for employees to enhance their skill
sets and qualities. Matrix organisational structure is suitable for ALDI Ltd. since the company
operates in a diversified range of vertical product-lines in different geographical areas and this
structure helps the management in effective monitoring and supervision of each functional
department in every distinct division (Clement, 2013).

TASK 3
P4 Positive and negative impacts of macro environment
Macro environment is considered external factors which are uncontrollable in nature so it
is essential for company to understand it and develop decision accordingly. For this a firm
management may conduct several activities such as PESTEL analysis. PESTEL analysis of
determined as framework through which a company can conduct scanning of factors related to
external environment(Brennan, Canningand McDowell, 2020). Factors of respective model are
political, economical, social, technological, environmental and legal. In respect of ALDI they
can PESTEL analysis to know their external environment factors according to which they can
develop strategies as well as they also determine factors strengths and weakness, below
explanation of this is given:-
Figure 2 PESTEL Analysis
Source: PESTEL Analysis, 2020
Political factor
For ALDI it is essential to update as well as change their strategies according to political
factors or decision of nation which conducting and expanding business operations and functions.
it is so because through it they get ensure that all operations are conducted properly (Contractor
and et. al., 2020).

 Positive – The positive aspect of this is related to United Kingdom political condition
which is stable which help ALDI in conducting business smoothly in nation as well as it
will also help in gaining high competitive advantage at the marketplace successfully.
 Negative – Whereas the negative aspect is there are number of political factors which
impact on decision making as respective company not able to follow which affect their
market value.
Economical factor
There is inflation take place in United Kingdom due to Brexit and due to same market get
rose to approx 2.9 percent in 2019 may. Due to this respective retail company need to change its
decision as well as strategies so that they can survive in the market successfully.
 Positive – The positive impact of this is that purchasing behaviour of a customer totally
depends on their economy condition so by changing decision according to economy of
UK respective company able to attain their desire goal successfully.
 Negative - On the other hand, if economy condition is not good then customer conduct
less purchasing which impact on company profit as well as employees moral negatively.
Social factor
For every company it is essential to consider society while developing decision as that
will help them in developing effective decision and sustaining at marketplace for long time
(Draijer, 2020).
 Positive - ALDI conduct several programmes which help society in development such as
their aim is to teach nearby 1.2 million poor children by the end of 2020 as that will help
them in attaining high competitive advantage. Societal factor is considered as positive as
that will provide this retail company opportunity to grow their business effectively at
different location.
 Negative - On the other hand, negative impact is that need, demand and expectation
change regularly due to which company need to change or update their decision
accordingly for sustaining in market.
Technological factor