Business Environment and Organizational Structure: Skoda Auto

This report provides a comprehensive analysis of the business environment, focusing on Skoda Auto. It begins with an introduction to business environments, organizational types (private, public, and voluntary sectors), and their purposes. The report then explores the size and scope of v...Read More

Business
&
The Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1 Different types and purposes of organisations..................................................................1
P2 Size and Scope of various types of organisations ............................................................3
P3 relationship between different organisational functions and related organisational structure
................................................................................................................................................5
TASK2.............................................................................................................................................6
P4 Positive and negative impact of macro environment upon business organisation............6
P5 Studying on Internal and External Analysis......................................................................8
P6 Ways in which Strengths and Weaknesses interrelate with macro factors.....................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business and its environment is a set of internal and external atmosphere of company that
affects operations of firm positively and negatively in direct manner or indirectly. Entrepreneurs
must study these environmental factors to identify their strengths and weaknesses to recognise
actual opportunities and threats that will lead organisation in greater place in competition
(Drucker, 2017). Skoda Auto is an Czech Republican auto-mobile maker corporation came in
force in 1855. It runs its business in several countries and is a brand in their field. It is a Privately
owned company and associated with Volkswagen Group. It is having both type of products
successful as well as low popular items in its product portfolio. This venture also provides
services which are related to its vehicles.
TASK1
P1 Different types and purposes of organisations
Nowadays there various organizations that are working for their own interest and goals.
Some firms are having objective of profit maximisation and some of them want increment of
their wealth. Association that have no profit interest and provide services to society as they work
for social welfare. This type of organizations works for maximisation of living standards of
people. Apart from this other two sectors are private and public which mainly focus on
economical growth of association and more profits. Skoda Auto is an auto-mobile company
founded by Vaclav Laurin in December, 1855 in Czech Republic. It is a subsidiary of
Volkswagen group. It sells its auto-mobiles across the world. It is private company that works
for enhancement of its economic condition and to gain respected position in marketplace (Craig
and Campbell, 2012). This type of association directly helps in growth of country's economy.
Different sectors of organizations are stated below:
Basis Profit making
organisation
Non government
organisation
Non profit
organisation
Explanation This sector includes
those companies that
works for their self
interest like increment
This kind of firms
works for social
welfare and they do
not care about profit
Non profit
organizations are those
who provide goods and
services for
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of wealth and profit.
Skoda Auto is a
private company.
and their earnings. It
means they do nit
charge any fees or
something in respect
of their service. Any
individual can open an
NGO for social
welfare.
development of way of
living of people. They
provide goods and
services to people
according to their
needs and desire and
profit which they make
by their offering does
not use for their
personal purpose.
Aim and size They work for their
single aim which
maximisation of profit
by providing more
serving to their
potential targets.
These firm can be big
or small in industry.
Main objective of this
kind of organization is
development of
society. These
associations are
generally big in no.
Main purpose of this
organization is to
enhance trade,
commerce, science and
arts of country and
have many prohibited
areas.
There are three major sectors in which an association works are described as beneath:
Private Sector: This type of firm any individual or group of individual can open because
Govt. has no role in this type of corporations. There main objective is to increase profit and
wealth along with maximisation of goodwill of firm in marketplace in industry they are working.
Skoda Auto is a privately owned company that earn profit by providing products and services
related to its products to its target customers according to their needs and demands. Company is
successful in its operations and running its business across the globe (Wild, Wild and Han,
2014).
Objective: association wants to expand its market share with 12% in recent time. This
aim will be achieved with help of providing cars and other auto-mobiles with high efficiency.
This aim can be attain by using quality parts in making of cars because this action will attract
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more customers who are having purchasing power. Company achieve its targets by selling goods
and services into market and charged price in respect of them.
Public Sector: This sector mainly deals in economical finance of country. These
organizations run by government body whether it is state or central. Profit gain by these
associations gets distributed among its workers according to their designations and positions.
Taxes are main income of this association which is also used in economical growth of nation.
Barclays bank is an example of this sector.
Aim: Main purpose of this sort of corporations is economical growth and development of
nation. Along with national development welfare of society is also an objective of this type of
corporate house. Social welfare is done by launching policies that is beneficial for country
people.
Voluntary Sector: In this section social welfare of people includes. These associations
are help those who are in need of anything. Oxfam is a corporation that deals in enhancing social
way of living of persons (Bryman and Bell, 2015).
Objective: Main motto of this firm is to develop those who are came in under developed
sector and enhance their style of living.
Sectors Legalised Structures:
Public Sector: There are different kind of structures that includes in this section :
 Local government- Main motto of this is to provide benefits to society and country's
economy as well. They also consider important part of under developed communities.
 State government- These are associations who works according to rules and authorities of
Govt. These firm provide goods and services for purpose of benefits of national people. Central Govt.- This section includes both above bodies that give power to economical
growth of country. This is regulatory body who operates local as well as state Govt.
Private Sector:
Sole proprietorship- It is a part of this kind of firms. These corporations operates by
single person who bears its all responsibilities and duties and he is the person who gain profit
through this (Cavusgil and et. al., 2014).
Partnership- When two or more than two person starts a business to share profit and loss while
bearing all responsibilities and duties as per pre decided ratios.
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P2 Size and Scope of various types of organisations
Different kind of associations are discussed below:
Small scale industries- Any personage can open this kind of business in any industry
which only adds 50 people as its members. These companies having restriction that they can not
generate profit of more than 5 million pounds. These are large in number and provides
employment facility to society persons (Boons and Lüdeke-Freund, 2013). Under this section
small markets, stores and shops to be include. Main motto of this sort of corporate houses is to
increase business activities to gain benefits. Voluntary Sector- Under this those organizations come who are having large no of staff
members. These firm can generate profits in millions and have no restrictions. Authentic
example of this section is Oxfam who comes under this point because they have big
number of members who are working in this corporate. Private Sector- Skoda Auto is a well defined example of this sector which is a large scale
company. Under this those organizations are includes that works for their own growth
and wealth maximisation interest by providing good and services to those who are ready
to purchase this. This kind of firm must meet satisfactory level of its clients.
Scope: Skoda Auto covers wide locations in Czech Republic as well as it has its operations
across the world. Minimum two and maximum infinite no of people can run this sort of
associations which is called private companies (Sena Ferreira and et. al., 2012).
Stakeholders: These are people who have their stake in company. For e.g. customers,
shareholders, suppliers, employees etc. These are people who take part in operations of business.
Every stakeholder have its specific role in organization working and these are stated below: Public Sector: Organisation size and scope of business depends upon purpose of firm.
These companies work for their and nation's interest. Firm's interest is increment of
goodwill, wealth maximisation and earning of profit as much they can and this kind of
action also drive economy to higher position. Barclays bank run their business and earns
huge no of benefits that will enhance company as well as country.
Scope and Size: Barclays bank has 10000 no of employees who are working for its banking
operations. This association is providing services to country since 1690. to run this kind of
business Govt. approval is mandatory (Onetti and et. al., 2012).
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Stakeholders: Main stakeholder of this sort of organizations is Govt. bank can not make
changes in its rate of interests and other provisions without taking permission of Govt. Other
stakeholders are employees, clients etc. Its main purpose is to became largest banking service
provider across the globe.
P3 relationship between different organisational functions and related organisational structure
A firm does not run their operation alone. It has so many functions that are operated by
many divisions in organizations and they work together to obtain goals of association in limited
and correct time duration. These functions are human resource department, purchasing division,
sales & marketing unit and production & logistics department.
Human Resource Department: Skoda Auto company swelled position in rank of
employees in specially in front line positions, in order to cope up with launch of new models of
its vehicles at Kvasin and Mlada Boleslav plants. When company set up its objectives for year
2025 and formulate strategy for these target achievement management also revised manpower
policies and updated this. Successful execution of strategies and excellent working of company
relies on its team that work hard for achievement of goals (Weske, 2012).
Purchasing Department: This is a primary department that's role is to optimise cost. This
unit is associated with technical department of Volkswagen that incur material cost for firm. It is
responsibility of this division to purchase materials that should be up to date. This functional area
makes possible of launch of new vehicles in market that competes with rivals.
Production & logistics Department: Best example of new generation production of
Skoda is latest Skoda Superb that gathered pace in marketplace. Company is gradually increasing
its production capacity to meet customer demands in this section it is strategy of this auto-mobile
venture to start its new production plants in various countries to launch new vehicle line into
marketplace.
Sales & marketing unit: This venture celebrated its successful 25 years with Volkswagen group
that is a proof of its continuous growth and success and association get this level with extreme
help of its sales and marketing department which gave up this growth of 6.7% year on year basis
(Prajogo, 2016). Skoda delivered more number of vehicles in every year that made it a
trustworthy brand in its client's eyes.
Kinds of organisational structures:
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Geographical based: Company uses this structure as it operates its activities in various
no of locations by selling large no of vehicles in different geographical regions. This structure
generally uses by large scale industries.
Goods based: Consumer wants all transportation module in a proper sequence as they
come in administration department. Organization sells products majorly and services are
secondary part of firm because they are associated with products.
Functional based: This depends upon no of employees and their designations. It is a
common sector but varies from organization to organization.
TASK2
P4 Positive and negative impact of macro environment upon business organisation
There are two key aspects that affect business operations directly and indirectly. That is
internal and external atmosphere which also describes as micro and macro atmosphere. Study of
these factor have their impact on business tasks of venture and they could be positive and
negative anything. Explanation of these factors are discussed as beneath:
PESTLE analysis of Skoda Auto is explained further in this report. That will showcase
impact of outside environment to business operations:
Political factors: All governmental policies are to be included in this point and these
policies have to be followed by organization and company has to manage its operations
according to these procedures. Because these policies have their direct impact on taxation policy
of country. If association denies to accept these procedures they will have to address
imprisonment and could get various charges imposed on them (Kim, Suresh and Kocabasoglu-
Hillmer, 2013). There are aspect that affect business activities are stated as beneath:
 Changes in laws and legislations: This include taxation policies and rates,
modification of tax law on regular basis and introduction of new laws in nation,
accounting standards and that are associated with environmental issues in
domestic as well as global markets.
 Changes in demand area: As per this section requirements of customers are
changing regularly as time passes and they are moving with new range of Skoda
vehicles that are able to fulfil demands of its clients because they are having
capacity of increasing production capacity as described earlier.
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 Distinct political conditions in international market: This auto-mobile venture is
a global company that sells its auto-mobile products across the world and has to
consider all political situations in every region of particular country to run their
business in that nation. By meeting all desires of political situation organization
will be able to run their operation globally.
Economic analysis: This firm has to study economic condition of every nation in which
they are selling or they want to launch their products (Yu and Ramanathan, 2012). This analysis
will provide further information regarding that particular country is having that ability to buy its
cars or they can not afford these vehicles of Skoda. Economic analysis shows financial position
of country that ultimately shows purchasing power of customers.
Analysis of social elements: Social factors have their impact on every business entity.
People are more focused on saving fuel and saving environment from pollution and this is reason
they are following car pool that reduces car purchase in some countries. It is a social challenge
for Skoda Auto.
Technological Analysis: This auto-mobile venture is very much affected with
technological changes that arises in market. It is responsibility of marketing manager to be aware
about technological changes and adopt them into their production so that they can compete with
rivals by making latest model cars and other vehicles. This is only cause with that they can
secure their good place in marketplace.
Legal Analysis: this section includes legislation and laws related to country and its
people. These laws includes various acts regarding environmental issues like pollution, save tree
etc. and other laws related to welfare of employees of organization which conclude all work
related points like working hours, compensations and wages, week days etc. Company must
consider these laws to run their operations in every nation. This action ensures running of
business globally.
Environmental Factors: Venture must consider all factors related to environment and
they should not harm environment by their activities like their vehicles do not create so much air
pollution and should focus all aspects that is associated with atmosphere (Bocken and et. al.,
2014).
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P5 Studying on Internal and External Analysis
SWOT-ANALYSIS of Skoda Auto: This technique enables company to analyse their
internal and external environment and can obtain their opportunities and threats that will help in
continuous growth of organization. SW means strengths and weaknesses that is associated with
firm's micro environment and OT means opportunities and threats that are related with macro
environment. Analysis of strengths and weaknesses will tell about opportunities and probable
threats. The complete discussion on this study is as follows further:
Strengths Weakness
 It is a recommended motor vehicle
brand globally.
 Awesome and prominent marketing
and sales strategies.
 They have strong logistic system that
helps in product placement smoothly.
 There are numerous vehicles that are
not having that much popularity as
other cars have in marketplace.
 Failure of many products because of
paying least focus on its branding
strategies is making negative publicity.
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Illustration 1: PESTLE Analysis
(Source: PESTLE Analysis, 2014)

 Their strategy of sponsorship of
promotion is quite good that helps
corporation in becoming trusted brand
in customers eyes (Schaltegger,
Lüdeke-Freund and Hansen, 2012) .
 They succeeded in achieving client
loyalty.
 They are facing extreme stiff
competition in market.
 They have weak presence in emerging
economies.
Threats Opportunities
 Rapid technological changes that are
hard to adopt in production of new
vehicle.
 They have strong competition from
other motor vehicle companies like
Hyundai, Honda, Ford and as well as
luxury car maker ventures.
 Other organisations launch hybrid
fuelled and new concept cars in market.
 Their strong collaboration with auto-
mobile entities that provide god quality
parts for manufacturing.
 Firm have augmenting manufacturing
capabilities that makes high efficiency
auto-mobiles.
 This venture is providing hybrid cars in
lesser price in comparison of its
competitors.
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Illustration 2: SWOT Analysis
(Source: SWOT Analysis, 2017)

P6 Ways in which Strengths and Weaknesses interrelate with macro factors
Study of PESTLE examines Opportunities and Threats of SWOT analysis that are related
to macro environment of business. Details of this are stated below: Political Factor: This element of macro analysis largely affects place of marketing mix.
Place is an important factor that have its impact on company competition. This
environment varies from nation to nation. Economical Factors: Condition of economy tells that what is purchasing power of its
people for e.g. if economic condition is not stable so that in that country there is no large
no of buyers for motor vehicles. On the other hand if economy is strong of nation it have
more number of purchaser of auto-mobiles that becomes market opportunity for
organization (Voegtlin, Patzer and Scherer, 2012). Social Elements: Corporation must consider all social factor and make sure that their
operations does not harm to society and they will also take care of social welfare and
includes this in strategy formulation decisions.
 Technological Essentials: It is mandatory for firm to keep an eye on every technological
changes that are arising in marketplace to make latest model cars and other transport
vehicles that will ultimately deals 2with competition in market and will help in obtaining
secure position in market.
There are various points that directly affects Strengths and weaknesses of association of SWOT
analysis. These factors are stated as beneath: Efficiency of manpower: It is a strength of a corporation if its employees are working
efficiently and able to achieve all targets in limited period of time. This action ensures
remarkable growth of corporate in market and also helps in beating its enemies and also
maximise goodwill of firm in its client's eyes. Training & Development: If organization is not able to make its workforce future ready
they are not having ability of gain a prominent market share. To secure position and to
achieve all targets it is necessary for company to provide time to time training program to
its workers so that they will be able to accept all changes and get confidence in their
occupation (Vahlne and Johanson, 2013).
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 HR Functions: It is a key role of human resource management to hire best candidate for
vacant position and assign task to them according to their capabilities and this action will
reduces T&D cost of association and will help in ventures growth.
CONCLUSION
From above study, it can be concluded that in market there are large number of
enterprises which are different from each other in respect to their size, nature, type and scope;
some may be public, private or voluntary. A large organisation will have complex system with
huge undertakings whereas in small firm simple structure as number of operations is limited. In a
business there are various department such as finance, HR, manufacturing which are beneficial
in utilising opportunities and safeguarding from threats. Executives formulate plan and strategies
to direct employees to work for accomplishment of objectives as people and technology are an
important asset of business because they transform raw material into end product and satisfying
customer's needs to generate sales and make profits for company to grow and compete with other
rivals.
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Online
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