HND Business Management: Organization and Environment Report

This report examines various aspects of business environments and organizational structures, focusing on Thaco Auto. It begins by defining different types, sizes, and scopes of organizations, including for-profit, non-profit, and non-governmental organizations, along with legal structures like sole proprietorships and LLCs. The report then delves into the interrelationship of organizational functions such as marketing, operations, human resources, and finance, and how they connect to organizational structure. Furthermore, it explores the positive and negative influences of the macro environment on Thaco Auto's operations using PESTLE and five forces analyses, along with a 7S model analysis. Finally, the report assesses Thaco Auto's internal strengths and weaknesses in relation to external macro factors, providing a comprehensive overview of the business environment.

RECORDING AND FEEDING BACK ON LEARNER ACHIEVEMENT
Course / Award Pearson BTEC HND Level 5 in
Business Management
Unit 1 Business and Business
Environment
Student Name Nguyen Huu Bao Tran
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Student Name/ID
Number: Nguyen Huu Bao Tran / 20BM40211
Unit Number and Title: Unit 1 – Business and Business Environment
Academic Year: 2021/2022
Unit Assessor: Soumitra Chowdhury
Assignment Title:
Final Assignment: Organization scopes, functions and
Environment
Issue Date: 2st November 2021
Submission Date: 7th January 2022
Internal Verifier Name: Willibeth Canonigo Candol
Date: 5th January 2022
Student declaration
I certify that the work submitted for this assignment is my own. I have clearly
referenced any sources used in the work. I understand that false declaration is a form
of malpractice.
Student signature: Nguyễn Hữu Bảo Trân Date: 05th January, 2022
TABLE OF CONTENTS
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I/ INTRODUCTION..........................................................................................................4
II/ THE DIFFERENT TYPES, SIZE AND SCOPE OF ORGANIZATIONS.....................5
1. Types of organizations.........................................................................................5
2. Legal Structure.....................................................................................................6
3. Size of organizations............................................................................................7
4. Scope of organizations.........................................................................................8
III/ THE INTERRELATIONSHIP OF THE VARIOUS FUNCTIONS WITHIN AN
ORGANIZATION AND HOW THEY LINK TO ORGANIZATIONAL STRUCTURE......9
1. The role of each function......................................................................................9
2. The interrelationships between organizational functions.....................................9
3. Advantages and disadvantages of alignment between functions in the
organization..........................................................................................................11
IV/ THE POSITIVE AND NEGATIVE INFLUENCE THE MACRO ENVIRONMENT
HAS ON THACO AUTO’S OPERATIONS.....................................................................12
1. PESTLE analysis..................................................................................................12
2. Five forces analysis..............................................................................................13
3. 7S model analysis.................................................................................................14
V/ THE INTERNAL STRENGTHS AND WEAKNESSES OF THACO AUTO AND
THEIR INTERRELATIONSHIP WITH EXTERNAL MACRO FACTORS.......................16
CONCLUSION.................................................................................................................17
REFERENCE...................................................................................................................18
I/ INTRODUCTION
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In this report, I am going to talk about different types, size and scope of organizations in
Thaco. Demonstrate the relationship of different functions in an organization and how
their links to the organization structure. Explain positive and negative effects on the
major environment on Thaco auto's activities. Thaco auto's internal strengths and
weaknesses and their relationship to external magic factors.
For types of organizations, it includes a definition of a for-profit organization, a definition
of a nonprofit organization, and a definition of an NGO, followed by two comparative
tables. Next is the Legal Structure section with definitions of sole proprietorship,
partnership, and Limited Liability Company. Then is the organization size in Vietnam
and defines the scope of organization with 5 types of franchises, licenses, international
companies, multinational companies, transnational companies.
Regarding the relationship of different functions in an organization and how they
connected to the organization structure, we will first talk about the role of each function
in the business including marketing, operations, human resources management, and
finance. Then talk about the interrelationship between the functions of the Thaco and
finally the advantages and disadvantages of alignment between functions in the Thaco
Group.
With the section positive and negative effects on the major environmental to Thaco
Auto's activities, it will be analyzed under the PESTLE model and five forces analysis
including potential entrants, suppliers, customers, industry competitors, substitutes.
II/ THE DIFFERENT TYPES, SIZE AND SCOPE OF ORGANIZATIONS.
1. Types of organizations
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Definition of profit organization
A for-profit organization is any business company whose primary goal is to produce
profits through regular activities in order to maximize the wealth of its owners. Profits
made by such companies are either held in the firm as reserves for future provisions or
paid to shareholders as dividends.
Definition of a non-profit organization (NPO)
A non-profit organization is a legal entity whose primary goal is to promote the public
good rather than make a profit. They are formed by a group of people who get together
for a shared goal, such as providing services to members and the general public.
Definition of a non-governmental organization (NGO)
Non-governmental organization is a term used to refer to an organization, association,
socio-cultural committee, charity association, non-profit corporation or other legal entity
that by law does not belong to the State sector and does not operate for profit.
Comparison chart
The basis for
comparison
For-profit organizations Non-profit organizations
Meaning A legal entity, which works to
make profits for the owners, is
known as a for-profit
organization.
A nonprofit organization is a
legal entity, working to serve
society as a whole.
Motive Profit motive Service motive
Organizational
form
Sole proprietorship, Partnership
or company
Clubs, Trusts, Public
Hospitals, Societies, etc.
Management Sole proprietor, partner or
director, as the case may be.
Commissioner, committee or
governing body.
Income Sale of goods and services. Contributions, subscriptions,
membership fees, etc.
Start through Capital contributed by owners. Funding from donations,
subscriptions, government
grants and so on.
Financial report Income Statement, Balance
Sheet and Cash Flow Statement
Receipts & Payments,
Income & Expense and
Balance Sheet.
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Earn more
money
Profits are transferred to the
capital account.
The surplus is transferred to
the capital fund.
The basis
for
comparing
NGO NPO
Meaningful An NGO refers to a non-
governmental organization
established by ordinary
citizens, operating
autonomously by the
government.
An organization formed to
provide goods and services to
people and operating on the
principle that no member should
receive profit or loss the shares
of the entity is known as an NPO.
Registration Can be registered as a Trust
under the Public Trust Act, or
as a Social Registration Act,
1860, or as a nonprofit
corporation under the
Companies Act, 1956.
According to section 8 of the
Companies Act, 1956.
Activity area Big Limit
Target To improve society and the
economy, raise human rights
awareness, empower women,
and so on.
To advance art, science,
research, trade, or any other
worthwhile endeavor.
2. Legal Structure
There are three primary forms of legislation used to run small businesses in most regions of the
world. These are some of them:
Sole proprietorship
A sole proprietorship is a business held by one person who is completely accountable
for all of his or her assets and all of the business's activities.
Partnerships
In addition to general partners who may have capital contributions, a partnership is a
type of business in which there must be at least 02 members who are common owners
of the firm and transact business together under a common name called general
partners. (vietnambiz, 2019)
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Limited Liability Company
A limited liability company (LLC) is a type of company that includes two types of
companies:
 A single-member limited-liability corporation
 A limited liability company (LLC) with at least two members
From the moment it receives its business registration certificate, a limited company has
legal status. Members' responsibility is restricted to the amount of capital they have
contributed.
3. Size of organizations
SMEs is an abbreviation for small and medium-sized businesses.
Micro, small, and medium businesses, or simply small and medium businesses, are
businesses with a small scale in terms of capital, labor, or revenue.
Small and medium enterprises can be classified into three groups, according to the
World Bank Group, based on their size:
1. Micro enterprises (micro): number of employees under 10 people and capital of
less than 20 billion VND
2. Small businesses: from 10 to less than 200 employees
3. Medium enterprises: 200 to 300 employees with capital of 20 to 100 billion VND
In Vietnam, corporate SMEs are classified as follows:
 In the realm of commerce, business agencies, and services
 Micro-enterprises are those with less than ten employees who participate in
military social insurance each year and a total income of less than ten billion
VND or a total capital of less than three billion VND.
 Small businesses are defined as those with fewer than 50 employees that
participate in annual military social insurance and annual revenue of less than
100 billion VND or total capital of less than 50 billion VND.
 Medium-sized businesses with fewer than 100 employees who participate in
annual military social insurance and annual revenue of less than 300 billion VND
or total capital of less than 100 billion VND
 Construction is used in agriculture, forestry, fishing, and manufacturing.
 Micro enterprises are those with ten or fewer employees who are covered by
military social insurance and have a total yearly revenue of less than 3 billion
VND or a total capital of less than 3 billion VND.
 Small businesses are defined as those with fewer than 100 employees that
participate in annual military social insurance and annual revenue of less than 50
billion VND or total capital of less than 20 billion VND.
 Medium businesses have fewer than 200 employees and yearly revenues of less
than 200 billion VND or capital of less than 100 billion VND.
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(PHANHUUTRAC1994, 2019)
4. Scope of organizations
Franchising
A franchise is a business that permits an individual or organization to trade in goods or
services according to the business structure and manner that the franchisor has put into
effect in a particular area. For example, franchised chain stores such as KFC, Pizza
Hut, Starbucks, and others are common in large cities. (Chấu, 2021)
License
Licensing is a contract that allows you to license intellectual property rights or the right
to utilize the intellectual property to create and sell products in other countries and it is
simply an intellectual property transaction in which the selling price is determined and
changes based on the supply-demand connection of this specific product-market and
profit margin. (nghialagi, n.d.)
International company
Any company that operates in at least one country other than its home country is
referred to as a global corporation.
A global firm is similar to a multinational corporation in that it invests and conducts
business in the nations where it chooses to do business. Global corporations frequently
have subsidiaries in multiple countries, allowing them to distribute goods all over the
world. (vietnambiz, 2020)
Multinational company
A multinational firm, often known as a multinational corporation, is a company that
operates in multiple countries at once. Throughout other words, it is a business that
operates in a variety of countries. There is still a central headquarters in a global
corporation, but subsidiaries in different countries are responsible for localizing products
and marketing to fit the culture.
Transnational companies
Limited or unlimited liability corporations having an organizational structure that includes
a parent company and a system of abroad branch companies are known as
transnational companies. (Anon., 2019)
III/ THE INTERRELATIONSHIP OF THE VARIOUS FUNCTIONS WITHIN AN
ORGANIZATION AND HOW THEY LINK TO ORGANIZATIONAL STRUCTURE.
1. The role of each function
Marketing
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The marketing role of an organization is determined by its production, sales, and
product features. Here are the four main functions:
 The adaptation function
 The distribution function
 The consumption function
 Functions to stimulate, influence, and promote.
(Steward, 2017)
Operation
This department is in charge of planning and implementing actions linked to the
company's production and operations. This department is where the company's short
and long-term goals, strategies, and business development orientations are developed.
Furthermore, the execution of business activities is the enterprise's source of revenue
and profit.
The operations department is in charge of overseeing activities within the company to
ensure that it is always running at maximum efficiency. It is critical to pay attention to
the actions of the business, regardless of whether it is engaged in manufacturing,
trading, or delivering services. The specific operations depend on the business industry
and the stage of the company's development.
(HRchannels, 2021)
HRM
The importance of human resources management in corporate governance is growing,
and it's always linked to other business objectives. The following three responsibilities,
in particular:
 Management of Human Resources
 Human resources must be maintained.
 Human resources should be used to their full potential.
(Talentbold, 2021)
Finance
The basic role of Finance is to give relevant information to all individuals interested in
the financial status of the company from a variety of angles, allowing them to make
educated decisions accurate and appropriate for their needs. (Diễm, 2021)
2. The interrelationships between organizational functions
Relationship between marketing and finance
 Analysis of the ratio between profit and marketing expenses
In the business world, finance and marketing are important. The relationship between
sales and costs is always taken into account by management. These are referred to as
ratios. In order to track the ratio of advertising and marketing costs to overall income,
the company's finance and marketing departments must collaborate closely. For
instance, if marketing costs rise over time but sales remain steady, management may
conclude that marketing is inefficient. This is referred to as ratio analysis.
 Expenses for Marketing activities
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Every company must widely publicize its services or products. As a result, marketing
and advertising are crucial expenses for any company. The finance department
provides information to management about advertising costs and their relative
effectiveness in terms of total income. In terms of total revenue, a sales strategy or
marketing campaign, for example, may have been successful. The finance department,
on the other hand, can decide whether the campaign was genuinely effective in terms of
cost.
 Consider coordinating between the Finance and Marketing departments in the
business
Finance and marketing must collaborate closely in order for management to understand
which marketing strategies are effective. Another reason finance and marketing get
along so well is that they can develop a budget for future marketing and advertising
spending.
Management can budget future marketing campaigns by looking at historical financial
results. The finance function's responsibility is then to assess how well marketing
departments adhere to budget limits as well as the effectiveness of the budgets they
utilize.
 Forecast and consider supplementing the Finance and Marketing budget in the
business
Business predictions can be provided by marketing departments to finance
departments. Assist the financial department in efficiently allocating resources.
Accountants can benefit from marketing data on which items or services sell the best. In
order to budget for future marketing campaigns, the two departments must collaborate.
The finance and marketing divisions keep management focused on the success of
certain marketing campaigns, assisting management in the development of future
strategies. (MAAS, n.d.)
Relationship between marketing and HRM
 Understand customer needs
Marketing initiatives are efficiently supported by Human Resource Management, which
selects and trains people to suit client needs. The Marketing department must submit
comments on client satisfaction to the HR department (through surveys). This data is
utilized to evaluate employees and is integrated into the entire Quality Management
process.
 Monitor and evaluate
HRM policies and functions must be aligned with the company's overall objectives. As a
result, it must be judged on the basis of its accomplishments and contribution to the
overall goal. For example, according to marketing study, 60 percent of client complaints
are caused by salespeople's attitude. This necessitates a re-evaluation of the
company's policies on sales force recruitment, training, and management.
 Human resource management and business results
The operations of all business functions must contribute to the company's overall
outcomes. If this isn't the case, all functions should be re-evaluated to ensure that
they're all working toward the same aim.
(quantri, n.d.)
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Relationship between marketing and sales
The marketing department creates campaigns, initiatives, and appealing material to
attract potential consumers so that the sales department can focus on their area of
competence.
The marketing department's market research and understanding of clients will assist the
sales department in comprehending customer psychology and genuine demands in
order to provide effective sales scenarios and solutions.
The sales department will bring back valuable data from actual customer interactions to
assist the marketing department in creating the most complete consumer portraits. As a
result, their shopping experience will be improved, increasing their persuasion and
conversion value.
Even if the marketing team attracts a large number of consumers, if the sales staff does
not adequately advise them, the clients will leave. Hence, it also implies that all
marketing efforts and attempts are pointless. On the other hand, poor or deceptive
marketing content will make it difficult for sales teams to advise and help consumers.
This clearly demonstrates the alignment of the relationship. (shopal, 2021)
3. Advantages and disadvantages of alignment between functions in
the organization.
Advantage
A business that wants to achieve success needs to have effective collaboration in work
between departments and departments. Effective collaboration and communication
between other departments helps businesses attract the best talent, boost employee
performance while charting their future career path.
Disadvantage
However, sometimes in the same working environment, there can still be conflicts due
to disagreements, about the work to be completed, the project process or the
surrounding relationships.
IV/ THE POSITIVE AND NEGATIVE INFLUENCE THE MACRO ENVIRONMENT HAS
ON THACO AUTO’S OPERATIONS.
1. PESTLE analysis
Political Factors:
 Positive:
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Automobiles are always subject to hefty state taxes, and they are also featured on the
list of items subject to excise tax. Cars have previously been subjected to 15 different
sorts of taxes and fees. Because of the multiple taxes imposed on automobiles, the
price of automobiles supplied to consumers in Vietnam is among the highest in the
world.
 Negative:
Because of exporting to foreign countries, enterprises must understand and follow the
rules of some countries to avoid affecting development. Countries can prevent the
distribution of Thaco Auto's product if it does not comply with all the rules they set forth.
Economic factors:
 Positive:
In comparison to other countries in the region and around the world, Vietnamese
citizens have a low income. As a result, the car is classified as a luxury item. This has
an impact on customer psychology, particularly during the current economic downturn.
 Negative:
However, as a result of the COVID-19 outbreak, many partners' orders for raw
materials, replacement parts, components, and even whole cars have slowed, and the
number of customers who use less gradually has decreased.
Social factors:
 Positive:
In Vietnam, owning a car is seen as an affirmation of the owner's brand or the class yet,
the value of a car remains an asset, similar to that of a home, rather than a common
mode of transportation. Furthermore, the urge to own an automobile is heavily
influenced by social factors such as money, age, and lifestyle. This necessitates firms
understanding customer psychology.
 Negative:
The products of the enterprise must always meet the latest and most modern trends to
attract customers. At the same time, it is necessary to understand the psychology of
customers to come up with models that "stimulate buyers".
Technology factor:
 Positive:
I Vietnam's auto-supporting industry still has a limited production capacity. Vietnam
receives very little advantage from the region's auto manufacturers' supply chain and
output. The final assembly stage, and the lowest value-added step in the value chain, is
where Vietnam participates in the global value chain. Hyundai, Thaco, and VinFast are
expected to form a triangle for the development of the Vietnamese car sector, thanks to
state support for indigenous vehicle assembly businesses.
 Negative:
Industrial parks cause air pollution from exhaust gas sources and land pollution from
solid waste and hazardous waste that are not collected and treated. Exhaust gas
pollution mainly comes from old factories, using outdated technology or having not built
exhaust gas treatment systems.
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