HNC Business Environment: Sector Analysis and Organizational Functions

This report provides an in-depth analysis of the UK business environment, examining various sectors including public, private, and voluntary organizations. It explores their purposes, legal structures, and the impact of environmental factors on business operations. The report uses Marks and Spencer a...Read More

BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 (P1) Different sectors' purposes and legal structures for businesses.....................................1
1.2 (P2) Size and scope of different sector organisations...........................................................4
1.3 (M1) Relation of size and scope of different sector organisations with their objectives......6
TASK 2............................................................................................................................................6
2.1 (P3) Relationship between organisational functions with its structures..............................6
2.2 (M2) Critical evaluation on relationships between organisational functions and structures 7
2.3 (D2) Critical analysis of complexities of different business structures and relations of
organisational goals with structures............................................................................................8
CONCLUSION................................................................................................................................8
REFERENCE...................................................................................................................................9

ILLUSTRATION INDEX
Illustration 1: Different sectors' organisations.................................................................................2

INTRODUCTION
Business environmental factors impact on entity's performance and further operations.
However, by analysing these factors, decisions are made for improvement in business activities
and its quality services. This assignment is to understand different sectors' purposes, legal
structures in UK which operate in several industries as retail, information technology travel and
tourism and so on. However, size, scope and mission of different sector, will also be introduced
in this assignment related with goals and business performances. Along with this, various
departments' functions of Marks and Spencer can be understood as an example for decision
making regarding establishing new entity. Besides this, link between organisational functions
with its structures can be discussed. Therefore, deep study on different sectors' organisations
including purposes, structures as well organisational functions relation with structures can be
understood in this assignment.
TASK 1
1.1 (P1) Different sectors' purposes and legal structures for businesses
There are different sectors in UK for businesses as public, private and voluntary sectors
(Storey, 2016). However, all of them are different in purposes and legal structures can be
understood as:
Public sector organisation:
In this sector, for decision making regarding business operations, it is essential to
consider government plans and policies. In this regard, for expansion of entity and business
operations, it is needed to take approval of country's government (MitchelmStorey, 2016).The
organisation in the public sector are owned and operated directly by the government. The
policies and business operations are also controlled by the government bodies. There are various
examples of the public organisations such as the fire department, police department, government
schools etc. These organisations are working for the non-economic benefits, the social well-
being and welfare. There are different entities which operate business activities under public
sector organisations such as; Tesco, Sainsbury, Morrisons, NHS and so on. In accordance to this,
objectives and legal structure of this sector can be discussed as:
Purposes of public sector organisations: These organisations are established for public
welfare at most. In this regard, its purposes are as:
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 To increase social awareness towards goods and services of entity.
 To establish and maintain good relations with customers including other countries'
entities.
 For public welfare at maximum level and providing services according to country's
development (Mitchelmore and Rowley, 2013). To contribute in nation's effectiveness and economic growth at higher level.
Legal structure: It is recognised that for business operations of public sector
organisations, it is needed to consider country's government planning policies (Bouckaert, Peters
and Verhoest, 2016). Therefore, variety of legal formalities are to be fulfilled for establishing
new entity.
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Illustration 1: Different sectors' organisations
(Source: Types of different sector organisations, 2016).

Private sector organisations:
These organisations' business operations are handled by individual owner and manager of
the entity. Likewise, less government interfere is recognised in comparison to public sector
organisations. Different entities of UK come under private sector organisation as; Marks and
Spencer, Iceland, Johns Lewis partnership, River Island and so on (Bebbington and et.al., 2014).
The sole-proprietorship firm is owned and operated by a single owner or investor. The profit
generated form these organisations is in the hands of a single individual, that is the sole owner or
proprietor. The Partnership firms are owned and operated by various individuals or investors
came together to start a business or organisation. The profit earned by these organisations are
distributed among all the partners of the organisation. There are many leading private
organisation in the market such as Tesco, Marks and Spencer's etc. According to case study, as
pursuing a HNC in business management and analysing business environment of UK, I would
like to emphasis on Marks and Spencer's purposes and legal structure at most. It can be
emphasized as:
Purposes: Private sector organisations are established for maximizing their profit margin
at the highest level. Except this, other objectives for M&S can be identified as:
 To increase productivity and profitability of M&S at maximum level.
 To enhance number of stores worldwide for providing its goods and services in wide
range (Mazzucato, 2015).
 To expand business in different ranges as; product development, establishing new store,
entering into new market etc. To adopt new technologies for improving quality services of M&S and sustaining its
market position for longer time period.
Legal structures: As for decision making related to business operations of M&S,
government interferes less in comparison to other sector organisations (Valavanis and
Vachtsevanos, 2014). Therefore, there is less legal rules and obligations recognised for business
operations. Thus, no legal formalities are determined for business operations and decision-
making process for their implementations.
Voluntary sector organisations:
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This sector organisation is also considered as third sector which is established for social welfare
at most. It includes NGO, foundation and charitable trusts which are established for contribution
in social development of UK at maximum level (Hudson, 2017). However, it purposes and legal
structure can be identified as:
Purposes: The non-profit organisations are set up for maximizing social and health care
of the country's people at most. In this regard, purposes for establishing these entities can be
expressed as:
 To build up people's trust with health and social care of organisation. To contribute in nation's social development at maximum level.
Legal structure: There is no governmental interference is recognised for establishing and
operating voluntary sector organisations (Prajogo, Tang and Lai, 2014). Therefore, its legal
structure is the least in comparison to public and private sector organisations.
Charity or Voluntary
The Charity social organisations can be owned and operated by both the government and
private individuals. This organisation provides social care and benefits to the citizens without
any return. The one and only objective of these organisations is to work for the public interest
and social care. The Organisations such as Christian Aid and Red cross are some examples of the
Charity organisations. These organisations are not generating any profits from their business
operations. They just provide services like food, shelter and home to the people in need.
1.2 (P2) Size and scope of different sector organisations
Different sector organisations are varying in size and scope for meeting their goals and
effectiveness (Andrew and et.al., 2016). Therefore, size and scope of all three sector
organisations can be understood as:
Public sector organisations:
For decision making in relation to business operations under public sector organisation, it
is required to consider government laws and legislation. It influences size and scope of the entity
is to expressed as:
Size: Public sector organisations are wide in range as in consideration to country's
government. It depends on organisation's growth and public's trust towards its goods and services
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(Storey, 2016). Therefore, for expansion and establishment of new entity, government's approval
is to be taken. Thus, size of public sector organisation is less than private sector but larger than
voluntary sector.
Scope: Public sector organisations are established for social welfare at most also work for
contributing in nation's effectiveness (MitchelmStorey, 2016). However, for business operations,
government's policies are recognised their expansion and building up society's trusts. In addition
to this, this sector entities are targeted for increasing productivity and profitability at most for
increasing public trust towards its services.
Stakeholders: Variety of stakeholders including customers, suppler, creditors and debtors
are recognised for which public sector organisations aim to maintain good relations with all of
them. However, number of employees are also depended in consideration of country’s
government’s planning policy. Similarly, decisions for business operations are made by
organisation's owner in consideration of government policies (Falkner, 2017). Therefore,
stakeholders and their ranges are done in recognition of country's government and public welfare
at most.
Private sector organisations:
Under this sector's organisation, decisions related to business operations are made by
individual owner and manager which aims to increase its profit level on larger scale. Its size,
scope and stakeholders' position can be identified as:
Size: Marks and Spencer has around 1400 stores in global market whose goods and
services are demanded in wide range. Including this, it also provides online marketing and adopts
new technologies for improving its services. Likewise, for decision making regarding its
business operations, there is less government interfere recognised in comparison to public sector
organisation (Bebbington and et.al., 2014). Therefore, for expansion of entity in different range,
no legislation are to be followed on as decisions are made by individual owner of the entity.
Hence, it is identified that private sector organisations are of largest, number of stores and profit
levels.
Scope: Private sector organisations scope for increasing stores, improving quality
services and sustaining its good reputation in global market on large scale. Including this, it
scopes for maintaining good relations with all other entities and customers effectively (Titi,
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2013). Moreover, M&S scopes for effective online marketing and maximising customers' trust
with groceries, food items and home products on large scale. Therefore, it is analysed that private
sector entities scope of their expansion and improving business performance at the highest level.
Stakeholders: There are no limitations and restrictions for business operations of M&S in
context to number of employees which impact on its business operations and providing services
(MitchelmStorey, 2016). However, it aims to establish and maintain good relations with its
stakeholders for longer time periodicity. Hence, stakeholder performance and effectiveness is
increased in this sector entity at most.
Voluntary sector organisations:
Business entities come under voluntary sector have different size, scope and stakeholder
position can be understood as:
Size: Non-profit organisations are the least in large in comparison to public and private
sectors of UK therefore no government's interfere is recognised for its operations (Valavanis and
Vachtsevanos, 2014). Therefore, it has the least number of stores and for no requirement to take
approval from government.
Scope: Voluntary sector organisations are scope for contribution in social development of
the country at maximum level. In addition to this, it sets vision for building up society and
community's trust with its health and social care services. Thus, these entities are known for
public welfare at most.
Stakeholders: There is no limitation to have a specified number of social workers for
taking care of needy people of the country (Hudson, 2017). In this regard, it builds up good
relations with service takers to maximize their trust with its services. Hence, number of
stakeholders is not determined for this voluntary sector organisation of the country.
1.3 (M1) Relation of size and scope of different sector organisations with their objectives
It is identified that different sectors as public, private and voluntary sector organisations
are varies in size, scope and their structures. It influences meeting entities' goals and performance
of the businesses. In this regard, these structures, sizes and scope are linked with their targets and
quality to reaching out their objectives (Valavanis and Vachtsevanos, 2014). For example; M&S
has large number of stores in global market then it continuous to set target regarding expansion
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of entity on large scale. Therefore, size and scope of a company is related with its target and
expansion maximization.
TASK 2
2.1 (P3) Relationship between organisational functions with its structures
There are different departments recognised within M&S whose manager perform
different functions as of coordination among them impacts on business performance. For
example; finance, production and operations, research and development, marketing and sales
department and HR department (Storey, 2016). All of these departments' functions are
interrelated with each other. However, various departments' functions can be understood as: Finance department: This department manager analyses financial performance of M&S
and further makes decision regarding profitability at maximum level. Including this, there
is also emphasis on reducing expenditures and increasing sales revenue of the entity. It is
linked with production and distribution of groceries and other product services of the
organisation. Marketing department: This department's essential function is to increase marketability
and competitiveness of M&S (MitchelmStorey, 2016). However, manager of the
organisation identifies market position of the entity and makes decision for its systematic
production and distribution. Including this, it is related with marketing strategies and
proper management of business operations of the enterprise.
 HR department: The HR department of M&S emphasis on performance management of
its employees in which he maintains records as well focuses to increase their working
efficiencies. It influences entity's effectiveness and growth as well. Besides this, it aims to
create positive environment of the organisation also affected its further operations and
proper management.
These different departmental functions are linked with organisational structures. In
accordance to this, some important structures for M&S can be understood as: Functional structure: In this structural framework, all functions of M&S are framed as
of finance, marketing, performance of employees and so on (Falkner, 2017). Therefore,
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this functional structure is to frame entire business operations as well preparing strategies
for their implementations.
 Matrix structure: This organisational structure emphasis on matrix performance and for
presenting different functions of M&S (Bouckaert, Peters and Verhoest, 2016). In
accordance to this, several ideas are created for management of entire business operations
and decision making to increase its efficiency at maximum level.
2.2 (M2) Critical evaluation on relationships between organisational functions and structures
It is determined that organisational functions are linked with its structures impact on
business performance and effectiveness of M&S. However, by analysing all of these functions
and prepared strategies, variety of ideas are created for managing entire business operations and
improving quality services as well. On critical evaluation, it is evaluated that it is critical task for
creating coordination among departmental functions as well encouraging its workers for
effective contribution to achieve organisation's goals. In addition to this, it is difficult to allocate
required fund and resources for further business operations as of imbalanced production and
distribution system (Mazzucato, 2015). Therefore, during planning, it is needed to consider all
the factors for organisation's growth and its effectiveness.
2.3 (D2) Critical analysis of complexities of different business structures and relations of
organisational goals with structures
There are different sectors in which organisations are established for various purposes. In
this regard, there is complexity identified for establishing new entity in which sector and which
type of business should an individual be set up. Including this, due to changes in external
environmental factors, it is difficult to set appropriate decisions for improving business
performance effectively(Hudson, 2017). For example; due to wide number of legal formality and
difficulty in taking government's approval, there is complexity to establish new entity under
public sector. Similarly, cut throat competition in private sector organisation is challenging
setting up new entity in this sector.
Including this, it is also difficult to encourage workers of the different functional
departments of M&S to achieve its objectives. Likewise, occurrence of uncertain changes impact
on entity's performance negatively (Prajogo, Tang and Lai, 2014). Therefore, it is essential to
consider all the strategies and weaknesses during planning to meet organisation's goals.
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CONCLUSION
It is concluded that different functional departments of M&S are linked with
organisational structures. In addition to this, various sectors' purposes, legal structures, size and
scope has been understood. Similarly, link between size and scope of different sector
organisations with their objectives are recognised. Including this, different functional
departments' performances are identified which are linked with organisational structures of
M&S. Along with this, critical evaluation on link between organisational functions and structures
is determined impact on its effectiveness and further business operations.
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REFERENCE
Books and Journal
Andrew, S. and et.al., 2016. Sources of organisational resiliency during the Thailand floods of
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Bebbington, J. and et.al., 2014. Sustainability accounting and accountability. Routledge.
Bouckaert, G., Peters, B.G. and Verhoest, K., 2016. Coordination of Public Sector
Organizations. Palgrave Macmillan.
Falkner, R., 2017. Business power and conflict in international environmental politics. Springer.
Hudson, M., 2017. MANAGING WITHOUT PROFIT. DIRECTORY OF SOCIAL CHANG.
Mazzucato, M., 2015. The entrepreneurial state: Debunking public vs. private sector myths.
MANAGING WITHOUT PROFIT. DIRECTORY OF SOCIAL CHANG.
Mitchelmore, S. and Rowley, J., 2013. Entrepreneurial competencies of women entrepreneurs
pursuing business growth. Journal of Small Business and Enterprise Development. 78(1).
pp.125-142.
MitchelmStorey, D.J., 2016. Understanding the small business sector. Routledge.
Prajogo, D., KY Tang, A. and Lai, K.H., 2014. The diffusion of environmental management
system and its effect on environmental management practices. International Journal of
Operations & Production Management. 67(5). pp.565-585.
Storey, D.J., 2016. Understanding the small business sector. Routledge.
Titi Amayah, A., 2013. Determinants of knowledge sharing in a public-sector organization.
Journal of Knowledge Management. 788(3). pp.454-471.
Valavanis, K.P. and Vachtsevanos, G.J., 2014. Handbook of unmanned aerial vehicles. Springer
Publishing Company, Incorporated.
Online
Types of Business Organisations. 2016. [Online]. Available through:
<http://slideplayer.com/slide/4884331/>.
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