Business Environment Analysis: Comparing Organizations and Structures

This report provides a detailed analysis of the business environment, focusing on the differences between for-profit, non-profit, and non-governmental organizations. It differentiates between micro, small, and medium-sized enterprises and explores various legal structures associated with different business forms, such as sole traders, partnerships, private limited, and public limited companies. The report examines the relationship between legal structure, size, and scope of firms concerning their objectives, services, and products. It also analyzes the interrelationships of organizational functions and their connection to objectives and structure, followed by macro and micro environmental analyses using PESTEL and Porter's Five Forces models, respectively. Furthermore, the report includes a value chain analysis to identify organizational strengths and weaknesses, a SWOT analysis, and a discussion of how strengths and weaknesses interrelate with external factors impacting strategic decision-making. The report uses case studies of ESPO, British Red Cross, and JCB to illustrate these concepts.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Differences between organizations for profit, non-profit and non-government companies........3
Differences between micro, small and medium sized enterprises...............................................4
Range of legal structures associated with varied form of businesses..........................................5
Legal structure, size and scope of various firm link to business objectives, services and
products........................................................................................................................................6
Interrelationships of different organizational functions and their connection to organizational
objectives and structure...............................................................................................................8
PART 2..........................................................................................................................................10
Macro environment analysis using PESTEL framework..........................................................10
Micro environment analysis using Porter's five forces model...................................................12
Value chain analysis to identify organization's internal strength & weakness..........................14
SWOT analysis..........................................................................................................................16
Strength and weakness interrelated with external micro and macro factors, that influence
strategic business decision making............................................................................................17
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Business environment refer to all external and internal factors that affect businesses
functions including consumers, workers, supply & demand, management and business
regulations. The current report is based on ESPO and include another firm like British Red cross
and JCB. This study explains, differences between firm and also differences between micro,
small and medium sized enterprises. This assignment clarified legal structure associated with
different forms of companies and analysed interrelationship between different organizational
operations, which connected to objectives & structure of organization. Furthermore, this report
justified macro and micro environmental analysis by using appropriate models like PESTLE and
SWOT. It defines the organizational strength and weakness by using Value chain analysis and
also justified Strength as well as weaknesses that interrelate with external micro and other factors
which affect strategic decision making process.
PART 1
Differences between organizations for profit, non-profit and non-government companies
Voluntary sectors organizations-
Companies working under this industry or sector provide the best services with purpose
for enrich society and cater benefits to local people. (Hartley, Benington and Binns, 2019). It is
team of people from different nations acting together, but non connected with government of any
nation. Usually non-governmental firm are non-profit, that is why they are trying to do
something other than make profit for people who run them. For example, British Red cross is
considered as NGOs was managing their operations across UK and provide range of their
services to local people in order to improve their health. The purpose of this organization is to
helps individual in crisis, responding to conflicts, disasters and emergencies in UK and all
around the world. The purpose of non-government companies usually to further social or
political goals of their members. Voluntary organizations fund their business activities via
charity functions and donations from big companies or entrepreneurs, who are able to donate
money for good cost.
Public sector organizations-
Public sector is commonly comprise of companies that are operated and owned by
government and exist to cater services for their citizens (Wettenhall, 2020). With the help of
outpouring, public sector firms will often engage in private enterprises to deliver their goods and

services to their consumers. The purpose of public sector firms is to cater important services to
underprivileged and wider sector of society in UK, through employment and by operating
business on profitable basis it serves both functions. ESPO is public sector companies in UK, the
main function of this company is to provide large range of services and products to public
sectors. As ESPO is public sector firm, surplus made by firm is returned only to public purse,
they offer one stop shop solutions. It is a public sector owned professional purchasing company,
specializing in offering its services and goods to people for over 35 years. The purpose of this
firm is to conduct business activities by using appropriate legal structure such as partnership with
their stakeholders to drive value for money for public sector through comprehensive procurement
result. Public sector firms funds their activities through government expenditure financed by
seignior age, government borrowing or taxes.
Private sector firms-
Private sector is a diverse area and makes up a large part of many economies. Most
companies in this industry are run and operate with the intention of making profit (Cacioppe and
Mock, 2018). In simple words, private sector companies are owned by individuals, these firms
are driven by profit. The purpose of these firms is to make money by selling quality products and
service to its consumers; it defines the differences between all above firms. JCB is British
International Corporation in UK; it is into manufacturing equipment for agriculture, construction
and waste handling.
The main differences between a public and private organization is that shares of public
firm are traded on a stock exchange (Liljeblom, Maury and Hörhammer, 2019). It also known as
equities, show fractional ownership in enterprises, while a private organization shares are not.
Here, differences between different kinds of companies in context of scope and size will
be discussed. The size of organizations under public sector is very wide on the other hand; size
of private firms is small in comparison of public. But a private organization also is a big
enterprise. The scope of private companies is limited, as it is limited up to a less number of
individual and enjoys few legal restrictions. On the other side, scope of public companies is vast,
owners of organization can raise profit from local public and have to abided by different legal
limitations.
Differences between micro, small and medium sized enterprises

Culture across world defines medium, micro and small enterprises with fancy language &
terms but in growing nations. Below differences had defined-
Micro enterprises-
It includes cafe and other places in neighbourhood; these are small businesses with
minimal workers and capital. Micro enterprises commonly operate with less than 10 staff
members and started with few amounts of capital. In a developing nation, necessity compels
micro businessperson to represent wider majority of small business sector. They add value to UK
economy by creating micro business, lowering overall cost and enhancing income of business
(Pearson and et.al., 2016). Limited area of fewer locations, small market area, few team of
workers and lower profitability are included in feature of micro enterprises.
Small enterprises-
Small enterprises sometimes called a small business, it is a venture that employs a few
employees and does not have high volume of sales. They are independently operated and owned
firm that is limited in size and also in revenue depending on sector. Such enterprises are mostly,
partnerships or corporations. They exist approximately in every sector; can variety from
convenience outlets to small production operations. It can be home bakery or small supermarket
that employs 10 workers or production team that employs 50 staff members. In addition to this,
forms of small-scale enterprises include privately owned low firms, dry cleaners, restaurants,
architectural and engineering firms (Karjalainen and Kemppainen, 2018).
Medium enterprises-
Medium sized organization is defined as a firm that not exceed at least 2 out of 3 of
following criterion in preceding & current period; balance sheet total 18 Million. Corporate form
of company is not well suited to medium operations (Hillary, 2017). Instead, medium enterprises
prefer to organize as sole proprietorship or limited liability organizations. These kinds of firms
cater highest level of managerial control for organization owners, while increasing expense or
hassle of business registration.
Range of legal structures associated with varied form of businesses
Sole traders-
A sole trader is business structure whereby one person owns and run overall business; it
is also known as sole proprietorship. It is considered as simplest form of business structure and it
is relatively inexpensive and easy to set up (Henley, 2015). Sole trader is legal set up where firm

is controlled and owned by single person. JCB is wider company, Asia, Asia, South American,
Europe and North America. It was founded by Joseph Cyril Bamford in 1945, in UK and Ireland,
JCB is used colloquially for mechanical diggers. It has 18 factories in Australia, UK, China,
India and CIS, operate individually under sole trader business structure. Firm employs 12,000
people on four continents and sell their goods in 150 nations through 1,500 supplier depot
locations. With this legal structure, organizations can take decision in effective manner, as it
allow decision making process run faster as it just permit owner who decided where enterprise is
heading and whether or not to conduct any work and when they will do so. So, this statement
defines the advantage of this structure. Along, with pros disadvantage of this structure is that, it
is very difficult to obtain wider jobs. Not only because wider corporations have many workers
that can work on offers, and tenders, but because most firms would not work with has a company
that only had a employee of one.
Partnerships limited firms-
It is formed when two or more people partner or join, together to run a business, each
member has equal share in net losses and profits of their businesses. ESPO firm has been work
under partnership limited as legal structure (Levmore, 2016). They feel proud to work in
partnership with BESA (British Educational Suppliers Association), it is a trade association who
perform on Behalf of their management to help UK based firms that supply their services and
range of products to education sector, in order to improve their educational level rather than
before. ESPO also operate their business by making partnership with SOPO, (Society of
Procurement Officers in Local Government), engages in different activities to promote their
strategic buying contracting as well as supplies functions. The main pros of this legal structure
are lack of formality as compared within managing a limited firm. Accounting procedure is
usually simpler for partnership limited companies more than for other. Cons- because
organizations with this structure do not have a separate authentic personality, partners are
personally liable for losses as well as debts incurred.
Private limited organizations-
Private Limited firms is one type of business structure, this kind of businesses limits
owner liability to their profit, and bound shareholders from publicly trading shares. It is
expensive and complex structure more than other business or legal structures. Mott MacDonald

group is private limited organization, it is consultancy with Headquarter in UK. Firm employs
more than 16,00 staff in 150 nations, it was considered as one of the biggest employees owned
organizations in the world (Alvesson, 2019). Pro- it is well known that a private limited firm is
more likely to be tax efficient as compared to sole trade or other legal structure. Con- sole trader
is straightforward and very easy to run as it only has to register with HMRC. Whereas, comply
with or setting up this structure will mean registering with organizations house.
Public limited companies-
The feature of public limited firm is limited liability and perpetual succession. Raising
capital through public issue of shares is the advantage of this structure. In simple words, being a
public limited organization is capability to increase share capital, especially where firm is lited
on a documented exchange. Disadvantage- to aid protects shareholders, regulatory and legal
requirements for public limited firms are more onerous rather than for private limited
organizations.
Legal structure, size and scope of various firm link to business objectives, services and products
JCB-
JCB was established in 1954 and number of people in firm are approximately 11000. In
context of their size by revenue, company estimated their revenue of 2017 was 3.35 Billion.
They are able to supply mostly those goods which is used in house building sector, specially
linked with construction. The mission of JCB firm is to become the top producing and
manufacturing firm to cater the highest quality services to its consumers. The objectives, services
and products of this company is linked with legal structure, size and scope as number of
employee are able to service the best service to its consumers, they help to achieve business
objective and increase profit as well as generate revenue through effective work performance
that also help to increase productivity of business rather than before. With the help of choosing
right legal structure, organization will utilize its features in order to achieve aims and set
objectives.
Range of employees in their organizational structure are capable to gain business
objectives. Risk management team identify risk and issues, discuss with top management and
then make plan to reduce the risk occur while workers perform to achieve objective of company.
ESPO-

They employ around 201 to 500 workers in company and generate revenue more than
12.93 million annually. Organization is professional purchasing firm that offer 25000 product
catalogues over 12,00 frameworks. The objective of company is to cater help support with their
procurement, they are able to provide fire safety to pet control, electronic office supplies,
grounds maintenance and catering services. All the framework of company is free cost and easy
to use, the organizational structure of this firm is functional that help to achieve its objective
effectively, with this structure they can divide departments based on their activities, in which
each member are having specific skill which make them able to serve its best and offer the best
quality products or services to its consumers.
British red cross-
The objective of British red cross is to mobilize strength of humanity so that people and
communities can prepare for, recover and deal from crisis, summed up by strap line refusing to
avoid individual in crisis. Organization provide their health care services and supports to
trafficked people and other as well in forced labour, they also help asylum and refugees seekers
get back on their feet after a traumatic period.
Illustration 1: Organizational structure
(Source: British Red cross organizational structure, 2019)
British Red cross employs nearly 4,000 workers who are able to work in UK and
overseas to support local people in crisis, they are capable to achieve organization business
objectives. The executive director and Broad of directors, take decision to make plan to serve its
services across the world in context of human well-being. The executive team and its director is
accountable for day to day management of firm.

Interrelationships of different organizational functions and their connection to organizational
objectives and structure
Every company has hierarchy of individual that need a well-planned structure to fit in the
organization operations and size. Firm structures define character of that company, it can be
three type functional, divisional and classical. Organizational functions are divided according to
the structure and size, it is core set or procedure of activities carried out within sections of firm.
Most common functions include marketing, operations, human resource, information technology,
finance and customers services. All these functions are interrelated with each other and help to
achieve business objectives by working together.
Marketing interrelationship with HRM-
Human resource management and marketing department work closely together in
businesses in order to create brand reputation and increase productivity (Schmelter and et.al.,
2017). In context of interrelationship, marketing department systematically communicate with
HRM to promote different vacancies in market that help to gain attention of skilled labour
suitable for specific position. Human resource department retain talented and knowledgeable
applicants within firm for longer period.
Link to organizational structure and objectives-
The interrelationship between marketing and human resource management directly link
to structure & objective of firm. For example, JCB objective is to serve better services to its
consumers, for which they required more people. With the help of relationship between both
section they are able to get talented applicants as soon as possible because HRM provide
information about required candidates to marketing, and then they create content to advertise
vacancies that help to achieve objective effectively.
Finance department interrelationship with marketing-
Marketing department and finance sector are the two major organizational functions, they
both work together for achieving greater success and enhance development of businesses (Wong,
Agarwal and Du, 2015). By working together, they increase market share as well as help to
improve bottom line. Finance section comprehends activities of marketing section and then
caters funds to create promotional plan. It play vital role with marketing section for example,
communicate with them for creating effective advertisement plan that may be increase profit and
improve financial performance of organizations, rather than before. Along with this statement,

finance department allocate money from different sections such as human resource management,
research & development department etc. In order to complete their activities that is beneficial for
business in term of increasing profit margin as well as productivity.
Link to organizational structure and objectives-
Finance and marketing department work together at different level in organization
structure. It linked to organizational objective, for example, ESPO objective it to cater help to
varied businesses such as catering and fire safety goods to pest control. With the help of finance
department work with marketing sector, they are able to achieve objective, by gaining the
attention of consumers towards them through the best advertisement including business info
because finance department funds is enough to make promotion plan.
By creating these various organizational functions, companies affect its chain of
command, roles and communication in effective manner when they conduct good collaboration
between all of them.
Benefits and drawbacks of interrelationships between organizational functions-
Advantages Disadvantages
When all the team members of different
department work together, they can share
greater knowledge so that people learn new
skills, it helps to make strong team and boost
up motivational level that supports to achieve
set objectives to businesses.
On the other hand, interrelationship between
all the departments in company provides
benefits, but along with this it comes up with
some drawbacks that affect not positively. For
example, workers from different teams does
not get an opening to share and meet
perceptions, that lead to be risky for lasting
business development. Risky means
ineffectiveness of gaining competitive
advantages.
The employees stay for long term period
because they obtain promoted by their
functions.
Lack of coordination is one of the reason
behind project failure, when people are
working together in different sector come up
from varied department, had less coordination,
which directly impact on productivity and

profitability of firm as they cannot be able to
requirement of team.
The interrelationship between above
organizational functions, provide many
benefits as it help organizations managed their
group of people by experienced persons with
high skill and ability so that they can entire and
review work (Mao and et.al., 2016).
Interrelationship between organizational
functions such as marketing and finance,
increase the base of arguments, that may
concerned with differences over budgetary and
objectives competition, which affect decision-
making process. Because of having different
perspectives, arguments do not stop that impact
on production and other process of company.
Organizational operations within a company
are production, research & development and
marketing. Each of them work together to
achieve objective, their interrelations improves
skills of applicants as they obtain knowledge
from other functions.
When different department workers work
together, it creates risk of miscommunication.
Different perspective of each applicant
decrease operational efficiency as they do not
agree on one topic.
PART 2
Macro environment analysis using PESTEL framework
Political factor-
It refers to the UK government activities that creates drastic effect firms in many terms
such as saving rates, regulations, rules and social unrest. ESPO operate their business in 26
nations and had 116 ports authorities, the changes in trade policies after Brexit affect its
operations negatively, as it restricts firm to serve in EU, it can impact on their profit margin and
revenues generated from other nations. Their comprehensive catalogues contain over 25,000
goods including office equipment, stationery, class room resources and site management, serves
to many people in different locations that get affected due to changes in trade policies according
to which they had to pay extra for making their trading successful (Domingues and Nunes, 2018)
Economic factor-