Analyzing Business Organizations: Structure, Scope, and Objectives

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Business and business environment

Contents
Introduction......................................................................................................................................2
LO1..................................................................................................................................................3
P1.................................................................................................................................................3
The different type and purpose of the organization.................................................................3
P2.................................................................................................................................................6
Explain the size and scope of a range of different types of organizations..................................6
M1................................................................................................................................................7
Analysis of how the size, structure, scope of the business organizations link to the business
objectives and products and services offered by the organization..........................................7
LO2..................................................................................................................................................8
P3.................................................................................................................................................8
Explanation of the relationship between different organisational functions and how they link
to organisational objectives and structure................................................................................8
M2..............................................................................................................................................10
advantages and disadvantages of interrelationships between organisational functions and the
impact that can have on organisational structure...................................................................10
L03.................................................................................................................................................12
P4...............................................................................................................................................12
The positive and negative impacts the macro environment has upon business operations,
supported by specific examples.............................................................................................12
M3..............................................................................................................................................12
Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organization......................................................................................12
LO4................................................................................................................................................14
P5...............................................................................................................................................14
Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses......................................................................................................................14
P6...............................................................................................................................................16
Explain how strengths and weaknesses interrelate with external macro factors...................16
M4..............................................................................................................................................17
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Apply appropriately swot/tows analysis and justify how they influence decision-making...17
Conclusion.....................................................................................................................................18
References......................................................................................................................................18
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Introduction
The business organization is formed by a group of people to sell their products and services in
the market. The people aim at profit-making by investing their energy, efforts, financial and
other resources. The business organization can be owned privet or publically depends upon the
nature of the organization. This report will make a discussion on a different size, scope and type
of business organization and the different functional unit of the organization with their
relationship with each other linking with the organisational structure will get analyzed in that
report
This report will analyze the impact of the macro environment factors on the business with
contemporary examples and it will also include the discussion on internal strength and weakness
of the organization and their relationship with the external environmental factors.
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LO1
P1
The different type and purpose of the organization
Business organization
The organization is jointly owned, designed and formed by a group of people to conduct business
activities with the aim of earning some profit. The business organization could be formed for
profit or non-profit depends upon the organisational policy and structure. The business
organization provides their offerings into the market with innovation and new ideas (Teece,
2010).
Types of business organization
There are several kinds of business organization which are formed by the people to generate
some profit by selling the products and services in the market. The business organizations are
governed by private ownership or public authority. Some types of business organization are as
follows (Haufler, 2013):
Figure 1 types of business organisation
Source: (Haufler, 2013)
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Private sector
The private sector includes those organizations which are privately owned and controlled by the
individuals. The government has no control over the private organization. All the decision
making of the private organization is done by the individuals who are the owner of the company.
The private organization gets funding for the business from local or commercial banks, family,
friends etc. private organization can be of small or medium size (Mohamed et al., 2012). The
private organization aims at profit-making and growing their market at a large scale. Today, a
large number of private sector organizations are creating job opportunities and providing benefits
to society with their products and services. The stakeholders of the company are individuals,
suppliers, government and community (reutzer and Jäger, 2011).
Example - Dell is a privately owned company founded by Michael Dell in 1984. Its headquarters
are Texas, round neck and the United States. The company is providing computer and software-
based services all over the world. the company has launched its various products like
smartphones, computers, and servers. The company is employing 145000 people in the
organization.
Public sector
The public sector organizations are owned and governed by the government. The government
has full control over the decision making and operations of the public company. The government
describes rules and regulations for these organizations (Carver, 2011). Public organizations are
consist of large size because it includes a large number of employees and shareholders. The
public and private organization may together sign a public-private partnership to jointly conduct
the business activity. This organization aim at profit-making as well as maintains the welfare of
the public by providing their services to them. The stakeholders of the public organizations are
public, government and suppliers (Wright and Pandey, 2011).
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Example
Microsoft cooperation is a public MNC organization of America with its headquarters in
Washington and Redmond. It basically deals with the software technology and providing
services like manufacturing, license, development and selling of different computer software
programs, personal computer and consumer electronic related services. the company is
employing 134944 people in its organization and having a large infrastructure.
Voluntary sector
Voluntary sector organizations are formed by a group of people who comes together to decrease
social problems and satisfy social needs with their offerings. They do not aim at profit-making
they work for the public benefit and maintain the welfare of the society. The government has
little or no control over those organizations (Carver, 2011). They get funding from the society
and its people or local government. They basically focus on creating the world a better place and
works for common people. The basic examples of voluntary organizations are old age home,
charity, foundations trusts etc (Osborne, 2013).
Example
British Red Cross Society is a charity organization of UK founded in 1870. The company has
32,500 volunteers and 3,500 employees in the organization. The company is helping in crises
and providing a donation to the general public. The company is providing social and health care
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services to the society and also helping the poor people of the society by providing food and
home services (Redcross, 2019).
P2
Explain the size and scope of a range of different types of organizations.
Organizations are consisting of different sizes and their scope is also different according to their
accessibility and infrastructure in the market. The size of an organization can be determined by
its number of employees working in it. And the scope can be determined by the beneficial area if
the organization. The size of the organization gives an idea of its growth and development in the
market as well as represents its current position in terms of its number of employees. The scope
of an organization represents its economic position and the benefits received by the people. The
small and medium scale organization has a lower number of employees where the large scale
organization employing a higher number of people. The scope of the small and medium
organization getting wide day by day because now they are able reaches large geographical
areas. The scope of large scale organization is wide because they have higher market access
(Chikoto et al., 2013).
Small size organization
The small size organizations are employing 1 to 50 people in the organization and using a small
scale to operate business functions. The small business are increasing their size very fast by
creating new job opportunities and serving a large geographical area for their growth and
development (Hillary, 2017)
Medium size organization
Medium size organizations are employing 50 to 250 employees in the organization. These
organizations are also creating many job opportunities and increasing their size and
infrastructure. They are covering a specific geographical area by operating their functions at a
small scale (Storey, 2016)
Large size organization
They are employing more than 250 people in the organization and their scope is very wide
because they are operating their business at a large scale and providing their offerings to a large
number of people. The growth and development of this organization are very fast because they
have access to the large market areas.
The legal structure of the organizations
Sole trader
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In this type of business organization, a single individual person operates business activity in a
limited geographical area and provides its products and services to the community with the aim
of profit making. For example – the grocery store of an area. The sole trade is less responsible
for following the rules and regulations of the government
Partnership
A partnership agreement is signed by two or more than two people to form business organization
they share their resources as well as rewards and risks of the organization. They aim at profit-
making by combined efforts of different partners (Meyskens and Carsrud, 2013).
PVT LTD Company
PVT LTD companies are owned privately and they use PVT word in their name. They have to
get to register under the government act before conducting any business activity.
PUBLIC LTD Company
These are public cooperation owned by the public and controlled by the government. They use
public LTD word in their name and follow a legal structure of the government body (Aarons et
al., 2011).
M1
Analysis of how the size, structure, scope of the business organizations link to the
business objectives and products and services offered by the organization.
Every organization operates its business activity to achieve some objectives. They offer their
services and products to fulfil some objectives like profit-making, gaining market share etc. the
size, scope and structure of an organization links with its objectives and offerings provide by it.
Small size organization sell daily needs products in a specific geographical area and they only
aim at profit-making to fulfil their financial needs. They only hire 1 or 2 employees in the
organization and have a small structure of the organization. The scope of these organizations is
limited. The medium and large size organization usually hires a large number of employees
because the organization aims at gaining higher market share and higher profit making. The use
of a large structure and provide a number of products and services into wide geographical areas
(Fisher et al., 2012).
Hence it is clear that the size, scope and structure of an organization totally depend upon its
objectives and products and services provided by the organization. The objectives of the
organization decide how much employees to be hired, how will get determined the structure of
the organization and its scope in the market (Dugdale and Lyne, 2010)
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LO2
P3
Explanation of the relationship between different organisational functions and how
they link to organisational objectives and structure
Organisational objectives provide help in deciding the structure of the organization. The
structure may include the different functional unit of the organization and its business functions.
There are many organizational units presented in any organization who are responsible to operate
different business functions to achieve common objectives of the business with their combined
efforts. Proper coordination and communication should be established between different
organisational department which would help in deciding the effective organisational structure
and also help in achieving business goals effectively (Maduenyi et al., 2015). There are many
functional units of an organization who works together like the marketing department, human
resource department, research and development, production department etc. the organisational
structure of the Microsoft company is presented as follows:
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Finance department
The finance department in an organization deals with the management of financial resources.
The financial department determines budget, expenditure, cost of different business functions to
achieve business objectives. The human resource department coordinates with the finance
department for the sufficient supply of finance to conduct recruitment and hiring activity. The
production department is also depending upon the finance department for the required budget to
make purchases of raw material and other items. Sales and marketing department also require
finance for the promotion and selling of the products and they have to communicate with the
finance department (Stare, 2011).
Marketing department
The marketing department of an organization is dealing with the selling and distribution of the
products in the market and also uses different advertisement technique to promote organisational
products and services (Stare, 2011). The marketing department of Microsoft is required to
communicate with the finance department because they need finance for purchasing promotion
and other tools. The marketing department of Microsoft also establishes good coordination and
cooperation with the HR department to get qualified and skilled talent in the marketing
department.
Human resource department
The human resource department of any organization focuses on the efficient management of the
people at the workplace. The people of the HR department coordinates with the finance
department to receive funding for its operations and also take the help of the marketing
department to design an advertisement for the new people in the organization. The human
resource department provides candidates to the other departments (Boxall and Purcell, 2011).
Operations department
This operation department of an organization looks at the management of the raw material and
goods used in the production process. The operation department of Microsoft keeps an eye on the
day to day operational activities along with the management of the people in the production
process. The production department focuses on the quality of the production process and ensures
a sufficient supply of the products in the market. The marketing department coordinates with the
operation department to make the on-time delivery of the products. The HR department also
coordinates with the operation department to lead and motivate the operation team.
Research and development department
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This department deals with innovation in the business. The research and development unit of the
Microsoft organization always focus on the innovation and generating new ideas which provide
benefits in the development of new products and services. They also conduct market research to
launch any product and services in the market and communicate the research report to the
marketing department.
Hence, all the functional units of an organization are interrelated with each other. The proper
coordination and cooperation between them will result in the attainment of the organisational
goals more effectively. The effective structure of the organization also can be determined
according to the functions performed by them.
M2
advantages and disadvantages of interrelationships between organisational
functions and the impact that can have on organisational structure
There is interrelationship exist between different organisational functions because they are
largely depending on each other to achieve common objectives of the business. There might be
some disadvantages or disadvantages of an effective relationship between them which may have
a negative or positive impact on the structure of the Microsoft organization. The discussion on
the advantages or disadvantages is presented as follows:
Advantages
Operation speed
The speed of performing different operational activities can be improved through proper
coordination and cooperation between functional units of the Microsoft organization. That will
increase the operational speed of the overall organization.
Focus on achieving common objectives
All the functional units work together and coordinate with each other in various decision making
of the organization to attain the common objectives of the Microsoft organization.
Collaboration and cooperation
Better collaboration and cooperation between different functional units help in establishing a
good relationship with the clients, suppliers, investors, customers and the general public which
will create a good image of Microsoft organization
Active participation in decision making
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