Business Organisation Structures: A Comprehensive Analysis

Desklib provides past papers and solved assignments for students. This report analyzes business structures and environments.

Business and business environment
Page | 1

Executive summary
The main indulgence of the study is to consider different types of organisation along with their
size and scope. It has also been demonstrated about different functions with the alignment with
its structure and conduction of different services. Along with this, contemporary examples are
also provided in support of the study. Internal and external analysis has also been taken into
consideration.
Page | 2

Table of Contents
Introduction......................................................................................................................................5
LO1..................................................................................................................................................6
P1 Explain different types and purpose of organizations; public, private and voluntary sectors
and legal structures..........................................................................................................................6
P2 Explain the size and scope of a range of different types of organisations.................................7
D1 Provide a critical analysis of the complexities of different types of business structures and the
interrelationships of the different organisational functions.............................................................8
M1 Analyse how the structure, size and scope of different organisations link to the business
objectives and product and services offered by the organisatio......................................................9
D2 Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making.....................................................................................................10
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organisation..............................................................................................11
LO2................................................................................................................................................12
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.........................................................................................12
M2 Analyze the advantages and disadvantages of interrelationships between organizational
functions and the impact that can have upon organizational structure..........................................14
LO3................................................................................................................................................16
P4 Identify the positive and negative impacts the macro environment has upon business
operations supported by specific examples...................................................................................16
D2 Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making.....................................................................................................19
Page | 3

P5 Using SWOT or TOWS conduct an internal and external analysis of your chosen organisation
in order to identify its strengths and weaknesses...........................................................................19
P6 Explain how strengths and weaknesses interrelate with external macro factors and justify
how the analysis influences decision-making by your chosen organization.................................21
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decisionmaking
.......................................................................................................................................................21
D2 Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making.....................................................................................................22
Conclusion.....................................................................................................................................24
References......................................................................................................................................25
Page | 4

Introduction
The assignment comprises of a general overview on the various forms of business organisational
structures and a detailed analysis on their varied functioning methods. To successfully sustain
any business, organisations have to depend on various sources like financial establishments,
social obligations, and hefty consumer bases and so on. All these factors together make up the
business environment of an organisation, which have been discussed in a detailed fashion. An
extensive outlook has also been delivered regarding the different types of organisations, their
limitations and various other issues regarding long-term sustainability, growth, market positions
and so on. Detailed reports including TOWS and PESTEL analyses have been attached in a
comprehensive manner to provide a more in-depth understanding and relative study of the
various factors that affect the business policies and decisions and how the multiple
accommodating factors and various other functionalities have facilitated the growth of business
organisations and economies at large.
Page | 5

LO1
P1 Explain different types and purpose of organizations; public, private and voluntary
sectors and legal structures
The company can be classified into three categories that are public company, private company
and voluntary company in accordance to its objective, scope, size and functions.
Public Company
Company whose has a dispersed ownership as the shares of the company are issued to the
general public are called public company. In a public company the minimum number of
members is 7 and the maximum no limits. The liability of the public company towards its
shareholders is limited with amount of shares holding. It is mandatory to use the word Public
Limited at the end of the company name like for example Prudential Public Limited Company in
UK.
Private Company
Private company is the company who are restricted to transfer their shares to the general public.
The minimum numbers of member required to operate this business is 2 and maximum can
extend up to 200 members. One of the private companies is Greenergy, UK.
Voluntary Company
Any two or more person can come together with the primary motive of providing service to the
society are the voluntary company. It is completely a non-profit organization that works for the
benefits of general public. Some of the examples are Social Welfare Organizations, Foundations,
Charities, Community groups and so on.
Legal Organisation
Legal structure is broadly explained with the help of three categories: sole trader, partnership and
limited liability (Argyrou et al., 2017). In order to commence a business many legal formalities
are required to be done according to organizational functions and objective (Eisenberg, 2017).
However in sole trade business there is less legal formalities compare to the other two.
Page | 6

Purpose of an Organization
The main purpose of the public company is to serve the general public by supplying large
amount of goods and services (Burke, 2017). Earning profit is the secondary objective of the
public sector company.
However, the primary and the foremost objective of the private company is to earn profit and
expand the business like the company Greenergy, UK. The reason behind the formation is to
earn revenue by maximizing the overall profit and minimizing the cost. They are also termed as
non-profit making organization because of their function and main objective of formation.
P2 Explain the size and scope of a range of different types of organisations
On the basis of the size and scope organizations can be broadly classified into- micro, small,
medium and large enterprises.
Micro enterprise involves business activities with the local areas. The size of the business is
small irrespective to the other organizations. No of maximum employees are less than 10 in these
enterprises. The amount of investment should not exceed more than 10 lacs in the micro
enterprise.
Small enterprise is that business operation in which the investment is more than 25 lakhs which
can exceed upto 10 crore. Some of the examples of the small business operations are retail stores,
grocery stores, bakeries, medical stores and so on. The owners of the small business are
independent with respective to their size of organizations.
Abbreviation of both small and medium sized of the organizations are co-ordinately termed as
medium enterprise. In this sector of organization the number of employee is more than 100 but
less than 1000. The investment in a medium enterprise is more than 50 million which can only
exceed up to 100 million.
In large enterprise the annual revenue is over 1 billion and the minimum number of employees is
250 that can exceed up to 1000. The reason behind the formation of the organization is to
achieve the common objective with respect to the organization’s mission. One of the example of
this kind of large sector enterprise is Greenergy, UK.
Page | 7

In general micro and small company are operated by very less amount of investment and the
scope is very narrow in respect to the medium and large enterprise.
D1 Provide a critical analysis of the complexities of different types of business structures
and the interrelationships of the different organisational functions
Public Organization Private Organization Voluntary organization
The intervention of the
government is huge
irrespective to the other
sectors as general public
welfare is related to this
organization (Haldane,
2015).
The organization enjoys less
or no government
intervention as it is related
to the personal interest of
the individuals.
No or less amount of
government intervention as
the main focus is helping
the general public.
The objective is to supply
good and services to the
public of the society without
the primary motive of
earning profit.
The main objective of the
business is to earn profit and
all the activities are
operated according to that
like for examples activities
carried by Greenergy, UK
(Hope and Vyas, 2017).
The main aim is to serve the
society for its welfare. No
motive of earning profit is
related to this kind of
organization (Noe et al.,
2017).
Public sectors generate its
revenue from the funds that
are provided by the
government (Brink et al.,
2017).
Private sector generates
revenues from the business
operations that may include
supplying of goods and
services to its customers in a
Funds for these kinds of
non-profit making
organizations are collected
on a manner of funds,
charities, donations and so
Page | 8

manner Greenergy supply
fuel, sulphur fuel etc
(Vanstraelen and
Schelleman, 2017).
on.
The legal formalizes are
many for the formation of
the business compare to the
other two sectors.
Private companies enjoy
less legal formalities at the
time of formations.
Similarly less formative are
required to be processed by
the non-profit or voluntary
organizations.
Table 1: Different between public, private and voluntary company
(Source: Created by Author)
M1 Analyse how the structure, size and scope of different organisations link to the business
objectives and product and services offered by the organisatio
Micro enterprise Small enterprise Medium enterprise Large enterprise
Number of
employees is less
than 10 people.
Number of
employees more
than 10 but less than
50.
Number of
employees more
than 50 but less than
250
Number of
employees more
than 250 but less
than 1000.
In micro enterprise
the scale of
investment is not
more than 2.5
million.
In small enterprise
the investment is
more than 2.5
million but cannot
exceed the limit of
50 million
In medium
enterprise the scale
of investment is
more than 50 million
but cannot exceed
more than 100
On large enterprise
the scale of
investment is more
than 100 million and
maximum no limits.
Page | 9

million.
The rate of
sustainability is
relatively high
compared to the
other sectors of
business on the
basis of Government
Very much similar
to the micro
enterprise, small
enterprise enjoy
sustainability
because of the
economy conditions.
The rate of
sustainability is
improving still due
to the creative and
innovative methods
of operation.
Due to the massive
level of operation
this sectors face a
little difficult with
the sustainability
factors, as it is
mainly operated in
the large scale of
industries.
Table 2: Analysing structure, size and scope of different organisations
(Source: Created by Author)
D2 Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making
Every activity in an organization is based on the macro and micro environment factors that affect
the overall business of an organization. The factors which are beyond the control of the
organization to maintain are its macro factors.
Macro environmental analysis
Macro environment are related with the terms of PESTEL which is the acronym of political,
environmental, social, technological, legal and economical (Alfaro, 2016). Moreover all these
factors are required to be analyzed before making any certain decisions and performing any
activity (Wirtz and Daiser, 2017). If the political issues are stable with respect to the government
policies than the organizations face no issues related to this factor. In order to operate in the
modern era every organizations are required to adopt advanced technologies, which will rather
increase the overall economic productivity of an organization. In order to operate smoothly all
the legal formalities are required to be performed. Referring with its name Greenergy promotes
Page | 10

environment friendly products that reduce the cases as well as risk of global warming. Although
during the time of recession, change in rates, inflation periods cause disadvantages to the
company economically (Marandu, 2015). Thus this PESTLE analysis allows a company to
understand its factors implementing the operations. Moreover, it helps an organization to develop
a perfect strategy that will help them to better functioning.
The stated factors can also be controlled by focusing on the efficiency of the company
productivity are states under the micro factors.
Macro is the broader word that includes all the external factors affecting the activities of the
business organization.
Micro environmental analysis
The internal factors that affect the activities of organizations are the company suppliers,
competitors, investors, employees, and customer. Their activity impacting the overall operations
of the business can be control by increasing the work efficiencies (Philipov et al., 2015). The
factor that has a immediate effect on the operations of an organization is the micro environment
factors. These are the factors that effects in the several ways to the business activities, although
this factors enable to plan of operations. However these factors are important for every business
organization to enable proper economic growth.
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organisation
PESTEL analysis is one of the commonly used important methods of analyzing environment
factors affecting the business organization (Fozer et al., 2017). However the above-mentioned
has critically analysed the value of PESTEL implicating the activities, opportunities and so on in
the private company Greenergy, UK (Sammut-Bonnici. and Galea, 2015). An organization
records all this factors including both positive as well as negatives that impact in a overall
operations of this company. However this analysis provides a complete picture of the upcoming
and current factors that can highly affect the operations of the company. It is very important to
state that frequent updating of the records done by this analysis is required for the proper
Page | 11

functioning of the organization. Finally all the factors highly affect and help the management to
draw a perfect strategy that will guide to achieve the ultimate objective of the organization.
LO2
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.
The different organizational functions essentially refer to the division of departments within the
organization in order to streamline the operational procedures and maintain maximum efficiency
and optimization. The relationship among most organizational functions is typically based on
three factors – time horizon, specification and developmental participation (Maduenyi et. al.,
2015). The time horizon dictates a perpetual form of relationship that may exist among the
purchasing and audit departments for example, or a short-term relationship between highly
specialized divisions to achieve a very specific organizational objective. Specification refers to
how targeted the needs for the relationships are, and in organizational contexts, they are rather
specific and directed. Developmental participation refers to specialized relationships that may
form to achieve a niche developmental objective (Iyamu and Mphahlele, 2014).
The different organizational functions generally include the key departments without which the
establishment cannot operate at all. They typically comprise of the production department,
research and development department, purchasing department, audit and accounting department,
marketing department, finance department and personnel management department. It is
extremely difficult for the aforementioned department to function individually and in an isolated
manner, as the final product or service that the company produces must go through a cumulative
value-adding process facilitated by all the departments (Alavi et. al., 2014).
Page | 12