Organisational Types, Functions and Structures: A Business Report

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Organisational Types, Functions and Structures
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Table of Contents
Introduction...................................................................................................................... 3
LO1.................................................................................................................................. 4
LO2.................................................................................................................................. 7
LO3................................................................................................................................ 11
LO4................................................................................................................................ 14
Conclusion..................................................................................................................... 17
Reference List................................................................................................................ 18
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Introduction
The amalgamation of every force both inside as well as outside the business
environment that can affect the functions, as well as the decision of the organisation, is
called the business environment. These are usually beyond the organisational control
and have either short-term or long-term influences on the business. “Arcadia Group” is
a private retail company that is based in the United Kingdom. Philip Green, Paul Bridge,
and Ian Grabiner are key people of this firm. This organisation has been established this
firm in the year 2002. The products produced by this business include accessories,
clothing, and footwear. There are around 22,000 employees working in this firm
(arcadiagroup.co.uk, 2019). Arcadia Group Ltd has been owned by the Taveta
Investments. There are many subsidiaries of this firm such as Topshop, Burton, Dorothy
Perkins, and some others. The given study will provide a discussion on the various
forms of organisations. The explanation will be provided on the structures of the
selected businesses. The businesses’ functions will be assessed along with the
explanation of their organisational structures. The internal, as well as external
environmental influences on the company, will be discussed.
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LO1
Explain three different types of organisations
Private Organisation
The companies under the private sector are owned as well as managed by an individual
or more than one person. The principle of such a business is to make a earnings by
making sales. One of the best examples of private organisations is Arcadia Group Ltd.
This is a large organisation as it has around twenty thousand people working under it.
The size of the firm is large. The scope of this company is high as it has thousands of
stores in the native country and hundreds of franchises in foreign countries. The key
stakeholders of the firm are directors, shareholders, employees, suppliers, and the
government of the country. The legal structure of this firm is of a “private limited
company”. As per this legal structure, the company would need to register for value
added tax as it has annual revenue of around two billion pounds as per the report of
2017 (craft.co, 2017). The advantage of this legal structure to the firm is that it can issue
stocks. The disadvantage is that it cannot trade the shares with the exchanges of the
public.
Public Organisation
The public organisations are controlled by the rules of the government of a particular
country where it has operations. The purpose of such a business is to offer important
service to the native citizens. British Army is an organisation that falls in the public
sector. The purpose of this firm is to protect the citizens of the country from terrorist
attacks and illegal invasion of foreigners. The size of the business is large as it is a
large organisation, which contains 27,000 army personnel (army.mod.uk, 2019). This is
a part of the “British Armed Forces”. The scope of this organisation is limited to the
United Kingdom. The stakeholders of this organisation included the Ministry of Defence
of the United Kingdom, the government of the country, “UK Defence Solutions Centre”,
and others (ukdsc.org, 2019). The legal structure of this firm is a general partnership.
According to this legal structure, each shares the assets of the company. The
advantage of this legal structure is that the members of the firm would get equal shares
in the profit. However, the disadvantage is that they would be held responsible for every
activity.
Voluntary Organisation
The voluntary organisations focus on the functions of the firm that would be helpful for
the society. The purpose of such a business is to help the people who are in need either
through financial or any other kind of support. One of the voluntary organisations in the
UK is “Care International” that is a relief agency, which delivers humanitarian relief in
the emergencies as well as development support to international projects (care-
international.org, 2019). The scope of this company is good as it has membership in
more than hundred countries (care.org, 2013). The legal structure of the Care
International is an NPO or “non-profit organisation”. As per this legal structure, the
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people own the ownership of this company. The advantage of this legal structure is that
it is not controlled by anyone except the trustees and board of directors. The
disadvantage of this is that it is accountable to the people. The size of the company is
117 in the UK; therefore, it is a medium-sized enterprise (careinternational.org.uk,
2019). The stakeholders of this firm are the general secretary, the executive team of
management, customers, and governance bodies (care-international.org, 2019).
The different kinds of organisations are explained below:
Basis of
comparison
SME’s Micro Large
Companies’ name Clarasys Limited Issoria Limited Arcadia Group Ltd.
Legal structure Private Limited
Company
Private Limited
Company
(issoriachange.com,
2019)
Private Limited
Company
Size of employees Less than 10 labour
force (clarasys.com,
2019)
10-50 workers More than 2000
employees
Scope Within the country Within the UK Beyond the native
region
Annual revenue Below 2 million Between 2 to 10
million
Around 2 billion
Table 1: Classification of companies based on their size
(Source: Created by the learner)
Analyse how the structure, size and scope of different organisations link to the
business objectives and product and services offered by your chosen
organisation.
Private Organisation
The organisational structure of Arcadia Group is functional and legal structure is of a
private limited company. These are connected to the objective of the business that is to
make a profit through making sales of the products. The legal structure helps the
business in getting stocks for the effective operation of the business. The functional
structure of the company assists it by simplifying the tasks of the members through
effective participation in work. This helps in improving the products’ quality, thus helps in
meeting the goal of the business by increasing profit. The employees’ size and scope of
the business is high that helps it in increasing the profit through more productivity and
sales in various regions.
Public Organisation
The legal structure of British army is a general partnership that helps it in meeting the
objective of the business that is to protect the citizens of the country as the
responsibilities are divided among the members as or this structure. The organisational
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structure of the company is hierarchical that helps it in controlling the activities of the
personnel so that the services provided by the personnel to the people would be
effective. The size of the company is large, that helps in meeting the goal effectively in
providing services to the native citizens. The scope of the organisation is within the
country that helps it in meeting the goal by providing services to the national people.
Voluntary Organisation
The legal structure of Care International is of a non-profit organisation that helps it in
providing the service of relief to the people and meets the objective. The organisational
structure is as defined by the law with the three entities at the top of management,
executive director, advisors, and board of directors (gdrc.org, 2015). They control the
activities of the members involved in the company in meeting the objective of providing
relief to the people in an emergency. The scope of the firm is high as it has operations
in many countries that provide services to the needy people during an emergency. The
employees’ strength in the country is under 200 that get together in meeting the
objective of the firm.
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LO2
Explain the various functions within the business and create an organisational
chart to demonstrate the interrelationships between different functions and how
they link to organisational objectives and structure. Explain how this would be
different in the other two organisations.
Marketing function
This function includes activities of the marketing department such as promotional tasks,
market survey, and product management. Promotional tasks includes activities of
promoting products of the Arcadia group, a market survey is for knowing customer’s
demands and product management deals with responding to customer’s needs (Baker,
2016).
Production function
Activities such as producing fashion clothes, managing product line comes under this.
This includes taking inputs as raw materials and converting those into apparels
according to designs. They do sewing, cutting, pressing, interlining, edge seaming and
many more.
Finance function
This function contains some tasks like planning, auditing, organising, and accounting
activities. It is mandatory to control the finance of Arcadia group. Finance unit is in
authority for preparing financial statements. They maintain taxes, manages capital, and
mitigates financial risks in Arcadia group (Williams and Dobelman, 2017).
Research and development function
R&D is an important function in Arcadia group, as it includes research regarding their
apparel products. They research designs, new materials for making clothes to improve
the quality and comfort of buyers. They develop blueprints of designs and new materials
for new products (Kimet al., 2018).
Human resource management function
HRM function is responsible for recruitment, training, retention, salary management,
regulation settings, and other tasks. The HR department allocates workforce to other
functional units of Arcadia group.
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Production function
Finance function
R&D function
Marketing function
HRM function
CEO
Manager Manager Manager Manager Managers
Staffs Staffs Staffs Staffs Staffs
Figure 1: Functional organisational chart
(Source: Created by the learner)
The production function is dependent on inputs provided by the marketing function
regarding customer needs. Finance unit allocates budget to the production team, and
the R&D team gives them required blueprints to make apparels of Arcadia group.
Functions of marketing depend on budget allocation from the finance group,
Instructions of the HR department. They give information about customer’s needs to the
R&D team and production team for assisting them for research purpose and production.
The R&D unit’s functions are such that it assists the production team to make new
fashion clothes by supplying blueprints of design. Finance unit gives them required
funds for operations. HRM functions are such that it provides guidelines for every other
functions and is responsible for workforce allocation to every department. This
discussion highlights factors, which gives reasons behind interrelationship amongst
every functions of Arcadia group. These functions are part of the organisational
structure of Arcadia group, as each function has amalgamation with the functional
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structure. Organisational objectives consist of tasks for each function. Therefore, to
reach these objectives, every function plays important roles (Maduenyiet al., 2015).
These functions are different for the British army. The organisational structure is
different, as there is the minister in charge of the defence of the UK at top. Other
departmental roles comes under this. They follow a top-down hierarchical structure with
divisions. Their marketing function is for letting people know about defence services
they are offering. Other functions such as production, R&D is focused on developing
better forces. Care home uses a divisional structure with the governing body at the main
organisation. There are managers and employees under them for each division.
Functions are different, as R&D unit focuses on developing medicines and treatment
methods for patients. The function of marketing is to make people aware of their
services. There is no production function here. The finance function is the same for both
these organisations, which includes budget allocation, preparing financial statements
(Williams and Dobelman, 2017).
Analyse the advantages and disadvantages of the interrelationships between
organisational functions and the impact that they can have upon the
organisational structure
The advantage of the connection between the organisational functions of the Arcadia
group is that there would be good communication among the members that would be
beneficial to solve the problems through discussion. However, one of the disadvantages
of the connection between the functions is that for instance, the failure of one
department in sharing information or adapting new technique would be reflected in other
departments also. Thus, it can be understood that there is need to be a connection,
however, the control of each department and proper sharing of information through the
management of each department is necessary for the effective functioning of every
department (Laudon and Laudon, 2016). This would also influence the organisational
structure in some ways. For instance, the functional structure would be affected if the
function of one department were not done properly through wrong information gathered
from another department. It can be inferred that information regarding doing the task for
one department might not be beneficial for other departments’ functions. On the other
hand, the general rules of the company can be shared among the members of every
department that would be beneficial for every one of them in the functional structure.
Provide a critical analysis of the complexities of different types of business
structures and the interrelationships of the different organisational functions.
There are various kinds of organisational structures, such as functional structure,
divisional structure, hierarchical structure, and others. According to Bustinza et al.
(2015), the functional structure is centralised, and the division is made as per the tasks
of the members. This structure facilitates the functions because there are less control
and efficient communication among the employees. The sharing and gathering of
information are simple, and each department has managers to regulate the activities of
the workers. The complexity involved in this structure is that the duties become a
burden for the employees. The management across the various functions become
difficult. As per the view of Argyris (2017), the hierarchical structure has many layers
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through which the activities of each member is controlled. The complexity in this
structure is that communication becomes uneasy for the members, and it takes time to
share information.
The divisional structure, as opined by Marx (2016), has a decentralised structure.
Management becomes easier. However, there the chance of conflict is higher, and
coordination is not easy among the members. There is complexity in the connection
between the diverse functions of the firm. As per the opinion of Carey et al. (2017), the
customers’ query would pass from one department to another if there is more than one
problem of the customer related to the products and services. There could be chances
of competition among the members of different departments.
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LO3
Identify the positive and negative impact the macro environment has upon the
business operations of your chosen organisation.
Apply the PESTLE model appropriately to support a detailed analysis of the
macro environment that affects the operations of your chosen organisation.
Elements Description Effects on Arcadia Group
Political The EU has removed the
regulation of legal block that can
let the dealers select franchise
method for expansion (Pratt and
Barrett, 2018).
The “free trade policy” of the
country has provided the chance
to the organisations to trade the
products in foreign countries with
no trade barriers (Baier et al.,
2019).
The Brexit in the UK has lowered
down the cost of the clothing
material as thee would not be
extra charges on the Common
Customs Tariff (James and
Quagila, 2019.
However, due to Brexit, there has
been a shortage of workers in
companies (Pollitt, 2017).
Arcadia Group Ltd would be
befitted by the regulation of
123/85 as it can market the
products through many
producers.
Arcadia Group will get the
opportunity of trading the
products with no extra tariffs on
importing goods or in investment
in the foreign regions.
The reduction on the cost
through the exit of Britain from
the EU market would benefit
Arcadia, as it does not need to
pay extra tariffs for importing
goods.
Due to the shortage of workers
in the organisation, the functions
of the company would become
difficult to manage with fewer
people. This would affect the
products’ quality of the products,
as well as more time, would
consume in performing the
tasks.
Economic The economic growth rate of the
United Kingdom has seen
increment within five months, that
is from 0.2% to 0.5% as in June
2019 (tradingeconomics.com,
2019).
The employment percentage of
the United Kingdom has
increased from last year (gov.uk,
2019). It has been increased from
75.5% to 76.1% in the year 2019
Due to the increase in the
growth rate of the national
economy, the profit of Arcadia
would also enhance. This is due
to the increase in the buying
power of the native people.
The raise in the employment
rate would enhance the profit of
the business of the Arcadia
Group. There will be an
enhancement in the living
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(Clegg, 2018). standard of the common people
that will increase the sales rate
of the firm.
Social There has been a considerable
change in the preference of the
customers regarding the shopping
of products.
The people are becoming
conscious about the quality and
durability of products (Cooper,
2016).
Arcadia group would need to
modify the functions of the
organisation and provide the
customers with modernised
products. It should follow the
trend to attract customers and
increase revenue.
Arcadia Group should provide
good quality products to the
consumers for increasing the
rate of sales of the organisation.
It should enhance the services
of the employees and regularly
regulate their tasks so that the
tasks would be done properly
and the quality of the products
would be improved
Technological The latest development in
technology has enabled the retail
industry of the country to perform
the work effectively and easily.
Cyber security has enhanced the
security system of the companies
by protecting the data of the
customers (Kitchin, 2016).
Arcadia Group would be
influenced by the use of
technological equipment in the
functioning of the firm, such as
in the management of the
supply chain.
The company should
incorporate the use of an IT
system such as cyber security
for data protection of the firm to
avoid hacking.
Environmental Sustainable development practice
is encouraged by the government
of the country as well as
appreciated by the people.
The “Environmental Permitting
Regulations, 2010” has restricted
the disposal of waste by the
companies. It promotes recycling
and reuse of waste products
(apis.ac.uk, 2019).
As per the ”Packaging Waste
Regulations, 2007”, the
companies should package the
waste and recover some parts of
them to reduce the quantity of
Arcadia should use the
sustainable process in the
improvement of the commodities
and services to influence the
buying decision of the
customers as well as to
enhance the image of the firm.
The regulation on waste
management should be adhered
by the company. This would be
valuable for the business as well
because of the reuse and
recycle of eh goods would
reduce the cost of investment in
more products.
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