Business Environment Analysis: Organizational Structure and Functions

This report provides a comprehensive analysis of business organizations, encompassing public, private, and voluntary sectors. It begins by defining different types of organizations, their purposes, and legal structures, using examples like Aviva, the Crown Prosecution Service, and the British Heart Foundation. The report then examines the size, scope, and objectives of these organizations, linking them to their products and services. It explores the interrelationships between various organizational functions, such as finance and IT, and their impact on organizational objectives and structure. The report further investigates the influence of macro and micro environmental factors, applying PESTLE and SWOT analyses to assess their impact on business operations and decision-making. The analysis highlights the importance of aligning organizational structure, size, and scope with business objectives and adapting to external factors for sustainable growth and success.

Assessment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purpose of organisation and their legal structure...................................1
P2 Explain the size and scope of different types of organisation...............................................3
M1 Analyse how structure, size and scope of different organisation link to the business
objectives, products and services................................................................................................5
TASK 2............................................................................................................................................5
P3 Explain the relationship between different organisational function and how they link to
organisational objectives and structure.......................................................................................5
M2 Analyse the advantages and disadvantages of interrelationship between all departments
and its impact on organisation structure......................................................................................6
D1 Provide a critical analysis of complexities of business structures and interrelationship of
organisational functions..............................................................................................................7
TASK 3............................................................................................................................................7
P4 & M3 Identify the positive and negative impacts of macro environment on business
operations and apply PESTLE model.........................................................................................7
TASK 4............................................................................................................................................9
P5 Conduct internal and external analysis of particular organisation.........................................9
P6 Explain how strengths and weaknesses interrelated with external macro factors...............10
M4 Apply SWOT analysis and justify how it influence decision making................................11
D2 Critically evaluate the impacts of micro and macro factors upon business objectives and
decision making........................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment refers to the collection of internal as well as external factors which
includes customers expectations, suppliers, employees, technological innovation, market trends
and economic changes that directly influence business decisions and operations (Calabrese,
2018). As business environment helps in analysing many opportunities, assist in planning,
growth and development, profitability, useful resources and so on. There are several factors that
effect business operations directly or indirectly which plays a crucial role in taking several
decisions in order to get smooth functioning of a business organisation. There are many kinds of
organisations such as public, private and voluntary. In this report consider all sectors like Aviva
as a private sector, Crown prosecution service as a public and The British heart foundation as a
voluntary organisation. In order to analyse the external environmental impact Aviva is
considered which is a British multinational company that headquartered in London, UK. Under
this report discuss about the different types of organisation, purpose and their structures, size,
scope, objectives etc. In addition, identify the interrelationship between various functions as well
as structure. Evaluate the impacts of internal and external environmental factors by using PEST
and SWOT analysis that influence business operations and decision making process.
TASK 1
P1 Different types and purpose of organisation and their legal structure.
Business organisation defined as a group of person who are working together in order to
perform tasks or activities. It is of two types like profitable and non profitable in which the main
motto of profitability is to earn profit and non profitability includes social welfare (Cepel, 2018).
Different types of business organisation are discussed below:
Public sector organisation: It is associated with that kind of organisation that are established or
operate by the government for the motive of providing services to general public. The main aim
of that kind of organisation is related to the public welfare not owned for the purpose of earning
profit. It includes Network Rail, BBC, Crown prosecution service, Department of work and
pension etc.
Purpose: The purpose of public sector businesses is to provides services to the public for
their benefits such as public or government goods and services.
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Legal structure: Central government: In this type of structure, companies are wholly controlled by the
government of country as well as owned, managed and formed by the central authority
and they collect money from the community by imposing taxes on their income. State government: In this, businesses are limited in particular states as well as managed
and controlled by the state authority itself.
 Local government: In this, companies are established and developed by the local
government and council board that involves municipals and they collect fund from public
by charging council tax.
Private sector organisation: In this kind of business organisation, all activities of a firm is
totally controlled and managed by individual's or persons as there is no intervention of
governmental body (May, 2019). For examples: Dyson, Tesco, Ford, Aviva etc. that are privately
owned for the motive of earning profits.
Purpose: The main purpose of private sector businesses are to make more money by
earning profits and employ more persons in comparison of public organisations (Argenti, 2018).
Legal structure: Sole proprietorship: It is owned individually with a little capital in order to earn profit.
As the owner of this businesses have entirely controlled over operations and shares all
risk individually. Partnership: It is related to the group of persons who agreed on a common deed to
carried out a business operation jointly. All partners are liable in equal manner for
execute day to day activities, shares equal profit and loss, make decisions and so on as
well as they required to perform work as per the Partnership Act, 1890 (The Partnership
Act 1890, 2019).
 Limited company: It is associated with the joint stock business entity as it is incorporated
under the companies act 2006 as per the laws and legislation of UK (Companies Act
2006, 2019). In this business entity and its owner has separate identity that is registered in
the form of companies registration.
Voluntary organisation: It is related to the group of individual's who comes together and make
agreement for doing a single business for accomplishing a specific objective that is common that
is in favour of people who lives in a society (Hair, 2019). It operates for the purpose of
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facilitating social services not for the profit earning. For example: Age UK, Cancer research, The
British heart foundation, Oxfam and so on they all work for the benefits of society by providing
services.
Purpose: The main motive of voluntary organisations is to make social wealth rather than
material wealth for provides benefits to the society instead of earning profit.
Legal structure: Trust: This is to be termed as a traditional constitution that are formed for trusts and
charities which is totally depend on the deed of trust in order to manage funds for a
specific goal.
 Unincorporated Association: In this kind of organisation, the business activities are
limited by the guarantee and used by the volunteers group and it is established as per the
memorandum and articles of association.
P2 Explain the size and scope of different types of organisation.
Crown prosecution service: It is the principal public agency for managing Criminal prosecution
in England and Wales and oriented by the director of public criminal prosecution. Background: The company CPS is a non ministerial government department that was
formed in 1986 and headquartered in London. This is mainly facilitates legal advice to
the investigation agencies such as police or other institutions. Size: It operates across the England and Wales only with 14 regional team prosecuting
cases in local areas so the size of this organisation is medium. Scope: It has narrow scope in future as it is based on the crime rate of a country and
totally influenced by the crime ratio of that country. products and services: The company deals in prosecuting services to public by providing
legal advice to the criminal investigators. Vision: The vision statement of company is to deliver justice through facilitating
excellent casework quality and make sure that public has confidence that CPS is fair,
independent and effective. Mission: The mission statement of company is to make impartial, timely and principled
charge assessment decisions which helps in promoting public safety, justice as well as
trust for the rules of law.
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 Objectives: The objective of CPS is to examine police evidence, deciding whether to
issue criminal due process through to court prosecution stage, fixing cases for court as
well as managing prosecution.
The British heart foundation: It is a charity organisation in UK and it funds research to beat
heartbreak from heart, circulatory diseases as well as risk factors. Background: The company British Heart Foundation was incorporated in 1961 and
located in high street, UK by a team of medical professionals and it is registered as a
charity foundation. This group is highly concerned towards the increasing death rate from
cardiovascular diseases (Aviva Life & Pensions UK Ltd. 2019). Size: The BHF has 3000 workers and ranked 5th among their top 10 competitors. The
revenue of business is ranked 7th among its top 10 rivals. Scope: The scope of British health foundation is broad as the diseases regarding heart and
circulatory are increases. products and services: They focused on earlier risk detection, better emergency care,
recognition of heart attack warning signs, improved care of heart failure and attacks.
Also, provides helpline support on heart health, healthy lifestyle and nutrition. Vision: The vision statement of British Heart foundation is related to the world free from
the fear of heart and circulatory diseases. Mission: The mission statement of BHF is to play a leading role in fight against disease
related to the heart and circulation in order to solve major consequences of disability and
premature death.
 Objectives: The objective of BHF is to pioneer research into the consequences of heart
diseases and increased method of prevention, treatment and diagnosis.
Aviva: It is a British multinational insurance company that headquartered in London, UK. Aviva
is the largest general insurer and leading life and pensions provider. Background: The company was incorporated in 2000 which headquartered in London,
United Kingdom and deal in financial service industry. As it was formed by a merger of
two British insurance company which named Norwich Union and CGU plc as the name
Aviva was adopted in July, 2002. Size: It has 33 million customers across 16 countries and 29600 employees. Investors of
Aviva has £289.9 billion assets under the management.
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 Scope: It has wide scope in future as it works towards the securing the life of loved once
at a nominal prices. products and services: Aviva facilitates many insurance services which includes
pensions, life insurance and general insurance. Vision: The vision statement of Aviva is to gain customer's trust as the better place in
order to save for the future, navigate retirements and checks what matters most of them. Mission: The mission statement of Aviva is to take focused approach to general
insurance along with disciplined underwriting as well as efficient claims handling.
 Objectives: The objective of Aviva plc is to offer customised solutions and quality
products which ensures sustainable growth over the years.
M1 Analyse how structure, size and scope of different organisation link to the business
objectives, products and services.
The businesses expands at global level by increasing in their size and scope of
organisation that is possible by brining improvements on continuous basis and technological up-
gradation. This will help in developing effective communication among various people of
different nations that are termed as a valuable for a business organisation as it helps in improving
the customer base (Luhmann, 2018). If businesses have huge customer base they they facilitate
more ranges of products and services that assists in creating better organisational structure that
gives flexibility in working performance by accomplishing organisational goals and objectives
within a particular period of time frame.
TASK 2
P3 Explain the relationship between different organisational function and how they link to
organisational objectives and structure.
Various departments and functions are present in a business organisation that are
dependent on each others either directly or indirectly. Aviva plc termed as a private limited
company that needs proper coordination and cooperation among the activities and tasks of all
departments that is directly related to the high profitability (Bajwa, 2018). There are discuss
some departments and its interrelationships with each others that are as follows: Finance and information technology department: Finance is the main part of an
organisation it is essential to perform any kind of activities whereas information are
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required to collect on right time for meeting the present market expectations. Aviva plc
can maintain interrelations among both departments in order to create effective delivery
procedure as well as online shopping with the development of techniques and software's
and financial department can aid in forecasting and managing money for all the
departments accordingly. This will assist in improving probability and sales as well as
develop reliable structure of an organisation. purchase and research & development department: Purchase department ensures the
quantity of raw material that are purchases for providing final goods and services.
Whereas, research & development department requires to identify and examine present
situations of a marketplace and predict future also (Argenti, 2018). Interrelationship
among both division helps Aviva plc in order to buy raw material as per the demand of
market expectations and requirements that will assist more efficiency and effectiveness in
operational functions and performance.
 Marketing and human resource department: In this interrelationship, marketing
department is required for every business organisation as it supports marketing activities
in order to promotes products and services in the market as well as attract large number
of customers. Human resource department is essential for having skilled and
knowledgeable team for performing marketing activities. Effective coordination is
needed between both departments of Aviva plc as it can help in accomplishing more
productivity and profitability with having a trained employees and more customers
(Hansen, 2018).
M2 Analyse the advantages and disadvantages of interrelationship between all departments and
its impact on organisation structure.
Coordination and interrelations between the organisational functions and departments are
essential for the Aviva plc as it strengthening the performance of company that directly influence
productivity as well as profitability. Effective coordination assists in increasing market shares
and customer base by analysing the market situations appropriately. In addition, interrelationship
among organisational functions may creates conflicts among the workers and managers of other
divisions that leads in delay in performance and lack in accomplishment of objectives. This will
reduce company's efficiency and effectiveness.
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D1 Provide a critical analysis of complexities of business structures and interrelationship of
organisational functions.
All business organisations needs to be structured in a well manner that is unique from
others but complexities in the legal constitutions results in poor coordination between all
departments of a business organisation as it facilitates inflexibility. In addition, if company has
complex structure then the work should be divided among all divisions that assists in
accomplishing organisational objectives and goals within the time frame and all persons know
their roles as well as responsibilities clearly.
TASK 3
P4 & M3 Identify the positive and negative impacts of macro environment on business
operations and apply PESTLE model.
Micro factors refers to those aspects that impacts on the strategy of business such on the
decision-making and the performance of organisation. The major impact on the organisation
relates with the changes that directly impact on strategy due to the changes in external and
internal environment of organisation (Carnevale, 2018). Customers are the key aspect for an
organisation that leads management to earn high amount of profits. Another stakeholder is
competitor which directly impacts on strategy of business as it is essential for management to
perform their work as per the strategy of business. Employee's is the another essential aspect that
leads organisation to achieve their targets in effective manner.
Internal factors refers to the organisation that leads management to perform their work
with more efficiency through enhancing strength of organisation. In the present scenario, there
are various operations are performed by the Aviva such as to provide life insurance, term
insurance, car insurance and many more. So to gain competitive edge it is mandatory for
organisation to analyse their strength and perform their work as per their strength.
To analyse the macro environment PESTLE is conducted in this report:
Political- All the rules, regulations etc. that are developed by government must be follow by the
companies to perform their work or operations effectively in a country.
 Positive impact- Majority of the individuals are engaged in the UK functions it
determines that is easy for insurance companies to sale their products easily in market.
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 Negative impact- Due to the implement of complex political conditions it is difficult for
organisation to manage their work.
Economical- In the present scenario all the monetary conditions that are related with financial
performance of country such as GDP, tax rate and monetary policy are consider as economic
aspect (Teeuwen, 2018).
 Positive- Government of UK is more supporting to business and organisation. So it is a
positive factor Aviva as it provide competitive edge to management.
 Negative- Brexit decision slow down the process of organisation as it directly impact on
financial decisions of consumer and business.
Social- According to social aspect values, beliefs, background, culture etc. that are followed by
society must be consider by management. This determines it is mandatory for organisation to
perform their work according to the society.
 Positive- The analyse of social factor work in a positive manner for Aviva because it
leads management to build trust among individuals.
 Negative- It is complex for organisation to undertakes the whole aspects of society as it
is dynamic and time consuming process.
Technological- All the existing operations of the organisation are performed by management
through considering technology aspect. So the performance of business operations will be
improved (Gaganis, 2019).
 Positive- By analysing all aspects it is analysed that technology leads the organisation to
gain competitive edge in market such as to enhance market area.
 Negative- Technological changes are too expensive so it is complex for management for
constant investment.
Environmental- From the recent years, environment is an essential factor for management as it
is considered by NGO, government, industry and society individuals. So it is essential for Aviva
to ensure that its services and products are environment friendly.
 Positive- If natural resources are used properly then it can results effectively for the long
period of time in this competitive marketplace. The resources are scare in nature then
they require to be utilised appropriately by Aviva plc in order to get productive results in
comparison of their competitors.
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 Negative- Increase Co2 emission impacts negatively on the environment and businesses
are regularly waste many resources and exhaust the environment so government cancel
many licenses that will negatively impacts on the image of company.
Legal- It includes consumer law, health and safety laws, import and export law, copyright law
and many more that is incorporated by a business organisation as per the nature. In order to adopt
the required laws by Aviva plc can helps in increasing their effective performance (SHTAL,
2018).
 Positive- Operating business activities as per the legal consideration helps in increasing
their customer base and productivity as well as profitability.
 Negative- If Aviva plc is not considered legal laws while operating their business
operations then the governmental interference is increased and they will be penalised for
misconduct.
TASK 4
P5 Conduct internal and external analysis of particular organisation.
In order to analyse the positive as well as negative aspects of Aviva and British Health
Foundation, SWOT analysis is conduct which helps in examining the present condition as well
as positions in the marketplace (Phadermrod, 2019). It can be considered as follows:
Swot analysis of Aviva:
Strengths Weakness
 Aviva plc has a strong as well as
diverse product portfolio which allows
a company to have large customer base
and market shares.
 Aviva has appropriate and effective
marketing strategies and organise
campaigns in a particular industry or
market.
 The company has faced its share
controversial advertisement of “after
death” experience of a man that
negatively impacts on the brand image.
 Company receives many complaints
regarding to the execution of policies of
conflict resolutions as it takes more
time to get resolved.
Opportunities Threats
 The awareness about the insurance  Huge level of competition creates
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policy and plan in rural market is
increased that gives an opportunity to
expand customer base along with the
increment in market shares.
 The income level of middle class of
people is increase so they are looking
forward to invest in insurance policies
that provides an opportunity to Aviva.
threats for a company as its competitors
includes HDFC life insurance, Bajaj
Allianz etc. as they have strong sales
team and looking for capturing the
entire market.
 Due to the economic crises the chances
of disinvestment in insurance policy is
increase. For example, due to the
Eurozone crisis, banking and insurance
sector are highly affected.
Swot analysis of the British Heart Foundation:
Strengths Weaknesses
 The British Health Foundation leading
in the market position which gives
strength to the company.
 A company have large integrated CRM
as they possess big pool of customers
information which is the strength of
company (Barik, 2018).
 The website of BHF is hard to voyage
as there are huge availability of
information but interred under links.
 Lack of sensed relevancy to the market
audience that is difficult or complex for
them in order to prosecute with British
Heart Foundation.
Opportunities Threats
 Large prospect of youth market
facilitate opportunity to increase the
revenue and market share of BHF.
 Gain more attention of media towards
the issues that are tackle by BHF that
includes food labelling, obesity etc. in
order to increase their profile.
 Governments Digital Britain initiative
could go forth British Heart Foundation
looking out of date.
 Huge level of competition creates some
threat as most of the health and
medicine charities tackle similar kind
of issues like smoking, obesity etc.
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