Organisational Types, Functions and Structures: A Report

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Organisational Types, Functions and Structures

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Table of Contents
Introduction................................................................................................................. 3
Different Types of Organisations, Including Their Size and Scope (P1, P2, M1, D1). 3
Interrelationship of The Various Functions Within an Organisation and Its Link to
Organisational Structure (P3, M2, D1)........................................................................5
Positive and negative impact of the macro-environment on business operations (P4,
M3).............................................................................................................................. 7
Internal strengths and weaknesses of specific businesses and interrelationship with
external macro factors (P5, P6, M4)............................................................................9
Conclusion................................................................................................................ 11
Reference List...........................................................................................................12

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Introduction
The rising competition amongst the organisations in the global market is pushing the
enterprises across the world to evolve their business processes such that they are
able to efficiently manage their operations and functions such that they are able to
maintain strong competitive position in the market. The organisational functions as
well as structures greatly depends on the varied factors as well as aspects that the
business environment is surrounded with. The following report is focused towards
determination of different kinds of organisations as well as their size and scope with
respect to their organisational structure have been discussed. Furthermore, the
impact of varied internal and external factors of business environment on an
organisation’s functions have been discussed as well.
Different Types of Organisations, Including Their Size and Scope (P1, P2, M1,
D1)
There are varied kinds of organisations that have different scopes and sizes and the
purpose of the organisations therefore, vary accordingly. The major kinds are as
follows.
Profit Organisation: These include those organisations that perform their business
performance for financial gains and considers the same as the final outcome of their
business. These businesses can either be in the form of public organisations or
private organisations.
Private organisations: The private organisations include those business that are
operated by individuals or other larger organisations and the government does not
play any role in the management of the same (Wheeler, 2012). The key purpose of
any kind of private organisation is the generation of profits from the business.
Generally, a team of individuals are provided the responsibility of maintaining the
functions of the organisations (Brudan, 2010). One of the leading private
organisations that have been operating in the UK market is ASDA, which is a
subsidiary of Walmart. At times, the private organisations are known to collaborate
with the organisations from public sectors to cater to the needs of the specialised
market segments. The legal structures of such organisations are generally limited
enterprises or may either be partnership firm as well (D. Brinkerhoff and J.
Brinkerhoff, 2011). ASDA has been operational in the UK markets since 1949,
however, due to financial constraints and similar such aspects, it was acquired by
Walmart. The organisation aims towards providing the consumers with low cost
products that would be highly attractive for the market. ASDA is a part of a limited
organisation and the same implies that the organisation can separate its entity from
its liability and the same does not extend to the owners of the business. The primary
stakeholders of the organisation include the consumers, trade unions, suppliers and
the workforce.
Public organisations: Public organisations include those businesses that are
primarily operated by private entities however, the public or the government also
holds ownership in the market shares as well as operations of the organisations
(Bouckaert, Peters and Verhoest, 2016). The funding for the operations of the
organisation are acquired through various sources for maintaining the smooth
operation of the organisations and the same are acquired in the form of donations,
subsidies or grants. The fundamental purpose of these kinds of organisations is
catering the requirements and demands of the common citizens and communities

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and therefore, these organisations often collaborate with the private organisations for
outsourcing several of the work procedures. One of the common public enterprise
operating in the markets of the UK is Tesco plc. The legal structure of the
organisation is public limited, and the production may be lowers due to the gains that
are earned through the economies of scale (Lægreid and Verhoest, 2010). Tesco plc
has been functioning in the UK market for a long time and has been successful in
maintaining its position in the market due to the wide array of products and services
that are offered by it. The company focuses towards offering the consumers with low
cost quality products that would keep the target consumers attracted towards the
stores. The major stakeholders of the organisation include the consumers,
employees, public, government and owners of the firm.
Not for profit and Non-Government Organisations: These are also known as
voluntary organisations and these enterprises do not conduct their businesses for
the purpose of gaining or earning profits from their business proceedings (Osborne,
2013). The fundamental aim of these organisations is towards bringing together a
team of individuals that have the intension to achieve the common objectives or
goals. These kinds of organisations generally function without any kind of support
from the public or private sector, although their earnings are based on the charity,
funds, and similar such platforms (Butler and Wilson, 2015). One of the successful
voluntary organisations operating in the markets of the UK is Oxfam. The legal
structure of the voluntary organisation is fundamentally association based and the
same is not dependent on the organisational size. Oxfam is a strong voluntary
organisation which is associated with 20 other non-governmental enterprises as well
as work across 90 nations for fighting against poverty and hunger. The primary
reason why the enterprise exists is to fight the injustices that cause individuals that
live in dire conditions, and the individuals at the organisation aims towards working
on eliminating these problems (Hajnal, 2018). The major stakeholders of the
organisation include partners, donors, communities, suppliers, volunteers,
government, staff members, private and public sector organisations.
Small and Medium Enterprises: The small and medium enterprises include those
organisations that either limited number of employees or turnovers. The size of the
balance sheet of these organisations is smaller as compared to other larger
organisations. There are varied kinds of small and medium enterprises and these
include micro firms that have about 0-9 workforce, small enterprises that comprise of
less than 50 employees. The next kind include the medium firms that have human
resources between 50 to 250 individuals and above all, the larger enterprises that
comprises of over 250 individual employees. It has been described by EU that the
small and medium businesses also include those enterprises who have not being
able to produce an annual turnover of more than EUR 50 million or would have an
annual balance below EUR 43 million. The small and medium enterprises have
experienced a growth in the UK market primarily due to the growth of the service
sector. The other reasons include fragmentation and subcontracting, information
technology, public sector reorganisation, the enterprise culture, and flexible
specialisation and networks. These small and medium enterprises play significant
role in the markets of the United Kingdom. For instance, Orion Eletrotech Limited is
such an organisation and therefore, it can be stated that the small and medium
enterprises are significant for the businesses of the UK market and are crucial for the
growth of the small and medium businesses.

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Sole traders or proprietorship
The sole trading or proprietorship implies the kind of legal establishment in which the
business is controlled as well as owned by a single person only. Due to the legal
nonseparation between the owner and the business operations, therefore, the
individual is liable personally regarding the entire association of the business
processes and functions like the finances. The profits of the business are maintained
by the owner and as a result of the same, the debts or any other kind of liability that
may arise is managed by the owners, thereby making them personally responsible
about it. Due to lack of any kind of legal division between the owner as well as the
business unit, the owners are generally responsible to take care of the losses as well
as debts that may arise during the business proceedings. The sale proprietors rarely
employ any other recruits although the issues associate with business accounts are
required to be settled by the owner.
Interrelationship of The Various Functions Within an Organisation and Its Link
to Organisational Structure (P3, M2, D1)
Any organisational basically comprises of different functional departments or units,
which needs to be functioning cumulatively for the organisational processes to run
smoothly. While the structure of an organisation, can be centralised or de centralised
or even hybrid (mix of both), it is equally essential in every form of organisational
structure that the department perform collaboratively for enabling the overall
organisational structure to achieve the strategized goals (S. Najafi-Tavani, Sharifi,
and Z. Najafi-Tavani, 2016). The hybrid form of organisational structure is followed at
Tesco, where the departmental units in a particular region work as a separate team,
following the decentralised structure for the branches in a territory, but the overall
business function of different territories are centrally monitored and strategies are
formulated by central management. The organisational structure of Tesco clearly
specifies that every functional departments needs to work over a common platform
that will enable the overall organisation to deliver anticipated performances, adapting
to the changes required for occupying the leading position in the increasingly
competitive market. The functional units of an organisation are mainly:
Human Resource Department
It is one of the most essential units looking after the abilities and necessities of the
organisational workforce. Starting from hiring the required talents to developing the
abilities of the existing employees, the HRD is responsible for dealing with the
internal issues of labour and employees working within the organisation, so that the
employees can perform to the best of their abilities.
Marketing Department
This department represents the face of the organisation, since this unit deals with
element that will represent the image of the company as well as act as medium
through which the organisation interacts with the consumer market. Starting from
identifying the needs of the consumers to building the reputation for the organisation,
the marketing department collects information as well as feedback about the
offerings from the consumers (Pettigrew, 2014).
Production and Research & Development unit

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This unit is related to manufacturing of the products or composing the services
based on the intelligence research about the market. This unit also monitors the
need for change in exiting products to match the changing needs to the customers in
order to provide enhanced customer satisfaction.
Finance Department
The finance department looks after all the budgetary related activities within an
organisation. Rather all the data related with the economic and banking aspects
within and organisation is monitored and controlled by this department (Jiménez-
Jiménez and Sanz-Valle, 2011).
Understanding the significance of inter-relationship among the functions
The collaborative functioning of all the above-mentioned units is required for
successful running of the overall business process. The process initiates with the
work of the marketing functioning who collects information from the market through
various forms and develop market intelligence. Using the market intelligence, the
production department deciphers the pre-requisites for manufacturing a new product
or develop an existing product (S. Najafi-Tavani, Sharifi, and Z. Najafi-Tavani, 2016).
The human department simultaneously comes into scenario to monitor whether the
existing workforce will suffice for incorporating the changes or not. Through the
processes, the finance department works by taking into account available budget
and allowance for the changes and prepares monetary reports on which further
decision can be taken by the relative departments.
Figure: Organisational Chart of Tesco at Store Level
Figure: Organisational Chart of Tesco at Organisational Level

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Positive and negative impact of the macro-environment on business
operations (P4, M3)
The business environment consists of the surrounding conditions where the
business carries out its functions and operations (Craig and Campbell, 2012). The
business environment can be divided into two broad groups – the external (macro)
and the internal (micro) environment. The external environment consists of factors
that are normally not under the control of the business (Gupta, 2013), such as the
government policies, economic conditions, competitors, and technological
advancements. The internal environment includes those aspects over which the
business has a certain degree of control, such as the managers, employees,
company policies, and the corporate culture (Klapper, Lewin and Delgado, 2011).
Usually, a PESTLE analysis is utilised for examining the macro-environmental
factors that affect a business. This framework enables one to gain a quick
understanding of the global environment, while helping to analyse the external
pressures that are faced by the business (Aithal, 2016). PESTLE analysis stands for
Political, Economic, Socio-cultural, Technological, Legal and Environmental.
The macro-environment has both positive and negative impacts on the business
operations of any organisation. The following analysis sheds light on the effects it
can have on an organisation –
Political: The purpose of the political analysis is to find out the manner in which the
domestic or the international policies and regulations would affect the business
strategy of an organisation. It considers the consumer laws, political influences, and
the government perceptions towards the business (Philip, 2011). These factors
harbour the potential to impact the business operations in both positive and negative
ways. For instance, if the government has provisions for subsidies or low tax rates, it
would benefit retail organisations such as Tesco PLC to a significant extent.
However, transitions such as elections and other political activities can harm the
balance of the external environment and might lead to situations of unrest.
Economic: The purpose of the economic analysis if to find out the manner in which
the various economic factors of the market might affect the business. It considers the
many consumer activities such as the spending capacity and patterns, economic
conditions such as market growth, unemployment and inflation, and the various
government policies such as monetary, exchange and fiscal policies (Chittithaworn,
et al., 2011). The various changes that take place in the labour market and
production levels are also of importance here. If the inflation is high, it would imply
that the amount of disposable income available to the consumers would decrease
(Thalassinos, Ugurlu and Muratoglu, 2012), thereby affecting the sales and revenue
generation for the company. On the contrary, if the market economy is stable, the
business operations of the organisation can be carried out efficiently.

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Socio-cultural: The purpose of the socio-cultural analysis is to find out the
competitive advantage that a business can possibly gain from the social changes in
its macro-environment. Some of the factors that must be considered in this regard
are the population trends such as ageing, increase in birth rates, security concerns –
which might give rise to the need for additional insurance, and changing consumer
preferences (Chittithaworn, et al., 2011). For instance, if the population is ageing at a
high rate, a retail organisation might have to expand their stock as per the demands
of the elderly people. This would lead to an increase in the investment with regard to
their inventory, which may nor may not be financially lucrative for them.
Technological: The purpose of the technological analysis is to find out the effect
that new technologies might have on the business operations of an organisation. It
considers the rate of change of technology, the development of information
technology, internet usage, and the creation of newer materials for improving the
production processes (Chittithaworn, et al., 2011). Technological changes will affect
a business negatively if its competitors start utilising the more upgraded versions of
technology, as it would lead them to be lagging behind. However, if the company can
keep pace with the technological advancements, it will outshine the competitors in no
time (Baker, 2012).
Legal: The purpose of the legal analysis is to find out the effect that the numerous
legal clauses or legislations might have on the business operations of an
organisation. It considers the various laws, policies and litigations that are applicable
to the market in which the company functions. For instance, if the minimum wage law
changes and results in the increase of the amount to be paid, it can adversely impact
the organisation and its financial resources (Bialowolski and Weziak-Bialowolska,
2014). However, if the trade laws are relaxed, import and export functions can be
practised with ease.
Environmental: The purpose of the environmental analysis is to find out the effect
that the environmental policies as well as the degree of ethical standards that are
being maintained by the organisation. It considers the consumption of natural
resources, the effects of waste generation, and various other ethical dimensions
(Chittithaworn, et al., 2011). In case the organisation fails to follow an ethical code of
conduct, environmental activists might try and hinder the business operations.
However, if the company tries to live up to the environmental concerns and
remedies, more consumers would be inclined to purchase from them as most people
today have become ethically and environmentally conscious of their actions.
This PESTLE model can be applied to the chosen organisation, Tesco PLC, as
indicated in the table below –
Table 1: PESTLE analysis of Tesco PLC
Political
There are a number of factors that affect the business
operations of Tesco PLC in numerous ways. The political
stability of the UK, along with the bureaucracy and corruption
of the domestic as well as the international markets, are
some of the factors that have the potential to affect the retail
industry. For instance, the referendum regarding the Brexit
issue has created numerous uncertainties with the investors,
thereby putting the British economy in question.

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Economic
Some of the macroeconomic factors that affect Tesco PLC
are the cost of labour and the numerous government policies.
For instance, the minimum wage has been increased in the
UK (Wadsworth, 2010), which has cost the company to a
significant extent. The inflation rates, credit availability, and
numerous other economic policies affect the functioning of
the company.
Socio-cultural
Various market trends in the UK indicate a shift towards one-
stop shopping as well as bulk shopping. Tesco PLC has used
this factor to its advantage and increased the variety and
quantity of items it shelves in the stores. Social conditioning
is what is responsible for the demand in the market, which in
turn is shaped by the attitudes and beliefs they harbour (Ma,
Krishna. and Montgomery, 2014). Most consumers have
become conscious about their health, and are thus choosing
to change the way they eat, such as by consuming more
organic products and cutting down on the consumption of
meat. This has encouraged Tesco PLC to shelve more
organic products to meet the newly emerged market
demands.
Technological
Tesco PLC has integrated online shopping facilities due to
the spread in the use of the internet and other technological
factors. The company has also started rolling out self-
checkout machines, which has not only benefitted the
customers but has also reduced the labour costs for the
company.
Legal
Tesco PLC is affected by the changes in the legislative
policies as well. For instance, the Code of Practice was
suggested by the Food Retailing Commission in 2004, which
made it mandatory for retailers to provide the suppliers with a
notice in case of a price change (Roach, 2011). In order to
manage these aspects, the company also offers fuel at a
discounted rate depending on the value of the items the
individual has shopped for from their retail stores.
Environmental
Tesco PLC is no stranger to the pressures that it faces from
environmental groups and government legislations regarding
the same. This has been the foundation for the company’s
plan to reduce the carbon footprint by 50 per cent by the year
2020 (Guenther, Saunders and Tait, 2012). Tesco PLC has
also generated newer ways to manage waste in an attempt
to inculcate awareness among the consumers.
Internal strengths and weaknesses of specific businesses and
interrelationship with external macro factors (P5, P6, M4)
He internal environment of an organisation consists of three components: the remote
environment, the industry environment, and the operating environment. A SWOT
analysis is usually conducted to understand the strengths, weaknesses,
opportunities and threats that the organisation is faced with (Helms and Nixon,
2010). A table for the SWOT aspects of Tesco PLC has been provided below –

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Table 2: SWOT analysis of Tesco PLC
Strengths Weaknesses
 Tesco PLC has the capacity to serve
a diversified customer base, which
implies that it is not dependent on a
single segment for revenue
generation.
 The product portfolio of the company
is massive, and it is carefully aligned
with the consumer demands after
appropriate market analysis. This
enables the company to keep the
competitors at bay.
 Tesco PLC has numerous license
and patent agreements when it
comes to the technologies that the
organisation develops, which in turn
attracts other companies for the
pursuit of numerous projects.
 Tesco PLC has been involved with
various infringement issues and
scandals, such as with Varco and
Weatherford on allegations of
violating their patents. This has led
to an increase in the company’s
legal expenditures, and has tainted
its public image.
 Tesco PLC currently has a market
stronghold only in the UK and is
dependent mostly on this country for
the greater part of the revenue. In
case the economy slows down, it
could impact the organisation
immensely.
Opportunities Threats
 Tesco PLC is dependent on
technology to a major extent, and
thus has the need for constant
innovation in order to sustain its
position within the extremely
competitive UK market. This opens
up the opportunity for improving the
existing technologies and attracting
newer market segments.
 In order to improve and enhance and
access to time and money, Tesco
PLC can indulge in strategic
acquisitions to build on its technology
and thereby enhance its business
operations.
 The global as well as the domestic
economic situation looks rather
bleak, and this is mostly due to its
unpredictability. Political turmoil,
availability of oil, and various other
factors have contributed to this
uncertainty.
 Organisations such as Walmart-
owned ASDA, Morrison’s and many
others are posing stiff competition to
the business of Tesco PLC, which
pressurises them further to improve
their business processes.
The internal factors as listed in the table above can be interrelated with the external
macro factors as well.
 For instance, the economic uncertainty has a lot to with the Brexit. The changes
in the trade regulations would threaten the functioning of business processes to
a significant extent (Davies and Studnicka, 2018), thereby calling for appropriate
decision-making to handle the situation.
 Also, Tesco PLC has the advantage of having a diversified product portfolio,
which acts in their favour as a major part of the UK population has now shifted to
buying groceries from convenience stores and retail outlets such as themselves.
This will help increase the revenue that is being generated.

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 The numerous patent and licenses that Tesco PLC has can benefit the company
to a great extent, in terms of its technological development.
The internal or the SWOT analysis also impacts the decision-making processes
within the organisation –
 It helps identify the opportunities that an organisation has in the market it
functions, thereby providing an outline on the steps that must be taken to utilise
them to its advantage (Kajanu, et al., 2012).
 It helps to respond appropriately to the new trends so that the organisation can
keep pace with the market rivals.
 New technology can be implemented more easily, as the SWOT analysis reveals
the need for such elements.
 Decisions regarding to dealing with the rival company’s actions can also be
determined through the SWOT analysis after careful consideration of the threats
the competitors pose.
Conclusion
Thus, from this report on Tesco PLC, it is evident that there are numerous purposes
of the different kinds of organisations. Furthermore, there is also an integral
relationship between the various organisational functions, along with the objectives
and the structure. It is also important to analyse the external and internal
environmental factors, as they have the capacity impact the business operations in
both positive and negative ways. Analysis of these macro and micro environmental
factors further indicate that they have an important role to play when it comes to the
decision-making processes.

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