Report on UK Business Environment: Structures, Functions, and Analysis

This report provides a comprehensive analysis of the UK business environment, encompassing various aspects of business organizations. It begins by exploring different types of business organizations in the UK, including public, private, and voluntary sectors, along with their respective legal structures. The report then delves into the size and scope of these organizations, using Aviva plc and the Department of Work and Pensions (DWP) as examples. Furthermore, it examines the interrelation of organizational functions and their advantages and disadvantages. The report also assesses the impact of the macro environment on businesses and conducts a SWOT analysis of both DWP and Aviva plc, considering how strengths and weaknesses relate to external macro factors. Finally, it concludes with insights into the UK business landscape.

Assessment

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
Different types of business organisations along with their legal structures................................3
Size and scope of different types of organisations......................................................................5
LO 2.................................................................................................................................................7
Organisational functions and their interrelation..........................................................................7
LO 3.................................................................................................................................................8
Positive and negative impacts of macro environment on businesses..........................................8
LO 4...............................................................................................................................................10
SWOT analysis of both Department of Work and Pensions (DWP) and Aviva plc.................10
SWOT analysis of Department of Work and Pensions (DWP)...............................................12
Strengths and weaknesses interrelated with external macro factors.........................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
All the businesses that operates in the market are affected by various internal and external
factors which creates an in influence on the company's operations and functions. These factors
affects the way in which company build relations with customers by offering them with products
and services as per their requirements which also determines the sustainability of business in the
competitive environment. All the business environmental factors must be considered so that
appropriate policies and strategies can be formed which can help the company to survive and
compete successfully in the market (Yeh and Et. al., 2015). Mr Barclay who is a renowned
businessman wants to expand his venture in UK. This report will help him in gaining knowledge
on various factors that affect the different types of businesses that exist in UK so that a detailed
knowledge of the environment of business can be known which will help him in deciding
whether or not UK can be considered for establishing business in UK. Under this report different
types of business structures are discussed along with the interrelationship of different
organisational functions. Legal structures of all the organisations are also discussed along with
the external environmental analysis of the company which will help the managers in efficient
decision-making so that the organisation can remain competitive in the market.
LO 1
Different types of business organisations along with their legal structures
In market there exist different types of businesses which operate in the environment with
different purposes and deal with different types of customers by providing them with goods and
services which will help them in accomplishing their goals and objectives. All these businesses
have different types of organisational structures, cultures, size, scope, legal structures etc.
depending on their purpose of operation in the market. Following are the different types of
businesses that operates in UK market:
Public sector: These are the organisations which are operated, governed, managed and
controlled by the UK government. They are mainly non-profit making organisations and the
surplus which is generated is reinvested so that their aim which is to provide services or products
for social welfare can be achieved. The organisation that is selected in public sector is
Department of Work and Pensions (DWP) which is a British government department (Wood and
Logsdon, 2017).

 Purpose: The organisation is responsible for welfare, pensions and child maintenance
policy in UK.
 Legal structures:
◦ Central government: The collection of funds is largely done by public mainly by the
way of income tax. DWP has a central governmental legal structure as it is centrally
owned.
◦ Local government: The collection of funds come from community and council
charges.
◦ State government: These collect funds from state taxes which are not collected by
the central government.
Private sector: This sector is mainly owned by the citizens of the country in which the
organisations are privately owned and less governmental interference is there in their functions
and operations. The chosen private sector organisation is Aviva which is a British multinational
insurance company which is headquartered in London, UK. Purpose: The company provides general and life insurance facilities to its customers in
order to earn huge profits by providing them with such facilities (Sodeyfi, 2016).
 Legal structure:
◦ Sole proprietorship: These are owned and operated by single individual who is
responsible for activities of the business like grocery owner, taxi drivers, plumbers
etc. The sole traders do not have to face government intervention and can function
freely.
◦ Partnership: These organisations are established on the basis of partnership deed in
which the participants have a fixed ratio which is pre-decided so that the profits or
losses are divided on the basis of the ratio.
◦ Limited company: In this legal structure the liabilities of the members of the
company are limited to the value of shares they own in the company or to the extent
to which the members have taken the guarantee to bear the profits or losses. Aviva plc
is a public limited company which means that the shares can be freely traded in
public.

Voluntary sector: The organisations in this sector are formed voluntarily by the citizens
of the country with the main purpose of improving the living standard of people by providing
them with goods and services that can help in dealing with problems of the customers. The
organisation chosen in this sector is Cancer Research UK. Purpose: The purpose of this organisation is to spread awareness among the general
public about cancer so that the deaths due to cancer can be reduced (Quinlan and et. al.,
2019).
 Legal structure:
◦ Trust: These organisations are not legally registered and function in the market on
trust of all its members. Cancer Research UK is a trust based organisation which is
not allowed to enter into any agreements for personal benefits.
◦ Unincorporated association: These organisations are formed by a group of
individuals who come together so that a particular purpose can be achieved like
societies, clubs etc.
Size and scope of different types of organisations
All the organisations that operate in the market have different types of size, structures,
scope etc. which help them in achieving the goals they have planned to achieve.
Aviva plc Background: It is a British company which deals in providing general and life insurance
facilities to its customers and is headquartered in London, UK. The company was formed
by the merger of two British insurance firms, Norwich Union and CGU plc. Vision and Mission: Their vision is to earn the trust of customers by providing them
insurance facilities that can help in securing their future. The mission of the company is
to deliver sustainable growing returns to all its stakeholders. Size: The company has about 33 million customers across 16 countries and also the
company has more than 30,000 employees (Pearson, 2017). Scope: The scope of the company is huge as large number of people are taking insurance
policies so that they save rationally for their future.
 Products and services: The company provides car, home, health insu5rance to its
customers along with pensions, investments and asset management services.

The company size, scope and structure determines the level at which the company works
and also determines the products and services that are offered. The large size of the company
helps it in securing the lives of a large number of people and the legal structure determines the
liability of shareholders in the company. The company is a public limited company which helps
it in gaining funds from the general public so that its objectives are efficiently achieved.
Department of Work and Pensions (DWP) Background: This is a government department created in 2001 which is situated in
London and helps in providing welfare and pension policy to the public. Vision and Mission: Its mission is to give welfare services to the public so that financial
independence can be ensured by increasing saving so that their living standards can be
improved. The vision of the department is to secure the lives of maximum people through
assistance and guidance (Löfsten, 2016). Size: It is the largest public service department in UK and has a client base of around 18
million people and has more than 10,000 employees. Scope: The scope of the company is huge as with the growing inflation the need for
securing a safe future for the people is very important.
 Products and services: The department provides the service of providing insurance to the
general public so that their future can be well secured.
The large size of the department ensures that a large number of people can be covered in
the welfare pension and insurance policies of the department which helps it in providing welfare
services at a large scale. The company is funded by the central government which helps it in
acquiring huge funds for public welfare.
Cancer Research UK Background: The organisation was found in 2002 with an aim of spreading the
awareness of cancer so that welfare services can be given to the people which can help in
reducing the number of deaths due to cancer (Kumar and Pradhan, 2016). Vision and Mission: It's vision is to reduce the number of deaths caused due to cancer by
spreading awareness about how to deal with cancer patients. The mission is to reduce the
smoking rates, improve early cancer detection etc. Size: It is the world's largest independent cancer research charity which helps in curing
the cancer patients by use of appropriate tools and techniques.

 Scope: The scope of the organisation is wide as number of cancer patients are increasing
due to smoking and drinking habits of the people, exposure to pollution etc.
 Products and services: The company provides anti-cancer medicines, physiotherapy,
chemotherapy etc. which can help in reducing the cancer patients.
The size of the organisation is large which means that a large number of cancer patients
can be given treatment which ensures their well-being and improves their quality of living. The
company gains funds from its trustees and other charities which help it in research and
development so that the cancer patients can be given proper treatment.
LO 2
Organisational functions and their interrelation
A business has many functional departments which coordinate, integrate and interrelate
with each other so that the collection of their activities can help the business in achieving its
goals and objectives. The interrelation of various functional departments in context of Aviva plc
are discussed below: Marketing and sales department: Sales department depend on marketing as it helps
attracting customers and making long-term relations with them which helps in increasing
sales and achieving the sales target. Marketing depends on sales as increase in sales will
help in generating funds which will help marketing department to have a sufficient
budget for market research and other activities (Kasemsap, 2016). Sales and finance department: Finance depends on sales as with increase in sales the
revenue and profits of company increase which will help in preparing financial reports
and managing funds. Sales depend on finance department for funds so that selling of
insurance policies to customers can be efficiently done.
 HR and finance department: The HR of Aviva helps in increasing the customer base by
contacting them and telling them about the policies of the company. This helps in
generating huge profits for the company whereas the finance department manages funds
which helps in paying salaries and other rewards to the HR of the company.
Advantages and disadvantages of interrelation of organisational functions
The businesses can function in an efficient and effective manner if all the functional
departments of the company coordinate and interrelate with each other which helps the company

in achieving its objectives on time. This helps in the efficient flow of information within the
organisation so that tasks that are to be completed can be done effectively. However the
interrelation also has some disadvantages as the dependence of departments ion each other
increase which also increase the delay in tasks as if one department is lagging behind in
achieving the target then all the departments will lag behind as all the departments are
interrelated and connected with each other (Karjaluoto and et. al., 2015).
Organisational structure
Organisational structure determines the way in which activities of the company are to be
carried out in order to achieve its goals. It also determines the way in which information flows in
the company so that all the members can be updated related to information related to various
organisational activities. Hierarchical structure: In this structure people are organised in the company in the form
of hierarchy with senior management forming the top level while the staff members
coming at the bottom level. This structure is followed in Department of work and pension
where information and instructions flow from the top level to the bottom level.
 Matrix structure: In this structure the employees can report to more than one manager
and also the stages that occur between managers and employees are reduced so that direct
reporting relations are established. Aviva plc has this type of organisational structure
which helps it in achieving its goals.
LO 3
Positive and negative impacts of macro environment on businesses
The macro environmental factors are those which cannot be changed and controlled by
the business and affects its functions in the market which also influence the competitiveness of
the business. For determining the macro environmental factors which affect business, PESTLE is
done which is a strategic management tool that helps in identifying the major factors along with
their impacts. PESTLE analysis of Aviva plc is given below:
Political factors: These are the rules and regulations formed by the government of the country
related to tax regimes, trade tariffs etc. which affect the businesses that operates in the country. Positive: As the UK government is stable it means that Aviva plc do not have to
frequently change its insurance and policies which helps it in saving its costs.

 Negative: The increasing tax rates of the country affects the insurance industry as the
income of people is decreasing which means they can invest low in the pension schemes.
Economic factors: These are the factors related to the economic conditions of the country which
determines the rate of GDP, unemployment rate etc. The economic condition of the country
plays an important role in the success of the business (Huang-Horowitz, 2015). Positive: The economy of UK is strong which means that the purchasing power of people
is high which is beneficial for Aviva as investments from many people can be gained so
that the benefits of pension and insurance can be given
 Negative: As the unemployment rate of the country is low it means that in order to
acquire skilful labour the company needs to pay high salaries to them which increase the
company expenses.
Social factors: These are related with the composition of population of a society like
demographics, age, sex, caste, religion etc. which also affects the businesses in an economy. Positive: The education rate is high in UK which means that skilful labour is present
which can be hired by Aviva plc to achieve its goals and objectives on time.
 Negative: The culture of spending on leisure activities is increasing which means that less
income is left with the people to invest in insurance company which decreases the funds
for company to provide insurance and pension policies to customers.
Technological factors: These are related with the level of technological advancement of the
country and the R&D activities that tajke place in country so that new technologies can be
invented. Positive: UK is a technologically advanced nation which means that Aviva can use
advanced technology to provide assistance and guidance to customers so that their
savings can be secured which can help in securing their future.
 Negative: Technology is expensive to be implemented and also needs a highly skilled
workforce so that it can be efficiently used.
Legal factors: These are the laws of that exist in the country which determines the legal
framework of the businesses so that they can legally function in the environment. Positive: UK has strong legislatures related to data protection, employment laws etc. The
legal factors help the company in gaining the trust of customers which also influence

them to make investments in Aviva so that they can be secured by its insurance and
pension policies.
 Negative: The implementation of policies which are within the pursuit of legal
framework increases the cost of the company which makes the policies and schemes of
the company expensive.
Environmental factors: These are related to the environmental conditions of country which
affects the functions of business like weather, climate, pollution, environmental laws etc. Positive: UK follows strict environmental policies and also Aviva follows CSR policies
which helps it in being socially and environmentally responsible. This helps the company
in gaining the trust of customers who invest in the company so that the benefits of
insurance and pension can be taken (Chen and Wu, 2015).
 Negative: As the environmental laws are becoming strict the company has to strictly
implement the changing laws due to changing environment which increases the cost of
company.
LO 4
SWOT analysis of both Department of Work and Pensions (DWP) and Aviva plc
SWOT analysis is conducted by the organization in order to better understand the
strengths, weaknesses, opportunities and threats. It helps top level management to frame tactics
in order to overcome the threats prevailing in the open market place. Additionally, loop of others
are turned into their business opportunities so that emerging needs of customers can be meet
easily. The SWOT analysis of Aviva plc are illustrated as follows:
SWOT analysis of Aviva plc:
Strengths:
Strong financial position: Aviva plc has strong financial position in the global market.
Over the years firm is able to build loyal customers which indirectly raised their sales ratio of the
goods and services. As Aviva plc are financially stable in nature they are providing effective
training sessions to their employees so that they can full-fill the demands of the customers easily
on priority level (Charter, 2017).
Effective strategy adopted: Three-pronged strategy is adopted by Aviva plc in their
working premises so that best services can be served to the end users. By adopting this goodwill

is raised in the eyes of the customers which is a positive mark for the business. The raised market
value in the global market aid firm to create tough benchmark for others.
High brand awareness: Firm is able to build high brand awareness in the eyes of the
customers due to which set goals and objectives of the company are set in the set time span.
Aviva plc is well known across the nation due to which huge customer base is raised for the
service offered by them for their targeted customers.
Weaknesses:
Customer complaints: The loop of Aviva plc is that it takes long time to resolve the
quarrier's of the customers due to which customers get frustrated and switch to other firm in
order to satisfy their emerging needs. Along, with this complaints are revived regarding the
execution of it's policies through out the year. It indirectly damages brand images of the
organization.
Controversial advertisement affects brand image: Firm is facing share related
controversies whenever it comes with an advertisements. Due to which negative views flow in
the air regarding Aviva plc services. It build negative image regarding the firm in the mind of
the customers who wants to be or can the the part of this service in the coming years. All this
aspects decreased the market value of the firm as compare to the rivalry (Beatty, Samuelson and
Abril, 2018).
Opportunities:
Asian markets: Aviva plc by expanding its business in the Asian market it will turn out
to be beneficial for them as they render good growth potential to this type of business.
Organization will be able to capture huge market ratio and will be able to raise huge customer
base for the service. On the other hand overall productivity and profitability ratio raises
accordingly by growing the business in Asian market.
Growing rural market: Firm has strong brand awareness due to which rural area are
aware regarding the insurance policies and their plans. The rural market is raising day by day so
there is huge growth opportunity for Aviva plc to raise their customer base and to uplift the
market share.
Threats:

Intense competition: In the global market the biggest threat faced by Aviva plc is from
leading insurance companies such as, HDEC life insurance, Bajaj Allianz and so on. This firm
has loyal customers from early days as well as has capture huge market ratio . So it become
difficult to cope up with them in the global market (Ansoff And et. al., 2019).
SWOT influencing decision making process Aviva plc: By conducting SWOT analysis firm
is able to identify their loop holes and as well as management is able to track threats prevailing in
the open market place. The decision which is taken by the firm manger is influenced in both
positive and negative way depending upon the condition. As the weak points are showcased
tactics are framed to improve them so that best and quality services can be offered to client.
SWOT analysis of Department of Work and Pensions (DWP)
Strengths:
Provide sense of security: With the growing inflation in the market the need for securing
a safe future for the people is very important. Department of Work and Pensions work for the
welfare of the people and to render them pension on time. By this positive image is build in the
eyes of the customers.
Large loyal customers: This organization is working for the welfare and providing
pension to the old age people on time due to which trustworthy customers are build with the
firm. By this gradually firm's recognition is done among the people.
Weaknesses:
Low-cost strategy: As this firm is working for the welfare of the people and does not
focus on profit maximization. By this strategy Department of Work and Pensions reduces their
overall profit margin. By this employees turnout ratio has raised to a large extent.
Lack of skilled employees: Firm is lacking behind in skilled workers. Due to which
appropriate services is not offered to the client regarding their pension. By this customers remain
unsatisfied and set targets are not achieved in the set time span (Andersson, Forsgren and Holm,
2015).
Opportunity:

Adopting advance technology: By adopting modern tools Department of Work and
Pensions will be able to resolve the issues related to pension immediately. By this brand
recognition can be done easily in the mind of the customers.
Threats:
Competition: There are many other institution who are working for the welfare of the
public and for their pension availability. So in order to remain in the competition they need to
bind customers for longer time duration. As well as need to resolve the quarries on priority level.
SWOT influencing decision making process of Department of Work and Pensions (DWP):
It affect the decision making process of Department of Work and Pensions in negative
way because all the long term plans need to be changed by understanding the level of threats
prevailing in the market. The decision need to be made by taking into consideration all the
opportunities available in the market. By this effective decision can be taken for the business
expansion.
Strengths and weaknesses interrelated with external macro factors
External factors are political, social, technological, legal and so on all this need to be
examined by the business associates in order to flourish the business successfully in the global
market. Some of the external factors are illustrated below:
Department of Work and Pensions :
Political factor: UK is politically stable in nature and by this Department of Work and
Pensions will be benefited as it will help to provide pension to the public on time in the up-
coming years.
Economical factor: The operating cost is high due to which organization is unable to
render best services to the customers.
Social factor: They are provide sense of security to the customers due to which loyal
customers are build over the years. They are able to satisfy the emerging needs of the customers
when the inflation rate is growing tremendously.
Technological factor: Modern tools helps organisation to to cope up with competition
prevailing in the open market place.

CONCLUSION
From the above it can be concluded that public, private and voluntary sector largely
contribute in the upliftment of the economy. They are the main creating large job opportunities
for the society people. Their size, scope and legal structure are studied deeply to understand
business capability in the global market. Interrelationship among the organizational functions are
studied in order to make improvements for better results. Macro environments positive and
negative impact is examined in order to design the tactics to overcome issues related to them.

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