This assignment is prepared for giving the knowledge about the business and its operations, the environment in which business performs its functions and how business is influenced by the environmental factors. Various types of organizations regulating in the market, their size, scope and functions and their link with the structure of the organization also described in this assignment. Also, it gives knowledge about the relationship between the business and its stakeholders and their role in making the decision for the business. Activities of the organizations are explained through various organizations namely Tesco supermarket store as a private company, Department for Transport as a public company and Transparent hands for a non-profit organization. By these examples,, the positive and negative impact of the external environment on the business is explained. This assignment also explained the internal strengths and weaknesses of the business and their interrelationship with the external macro factors in the environment.
P1 – Explain different types and purposes of organizations; public, private and voluntary sectors and legal structures.
Different businesses do different things and different people are responsible to start any type of business. There are mainly three types of organizations which are as follows –
Public sector organization–
State government runs this sector for people. The aim to provide essential public services and to utilize the resources in the best way so that they can make a benefit for the community. ESPO is a public sector organization in the UK, its main function is to provide a wide range of goods and services to the public sectors. As it is a public sector organization, surplus made by the organization is returned only to the public purse. It offers one-stop-shop solution.
Private sector organization –
It is owned and run by private individuals. Its main objective is to earn profit for their organization. In this there is little or no involvement of government thus it also called the citizen sector. JCB is a British multinational corporation headquartered in the UK. This company is into manufacturing equipment for construction, agriculture, waste handling, and demolition.
Voluntary sector organization –
Its primary objective is to create social impact rather than making a profit. Its purpose is to enrich society. So it is an independent, flexible and non- profit people organization which works selflessly for the welfare of the society. Macmillan cancer support charity based in London, UK is the largest British charity that provides financial support, specialist healthcare, and information to those who are affected by cancer. (Salamon & Sokolowski, 2016).
P2 Explain the size and scope of a range of different types of organizations
An organization is described as a group or structure set up to achieve certain goals and objectives. Some organization operates for making profits and some for social welfare.
|Organization name||Type of organization||Size by its employees||Size by its revenue|
|ESPO||Public sector organization||It is established in 1981 and it has around 201 to 500 employees||ESPO estimated revenue is £12.93 million annually (ESPO, 2019).|
|JCB Company Limited||private sector organization||JCB established in 1954 and the number of employee in it are approximately 11000||JCB estimated revenue of 2017 was £3.35 billion. It was a strong year for JCB.|
|Macmillan cancer support||Voluntary sector organization||Macmillan established in 1911 and staff is around 2910||Macmillan revenue £356.98 million in year 2017|
M1 Analysis of the fact- how the structure, size, and scope of different organizations link to the business objectives and products and services offered by the organization.
The product, services, and objectives of an organization is directly connected or linked with its structure, size, and scope. Any organizational structure refers to its certain activities to achieve organizational growth or in other word structure of a company determines the flow of information between the levels within an organization.
How ESPO size, structure and scope linked to its objectives, products, and services-
ESPO is a professional buying organization that offers 25000 product catalogs over 1200 frameworks. Its objective is to provide help support with their procurement. ESPO provides fire safety to pet control, grounds maintenance, electronic office supplies, and catering services. All the framework of ESPO is easy to use and free of cost. Organisational structure of ESPO is Functional. (Guliyev et. al., 2018).
How JCB size, structure and scope linked to its objectives, products, and services-
JCB supplies mostly those products which are used in the house building sector, particularly linked with construction. Its mission is to become the top producing manufacturing company to provide the highest quality service to its customers. Some of the JCB’s products are industrial forklifts, hydraulic excavators, diesel generator, compaction equipment, etc. These products are highly significant in terms of their revenues (JCB, 2019).
How Macmillan cancer support size, structure and scope linked to its objectives, products, and services-
Size, scope, and role of voluntary sector organization Macmillan cancer support give the whole overview of the organization. Macmillan is a UK’s leading cancer care charity that provides integrated products and service portfolio. They provide physical, financial and emotional support. This organisation comprises team based, functional as well as divison organisational structures (Macmillan, 2019).
Structure of the voluntary organization
P3 Explain the relationship between different organizational functions and how they link to organizational objectives and structure
Every organization has a hierarchy of people that need a planned structure to fit in the size and organizational operations. Organization structure defines the character of that organization; it can be of three types- classical, functional and divisional. The classical structure of an organization is very centralized and related to small businesses. The functional structure of an organization divides its employees on the basis of their job functions. It is related to the larger companies. In the divisional structure, it takes a functional unit and divides them into divisions. An organizational structure defines people in the organization are grouped and they report to whom. The traditional way and common way to organize people is by functions. Marketing, sales, production, accounting, and production are some common functions of any organization.(Thompson, 2017). The establishment of organisation structure evolves to identification of work to be performed and then breakdown this work into tasks through product planning. These tasks are evaluated from their type, complexity and require a schedule of completion of this task.
The organizational structure of JCB, UK
JCB is related to the construction company its products are tractors, JCB dieselmax, wheeled loaders, JCB vibromax, etc. It has a huge structured hierarchy of the management. The board of director finalize different headquarters regarding planning, marketing, technology, business development, network services and then operations. This figure shows the management hierarchy of JCB. Any organization performs some functions to achieve its goals. These can be planning, controlling, organizing, coordinating and commanding.
(Figure: – Organizational Chart of JCB)
(Source: – JCB, 2019)
M2 Analyse the advantages and disadvantages of interrelationships between organizational functions and the impact that can have on organizational structure.
|When the team members work with other people, it allows the sharing of knowledge so that they can learn new skills.||Segregation: Employees from various teams does not gets an opening to meet and share perceptions, which can leads to be risky for the permanent business development.|
|The staffers stay long term because they get promoted by their functions.||Lack of Coordination: as the isolated groups might disappoint or even fail as they have no institutionally standard mode of communicating requirements and issues to a new functional groups that could helped.|
|The team is managed by experienced persons with high ability and skill so that they can review the entire work.||Weakening of Common Connections: the common connection that highlights a single principal organizational purpose is certainly weaker than in an industry where diverse varieties of workforces regularly work together.|
|In organizational structure senior managers are
Free to concentrate on strategy.
|Territorial Arguments: These arguments may concerned with differences over objectives, budgetary competition.|
Organisation is having the sales department. If there is good interrelation between this marketing and sales department, then in this situation problem that sales officials getting in market can be communicated to Marketing officials. This will be beneficial for making the strategies market strategies better. If there is good inter-reatlionship between R&D departments that feedback of the products from customers and clients can be communicated by marketing department to R&D. This will be helpful in creating innovation in the products (Cegarra-Navarro et. al., 2016).
D1 Provide a critical analysis of the complexities of different types of business structures and the interrelationships of the different organizational functions?
Business is not at all easy in these days many complexities are their like amendment in rules and regulations and laws, finance related problems, technology advancement, infrastructural issues, availability of skilled manpower, lack expert top managers, etc.
Different types of complexity in a different type of business structure are there-
Complexity in Public sector organization
Public sector organizations have to face more complexity in comparison to another kind of business.one of the biggest complexity is to satisfy the stakeholder in public sector organizations. Satisfying customer demand is a very big issue today because the demand for the consumer is changing very frequently because of social media and networking sites. Many more issues have to face by public sector organizations.
Complexity in Private sector organization
Private sector organizations have to manage everything my own. Their profit and loss all depend on their own working. Managing finance is the biggest complexity in private sector organizations. The government imposed so many rules and regulations on the private sector which is hard to follow. Diversification is very low in the private sector. Proper management is not available in private sector organization and unnecessary government procedures are big hurdles in private sector organizations these days. (Axelsson & Easton, 2016).
Voluntary organizations are made for social purpose instead of making a profit. Internal control is a major complexity in this type of organization. Trustees should be good because the success of the organization is in the hands of trustees. Proper documentation, risk management, fundraising all is the complexities are there in this type of organizations. (Bryson, 2018).
P4 Identify the positive and negative impacts the macro environment has on business operations, supported by specific examples
There are various impacts of macro environment on the business they may be positive or they may be negative for the business operations on the Tesco Ltd.: –
- In the macro environment, first thing is to be considered is demographic factors or forces which influenced the business on many grounds for e.g.: country, education level, age, lifestyle, ethnicity, cultural features, and household. Developed countries have good demographic conditions and selling of the good quality products was high in quantity and if the demographic condition is not good of country then the market of that country will not earn that much profit as compare to a developed country. The second thing is to be considered is the economic factors that affect the business environment. In an economic environment mainly two factors affect the business that was demand and supply. If demand is high then the market will go on a hike and if demand will go down then the market will also depression. (Schaltegger & Wagner, 2017).
- Natural forces also influence positively as well as negatively the market of Tesco Supermarket. Business depends on the natural resources available in the environment like minerals, oil, coal, etc. that will also affect the organization’s production.
- Technological factors also impact the environment of the business. If a business is able to update its technologies time to time then it will survive in the competitive market efficiently but if it is not able to follow the trend then it will have to the loss in the market.
- Political and legal factors also influence the business environment with rules and regulations implied by the government positively as well as negatively.
- One more factor that influences the environment of the business is social and cultural forces. Businesses have to produce the goods and services according to the need and desires of the society so it will give profit otherwise not.
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro environment within an organization.
|Political||The political environment helps in analysing the essential government regulations. It also helps in giving a stable condition to Tesco supermarket. The political environment also supports the export and imports in an effective and efficient manner. The factors influencing business environment are political stability, tax and economic policy, employment laws and legislations foreign trade rules and regulations.(Hillary, 2017).|
|Economic||The economic factors of the country very much influence the results of the organization. If the economic factors are in a positive situation then it helps in increasing productivity in the market.|
|Socio-Cultural||The socio-cultural factors also influence the environment of Tesco supermarket in both negative and positive manner. It helps in enhancing the diversification in the production of goods and services in the best effective manner.|
|Technologic||New and updated technological factors help in increasing the efficiency in the production of goods and services for the goodness of the business. It also increases cost and complexity.|
|Environmental||This factor is helpful in the determination of changes in the needs and desires of the customers according to the changes are the season. Sometimes limited resources also become the failure reason for the business. Now Tesco inspires its buyer to buy from tesco.com. Tesco delivery drivers will use fuel-saving directions and as well they bring together unwanted plastic polybags from customers as well as reuse them. The organisation is committed to exploit renewable sources and also will produce 100% of its power by 2030 and promises to reduce upto 50% carbon impression by 2020 (Kew, et. al., 2017).|
|Legal||For smooth and efficient running of the operations of the business, it is essential to follow the rules and regulations of the government. It creates a good image in the eyes of customers for the business; on the other hand, it is time-consuming and increases the cost also.|
|Ethical||ETI base code is used by Tesco which embraces that employment can be chosen freely, liberty of association as well as the right to cooperative trading are respected, hygienic and safe working environments, child labour are not entertained, living wages are compensated, no excessive working hours, no discrimination, consistent employment is delivered and etc. further, They have effectively attained Fair Trade promise for their farmers.|
P5 Conduct an internal and external analysis of specific organizations in order to identify strengths and weaknesses.
Internal and external analysis of Tesco supermarket in order to determine the strengths and weaknesses are as follows:
- Competitors help organizations for gaining a competitive advantage for the organization. This is count as a strength for the organization. (Sarda, et.al. 2013).
- Tesco provides good quality products that will satisfy the needs of the customers and create a good image in the market.
- Tesco also provides services on time and its supplier also provides the stock time to tie in the stores so this is also strength of the store.
- .The product of this company is the good quality products so the customer suggests purchasing from Tesco specifically so this also becomes the strength of the organization. (Warner and Sullivan, 2017).
P6 Strength and Weakness Interrelate with External Macro factor.
Every organization has to work in its surrounding which have some strength and some weakness and these are interrelated with external macro-environmental factor. The organization is much more affected by its external factor because it is sometimes not easy to identify the problems in the external environment which affect the decision making of the organization. Strength and weakness are opposite to each other and proper analysis of strength and weakness give big achievement to the organizations. SWOT analysis is the best way to identify the strength, weaknesses, opportunities, and threats for the organization. SWOT analysis is the best way to identify the opportunities in the market and also what threats are there. Many other factors like political issues affect the organization and increase the threat. social factor affects the business in both ways positive and negative .positive is that without society business cannot be possible and negative is that responsibility which the organization have a bear for a society that is corporate social responsibility. Economic, social, technological many problems are there but these are opportunities also. (Na & Lee, 2017).
A political factor may be strength and weakness depending upon the situation, the economic factor is broader in range it includes national and international environment and it affects the business decision making .so all strengths and weaknesses are interlinked with the macro environment.
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision-making.
SWOT analysis of Tesco Supermarket is as follows: (Grundy, 2017).
|The Tesco supermarket provides the best quality products and services to the customers.
This enables transparency also in the organization and also it has a large consumer group which becomes its strength.
|Tesco supermarket has very tough competitors such As ASDA, Morison’s and Sainsbury’s. Due to high rules and regulations such as code of business conduct, the cost implied by the organization on the products is high so it becomes the reason for the weakness of the business.||This company has a large group of consumers so it can increase the business and do more efforts on effective management so the business can work more efficiently and effectively.||Due to the huge number of competitors the businesses have to face high competition in the market. This is considered as a threat to the organization. Miss management is also there in the organization.
Competitive threats are also rising from other worldwide retailers.
D2- Impact of Micro and Macro factors upon business objectives and decision making.
The business organization is based on both micro and macro factor and business affected by these factors in both a negative and positive manner.
The micro factor includes customer, suppliers, competitors, market intermediaries, etc. Today is the era of technology so it is easy to manufacture anything very easily but to satisfying customer demand and sustainability of customers is not at all easy.
Porter Five Forces and SWOT are the complete strategies framework that procured strategic decision by just examining the current competition. It majorly focuses on – how organizations such as Morrison (Wm) , Tesco Plc can form a maintainable competitive improvement in Retail business. Managers at these organizations use Porter Five Forces to change a strategic situation in Retail business and also can discover gainful opportunities in complete Customer Services sector.( Snyder & Diesing, 2015).
The supplier who supplies the raw material, tools and other related things use in production. Suppliers affect the business very much because maintaining the quality of raw material and other input, adequate quantity is on the trust of suppliers. The supplier holds the power of when he is the largest supplier than the success of a business is dependent on him.
Competitor means selling the same kind of material which already selling by other organizations. The business organization has to beware of competitors exist in the market and always should take into account how can an organization can de differ from others.
The market intermediary also affects the business in both ways negative and positive. Basically, market intermediaries help the company in promoting its business.
Macro factor includes economic, technological, political, social, legal environment .economic environment factor affect the business as it brings economic growth, it affects the production as well as the decision making of the organization. (Vecchiato, 2012).
Technological factor includes systematic use of information which helps in production management. To cope up with technological advancement is very necessary without it business cannot survive or succeed.
Political factors always should keep in mind while taking the business decision for success. Legal factors also affect as if organizations are not aware of rule and regulations and updating related to them is not easy to survive because laws have been changed very frequently these days.
Society is the primary responsibility for any business organization because the growth and survival of a business depend upon society.
As both micro and macro factor affect the business in both ways.
Doing business is not so tough but also not so easy these days. Because of social media, global approach, technology advancement it not hard to do business but with governmental policies, rules regulations, political issues. Society responsibility becomes problematic to do business and survive in the long run. But helping with analysis of external-internal factor, with the help of SWOT analysis it is easy to understand the threats and weakness so it helps in overcoming business problems and earning profit-maximizing the ultimate aim of every business. For SWOT analysis or any other kind of analysis there is a need for expertise in every organization it is not possible for a small organization because it incurred high expense which is not easy to bear but if the organization is able to bear these expenses and have an expert team then it can achieve its goal and also get profit maximization with sustainability in the long run.
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