There are following questions which are needs to be achieved by the students are given below:
- Describe various types of companies, including their size and scope.
- Discuss the interrelationship of various functions within the company and how they connect to the structure of the company.
- Analyse the positive and negative influence of the macro environment over the business operations.
- Conduct the internal strengths and weaknesses of particular businesses and define their interrelationship with macro factors.
Business is an activity which is undertaken by the individual person or a group of persons with a motive of earning money. The operations of the businesses are influence by various internal and external factors in the business environment. To ensure the growth and success of the organisation they have to understand the impact of various factors as only few internal factors can be controlled by the company. For the efficiency in the business the organisations need to understand the interrelation among the different departments of the company as it facilitate the company to take efficient decisions and utilising the resources. The organisations conduct SWOT analysis for analysing the impact of the internal factors and PESTLE analysis for analysing the impact of various macro factors. For this report different types of companies are taken into consideration along with that their legal structure are also studied. The scope, vision, mission, legal structure of different type of companies will be analysed.
Introduction of different types of organisations and the growth of international business environment
The organisations are set up with some motive which can vary from organisation to organisation. On the basis of their motive the companies can be classified into various categories. The different types of organisation are:
Private Organisation: Private organisation are the organisation which are established with the aim of profit. Such organisations are managed and controlled by the individual or by the group of people who has invested funds in the organisation. Private organisation are highly regulated by the regulatory body with the implication for various laws (Prajogo, 2016). For example: Sainsbury's is private organisation which is third largest supermarket chain of UK.
- Sole Proprietorship: Sole proprietor is a business which is managed, controlled and financed by an individual. They are responsible for all the risk and profit associated with business. The legal compliances are few for sole proprietors.
- Partnership: The partnership is a form of business in which two or more person together establishes the business. Terra and conditions of the businesses are either mutually decided by them or it can be provided by the governing law.
- Limited Companies: The limited company can be a public company or a private company which depends upon the investors and the amount invested in the business. Such companies are highly regulated as they amount of general public and various investor are involved (Hillary, 2017).
Public Organisation: Public organisation are those organisation which are owned and managed by the government and the government bodies. The main purpose with which they are establish is welfare of the society. But the organisation aims to earn profit so that such profits can be utilised in betterment of the society and to assist financially in the operations of the organisation. For example: BBC is a public organisation, which is financed by the government out of the funds collected by them as the license fee from the public.
- Central government: It is the apex body which is responsible for the entire nation. They delegate the roles and responsibilities to various people by dividing the whole nations into small manageable states. Further they also allocate funds to different states so that they can efficiently execute their roles (Golovnev and et. al. 2013).
- State government: State government controls and manages a territory which has been assigned to them by the central government. The territory is managed by a person who is held responsible and the person can either be elected by the people.
- Local government: The local government is the one who manages the local community and are responsible for the betterment of the society by conducting various welfare programs.
Voluntary Organisation: The Voluntary organisation are those organisation whose main aim is welfare of the society. They are managed by the individuals and the groups who joins them voluntarily with the aim to serve the needy. The trustees of such organisation manage the funds collected by the organisation. For Example: Cancer Research is a Voluntary organisation that aims to serve the cancer patients (Georgescu and Popescul, 2015).
- Unincorporated Association: The aim of such organisation is to protect the society from a particular concern which can be for a short span of time.
- Trust: Trust are those organisation which are responsible for managing the money and the property which are received by the institution for particular purpose (Makarova and Polyanin, 2015).
Growth of international business environment : The international market is growing due to strategic imperatives and the changes in the environment. Strategic imperatives includes the core competencies, resources, competition etc. To meet up with this the businesses whether public or private, organisation has to focus upon the expansion. BBC has been operating worldwide while the other companies are operating in UK itself. But to meet up with the level of competition they also have to move global (Singh, 2012).
Explanation of different type of organisation
The different types of organisation are considered which are classified on the basis of their motives. Various organisation which are considered are :
- Background of the organisation: Sainsbury's is a private organisation which is a chain of supermarkets whose headquarters are in London, UK. It was founded in 1869 by the John James Sainsbury. Later on the company became largest retailer for groceries and adopted concept of self services in retailing. The holding company of Sainsbury's has been divided into three divisions : Sainsbury's Supermarket Ltd., Sainsbury's Bank, Sainsbury's Argos.
- Vision: The vision of the company is to be a trusted retailer which is efficient to attract people to shop and work.
- Mission and Business objective: The mission of the Sainsbury's is to be the first choice for the customers in the food segment and to deliver the better quality products to the customers which will help them to improve their level of satisfaction. Also their objective is to serve the customers at a competitive cost by offering simpler, faster and together.
- Size and Scope: The Sainsbury's has been operating in UK with approximately 770 convenience stores with a strengths of 1,86,900 employees.
- Products and Services: The company has various superstores, convenience shops in which they offers a wide variety of products including groceries etc.
- Stakeholders: The stakeholders of the company includes various suppliers, managers, staff of the company, customers, the community etc. The company has some responsibility towards the stakeholders such as timely payment to the suppliers, better quality of the products, better working conditions for the employees etc.
- Background of the organisation: BBC stands for British Broadcasting Company which is a public organisation which is registered under the royal charter and they are regulated according to the charter. BBC is one of the oldest broadcasting company which has its operations worldwide. They are funded from the license fee which is collected by the government from the public.
- Vision: The vision of the company is to become an innovative and creative company by providing various differentiated and augmented services to the customers.
- Mission and Business objective: The mission of the company is to serve the customers as per their needs and interest. Also the objective of the company is to provide the authentic information to the customers so that awareness can be created among the public.
- Size and Scope: The BBC has been operating globally with the aim of expanding their businesses. The company has been operating from so many years in the field of media, journalism and technology. More than 20,000 employees are working worldwide for BBC.
- Products and Services: The company offers various services which are related with broadcasting news, information related to weather, sports, economic situations etc. The medium which they have been using are television, radio, mobile app and their websites (Ji-fan Ren and et. al., 2017).
- Stakeholders: The BBC has both internal and external stakeholders which includes their board members, employees, field members who collect news, media partners etc.
- Background of the organisation: Cancer research is a voluntary organisation that aims to create awareness among people regarding cancer. The organisation has focus upon reducing the numbers of cancer patients. They raises funds from the donations, legacies etc.
- Vision: The vision of the company is to reduce the number of deaths due to cancer which will make the world free from cancer.
- Mission and Business objective: The mission of the company is to conduct research which will help them to identify the diagnoses to cure cancer and to identify all the possible symptoms.
- Size and Scope: Cancer research is operating in London but they are planning to establish their offices further in different countries as they aims to serve the cancer patients worldwide.
- Products and Services: They conduct various researches which helps them to identify various medicines and on the basis of such researches they assist the patients.
- Stakeholders: The stakeholders of the organisation includes the society for whom they work. Also the individual and groups which are associated with them are also their stakeholders (Wetherly, 2014).
Explanation of different functions of the company and their interrelation
Functions of Sainsbury's : The organisations have to perform various function which helps them to achieve their organisational goals. In an organisation, there are various functions which can be performed by them such as :
- Finance function: The finance department in Sainsbury's helps them to procure funds from the market and then helps them to utilise them by allocating it to the different departments (Kljucnikov and et. al., 2016).
- Human Resource function: The human resources department helps the Sainsbury's to procure the employees. Also it facilitates them to plan for various training and development programs required by them.
- Marketing function: The marketing function of Sainsbury's helps them to create awareness among the customers about the products and services offered by them.
Organisational structure outlines the system with the help of which the company delegate the roles and responsibilities to the people. Various types of structure can be used such as hierarchical organisational structure in which the organisations is structured in top down structure; flat organisational structure is one in which there is no layer and all the employees can easily approach to the managers (Analysing The Organisational Structure, 2019).
Organisational chart for Sainsbury's:
On the basis of this organisational chart it is identified that the Sainsbury's has various functions and thus departments in their company. All the functions are interrelated with each other. The interrelation of various functions are given below:
- Customer department with Trading department: These two departments are interrelated to each other. The customers department of Sainsbury's analyses the taste and preference of the customers on the basis of which they communication it to the trading department. The trading department accordingly formulate their strategies.
- Finance department with company secretary: Company secretary of the company guides the finance department of Sainbury's in formulating various reports and in taking various decisions. While the finance department provides all the data which help company secretary in presenting their analysis before the management (Fabuš, 2017).
The complexities which are faced by the company due to this interrelation is conflicts and delay in decision making which arise because of lack of communication, improper utilisation of resources etc.
PESTLE analysis including positive and negative impact
For an organisation it is important to analyse the impact of various macro factors so that they can reduce its impact. This can be done by PESTLE analysis which will help the Sainsbury's to determine the influence which can be positive or negative.
- Positive factors: Political factors are those which reflect the level to which the government can intervene in the business operations. The government debts and the consumer debts are high which adversely affect the operations of Sainsbury's as they income in hands of customers and the company both will shrink. Due to this the company will have to face the pressure of the customer’s attitude. The political stability in UK offers a positive impact as the policies does not changes frequently and due to this they do not have to make changes in their policies.
- Economic factors: Economic factors are those factors which includes demand, cost, interest rate etc. Due to high unemployment rate the company faces the issues of lower demand as this reduces the lesser disposable income in the hands of the customers which is why they cannot afford the goods of the Sainsbury's. But the higher interest rates help the company to get funds easily for investments.
- Social factors: Social factors are related with the demographic factors, taste and preference, culture, beliefs etc. of the customers. With the change in taste and preference of the consumers the Sainsbury's has been introducing “cook and save' products which will help them to satisfy those who cannot devote much time in preparing food. But frequent changes in demands affect the company’s inventory and their production decisions.
- Technological factors: These factors include the advancement of the technology, automation, innovation etc. The Sainsbury has adopted the latest technological trend which online shopping through their website. This has positive impact as attracts more customers. But frequent advancement of the technology increases the cost of the company which is why they have to procure more of funds.
- Legal factors: The legal factors are associated with the implication of the law which are imposed by the system of the country in which they are operating. The legislation has imposed a new tax on some specific variety of food which has impact on their sales and their revenue. This has adverse impact on the company. But they have modified such products which is why the impact of such implication has reduced on the Sainsbury’s.
- Environmental factors: The environmental factors have influence on the businesses as it put pressure on the companies to comply with such impositions. Supermarkets contribute a lot to the carbon footprints because of their transportation from one store to other or from warehouse to stores. This has adverse impact of the image of the company as it contributes to the carbon footprints. But the Sainsbury is so focussed for the use of the plastic and its disposal. Also it considers the waste management techniques which helps them to reduce the impact of such issue on their business (Deshpande, 2018).
SWOT analysis to identify the strengths and weaknesses
The organisations need to consider various internal factors which can affect the organisational operations and their decision making. For such internal analysis the SWOT need to be conducted for the Sainsbury’s:
Interrelationship between internal and external factors: Political: As the company has political stability so it will not affect their relation with the suppliers. While forecasting of demands is not possible because of consistent changes in the customer’s attitude. Economic: The better automation and high investment due to high interest rate the company can easily expand.
Social: The Company consider taste and preference for which they launched campaign of “cook and save”, this help them to grab the opportunity further they will have. Technological: They considered online shopping with the help of efficient workforce which help them to serve their customers in a better way. Legal: Due to automation they have taken the advantage of tax on some specific category of food. Environmental: The Company is efficiently managing the waste which is their competency. This can be utilised by them to expand their business in similar field (Bocken, Rana and Short, 2015).
Key finding and evaluation of impact of business objectives and decision making
On the basis of the SWOT analysis, it is identified that some capabilities can be strengths and weakness both as the company has better automation but their research is not efficient. This has impact on the decision making as they cannot efficiently forecast the demand which affect the achievement of the objectives. Also it is analysed that they do not have any such factor which can help them in taking competitive advantage over others.
From the above report it is concluded that for the organisations it is important to understand different types of organisation. To survive for a longer period of time the company need to identify various environmental factors and their analysis need to be done by them with the help of SWOT and PESTLE. On the basis of such analysis of internal and external factors the decision making can be one as the impact can be identified. Also interrelation of the department helps the companies to determine the complexities and the benefits they have from it.