Internal and external factors that affects overall performance of a company is known as business environment. Factors that are mainly included in the business environment are suppliers, competitors, owners, employees, government laws and other market and economic trends(Hilton and Platt, 2013). In this report, company chosen here is General Motors which is UK based Multinational auto-mobile manufacturer industry. They are indulge in designing, marketing and manufacturing of vehicle and it's parts. In this project, topics topics which have been discussed here is, different types and purpose of organisation, size and scope of organisation and their link with it's functions and objectives. By using PESTLE analysation evaluation of factors that put impact on business in negative and positive manner are also described in this project.
1 Different Types and Purpose of Organisation
A public organisation is mainly a sector which is owned and regulated by government and work to provide public services to citizens. Services that are provided by public sector not only benefits an individual but also to society(Bharadwaj, A. and et.al., 2013). They are mainly known as non-profit organisations. In this regard, Crown Prosecution Service which is a principle public prosecution agency.
Purpose: Its function is to conduct criminal prosecutions in Wales and London. Major responsibility of Crown Prosecution service is to furnish legal advices to investigation agencies and police.
The private sector is a part of the national economic system. It is mainly owned and controlled by an individual or group of people. Their main intention is to earn profits. In this context, General Motors which is a multinational corporation. It is the largest UK automobile manufacturer company.
Purpose:- General motors mainly indulge in designs, market, manufactures and distribution of vehicle and it's parts. Main purpose of this company is to produce affordable electric cars(Berg, E. and Kilambi, K., Siebel Systems Inc, 2014). Company produces highest quality of auto mobiles worldwide in the market.
The voluntary sector is mainly a non-profit organisations which work towards benefit of society and to create social impacts. Their main aim is to provide help to society and citizens rather than to generate profits. Main purpose of voluntary sector is to benefit society by performing social activities. They are non-governmental and non-profit organizations which aim toward benefit of society. Their main aim is to generate relationship with civil society. In this regards, Oxfam which is a confederation of 20 different independent organisation for charity.
Purpose: The main purpose of Oxfam is to erase global poverty. It is a majorly a non profit association. Their main focus include, poverty eradication, disaster relief, policy research and pro-migration.
2 Size & Scope of Different Types of Organisation
Crown prosecution is a non-ministerial government department which helps police and investigation agencies by providing them legal advice.
Size:- Approximately 6,000 people are currently working in crown prosecution services. With annual budget of more than 592 million euro.
Scope:- Crown prosecution services mainly conduct investigation regarding to criminal case that is examined by police. Hence, according to collected data they prove a person either right or wrong.
General motors is a UK multinational corporation that mainly indulge in manufacturing, designing and distribution of vehicles and their parts. This company was founded by William C. Durant.
Size:- General motors are currently manufacturing their vehicles in 37 countries and more than 180,000 employees are working in this. Their main products are auto mobiles, auto mobile parts and commercial vehicles. A number of locations in which the company provide their facilities are 396.
Scope:- General motor is having scope to provide low-cost products. They can innovate new products and services and provide it them in affordable range to their customers. They can serve their customers in more than lot of geographical locations.
Oxfam is a charitable organisation which works towards eradication of poverty, disaster relief, policy research and pro-migration. They are an international non-government organisation and are serving worldwide.
Size:- Oxfam is mainly alliance of 19 organisation and are working in more than 90 countries. Company is having their headquarter in England.
Scope:- Oxfam focus on eradication of poverty and injustice. Their main aim is to help citizens when there is lack of resources. They have implemented strategies to fight against causes of famine. They can provide their humanitarian services in remaining needed areas.
Legal Structures of:
There are mainly two types of public firm structure that are mentioned below:
- State Government: Sharing of political rights with national level authorities are done in this type of government(Schaltegger, Lüdeke-Freund and Hansen, 2012). But they have right to take authorized decisions. They have basic responsibility to develop state legislation. They have authority to approve state budget.
- Local Government: This government mainly perform their function under one tier system or two tier system. They have responsibilities of regular re-structuring. There are basically five local authority which includes country council, metropolitan council, district council, London boroughs and unitary councils.
- Central Government:Central government is supreme and highest governing authority in a unitary state. They create new rules and policies which is require by other governing bodies to function.
Private firms follow two types of structure that are described below:
- Sole proprietorship: It is one of the most simplest form of business which is owned and controlled by single person. Sole trader, individual entrepreneurship is another name of this form of structure(Ballard, and et.al., 2012). Sole trader is responsible for all debts and profits. Book keeping, home healthcare, financial planners, computer repair-services, catering company, freelancer writer are some examples of sole proprietorship. A sole proprietors can perform their work as an independent business operator. They have responsible to pay tax specific to their business and are fully responsible for debts and losses.
- Partnership: In this type of private sector, there is an agreement between two or more than two public or private sectors. All roles and responsibility are mentioned in a partnership deep which is duly signed by partners(Werbach, K. and Hunter, D., 2012). This will benefit in taking systematic decisions and resolving issues and conflicts which may arise in future between any partner.
There are mainly three sectors in voluntary organisation that are:
- Trust: A trust is form of Corporation which is especially known as commercial banks because it is formulated to achieve as a guardian of agencies and trusts. Responsibility of managing investments, assets,pay bills, medical expenses and charitable gifts are done by trustee.
- Unincorporated association: It is a non-profit association which is created when at least two individuals give their consent on pursuing a common legal purpose. It is basically a informal organisation in which people act together for sharing interest rather than generating profits.
- Company limited by guarantee( CLG): It is a company where there is no shareholders but their members acts as a guarantors. In this type of sector member have to contribute a decided amount. They are liable for profit and losses according to their invested shares in a company. These companies are mainly used for charity propose, clubs and community projects.
3 Relationship Between Different Organisational Structures
Organisational structure is refers to a process of directing certain business activities with a motive to achieve organisational goals and objectives(Vitale, R. P., 2011). In this report, it will helps General Motors to identify the working of chain of command in different levels of an organisation. The nature and relationships between different organisational is explained as under:
(a). Marketing and Finance
Marketing and finance plays a crucial role in achieving specific goals and objectives of an organisation. The basic function of finance is to maximise company's profits, whereas marketing emphasis on increasing sales volume of a firm by promoting its particular products and services in a business market. In this context, these functions are inter-related in chosen company General Motors, as to promote their products and services in a business market they will need appropriate funds, which are arranged by the finance department. So both finance and marketing go side by side and performing their function in an organisational structure to achieve a common goals and objectives.
(b). Human Resource Department and Finance
Human resource and finance department are important for organisational objectives as human resource works on making an organisation effective and finance department works on making an organisational structure financially stable(Janita, M. S. and Miranda, F. J., 2013). In this context, the HRM department of General Motors is to support its employees in every situation and helps an organisational structure in building a healthy and positive work environment, this will result in lower employee's turnover which indirectly gives advantage to a finance department. So human resource and finance department of General Motors works to achieve a common goal and helps each other in making effective organisational structure in order to improve overall performance of an organisation.
(c) Production and Finance
The production department of an organisation involves in manufacturing products and services in accordance with the customer wants and needs, whereas the main objective of finance department is to arrange required funds for an organisation. In this context, product and finance department of General Motors are related to each other because the cost required in producing a particular products and services is managed by finance department. This inter relation between production and finance will helps General Motors in achieving their organisation objective and also in building efficient organisational structure.
So these inter-related organisational functions will helps General Motors in achieving their organisational objective as all functions are working for a common purpose.
4 Analysation of Structure, Size, Scope of Different organisation Linked to Other Business Objectives
In a business environment all the internal and external affects functions of a company. Factors like size of the organisation, structure of a business firm and scope of a business unit are directly linked to company objectives, product and services which are offered by them. In this context, evaluation of different types of organisations have been done:
In public sector, Crown prosecution service which perform their function by providing legal advices to police and investigation agencies. Their have more than 6000 employee working under them. They are serving for a propose of non profit motive which will help them to gain loyalty and enhance their job performance. By gaining loyalty and respect from people motivation level of their employee will increase which benefit them to expand their area of servicing. By saving people who are wrongly subjected to criminals and proving crime on person who are really guilty company can increase their efficiency of giving advices.
In private sector, General motors which is UK multinational corporation which exercise their functions in making and designing of auto-mobiles and their parts. More than 180,000 workers are employed in this company. Having this large number of employees range will help general motors to perform their functions very efficiently. This can help to increase productivity of company. Company is performing in 37 countries and are providing their services in 396 locations. This will help general motor to earn great amount of profits by acquiring new costumers from different geographical locations.
In Voluntary sector, Oxfam which is a non profit organisation works to satisfy people by providing them resources when there is any need. They are perform their function not to generate profit but to help people when there is a need. This will help them to enhance their goodwill.They are providing help in more than 90 countries which will help them to increase their area of service and will generate feeling of humanity in their volunteers and they will work with more motivation. This will benefit company to enhance their performance level.
5 Critical Analysis of Different Types of Business Structures and Inter-Relation of Different Organisational Function
A business structure comprises of various department which works together to achieve common goals and objectives(Wheelen, T. L. and et.al., 2017). There are three types of organisational structure in a business market.i.e. public, private and voluntary. The critical analysis of business structure follows by chosen organisations are:
(a) Public Sector
A public company is owned, managed and controlled by the government with a motive to provide benefits to individual and society. In this context, the chosen public sector company is Crown Prosecution Services follows corporate governance structure which is supported by audit committee and government executives. In this structure rights and responsibilities are distributed among various stakeholders and participants of the organisation, which leads in achieving their societal objectives and monitoring performance. There are various complexities for the company having corporate governance structure which are:
- Ownership and management Separation
In this context, the chosen organisation Crown Prosecution Services is controlled by board of directors and the officers in which there is no role of its shareholders, which can leads to create conflicts in a business entity. It will makes an organisation to suffer in terms of its market value as there is separation of management and ownership.
- Misleading financial statement
As the chosen organisation Crown Prosecution Services is managing its business activities, which sometimes leads in presenting financial facts and information in in an unappropriated manner that can misleads its investors. It will cause a harm on company's revenue in a business environment.
(b) Private Sector
A private company is run by individual with an intention to generate profits. In this context, the chosen private sector company is General Motors which follows flat organisational structure. In this structure there are few or no individuals between management and staff members. The complexities of having flat organisational structure is explained below:
- Limit productivity
In regard to General Motors, as they are following flat organisational structure there will be no close supervision on a particular task because there are less number of individuals, so it will simultaneously limits their productivity as compared to their competitors.
- Bad decision-making
This structure will cause bad decision making situation in General Motors because they relies majorly on the expertise of their front line staff. It will cause to decrease in their performance level in a business environment.
(c) Voluntary Sector
A voluntary sector company is mainly a non profit organisation, which gives more emphasis on achieving objectives related to society. In this context, the chosen voluntary sector organisation is Oxfam, which follows flat organisational structure. The complexities of having flat organisational structure is explained below:
- Wastage of time
In this context, it is time consuming for the chosen organisation General Motors as they are limited number of individual in the management process, so it takes time in ensuring that the idea is duplicated or not.
- Not scalable
This organisational structure is only suitable for small organisation but General Motors is established at a global level, so there will be an difficulty in measuring overall growth of an organisation.
Inter-relation functions plays an important role in every organisation whether it is public, private or social(Ullah, A. and Lai, R., 2011). In this context, there are many departments in General Motors which are inter-related with each other, as they are working together to achieve a common purpose. For instance finance department of General motors is helping its Marketing department by generating funds for their promotion and advertising expenses.
As per above mentioned project, it has been concluded that business environment plays a very essential role in each and every management organisation to perform effectively and efficiently. It is a function which involves all macro and micro organisational factors that affect any business concern. According to this report, there are various types of organisation structure as per their size, scope and structures. As per this report, it have been analysed that SWOT and PESTLE analysis theory is best for the management. Also, there are some business factors which affect decision making have to be taken care while studying various macro environment forces. Also how these factors are related to decision making has been explained in this report.
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