The undermentioned unit is based on understanding & knowledge of business functions in wider organization context, identification of stakeholder’s relationship and how they shape decision making process.
- Provide explanation of various type size & scope of organizations.
- Develop interrelationship of different functions and their link with organization structure.
- Formulate example to establish both positive & negative impact of macro environment had on business operation of Marks & Spencer.
- Provide strong and weak areas of Marks & Spencer and explain their interrelationship with outside macro factors.
Business environment consist of all the internal as well as external factors that influence commercial activities and functioning of business. These forces involves government, suppliers, stakeholders, customers, political, legal, economical, social, technological and environmental factors that highly impacts operations of an enterprise in both negative as well as positive manner. Proper understanding of business environment components assists manager in formulating effective strategies and policies which helps in accomplishment of predetermined objectives & targets effectively in specific period of time (Adeoye and Elegunde, 2012). The present assignment is based on Marks & Spencer which is leading retail firm of United Kingdom which offers luxury, home and food products to customers. This report covers different types, size, purpose and scope of organisation along with its structure and function. It also includes PESTLE model to determine negative and positive impact of macro environment. Apart from this, SWOT analysis is conducted & five force model is defined. Interrelation of strengths and weaknesses with external macro factors is discussed in this project.
P1 Different types and purpose of organisation
Main objective of every business concern is to develop and offer innovative goods and services to customers in order to satisfy their needs and earn high profits. Various departments of company are working collectively for the purpose of attaining common goals. Three types of organisations are there namely, public, private and voluntary sector. Each firm run with different purpose and contributes in growth and development of economy. Different types of organisations are as follows:
Private sector organisation:
These organisation are owned, run and managed by private individuals. Government involvement in activities and operations of firm are less (Al-Debei and Avison, 2010). These companies administer high quality of goods and services to their target audience in order to satisfy their needs in better and effective manner. They add some innovative features in their products which assists them in attracting large group of customers and yielding maximum profits and revenues. Main purpose of these firms is to generate high profitability ratios which supports them in living luxury life. The best example of private sector company is Marks & Spencer which is a discount super market chain. Firm perform its operations in 20 countries and around 10,000 stores are located at different places.
Purpose of firm:
- To enhance profitability ratios.
- To provide high quality goods to customers.
- To generate high revenues and enhance business operations on constant basis.
Types of private firms:
Partnership: When firm is established by 2 or more people then it is referred as partnership in which all the individuals engaged in business sign an agreement (Aula, 2010). It includes all the terms and conditions on which partners agreed. It assists in reducing chances of conflicts among them. All profits and loss are equally divided between partners as per there share in business.
Sole Trader: These businesses are operated and run by single individual. In these firms, a person is solely responsible for all operations and functioning of company. They bear all losses and enjoy profits solely. As there is single owner of business, they are liable for taking all important decisions regarding functioning of firm.
Limited companies: These are categorized in 2 types, that is, limited by guarantee and limited by share.
Public sector organisation:
Functions and operations of these companies are regulated and monitored by government of respective nation. These firms are not run for the purpose of generating profits but, they also focus on development & welfare of society. TESCO is a public sector firm which is headquartered in London. It is a British multinational retailer which specialize in selling home products, clothing and luxury food products (Bill Pasmore PhD and CMC, 2010).
Purpose of organisation:
- To yield high profits by providing quality products to customers.
- To contribute in welfare of society.
Types of pubic organisation/ types of government:
Central government:It is an apex body who has power to monitor and control all issues of nation. Collection of taxes and currency printing are the main activities performed by central government.
State government: Affairs related to a specific state is monitored and controlled by state government. They frame several plans and policies to promote higher education among people and keeping them aware about all the necessary things.
Local government: Affairs related to particular city, area or town are regulated by local government. This legal authority has less power and authority in comparison to central and state government (Brannon, 2010).
These are non profit organisations whose main purpose is to provides welfare and development to society. For running their operations, voluntary organisations requires to take permission of government. Basically, these are charitable firms which runs with the help of volunteers. The organisation comes under voluntary sector is Oxfam which perform its operations in order to reduce poverty from world. Firm also render food facility to poor and needy population of society.
Purpose of firm:
- Bring solutions to eliminate poverty from world.
- Provide basic food facility to needy people of society.
Types of companies:
Basis of Comparison
These are non governmental firms that are established for delivering services to society.
There are firms which obtain benefits and sharing it among their members by selling goods.
These firms operates for the purpose of earning high profits.
Area of Operations
Restricted or big
Social evolution and welfare.
For motive of arts, science and commerce.
Earn revenues by selling goods and services.
P2 Size and scope of several organisations
Three types of organisations are there which includes public, voluntary and private. All firms have their distinct sizes and scopes. Size defines about the area within which company is operated and do their business transactions whereas scope tells about diverse activities of firm. Due to different objectives as well as purposes, its scope and size differs from each other which are defined below:
Marks & Spencer
Size: It is one of the well known discount supermarket chain which is headquartered in Germany (Cantwell and et. al., 2010). Firm operates around 10,000 stores in more than 20 countries. The estimated combined turnover of company is more than £50 billion. More than 1,60,000 people are employed in firm which assists in offering high quality products to customers in effective and efficient manner as well as contributes in increasing productivity & profitability of company.
Scope: Diversified range of products are offered by company to its potential customers for satisfying their needs and demands. It provides food, sanitary articles, beverages and household goods to customers (Cassell and Blake, 2012).
Size: It is one of the popular British multinational retailer whose headquarters are located in London. Currently, firm has 979 stores all across the United Kingdom and 615 other stores which sell only food products. Revenues generated by company is £10,622 million and around 85,000 employees are working with company to render goods and services to customers effectively.
Scope: Diverse range of goods are sell by enterprise includes luxury food, home products and clothing. They manufacture high quality products and offer to customers for gaining their loyalty.
Size: Some independent charitable organisations are come under Oxfam in order to render services to public. Firm administer their services all over the world with the aim of removing poverty.
Scope: Some services provide by Oxfam includes pro migration, poverty reduction, disaster relief, advocacy, policy research etc. Firm render food relief facility to poor people by help of volunteers.
Scope of various organisations:
Micro: These are firms which are operated by single individual for the purpose of earning profit in order to feed their family members. Their motive is to fulfil basic need which are essential for survival.
Small: These are the organisations which are owned and managed by one or more then that individuals for the purpose of earning profit for livelihood and improving their living standard.
Large: These are the companies that are operated and managed with the motive of earning higher profits and brings economic stability within country.
P3 Link between functions and objectives of organisation
Marks & Spencer is a well known British retailer which offers various products worldwide. Main objective of company is to generate high profits as well as contribute in society welfare (CGA, 2010). For effectively meeting needs and requirements of customers, huge efforts are made by firm. In an organisation, several departments are functioning together such as production, human resource, marketing, finance etc. Each department perform different roles and responsibilities but, work for the common purpose, that is, attainment of firm's objectives in specific period of time. In Marks & Spencer, these departments works collectively for performing functions and operations smoothly. Collective efforts of all functional areas aids in attaining goals effectively. Flat organisational structure is followed by company in which management levels are limited between front line and administrative employees. This structure assists in decreasing bureaucracy in organisation and make workforce more skilled and competent by authorizing them for making decisions. Various functions performed by Marks & Spencer are:
Human Resource Management Department: It is one of the major department of an organisations which performs various important functions. Contribution of this functional department is high in growth and success of company. Managers play crucial part in determining manpower needs of firm (Charter, 2017). They identify current needs and anticipate future one in order to recruit and hire right number of people within company. Selection of candidates is done on the basis of their competencies and skills. Individuals with great experience and knowledge is hired so that goals and targets can be accomplished successfully. They also render training to their manpower so that, they are able to deal effectively with challenges. Effective learning programme provides an opportunity to workforce to enhance their skills and gain new knowledge. It assists in increasing motivation of employees and they are encouraged to perform their duties in more effective manner. Several activities are conducted by human resource manager of Marks and Spencer which helps in increasing engagement of employees in activities of company. This will increase team working and leads the firm towards successful attainment of objectives of company.
Finance department: It is an important that plays major role in growth and success of company. Finance is essential component by the help of which activities and operations are performed effectively. Every firm needs to maintain adequate finance so that at the time of contingency, firm can easily manage their working. In Marks & Spencer, finance manager has the responsibility to allocate funds for various activities to different departments and formulate budget. They ensure to maintain appropriate amount of money so that day to day operations run effectively. If adequate funds are available with firm, it will assists in accomplishment of goals and targets (Chavis and et. al., 2011).
Marketing department: This department assists in enhancing sales and increasing profits of company. Research is conducted by marketing managers for getting information regarding prevailing market trends as well as needs and requirements of customers. Effective plans and strategies are designed and executed by them in order to promote their goods and services in market. Manager of Marks & Spencer making use of various promotional tools in order to communicate its value and benefits to customers. This will assist firm in attaining high growth and success and enables it to attain objectives effectively. Effective marketing helps in building large consumer base and aids in gaining high consumer loyalty. This will ultimately increase profitability of firm and leads the firm towards attainment of objectives.
Production and operations department: Goods and services are produced under this department. It is concerned with transformation of raw materials into finished goods. One of the main function of this department is to control cost by making optimum utilization of resources (Craig and Campbell, 2012). In Marks & Spencer, high quality clothes are manufactured for customers in order to meet their needs effectively. All the activities and operations are monitored by operations manager in order to ensure delivery of high quality goods. Production & operations department assists in increasing productivity as well as profitability of company and helps in attaining its objectives.
Function based: Activities and functions are the main basis on which departments of firm are divided. Finance, human resource,marketing, production etc. are main division basis.
Geography based: A particular region or area is the basis of segmentation. Needs and desires of customers living in various regions are identified by firm in order to effectively meet them.
Consumer based: Buyer's behaviour is the basis on which segmentation is done. It promotes innovation in firm.
Product based: Products that are offered to customers are the basis on which segmentation is done. Several goods are offered by Marks & Spencer to their customers such as clothing, luxury goods etc.
Types of organisational structure:
- Divisional: In this type of organisational structure, firm groups each function into division. This kind of structure of company brings operational flexibility within firm. Each division includes all required functions and resources that supports geography or product line.
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