Business environment is sum of external and internal factors which have influence over the business operations. It is an obligation upon manager of organisation is to keep these factors in mind while making decisions. Internal factors are related to organisational capacity which are under control of the management. To attain success and accomplish their objectives required to adopt such measures which strengthen their internal position. External factors are such which are not under the control of management such as political, economical, social, technological, legal and environmental. It is important to oversee the impact of all these factors to attain sustainability in future period of time. Unilever is consumer goods company which is headquartered in London (Avramenko, 2012).
In the present report explain about different types of organisation along with their purposes and legal structure, size and scope of various organisations, relationship exist between different functions performed within the organisation along with their link with objectives and positive and negative impact of external factors. Also, Internal analysis to identify strength and weaknesses and interrelation of strength and weaknesses with macro environmental factors.
Getting Top Grades is No Longer a Dream for You.
P1 Types and Purpose of private, public and voluntary organisation and their legal structure
There are different type of organisations are working in environment. These organisations are known as public, private and voluntary. All the organisations having their different objectives and legal structures. It is the duty of the manager of organisation is to follow such structure while performing their functions. Types and purposes of all these public, private and voluntary organisation is defined below:
This will includes all the organisations which are working or the purpose of earning profit for the benefit of their different stakeholders. These kind of organisations are privately owned by individual and government of country is having no significant control over them. There are many restrictions are imposed by the government on the working of such organisations and they are required to follow while operating their functions (Bovee, Thill and Raina, 2016).
Unilever is consumer good company which was established in 1930 in London UK. The main products which are delivered by organisation includes food and beverages, cleaning agents and personal care products. It is analysed that Unilever is Europe's seventh most valuable organisation and also world's largest organisation in terms of revenue by 2012. It provides their functions in more than 190 countries with the help of more than 169000 employees.
Purpose of Unilever
- To earn huge amount of profits for the benefit of stakeholders
- Attaining the target of zero impact upon environment through their business functions
- Improvement in the living standard of individuals of society
- Development of the highest standards of corporate behaviour
Legal structure of private organisation
Partnership:It is a type of business which is formed by the group of individuals for the purpose of attaining common business objective (Cai and Yang, 2014). All the partners are equally liable for the liabilities which are created as per the performance of business functions. The profit and loss is shared equally among all partners or as per the ratios which is decided in the agreement. The liability of all the partners is limited in nature.
Sole proprietorship: This kind of business is setup by single person. The main objective of this type of business is to survive in market. The liability of this single person is unlimited towards the business. The owner of organisation has total control over business operations.
Limited companies: This will be of two types limited by shares and guarantee. The liability of all the members is limited to the extent of unpaid amount of shares and guarantee which is required to pay off at the time of call. Such organisations are separate legal entity from their owners (Chavis, Klapper and Love, 2011).
Advantages and disadvantages of private company
Public organisation:The will includes such type of organisations upon which government of nation has significant control over functions. The different type of activities which are majorly covered under public sector is related to police, military, transport, education, infrastructure, healthcare etc. These organisations are working with the aim of providing maximum benefit to the individual of society.
NHS is public organisation which provides services in all over the world. The main aim of organisation is to provide free medical facilities to the poor people of society. The other services which are provided by NHS includes optical and dental care. They wants that no body is deprived from the basic medical facilities (Commander and Svejnar, 2011).
Purpose of NHS
- Provide basic medical facilitiesto the individual of society
- Attainment of quality in their services fro the optimum care of patients
- Act as the voice of different health providers to provide information regarding different policies related to health aspects
Legal structure of Public company
- Central government: They provide functions related to operation of the department of state and central government departments
- State government: They provides functions related to oversee of the functions of state government agencies (Cuervoâ€Cazurra, 2011).
- Local government: Their main aim is regarding functioning of different operations of public organisations
Advantages and disadvantages of public organisation
Voluntary organisation: This will includes all such organisations which are operates their business activities for he purpose of development of society and not for earning profits. All the functions are provided with the helps of volunteers. To form such kind organisation required to take the approval of government and follow the guidelines provided by them.
Oxfam is voluntary organisation which formed with the aim of removing poverty from the society. There are many activities which are simultaneously provided by this organisation includes advocacy, disaster relief, policy research, pro etc. This organisation was established in 1942 and now provides their services in all over the world. They also provide food relief to the poor individuals of society with the help of volunteers and government of England (Gebauer, Paiola and Edvardsson, 2010).
Purposes of Oxfam
- Helps in removal of poverty from society
- Provide secure future to the individuals of society which is free from poverty
- Holding up educational programmes which helps to spread awareness among th individual of society
Advantages and disadvantages of voluntary organisation
P2 Size and scope of different organisations
It is observed from the above analysis that organisation is of three types mainly which are defined as public, private and voluntary. The size and scope of organisation depends upon their nature (Halbert and Ingulli, 2011). Size of organisation covers about the business operations which is have in different nations along with their capacity of earning revenue. On the other hand, scope of organisation provides the information about different type of services which are provided by them. The size and scope of these different type of organisation is defined below:
Size: Unilever is transnational consumer goods company which provides diversified products such as food and beverages, cleaning agents and personal care products. The total number of brands which carried by this organisation is around which helps in earning the turnover of 50 billion euros in 2016. In terms of profit, this organisation is considered as world's largest organisation in 2012. The revenue which is earned by organisation in 2017 is around $62.622 billion.
Scope: This will defines about the products and services which are provided by the organisation. The different type of offerings which are provided by Unilever includes personal care products, food and beverages and cleaning agents.
Vision: The main vision of Unilever is to build sustainable living common place which is proved as the best way to to grow business with continuous rate. Here, more emphasis provided on sustainability in terms of consumer services (Hamilton and Webster, 2015).
Size and scope:NHS was founded in 1948. The total number of employees working in NHS is around 1.5 million. They provide health facilities irrespective of their wealth. The other services which are provided by NHS includes Optical and dental care. The services which are provided by organisation is free of cost to the poor individuals of society for improvement of their living standard.
Size and scope:This organisation is established in 1942. The total number of charitable organisations which works under common brand name are more than 20. all these working for removal of poverty from society. The type of services which are provided by them includes advocacy, disaster relief, policy research, poverty eradication and pro-migration (Hilton and Platt, 2013).
This will includes determination of different stakeholders along with their power of influence upon business operations. This can be understood from points given below:
- High power – fascinated people
- High power – less fascinated people
- Low power – less fascinated people
- Low power – fascinated people
P3 Interrelation between different organisational departments and their link to objectives
The major objective of any organization is for all its workers to work as a team. In large organization workers are organized into their department, according to a specialisation. The organizational structure defines the relationship and interaction between the employer and employees to identifies how the chain of command runs through at different levels. Organizational structure can be categorized into two different dimensions that is vertical and horizontal (Klapper, Lewin and Delgado, 2011). The vertical organization structure can flow in two ways such as downward. It includes top to bottom, whereas, in upward the direction flows from bottom to top. In a horizontal organizational structure involves the flow of direction in different department. The major objectives of an organizational structure are describe in detail as:
- Flexibility: Through, organizational design helps to provide flexibility for decision making, in their authority and departmentalisation. This will increase the efficiency level of an individual in the Unilever company and bring the accuracy or effectiveness among the employees.
- Coordinating the components: In the organizational structure, managers need to tie all the departments together to ensure coordination and collaboration across the departments. It assists in arranging the employees according to the internal environment of an Unilever organization (Osterwalder and Pigneur, 2010).
- Integrates elements: This includes growth, evolve and respond to changes. For instance, the strategic need to enhance the quality services and creating teams or re-delegating authority.
The interrelation between the different departments are as:
Marketing Department: This department is the main part for producing the sale in a marketplace. Hence, Unilever will responsible for the demand of products in a competitive world. It focuses on the demand and the needs of a customers, targeted sales and research of the marketplace (Pikka, Iskanius and Page, 2011).
Financial Department: It will responsible for the financial budget of a company. This includes the allocations of resources, resource estimation and scheduling as per the requirements.
Organizations are set up in specific ways to accomplish the different goals, it helps to overcome from the hinder and its progress towards completes their goals. The different organizational department in the organization structure of Unilever are discussed in below:
Organization departmentincludes the following department are as:
- Functional Department: This type of organizational structure works on the management functions in a specific manner. The common departments are as follows:
- Planning: It refer to the planning for a future. It involves what to do, when to do, how is to be done and by whom should be done. This bridges the gap between the present and the future needs.
- Organising: It refers to the arrangement of the department which can help in improving the efficiency as the work is in organised form. This will enhance the abilities and the skills of the subordinates. It includes the authorities, responsibilities and accountability of an individual employee.
- Staffing: This function of an organization is the most important structure in the business. It includes the manpower and human resources of the company which will increase the productivity for expanding the business organization (Prajogo, 2016).
- Controlling: It measures the actual performance with the standard performance of a company. Through, this corrective measures can be taken for controlling the performance of the business.
- Divisional Department: This structure is a set of division in which a business is divided into a smaller groups, which can easily managed by the supervisors of the organization. It offers greater flexibility to a large company with many divisions.
- Matrix Department: The third main type of organization structure, it is a hybrid of divisional and functional structure. The advantage of a matrix structure is that employees have responsibility not only for their department but for organizational projects. It focuses on the company's resources on the specified project, thus enabling better planning and controls.
- Line and Staff Department: In this type of organization structure, it is used for large enterprises. It is a modification of line organization and it is more complex than line organization. But, the power of command always remains with the line executives and staff supervisors guide, advice and council the line executives. The whole organization is divided into different functional areas to which staff specialists are attached.
P4 Impact of macro-environmental factors
Macro environmental analysis helps in ascertaining the impact of external factors upon business operations which is understood from the points defined below:
Political and legal factors :-
Positive Impact :- In many country's government offer trade free facility to men for economic development of nations. Maintain good relationship with government give opportunity to Unilever company for enhancing and rising business at internationally ,With the help of stability in political factors like tax benefit.
Negative Impact :- Purchasing power of buyers are weak so that they are not buy expensive goods. Consumers demanded for a cheap products are big problem to Unilever company because negative impact on net profit and cash flow. In environment tax reforms, policy and regulation are changes according to government they factors are negatively affected to company product (Pulver, 2012).
Economical and social factors
The factors which are included in this point are related to education, flow of cash, age, inflation and deflation rates etc.
Positive impact: If education is good and flow cash is high in an economy then this will have positive impact upon business. This will provides opportunity is to easily expand business operations.
Negative impact: Presence of deflation in an economy has negative impact upon demand and sales of product.
P5 Internal analysis of organisation for identification of strength and weaknesses
Internal analysis is the process which includes the activities related to identification of aspects which are present within the organisation and turns into their strength and weaknesses. The tool which is basically used by the management of organisation regarding internal analysis is known as SWOT analysis (Reed and et. al., 2013). This will enables the manager of organisation is easily know their strength, weaknesses, opportunities and threats. This will provides the opportunity is to rebuilt their strategies according to their capabilities and attain success in future period of time. Unilever is multinational consumer goods company which deals in diversified goods such as food and beverages, cleaning agents and personal care products. There are large number of employees are working in organisation which is around 169000 who serve their services in more than 190 countries. It is observed that Unilever is seventh most valuable organisation in Europe and oldest multinational companies. The SWOT analysis of Unilever in respective of identification of strength and weaknesses is defined below:
Global organisation having operations in more than 190 countries: It is observed that Unilever is enjoying their business activities in more than 190 nations which is beneficial in making of high international brand image of organisation (Reinhardt and Stavins, 2010).
High brand recall among customers: Unilever is established their business in 1930 which facilitates over the years is to create their unique image in the mind of customers which is results in great strength for organisation as their brand products are first preferred over others.
Deep brand portfolio with various range of products: There are large number of products are provided by Unilever n market such as personal care, cleaning, food and beverages etc. They work with having the aim that no body goes empty handed. Such kind of deep portfolio is always the strength of organisation.
Heavily funded research and development activities: There are large number of funds are invested by the organisation on research and development activities to produce new and innovative products as per the preferences of customers. This will provides the opportunity to become most loved organisation in between customers.
Expertise in distribution channels: There are large number of distribution channels of Unilever which enables them to serve in every corner of different nations. This will be great a strength for organisation to effectively cater the needs customers on arrival of demand.
Imitable products: All the products which produced by organisation are imitable in nature which is easily copied by others in terms of features, design and utility. Such kind of issues has direct impact upon their brand image and sales figure.
Limited business diversification: It is observed that Unilever has weak diversification of business operations. They have broad product mix but deals only in consumer goods which is limited nature.
Huge dependence upon retailers: The sale of the products of Unilever is highly depends upon the retailers as they have direct impact upon the buying behaviour of consumers. Such dependency turns into their weakness.
Availability of substitutes and low switching costs: It is observed that large number of substitute products are available and cost efficient to switch from one brand to another. This will results in the weaknesses of organisation as they have to face high amount of competition in market.
High demand in growing economies: There are large number of developing nations where Unilever has the opportunity to place right products in right time for improvement of overall living standard of the individuals of society.
Growing demand of health conscious products: The Unilever has the opportunity is manufacture healthy food items as the large number of people in community becomes health conscious and like to consume healthy food which is good for health. This will provides the opportunity to explore new area.
High amount of competition: It is analysed that competition is highly increased in market. There are many big retail outlets which comes up with their own brands and Unilever is still dependent upon retailers which is a big threat in future period of time.
Growing popularity of Ayurveda products: The growth in Ayurveda products is seems to be high in current period of time which is big threat for commercial organisations like Unilever. In this this regard they takes one step forward and launch Ayush lever but still need to go long way to sustain in market in this segment (Savrul, Incekara and Sener, 2014.).
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
Macro-environmental factors are such which are present within external business environment and not under the control of the management of organisation. Such factors are basically known as political, economical, social, technological, legal and environmental. From the analysis of these factors it is observed that there is significant relationship is present of these factors with the strength and weaknesses of organisation. This will improves the understanding of manager in respect of different aspects which enables them to formulate new and innovative strategies through which future objectives are easily achieved within stimulated period of time. The relationship between both these macro-environmental factors with strength and weaknesses is understood from the points which are defined below:
Strength-opportunity strategy: It is observed from above internal analysis that Unilever has wide product portfolio and business operations in different nations. This strength of organisation provides the opportunity is to expand their business in many other developing nations where more demand is present regarding consumer products. This will enables the organisation to attract the new customers and improve their customer base to earn large number of profits through increase in their number of sales.
Strength-threat strategy: The major threat which is faced by Unilever is related to high amount of competition and emergence of Ayurveda products. It is seemed that the core strength of organisation is heavily funded research activities and effective distribution channels. This will provides the chance to overcome from threats regarding high amount of competition through production of new and innovative products which are unique in nature and having different identity in between consumers.
Weakness-opportunity strategy: The weakness of Unilever is that they are highly dependent upon retailers. From this analysis it is clear that power of retailers is high and having significant influence over the operations of organisation. But in future this will helps to grab the opportunities in developing nations through optimally utilise the power of their distributors.
Weakness-threat strategy: The weakness which has adverse impact upon the business operations of Unilever is imitablity of their products. The products which are manufactured by organisation are general in nature and easily copied by competitors. This will turns into threat as number of competitors is increased due to imitable nature of products (Shigang, 2010).
It has been concluded from the above report that business environment is wide in scope where different type of organisations are working such as public, private and voluntary. All these organisations are different in nature and purposes. The main aim of public organisation is provide optimum quality products to society and private organisation is having the aim of earning large number of profits for the benefit of stakeholders. There are different departments are functioning within an organisation which are known as marketing, finance, human resource etc. which are interrelated to each other and helps to achieve organisational objectives. Internal analysis of organisation helps in identification of strengths and weaknesses through which potential opportunities are easily grabbed in future period of time.
You May Also Read: Marketing Essentials of ALDI
- Avramenko, A., 2012. Enhancing students' employability through business simulation. Education+ Training.54(5). pp.355-367.
- Bovee, C. L., Thill, J. V. and Raina, R. L., 2016. Business communication today. Pearson Education India.
- Cai, S. and Yang, Z., 2014. On the relationship between business environment and competitive priorities: The role of performance frontiers. International Journal of Production Economics.151.pp.131-145.
- Chavis, L.W., Klapper, L.F. and Love, I., 2011. The impact of the business environment on young firm financing. The world bank economic review. 25(3). pp.486-507.
- Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm performance. The Review of Economics and Statistics.93(1). pp.309-337.