Different Types Of Organization In The Economy
There are different types of organization in the economy and each has their own purpose and nature of existence. In this task three different organizations are chosen. Wilko is chosen as private company, NHS as Government Department and Children First is selected as a charity organization.
Different types of organization and their goals and objectives
Private Limited Company
Wilko is one of the private limited company of UK and deals in retail business of home wares, consumer products, textiles and household goods. Till 2013, company has 372 stores in the entire nation and offering its range of products from last 80 years (Wilko:Visions and Values, 2014). Goal of the company is to sell right products at right range of price to its customers and promises its customers that where there is Wilko there is way. Objective of the company is to give first preference to their customers, solving of their problems and to know their stuff. Wilko also wants to accomplish its objective to shape its future and to work together and to show their passion to their customers (Wilko:Visions and Values, 2014).. Purpose of the private limited company is to earn high profit margin from higher sales revenue. Advantage of private limited company is that they only work for profit motive and can follow their own rules and regulations in business. Disadvantage of this type of organization is that they are liable for taxation duties (Fulford, 2013).
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Government Departments are those organizations which are managed and control by the government of the country. NHS is one of the major government departments of the country and it is owned by the government of UK. Goal of the company is to provide health care services to people of the country at free of cost or within a reasonable price (Matuszek Dennis and Schraeder, 2010). Objectives of this government department are not to achieve higher profit and their main motive is to give best treatment to patients. These are provided in terms of hospital service, emergency service, dental service, mental service, urgent care, pharmacy etc. services are offered to people of UK at large scale (NHS services, 2014). Advantage of government department is that they work for only welfare of public and do not have any objective of achieving nay higher profits (Wild, Wild and Han, 2014). On the other side, disadvantage of government organization is that it performs under the rules and regulations of government which are not so rigid and strict in compare to private limited.
Child First is one of the charity organizations of UK which provides the safe and secure services to children. This charity organization is also known as (RSSPCC) Royal Scottish Society for Prevention of Cruelty to Children (RSSPCC). Main goal of the organization is to make significant change in the external environment of economy in terms of development of children (Children 1st Strategic Plan 2013-2018, 2014). These are in terms of to cure the children from poverty, exploitation, abusive practices etc. Main objective of the Children First is to help both children and also young people by maximizing their benefits and giving better ways for their smarter future. Advantage of charity organization is that they do not have to generate revenue as they get funds from government, organizations and also from public (Kunnanatt, 2011). But disadvantage of these charity organizations is that they totally depend upon charity and funds and does not have any other source of income (Chaiprasit and Swierczek, 2011).
From the above task it has been concluded that different types of organization have different goal and objectives. As some are working for customer satisfaction to achieve higher revenue, some are not for profit organization which works for beneficial of general public and society.
It is essential for every business to meet the objectives of their stakeholders as they play very important role in the business of company. In this task, Shell one of the leading oil company of UK is taken to examine that how they meet the objectives of their stakeholders and also the explanation is given regarding their roles and responsibilities.
Describing the extent to which the shell organization meets the objectives of their stakeholders
Shell effectively meets the objectives of their stakeholders by fulfilling their needs and requirements. The major stakeholders of the company are owners, employees, environmental groups and government (Leonidou, et. al., 2010). Other stakeholders of the Shell are customers, suppliers and society.
Owners: Owners are the key stakeholders of the Shell as they are the primary stakeholders which play important role in success and development of the business. Shell meets their objectives by managing their business operations in appropriate manner and achieving the goals and objectives of the business (Haigh and Brubaker, 2010). They also fulfill their needs and demands of generating higher profit margin.
Employees: All the major functioning and business operations of the company are performed by the employees of Shell only. It is essential for the company to meet the objectives of these stakeholders (Huettinger, 2014). They are accomplished by the company by giving higher salaries, bonus, better working environment and also many other facilities and incentives to employees (Cross and Miller, 2011).
Environmental Groups: It constituents of those stakeholders which are responsible for the protection of environment, degradation of pollution and emission of gases and hazardous substances (Manchanda, 2014). Shell also fulfills the objectives of these stakeholders by controlling and limiting the emission of carbon footprints, waste management and also by minimizing the hazardous and toxic substances.
Government: Working in any economy, it is vital for Shell organization to accomplish the objectives of government and also to work on the basis of country’s rules and regulations. Shell accomplishes the objectives of government by conducting their business of oil in accordance with the government policies (Leonidou, et.al., 2010). Submission of annual reports and financial details to government department and also follows the law of government related to corporate social responsibility, safety acts, employees acts and many other legislations of government.
Responsibilities that Shell organization have and strategies they employed to meet their responsibilities
Shell is from one of the major oil company in the world and working at global level, company has effectively employed its strategies to meet the responsibilities of employees and ethical issues.
Health and Safety: Shell very efficiently fulfill the responsibility related to the health and safety of employees as they follows all the rules and regulations related to health insurance of employees and employment of safety policies (Daniela and Blettner, 2011). They also follows the legislation of Health and Safety at work 1974, which depicts about the fulfilling the responsibility of giving high standard for health and safety in their business environment (Botha, Kourie and Snyman, 2014).
Equal Opportunities: In terms of equal opportunities, Shell also achieves its responsibility. They treat their employees with equal ease and similar opportunities for their employees. Practice related to gender discrimination, sex, age, race, belief etc. They also followed the act of Equal Opportunity Act 2010, which describes about achieving the responsibility of protection of employees from discrimination at organization (Lawton, Rajwani, and O'Kane, 2011).
Pollution: Shell is also follows the responsibility of ethical issues which are related to the pollution which is one of the major issues and also important for all the companies to follow this responsibility (Jennings, 2010). Shell is working on the improving the performance of environment by minimizing the emission of harmful gases and also minimize the excessive use of scare resources such as water and energy. In terms of pollution, Shell has controlled over the emission of polluted gases, minimization of carbon foot prints (Stonehouse Campbell and Hamill, 2011). They also have controlled over hazardous and toxic substances and have employed recycle waste management system in their business.
Global Warming: It is one of the primary ethical issues which is considered at global level to decline the effect of carbon dioxide gases in earth atmosphere and also to control the uncertain climatic change in the environment (Chaiprasit and Swierczek, 2011). Shell has control over the emission of toxic carbon substances and gases which are emerged from their plants and also has employed global low carbon emission systems and use of bio-fuel plants.
From the task it has been concluded that shell is effectively fulfilling the objectives of their stakeholders and also fulfilling the needs and responsibilities. Strategies are also employed by the Shell to meet the responsibilities of employees in terms of health and safety and equal opportunity and also the ethical issues related to control of pollution and global warming.
Evaluating the competition policy and other regulatory mechanism based on the anti-trust suit which was filed against Microsoft
Competition policy and other regulatory mechanism are framed by the government in order to control the market and restrict the level of competition between the companies. It facilitates the organizations to attain any dominant position, monopoly or any other situation which affects the economy and purchasing power of customers (Manchanda, 2014). In 1993, case was file against Microsoft by Novell by stating that company is blocking the competitors in the market through the anti-competitive practices. This was related to the licensing practices of Microsoft in which royalties is to be paid for the computers and even when the computers do not have operating systems. It was found that Microsoft was breaching the policies of competition act and uses its abuse dominant position over the other companies of the market. It was one of the violations of law of competition policy (Chaiprasit and Swierczek, 2011). EU has stated the legislations which are related to the anti-competitive practices of competition law of EU which are designed for controlling the organizational practices which makes huge impact on the other companies and also on customers. Legislation of liberalization was also passed by the commission to minimize the market conditions of monopoly market (Prasad, 2010).
Concerning on this serious issue of Novell and Microsoft, European Union has found the Microsoft as guilty and ordered to pay €497 million as a penalty. This was also one of the largest fines charged by European Union which also includes the penalties. Act conducted by the Microsoft was against the rules and regulations of competition policy and other regulatory mechanism (Daniela and Blettner, 2011). After the deep insight research, EU has found that the company was guilty and liable to pay millions of euro for this misconduct.
In 2003 has takes its decision and found that the company has performed its duties which are against the competition policy and EU has ordered the Microsoft that within time span of 90 days, company will produce both the version of Windows with media player and without Windows media player. Further in the year 2004, company has to €497 million and it also includes the additional penalties and which comprised of the 120 days of for the divulge information of server and 90 days for the production of both the version of windows operating system (Jones and Vagliasindi, 2013). On the basis of the judgment of EU, Microsoft paid the full amount of penalty and also released their statement that this new legislations of commission will make an adverse impact towards the intellectual property rights and also restricts the companies to achieve innovation.
From the above case of Microsoft and Novell which was based on competition act and other regulatory provisions, it was concluded that there should be presence of this type of acts and legislations. It favors both customers as well as other companies of market also and also restrain the companies to secure dominant position or to crate the create the situation of monopoly.
Business and cultural environments have major impact on behavior of Shell operating in UK and internal factors of country affect the behavior of organization
Business operations of Shell and their behavior affects from the various internal factors of the business and cultural environments. Below three different factors which affect the business operations of the Shell are evaluated.
Political factors: Political factors are related to the rules and regulations of government and business operations and behavior of Shell affected from the political role of UK government (Botha, Kourie and Snyman, 2014). Shell is operating in UK and it is vital for their business to follow the policies of government such as taxation policy and other legislative policies related to CSR, corporate governance etc. In 2013, Shell has paid taxation of $17066 million to the government (Shell: Annual Report 2013, 2014). Taxation duties of Shell were lower in compare to previous year due to decline in the sales revenue of the company. Government also invests in the business of the company and mostly they preferred the source of investment by purchasing the shares of company or through stack (Stonehouse, Campbell and Hamill, 2011).
Socio-cultural factors: Shell is operating its business at global level and due to which they also faces the challenges related to socio-cultural factors in different countries. In terms of internal environment it depicts about the decision making culture at Shell, attitudes and behaviors of managers and employees and many other conditions which shape the behavior of Shell (Leonidou et. al., 2010). There are also their factors which shape the behavior of Shell in terms of its business environment and working conditions. These are based on the changing preferences and needs, demographic factors and also the internal environment of the company (Lawton, Rajwani and O'Kane, 2011).
Educational factors: Educational factors also shapes the behavior of Shell as these factors related to the literacy, education level, knowledge, skills and development of employees affects on the business of company (Matuszek, Dennis and Schraeder, 2010). This internal factor also plays significant role on the success and accomplishment of goals and objectives of the company (Fulford, 2013). Shell also have to consider these factors while recruiting and selecting the employees for their organization as it specifies about the job position and roles and responsibilities of the employees.
Analyzing the impact of external factors which are beyond the control of Shell as they are part of range of global factors and affects their business operations
Shell is operating its business in UK and there is range of global factors which affects on the business operations of the company and these external factors are also beyond their control (Cross and Miller, 2011). Below the factors which affects the business of Shell are detailed:
Technological Factors: In this present age of advance technological period and era modernization makes huge impact on the business of company in terms of technological aspect. Impact of this external factor on Shell is that company has to adapt the modernization and implement the latest technology in their operational plants (Jones and Vagliasindi, 2013). Impact of these factors is both positive and negative. In terms of positive aspect is enhances the productivity and efficiency of the Shell (Haigh and Brubaker, 2010). In addition to this use of technology also help to compete with the issues related to global warming, ethical issues and pollution. Negative impact is that company has to incur huge amount of investment for implementing new technology in its businesses (Stonehouse Campbell and Hamill, 2011).
Legal factors: These factors are comply with the legal laws and legislations which uncontrollable and makes huge impact on the existing working conditions of Shell. Changes in any of the legislation affect the business operation of entire company (Manchanda, 2014). They are related to the legal laws of employment, safety and security of employees, insurance and many other laws related to employment. Shell also affect from the policies of UK government which are related to ethical issues, competition act and many other regulatory policies of country. These factors are based on the rules and regulations of government and are beyond the control of Shell (Botha, Kourie and Snyman, 2014). It also directly affects on the organizational policies and working of the business as legal factors are based in perspective to functioning of company only.
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Environmental factors: Environmental factors have become the primary external factors in this present scenario as increasing pollution, global warming and emission of harmful gases have made greater impact on companies (Lawton, Rajwani and O'Kane, 2011). Business of Shell also affects from this external factor as they have to control over those operational areas which are responsible for the pollution in environment. To operate their business in UK, Shell has to deploy the latest technology and equipments through which control the emission of carbon gases, hazardous and toxic substances (Huettinger, 2014). On the other side, company also have to take care of the environment in which they are operating their oil plants as it affects the biodiversity, plants, water etc. As per the rules of government, company also has to control over the natural resources by minimizing the use of non-renewable resources.
From the above analysis it was evaluated that internal factors such as political, socio-cultural and educational factors makes impact on the functioning and behavior of company. It directly influence on the behavior of organization (Leonidou, et. al., 2010). External factors are uncontrollable and it also makes impact on the business of Shell as they have to follow the current laws and legislations which are framed by the government of country.
You may also like to read:
- Cross, F. and Miller, R., 2011. The Legal Environment of Business: Text and Cases: Ethical, Regulatory, Global, and Corporate Issues. 8th ed. Cengage Learning.
- Daniela. and Blettner., 2011. Adaptation of allocation of resources and in response to external shocks: The case of Southwest Airlines. Management Research Review.
- Fulford, R. 2013. A case study of strategic enterprise resource management in a global corporation: Standardisation is the basis of competitive advantage.Journal of Systems and Information Technology.
- Haigh, M. M. and Brubaker, P., 2010. Examining how image restoration impacts perceptions of corporate social responsibility, organization-public relationships, and source credibility. Corporate Communications: An International Journal.
- Huettinger, M., 2014. What determines the business activities in the airline industry, A theoretical framework. Baltic Journal of Management.