Business is defined as a firm which starts and operates by an individual with an aim of maximising wealth and profits in an effective manner. A person always comes up with specific ideas and innovation for starting a new business and running it in an appropriate way so that better outcomes can be achieved. Businesses are surrounded by various environmental factors that can affect its operations and activities in several ways. These forces depend on environmental changes which have major impacts on business functions. There are defined various types of businesses including public, private and voluntary etc. who have different nature and run business entities for generating more profits or revenues in an effective manner (Avramenko, 2012). Environmental factors have major impacts on the business productivity and profitability that may not be controllable by manager as well. This report is based on Nestle which is a Swiss transnational food and drink company. It is headquartered in Vevey, Vaud, Switzerland. This assignment will define different types and purposes of organisation with size, scope and legal structures. Relationship with various organisation and identification of positive or negative impacts on business will also be elucidated. It conducts internal and external analysis and explains strengths or weaknesses of macro factors.
P1 Different types and purpose of organisations as public, private and voluntary with legal structure
Every business firm has various natures and aims or objectives for operating entire functions in an effective manner. They also have some legal structure which depends on the nature of business. It is the most important duty of manager that to consider all these and follow particular legal requirements for operating business in an effective ways. It can be categorised among various firms such as public, private and voluntary etc. All these play a vital role in increasing country's economy and support in fulfilling of different regulations in more efficient way.
There are defined various types and purposes of different organisation with their legal structure such as:
In this considered those businesses which starts and owned by an individual and undertaken in private ownership is called private company. They have rights to issue stocks and also have shareholders. There are some limitations that they do not trade for public exchanges such as Initial Public Offering (IPO), therefore private companies do not meet the Securities and Exchange Commissions (SES) which generally strict to fulfil any requirements in public companies.
Nestle is world's largest confectionery brand that deals in several products such as foods or drinks as well. It established in the year of 1866. They also provide number of goods and services including medical and baby food, tea, coffee, dairy products, snacks and frozen foods etc.
Purpose of Nestle:
- To give the best quality of food items to the targeted audiences.
- They contribute to the national economy by serving better foods in the marketplace.
- To achieve predetermined goals or objectives including zero environmental effects.
- To improve the standard of living of society people by giving them healthy life.
Legal structure of private company
- Partnership: This defines the formal agreement in which two or more individuals come up with some necessary resources for the purpose of operating and managing the business in successful manner. All partners have rights to equally share profits and they are liable to bear losses while running an organisation. On the other side, silent partners are those who do not take parts in any business functions. The purpose of partnership firms are increasing profits and productivity to get better outcomes in an effective way.
- Sole Proprietorship: In these kinds of businesses, a single person takes responsibility to operate or run an organisation. An individual is responsible to own as well as control by them such known as sole trader. Owner has rights to take decisions and he or she also focuses on controlling over the business operations for the purpose of generating more revenues or profits in an effective manner. In such kinds of businesses, the owner has separate legal distinctions.
- Limited companies: In this also found the separate legal entity which distinct owners from them, it can be understood by undertaking different companies such as limited by shares and guarantees as well. Limited liability may be considered as those firms where owners and shareholders have limited liability for operating particular organisation which extents of shares as well as capital.
Advantages and disadvantages of private companies:
Private owners have totally freedom to control and maintain business activities in an effective manner.
They have needed to consider an appropriate legal requirements
Owners have some limited liabilities to run a business firm.
There may be some difficulties to arrange and raise funds for organisation.
As its name describes, the public companies provide various support to the people including education, military, police service, public transportations, health and safety etc. these activities and functions generally run by the government of the country. Government play major role in operating public organisations as they operate as well as control over the business operations. Their main aim is to provide social benefits and undertake people welfare during running the organisation.
National Health Services (NHS) is a public organisation that funded by publicly regarding national healthcare systems in the UK. They are serving number of facilities or services including medical, dental and optical care as well. Their main purpose is to improve people health and give them appropriates medical services so that they will satisfy their needs or wants as well as meet desired expectations.
Purpose of NHS:
- Treats every individuals with better manner and provide effective services to them.
- The main purpose is to provide best medical or healthcare services for attaining business goals.
Legal structure of public company:
- Central government: In this define about state and central government who supervise the particular department.
- State government: They focus on effective functions and contributes in agencies activities.
- Local government: They are responsible to manage the public firms through effective functioning as well.
Advantages and Disadvantages of public organisation
They usually works for public welfare
In this requires adequate funds which are limited
They focus on utilising of available resources for the purpose of attaining best possible outcomes.
There are some restrictions regarding borrowing money.
In this included those companies that helps in providing several services or functions for the purpose of supporting volunteers as well. They generally concentrate on social people and their development by giving number of facilities. Their main aim is to provide social services and helps needy people rather than earning profits. They have required to take permissions and approval from governmental authorities for the purpose of meeting all criteria.
Oxfam is one the best example for voluntary as this firm is providing charity and donations to overcome the poverty. They provide various support in critical situations including natural disasters and provide reliefs, advocacy, pro-migration and policy research etc. it introduced in the year of 1942 and they covered wide for helping to other volunteers. They provide some basic things which are required to live for surviving.
Purpose of Oxfam:
- To provide better services and facilities for fulfilling basic requirements.
- They focus on removing poverty by giving social services.
- Provide better educations to the poor people and focus on developing sustainability.
Advantages and disadvantages of voluntary organisation
Government support in providing adequate funds to the voluntary firms.
There is difficulty to get several opportunities due to unplanned and controlled activities in the firm.
Here are defined number of activities and participation for achieving predetermined goals or objectives.
There may be no any guarantee for its continuity.
P2 Size and scope of different types of organisation
From the above organisations such as Nestle, NHS and Oxfam have different nature so their size or scopes are also different from each other. In this included various aspects regarding the firm such as locations, areas and business activities. On the side, in this included different procedures such as producing goods or services and running business activities for achieving set targets or goals in an effective manner. There are several size, scope which can be understood bys considering these such as:
- Size: Nestle company is world's most famous firm that deals in food and drink and provide to the customers for satisfying their needs and wants in an efficient way. This firm provide better quality of products and services to the people by considering their health and safety. Nestle established in 1866 and diversified the businesses in various line for improving the performance and develop the business in very impressive manner. There are approx 447 factories in all over the world that focus on serving best food items and drinks as well. There are around 339000 employees working who work hard to getting success in an appropriate manner. It also operates one of the world's largest cosmetic firm which is L'oreal. It has generated profits around 8.88 billion according to recent data.
- Scope: In this considered those business firms which are diversified in several line or areas so Nestle also provide number of products or services. they produce foods and drinks such as baby food, coffee, tea, medical food, water bottled, Kit-Kat, Maggie, dairy products, frozen foods, pet foods, ice cream, snacks and many more.
- Vision: Nestle company focus on providing best quality of products which feels safes and secure to the customers. Their vision is to manufacture the consumer goods by considering their health or safety and also provide maximum nutritions to them so that physiological needs can be satisfied in well manner.
- Mission: Nestle company wants to become the world's largest firm in providing nutritions and health services. they try to provide good food and life as well by best quality of food or beverages.
- Size: The National healthcare service organisation is focusing on provide best medical services to improve individual health conditions. Therefore, management always try to consider the available facilities and provide them effectively so that patients can be feel more relax. It established in 1948 and give services in free of costs. This firm is one the famous firm in the world that provide number of services regarding medical, therapy, dental and many more in the UK.
- Scope: In this included various healthcare services or facilities which served by National Healthcare Service (NHS). Their main aim is give better treatments to the patients in free of costs. They are providing effective medical facilities or services to people including optical and dental as well.
- Vision: they provide number of services by undertaking people lives which should be effective and healthier. This firm is also giving various services for the purpose of reducing chances of infections and make it very efficient.
- Mission: The main purpose of NHS is to give more effective and quality treatments to the people for better caring.
- Size: In the Oxfam firm, there are around 20 charitable trusts which operating in its functions or activities at global level. Their main purpose of Oxfam is to remove global poverty. It has established in the year of 1942. they are serving these facilities in the number of countries for helping volunteers.
- Scope: There are different services or facilities are providing in any critical situations including disasters reliefs, pro-migration, advocacy, poverty eradication and policy research and many more.
- Visions: Their main is to reduce poverty rates and helps to needy people by giving several services. they try to provide necessary things for meeting people requirements in well manner.
- Missions: In this defined that Oxfam firm is trying to remove the poverty with the help of improving standards of life in well manner.
P3 Relationship between different organisational functions that link with objectives and structure
There are number of activities and functions defined that must be performed by the company to achieve predetermined goals or objectives in an effective manner. In this included several functions such as human resources, finances or accounting, research and development, administrations, IT, production and operations, Marketing and sales and customers services etc. these functions are essentials for every business firm so it must be necessary to perform every or each tasks in well manner so that particular goals or targets can be accomplished (Bovee, Thill and Raina, 2016). They play an important role in increasing profitability and productivity in well manner by maintaining as well as managing entire business activities for achieving best possible outcomes. Every business functions are interrelated with specific objectives.
Marketing department play vital role in maintaining the bridge of relationship with market that support in making effective decisions and creating better goods and services for satisfying customers needs or wants and also consider their future trends or fashions so that effective items can bes produced in well manner. They undertake an appropriate study of market analysis in which they will identify particular market trends, situations, competitors, customers and their demands as well. Therefore, it is very necessary to analyse particular market by screening environment in an appropriate manner. Nestle company is one of the best organisation which provide nutrition products to the people for improving their health and give better services in better ways. Therefore, it is requires to understand the departments and their relations with various functions. It also helpful aspects that support in giving several opportunities regarding improving strengths or weaknesses of an organisation (Cavalcante, Kesting and Ulhøi, 2011). There are some important department that consider while running an organisation such as human resource, finance, marketing, operational and other functions for the purpose of achieving set goals or targets in more efficient manner. Here are define different department such as:
Human resource department: It is very necessary and helpful component that requires to perform in well manner. Organisations have to perform number of activities and functions including training and development, recruitment and selections, remuneration and determination, performance appraisals and many more for the purpose of making skilled workforce in the organisation. HR manager try to appoint or recruit best suitable person who can be able to perform any tasks or work so that company cans achieve predetermined goals or targets. Nestle company always consider the human resource department and also focus on providing effective training and development programs for enhancing their skills or knowledge (Hair, 2015).
Marketing department: This department is most important which have direct link with manufacturing department. They play vital role in analysing the market demand, customers and competitors to make favourable decisions so that company can produce or manufacture best quality of goods or services to satisfy customers needs or wants to meet their desired expectations. These are very beneficial to production department as marketing department provide adequate informations to them so that they can make better products as per requirements.
Finance department: This department also play vital role in forming a budget and arrange funds to every departments for performing entire tasks or activities in an appropriate manner. It is necessary to allocate available resources for getting maximum outcomes. Nestle also consider this for providing effective financial services for producing goods and also use some new promotional methods to increase market awareness in an efficient manner.
Production department: This is another important function which must be performed in well manner. This function is related with producing goods and services to fulfil consumers needs or wants in an adequate manner (Hamilton and Webster, 2015). Nestle company also consider this and use appropriate informations or data regarding market trends and situations so that they can add some unique feature or modify existing products in more effective ways.
- Function based: In this, firm decide its structure by undertaking some important functions that must be performed for achieving targets such as human resource, finance and marketing etc.
- Geography based: In this structure, businesses are divided into small groups according to regions of country and consumer behaviours regarding particular goods and services.
- Product based: In this, firm generally fix its structure as per the diversification of products or services that given by the firm such as Nestle is providing various foods and drinks to the people in the market.
- Consumer based: In this identify the behaviours of consumers for better structuring of company (Karagiorgos, Drogalas and Giovanis, 2011). They always support in brining new ideas and innovation for modifying particular goods or services in an effective manner.
P4 Positive and negative impacts of macro environment upon business operations
There are number of companies available in the international market that deals in providing variety of products or services and they have to face various environmental factors while running an organisation. Nestle also provide its products or services across the country so it is a multinational organisation that deals in global market. They also requires to consider the several forces which are related to environment aspects such as political, legal, environmental, social and economical factors which have major impacts such as positive or negative while running business operations. In this requires to implement the particular strategies as well as formulate policies so that workers can attains predetermined goals or objectives in more efficient manner (Kolk, 2016). There are various factors of environment such as:
Political factors: Nestle is providing its products or services in different countries so there can be exists number of rules or regulations which formulated by the government of the nation. Therefore, Nestle firm have to undertake the various aspects such as taxations, code of conducts, government stability, import or export excise duty, permission for entrance and many more.
- Positive impacts: If all these rules or regulations are favourable of the company then it has positive impacts on the business so Nestle firm has considered the health policies and produce better quality of goods to maintain the health or safety of customers.
- Negative impacts: there can be any negative effects due to high taxations and also policies regarding imports or exports which have direct impacts on the Nestle business.
Economical factors: There are many of country where Nestle is serving its products so they have different level of economies and growth rates of the nation so it can affects on the business operations or activities due to fluctuations such as inflations as well as deflations. Therefore, it is necessary to adopt various strategies or policies by the Nestle firm.
- Positive impacts: In this requires to prepare proper reports and analyse them for the purpose of gathering informations (Nishitani and et. al., 2012). This will helps in providing accurate information regarding fluctuations in the economy of the country so it has positive impacts on the business.
- Negative impacts: Decreasing of the economy rates or lower level of incomes can influence upon business operations.
Social factors: In this included people culture, customs, values, beliefs, regions, educations, gender, language and many more that can affects on the business and its functions in several ways.
- Positive impacts: There is requires proper study or environmental analysis for the purpose of defining and identifying the customers needs or behaviours so that effective goods and services can be provided. It will also help in increasing sales volume in well manner.
- Negative impacts: The negative effects can be consider as the lack of knowledge, educations and improper management of societal people.
Technological factors: In this included various tools or techniques that are launching in the market. In the modern scenario, advanced technologies are adopting by the business organisations for the purpose of making entire operations in smooth manner.
- Positive impacts: New advanced techniques or applications can be beneficial for the organisational development. It included internet, e-commerce and many web sites which are very effective to attain goals or targets (Osterwalder and Pigneur, 2010).
- Negative impacts: This also have negative impacts as it can be decrease the products quality and also major impacts on the goodwill of the firm.
Legal factors: In this included those legal factors which can be impacts on the business operations so it is requires to undertake such forces by the Nestle firm while making better decisions.
- Positive impacts: Nestle company is focusing on customers heath and safety by following legal laws so that they can win trust of customers.
- Negative impacts: Various rules or legal legislations have major impacts on the business firm so they have to follow these in adequate manner.
Environmental factors: This is main responsibility of every business firm that to keep clean and safe environment. They have requires to follow several rules regarding environment safety so that company can build its brand image (PikkaIskanius and Page, 2011).
- Positive impacts: It has positive effects due to cleaning environment as Nestle is doing CSR activities for friendly climate.
- Negative impacts: It is necessary to take care of atmosphere otherwise it can affects on the goodwill of the firm.
P5 Conduct internal and external analysis to identify strengths and weaknesses
In this defined the SWOT analysis of the organisation by undertaking study of internal and analyse the various opportunities for improving business performance in well manner.
Strengths of Nestle:
- World renowned brand: Nestle is a biggest brand in the organisation in food or beverage sector so they have captured international market. They focus on creating more customers awareness and generate higher profits.
- Good distribution network: Nestle have better network as well as channels of distribution so that they can reach at potential targets customers in more efficient manner.
- Large workforce: In this company, there are around 340000 workers working and providing various services to the customers (Pulver, 2012).
- Brand structure: There are some difficulties to formulate or manage the particular structure due to variety of products or services in the market.
- Legal and consumer issues: In this considered number of issues regarding market shares, image and customers so Nestle have to follow legal requirements that can affects on the firm.
- Expanding market: There are wide scope of the Nestle that they can expand business at various areas such as rural, and urban through supply chain as well.
- Increase income level: There is another chances for increasing income level by providing various products or services so that sales can be increased.
- Quality of products: Nestle firm also can create good image in the market through serving better quality of products in the marketplace.
- Competition in the market: In this determine about new competitors that are entering into the market place so it is major threat for the organisation (Reed and et. al., 2013).
- Price of commodities: This is also another biggest threats for the firm as company can decrease its sales due to increasing price.
P6 Explain strengths and weaknesses interrelate with external macro factors
It is very important to analyse the external factors and their strengths or weaknesses for achieving particular goals or objectives of the company in an effective manner. Here are define PESTEL analysis to identify such factors:
Political: This has major impacts on the business operations as it included government stability, rules and regulations, code of conducts or policies that can affects on the Nestle firm. Therefore, they have to follow all these.
- Strengths: They have to identify and follow regulations like pay taxes for building brand image.
- Weaknesses: Nestle deals in 194 countries so it is difficult to understand and follow laws.
Economical: In this included economical fluctuations, inflations, deflations rates, growth rates, import or export ratio and international exchanges etc. that can affects on the business (Reinhardt and Stavins, 2010).
- Strengths: Nestle is dealing in Asian countries so they can increase their profits or improve economic conditions.
- Weaknesses: It has included higher international exchange rates which have negative impacts.
Social: It is related with customers culture, attitudes and beliefs that have impact on the Nestle firm.
- Strengths: Nestle provide better quality of goods and services by analysing the customers needs and demands.
- Weaknesses: It is necessary to know about the people culture otherwise it can create conflicts between firm or customers (Shigang, 2010).
Also, read the Business Environment of Virgin Group for better knowledge.
From the above report, it has been concluded that there is required to understand about the environment while running or operating business in an effective manner. This assignment will define different types and purposes of organisation with size, scope, and legal structures. Relationship with various organisation and identification of positive or negative impacts on business. It conduct internal and external analysis and explain strengths or weaknesses of macro factor. Nestle can attain set goals by analysing such factors and formulate better strategies to get succeed.
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