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Impact of External factors of Organization

University: University of London

  • Unit No: 1
  • Level: Undergraduate/College
  • Pages: 14 / Words 3482
  • Paper Type: Assignment
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INTRODUCTION

Business environment is a wide concept which includes both internal and external factors which impacts the organisational functions. Internal factors are those which are present within an organisation (Business environment. 2018). Employees and poor delivery system are considered as internal factors which are diminished the internal strength of an organisation and negatively impacts their productivity and profitability. Management of an organisation have an power to overcome from the negative impact of internal factors as they have sufficient control over them. External environment also includes many factors which have direct and indirect impact upon the functioning of an organization (Hilton and Platt, 2013). These factors are considered as political, social, technological etc. Aston Martin is Auto-mobile manufacturing company that was founded in London in 1913. It has over 150 car dealerships in over 50 countries on six continents, making them a global auto-mobile brand.

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This report covers a different type of organizations that operates their business in different sectors along with their legal structure, size, and scope of those different type of businesses and link between different organizational functions. Also, analyze the impact of external factors on an organization and SWOT analysis of an organization covers in the report.

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TASK 1

P1 Types and purposes of an different type of organisation along with their legal structures

There are many type of organisations are working within the country. These are classified into three different headings named as public, private and voluntary. All these organisations having their different objectives and legal structure (Savrul, Incekara and Sener, 2014). It is an obligation upon the management team of an organisation to follow these structure and provide their best in the process of completion of their desired objectives. Purpose and legal structure of these different organisations are defined below:

Private company

This will includes all the organisations which are held under private ownership. The main objective of these organisation is to earn profits. The organisations that are fall into this category are allowed to issue stock and have shareholders but not permitted to trade their shares on public exchange. Government of country have less control over the functions of private organisations.

Aston Martin is Auto-mobile manufacturer. The segments in which it deals includes luxury sports cars and grand tourers. This organisation founded in 1913 at London by Lionel Martin and Robert Bamford. The amount of revenue which is earned by an organisation through their business operations is around £ 876 million till 2017. The number of employees which are presently working with the organisation is around 1850.

Purpose of Aston Martin

  • To earn large number of profits through providence of quality products to consumers
  • To improve brand and product awareness
  • To gain advantage over competitors

Legal structure of private company

  • Partnership: This will includes the business which are formed by the two or more persons and groups with mutual agreement regarding accomplishment of particular objective (Boons and Lüdeke-Freund, 2013). If there is no agreement regarding profit and loss, then it should be distributed equally among the partners.
  • Sole proprietorship: This will includes all those businesses which are set-up by single person. Overall liability of business is upon that single person and have total control over the functions of an organisation.
  • Limited companies: This can be further classified into two different categories which includes limited by shares and guarantee. That means the liability of members within an organisation is limited up-to the unpaid amount on the shares held by them.

Public company

These organisations having the main about is to serve their best towards nation. On the functioning of these organisations, government of nation has significant control over them. The business activities which are covered under this are termed as police, transport, education, healthcare etc.

NHS is a public organisation whose main aim is to provide medical services to those individuals of society which are deprived from the same. They provide their services n all over the world.

Purpose of NHS

  • Providence of basic medical facilities to individuals of society
  • Provide quality services to ensure optimum health care of needy people

Legal structure of public company

  • Central government: They ensure the effective functioning of central and state government departments.
  • State government: They ensure that proper functioning is done by state government agencies.
  • Local government: They ensure that public organization must do their activities as per the regulations provided by the government.

Voluntary organisation

This will includes all the organisations which are established with the purpose of providing activities for the welfare of society. These organisations not having the aim about earning profit (Hamilton and Webster, 2015).

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Oxfam is voluntary organisation which provides their functions for the purpose of removal of poverty from the society. There are many other activities which are performed by Oxfam includes disaster relief, advocacy, policy research etc.

Purpose of Oxfam

  • To remove poverty from society
  • To provide educational programmes for enhancing the awareness of individuals

P2 Size and scope of different organizations

All the organisations having their different size and scope irrespective of the industry from which they belongs. The size of scope of the organisations which are falls into the different category i.e. public, private and voluntary are defined below:

Aston Martin

Size: Aston Martin is British Car Manufacturer of luxury sports car and grand tourers. This will provides their products and services in all over the world. The products in which this organisation deals includes Auto-mobiles and Luxury goods. Aston Martin have more than 150 dealerships around in almost 50 countries in six different continents. In 2017 the Net income which is earned by an organisation through their operations is around £ 79 Million. The number of employees whom are presently serve their services within an organisation is around 1850.

Scope: This can be identified from the services and products which are offered by an organisation. At present this organisation manufactures Auto-mobiles and announced to turn itself into global luxury brand that deals in different kid of products like speed boat, bicycles, real estate and clothing (Wetherly, 2014).

NHS

Size: The size of an organisation can be identified from the point of the employees working in the organisation and their services which they serve in different nations. Around 1.5 million employees are working and provide their assistance in delivering their service in all over the world. This organisation comes into existence in 1948. The basic aim for which this organisation works is to provide their services free of cost to the needy individuals of society who are deprived from such basic amenities.

Scope: Scope of can be identified from the services which are served by NHS. Three different type of functions which are served by this organisation includes basic medical facilities, dental and optical care.

Oxfam

Size: The total number of other charitable organisations which comes under the governance of Oxfam is around 20. This organisation is founded in 1920. They provide their services in all over the world with the help of large number of volunteers.

Scope: The main activity of this organisation to remove poverty from society. Instead of that there are many other functions in which this organisations deals includes advocacy, disaster relief, pro-migration and policy research (Smith, 2016).

TASK 2

P3 Interrelation between different organisational departments and their link to objectives

Aston Martin is a private organisation and having an aim about earning large amount of profits and capture large market share. In the success of this objective main support is provided by the different departments which prevails within an organisation. All these departments have their different role and objectives but some point interrelated to each other (Brym annd Bell, 2015). Such interrelation between the different departments of an organisation and their guidance in accomplishment of overall objectives can be understood from the points which are defined below:

  • Human resource with Marketing: The main function of HR department within an organisation is about recruitment of employees and workforce planning. They ensure that adequate candidate is appointed in an organisation who effectively serves their services towards their department and an organisation. The interrelation of this department with marketing is understood from the point that aid in providence of candidates which have adequate amount of knowledge about marketing approaches and theories which are applied practically with effectiveness. This will help the organisation to accomplish their marketing objectives about capturing large market share.
  • Finance with Operation department: The main function of finance department is about analyse the need of funds of different department and formulation of appropriate budget. Allocation of adequate amount of fund provides aid to each and every department of an organisation to optimally utilise their resources. Efficient allocation of funds proved as a effective financial aid through which operations department of Aston Martin able to introduce all the new features in their cars and optimum utilisation of their given resources. This will aid in accomplishment of the objectives of profitability and fulfilment of customers needs.
  • Research and Development department with Marketing: The main function of R&D department is to analyse the market and identify the current trends which persist among customers. This department of Aston Martin provides their functioning related to analyse the abilities of competitors and current demand of customers that are further used by the marketing department to bring changes in their promotional and targeting strategies to strengthen the position of an organisation in market. This will aid in achievement of the marketing objectives and competitive advantage in market. you have required the best oxford assignment help from experts. Contact now.

TASK 3

P4 PESTLE analysis along with their positive and negative impacts

PESTLE is a framework which is used by an organisation to identify the impact of macro factors upon the organisation (Crane and Matten, 2016). This will provides the opportunity to an organisation like Aston Martin to assess the situations which are present in market and make their strategies. All these factors have their positive and negative impact upon the operations of an organisation which are defined below:

Political: The government of UK is protective in nature. Also, there is huge stability in the government and effectively govern by the local and national administrations. One the decision which impacts the UK negatively is about their exit from EU.

  • Positive impact: Stability and protective nature of government has positive impact upon an organisation like Aston Martin because this will provides the opportunity to implement their strategies effectively.
  • Negativeimpact: Exit of UK from Eu and Corruption governs negative impact upon the trade of Aston Martin.

Economical: The economic condition of UK is quite strong in comparison to other countries. There is presence of High GDP and Few issues. But they lost large amount of money is public services and financial aid (Chen, Chiang and Storey, 2012).

  • Positive impact: Presence of high economic floe provides the opportunity to an organisation like Aston Martin to easily expand their operations.
  • Negativeimpact: slow recovery from economic recession negatively impacts the business of Aston Martin as they only deals in luxury auto-mobile segment.

Social: The individuals reside in UK have high standard of living. Also, there is availability of cheap workforce. But on the other hand, the dependency ratio in UK is quite high and ever increasing education cost.

  • Positive impact: Cheap availability of workforce and high standard of living provides positive impact upon the business of Aston Martin. As this will allowed to improve their business.
  • Negativeimpact: High dependency ratio and education cost negatively impacts the purchasing power of individual which has negative impact upon an organisation Aston Martin.

Technological: There is presence of quality innovation skills and expertise in science in IT. But in comparison to US there is less technological development present in UK.

  • Positive impact: Quality innovative skills provides the opportunity to Aston Martin to bring changes in their auto-mobile as per the demand of consumers and trend.
  • Negativeimpact: The growth opportunity present in front of an organisation US is quite high in comparison to UK which impacts the decision making of management.

Legal: The laws which persist in UK has high in standard and required to follow by each and every organisation.

  • Positive impact: This will have positive impact on an Aston Martin as help to gain the trust and loyalty of consumers and government.
  • Negativeimpact: This will arise in the situation when organisation is unable to follow such legal laws. In this case they have to face fine.

Environmental: This will includes environmental regulations which are made by UK government and required to adhere by organisations operating their business in country.

  • Positive impact: Aston Martin is auto-mobile manufacturer require to follow environmental regulations as to attain the support of government (Charter, 2017).
  • Negativeimpact: UK is much strict regarding environmental aspects. If not followed then they have to face consequences in terms of fine and discontinuation.

TASK 4

P5 SWOT analysis of Aston Martin

SWOT is an effective tool which is used by an organisation for the purpose of identifying their strengths and weaknesses to build appropriate strategies through which they can achieve their goals. This will aid an organisation like Aston Martin to identify the opportunities available in market and to grab them through usage of their internal and external strengths. Application of this tool towards Aston Martin is can be understood from the points identified below:

Strengths

  • Good quality cars: Aston Martin have capable manufacturing and designing team that ensure that every car which will be manufactured is powerful and perfect in all aspects. People pursue this brand over other because its performance and brand quality.
  • They target cream of the society: The cars which are manufactured by Aston Martin are specialised in nature and not purchased by every one. Everything which is made by this organisation has perfection in all terms and advertise for the affluent class. They only target to those persons from where they get best profits and purchase value.

Weaknesses

  • Lesser market than other companies: In comparison to all other companies Aston Martin has lesser market share due to having their concentration on luxury market. They also never tried to enter into new market. This will impacts negatively upon the organisation operations as they have to compete with many competitors in market whom are having large customer base.
  • Small selection range: The range of auto-mobiles which is provided by Aston Martin is limited and available at particular time which limits the consumer choice. They have only one consideration which is about providence of best quality products to gain loyalty of customer base.

Opportunities

  • Budgeted auto-mobile: High demand and reliability is present in the luxury auto-mobile market of Aston Martin. This will provides the opportunity to an organisation to enter into the medium budgeted segment to allow their general followers to taste their technology.
  • Expansion of their availability: There are large number of opportunities are available in front of Aston Marting to expand their business in several different countries. This is quite difficult but can be achieved, if proper strategies and advertisement techniques are applied in local markets (Andersson, Forsgren and Holm, 2015).

Threats

  • Increase in fuel costs: Continuous increasing prices of fuel is is one of the threat for an organisation. This will impacts their business and they should look towards the car segment that will be electrically powered.
  • High competition: There are many other organisations which are operating in market and provides luxury auto-mobiles such as Bentley, Porsche, Jaguar etc. All these organisations having their huge brand image and demand in market that becomes the threat fr an organisation in future.

P6 Interrelation of strength and weakness with external factors

There is huge interrelation between the external factors along with the strength and weaknesses of an organisation. This can be understood from the below point that how external factors become the strengths and weakness of Aston Martin which are defined below:

Political:

This will includes the political conditions, laws, trade laws, tax policy and environmental law which are persist in country impacts the organisation activities. In terms of political situation UK is quite sound and stable. But on the other strict regulations are implied related to employees.

  • Strength: Political stability becomes the strength of an organisation as this will aid to concentrate on important matters.
  • Weaknesses: Strict labour laws impacts the activities of Aston Martin as they needed to adhere them, otherwise they have to face the situation of penalties.

Economical:

The economic condition in UK is quite good and high flow of cash is present. But the rate of interest is high.

  • Strength: High flow of cash becomes the strength as this will aid to raise funds from market.
  • Weaknesses: High rate of interest negatively impacts the borrowing capacity of individuals and this will direct negative impact upon the earnings of Aston Martin as they provide quite expensive auto-mobiles.

Social:

The belief and attitude of young age people in UK is quite luxurious. But on the other hand they also career centric (Shenkar, Luo and Chi, 2014).

  • Strength: Demand of young people of luxurious cars is become the strength for an organisation.
  • Weaknesses: The approach of career centric of large number of UK individuals has negatively influence their behaviour to expand too much on auto-mobile.

Technological:

The presence of technology is strong in UK. But this will required to change the process of operations of an organisation.

  • Strength: Advance technology is strength for an Aston Martin as they built luxurious cars.
  • Weaknesses: Change in the processes and employee training become proved as string negative point as huge amount of expenses they have to incurred in this case.

CONCLUSION

It has been concluded from the above report that there are three different sectors which are operated their business activities in external business environment named as private, public and voluntary. All these organisations having their own different objectives and legal structure which is required to follow while they are operating their functions. PESTLE is effective analysis tool which help to analyse the impact of external business environment upon the business. This will provide opportunity to the management of an organisation to re built their strategies and make appropriate future plans. SWOT analysis helps to identify their strengths and weaknesses which aid in the process of gathering important information to grab the opportunities.

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