The term business and business environment plays a vital role in influencing business decisions in direct and indirect manner. It involves several factors, i.e. internal and external that has a vast impact on working activities of the company. An effective manager is able to determine future threats and opportunities for business associations and also evaluate the environment (Chetwood and et. al., 2014). The present assignment is based upon WALMART; its a leading retail corporation that operates a chain of grocery stores and hypermarkets. Apart from this, the report will be described types and purpose of business organizations with their legal structure. Positive and Negative impact of PESTLE analysis is also going to be described.
P1 Different types and purpose of business organisations
On the basis of size and purpose, business organisations are classified into three different parts, such as -
Public sector organisations – These sector are considered as vital or critical pillar to strength of a country's economy. Public sectors enterprises are started in order to fabricate infrastructure for attaining economic growth and development (Crane and Matten, 2016). Such organisations are implemented, managed and controlled by central government of UK having 100% in it.
For example – DCMS (department for digital, cultural, media and sport) is UK government organisation which is responsible for managing cultural and sport in England. In context of media, DCMS provide internet and broadcasting services.
- Departmental management – These undertakings are wholly dependent upon government and its associated bodies for finance. State and local treasury provides finances where surplus money is deposited in treasury.
- Public corporation – These sectors are created by a specific aim of state and central government. A public sector corporation has a separate legal entity to attain specific purpose. They can also raise loans separately (Gharajedaghi, 2011).
Private sector organisations - These associations are defined those firms in which factors of production is owned by an individual and by the group of persons with an aim of profit maximisation. Private sector is focused on creating new and innovative products thus to high customer satisfaction.
For example – WALMART is leading chain of grocery and retail products area severed worldwide; the firm was founded in 1962. As of January, 2016 company has 12000 stores in 28 countries.
- Sole proprietor – It is one of the simplest form of organisations which requires minimum capital for start up. In sole proprietor business, profits and business incomes are personal income of owner and they are liable for all profits and taxes within organisation (Gilboy, 2016).
- Partnership – Its a business in which two or more respondents are equally liable for all profits and losses. In partnership, members invest their money as per the terms and conditions of partnership deed.
Voluntary sector organisation – These sectors are usually comprised with an aim to benefit and enrich society thus to improve their living standards. Voluntary sectors focuses on delivering qualitative and value added services to people for their growth and development.
For example – Wellcome trust is a biomedical charity that is based in London. The firm was founded in 1936 with an aim to fund research activities for improving animal and human health.
- Trusts – It governed and controlled by a trust deed which sets out aims and objectives of a charity (Kian Chong, Shafaghi and Leing Tan, 2011).
- Industrial and Provident Society (IPS) – An IPS is a society that is developed by an industry or business for benefits of a local community.
P2 Size and scope of business organisations
On the basis of size and scope business entities are classified into three parts, such as -
Large business organizations
These are those organisations which operates at wide contrast and having global market presence. For example – WALMART is largest organisation in terms of revenues that is approximately, US$500 billion. The main purpose of large business associations is to accomplish high sustainability and improve brand image over the world.
These businesses employs more than 1000 employees as in WALMART 2.3 million are presently working Worldwide.
The main objective of the company is to retain its sustainability among customers by winning their hearts and provide them something different (Kaufmann, Kraay and Mastruzzi, 2011).
WALMART is having a share of 34.5% in global retailing industry of UK.