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K/601/0437 Unit 4 Business Environment BTEC (HND) Travel and Tourism

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Various Organizational Structure Along with their Strategies

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Introduction

Various types of organizations are performing different types of functions in the market as per their nature but with the common goal of earning. In this detailed study, the learner will discuss the different types of the organizations along with the organizational structure of the organization. Apart from this, the learner will also mention the organizational function of the particular types of organization.

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Task-1

LO1: Explain the different type of organizations, including their size and scope.

1.1: Explain different types and purposes of organization, public, private and voluntary sectors and legal structure (P1)

In the corporate business, there are a different type of organization are available:

Public sector: public sector are those type of the organization in which a maximum number of profit share under the government of the country and in the overall the maximum number of share are also holed by the government (Marginson, 2015). For every growth the company only government is responsible for that because every activity of the company is operated and controlled by the government. The main aim of this type of the organization is to provide better facility and services to the people of the country at low cost this type of organization main objective is not to make a profit, rather make the welfare of the public of the country by serving various types of services (Lewandowski, 2017). The profit that the organization is getting from the people is later used in the public services. There is some example of the public sectors, they are like railways services, road and transport services, electric supply, public health committee, supply water services, road construction agencies, environmental organization and highway agency government NGOs, and government educational institution and so on. In the UK there are many types of public organization present in the UK named as Network Rail, National Health Services, the UK atomic energy authority, and England education services. The main aim of the public sector organization is to serve to public of the UK.

Private sector organization: Private sectors are that type of organization which are mainly operated by an individual or a group of individuals. The main objective of this private sector is to make the profit at a higher level. Generally, the government has no control and not even the authority over this type of organization, but sometimes through contracts basis government can work with the private sector organization through the partnership or contract to get profit and better service to the public (Mazzucato, 2015). The employees or workers in private sector don’t have the security of the job they can be fired at any instance of time and some time the workers are working on different contract. The private sector has a huge benefit in serving better product and proving higher jobs all over the globe.

There is four type of private sector organization, and they are:

Multinational companies: multinational companies are that kind of companies which deals with their product in more than one countries. In other words, the investment is made by companies in two different countries but their product is not dealt in different countries in multinational companies. In the whole, the multinational company deals with their product and services in different company and organizations.

International companies: in international companies, the company only deals with its exports and import services in various countries they don’t invest in other countries but only deliver their product in other countries.

Global organization: in the global organization the investment of the companies is made in the world by this type of the organization to benefit the entire globe.

Transitional organization: the main business of this organization is in the different countries in the entire world, the features of the transitional organization are to contribute differently to make the worldwide integrated operation.

Voluntary organization: Voluntary organization works for the welfare of the public of the country. These organizations don’t want to make a profit with the people they work as a charity. The voluntary organization through its services wants to help the public of county to get a better life and have good stander of living (Booth, 2018). Its employees or its manager do not even use the total income of the organization but its all revenue is used as the welfare of the country. Few names of this type of organization are cancer research in UK, Welcome Trust, the British Heart Foundation, Guide Dogs, and British Red Cross society and so on. Some voluntary organizations are also working as an NGO to serve the public of UK better.

1.2 Explain the size and scope of a range of different types of organizations (P2).

The size and scope of the private organization

For explaining the range and scope of the private organization have taken a name of the company as ASDA. It is Retail Company named as ASDA stores limited. This company was established in 1965. The market of this company was expended during the period of 5 years after its establishment in the year of 1970 to 1980, and the acquire around 62 supermarket and other business in its retail line. Apart from the retail business this company also acquires the business of finance and general merchandise and mobile phone business. In the current time, the total number of employees is around 180,000. In the year of 1987, the companies’ slogan is “save money & live better”. For the better service, ASDA stores use EE net this company also deals with the building and household services. Because of stronghold in the retail sector and now expanding his business in all other sectors makes the position of the company better and strong in the global market. This company is also making his revenue strong in the global market. The scope of the ASDA stores in the future is great, and for the global market, they are the highest service provider in the retail market. Because of the good reputation of the ASDA in the UK market, it is its moral duty to serve their customer well. The objective of this company is to become the best company of retail in the global market by serving and providing products and services to the society (Stiglitz et al., 2015). Customer satisfaction is also an important objective and apart from this the satisfaction of the employees by providing good salary and facility, and making the highest profit in the market is the key objective of the company.

The size, scope and range for public organization

For the discussion about the range scope and size of the public organization in this project, Rail Network Infrastructure is one of them. This network rail company is serving its services in the public sector of UK since 2014. And its work is to monitor all the railways services and maintenance of all the cross rail services and electrification of rail lines. All the rail operations like schedule of arrival and departure and railways food and its maintenance are take care this organization. The main aim of the company is to deliver better and growth of the rail services in the entire country for the public and make best for the revenue. The main objective of this organization is to provide the best service of railways and increase the revenue of the country. Cross Rail is the last very successful project in the London (Gerrish, 2016). The new project is the Birmingham new street rail project which is recently going to implement in the railway's department.

The size, scope and range of voluntary organization

To provide the range size and scope of the voluntary organization let us take an example of Guide dogs organization as this organization is small in size in the comparison of other organization which are discussed earlier. The Guide Dogs foundation runs with the help of a donation from many businessmen and other peoples of UK, and various type of organization also donates this organization. In this organization the dogs were trained by this organization to help the blind peoples to cross the roads and help the other peoples from different type of danger. This organization also performs in different shows and help in the better standard of life to the society (O'Connor et al., 2016). The main objective of this organization is not to make a profit but serve well to the society and help the different kind of peoples who need helps.

Task 2

LO2: demonstrate the interrelationship of the various functions within an organization and how they link to organization structure.

2.1- Explain the relationship between different organizational function and how they link to organizational objectives and structure (P3).

The ASDA stores limited organizational structure are as follows, at the top of the company the CEO of ASDA sits and he looks all the activity of the company, and the function of every ongoing project the CEO of the company is also responsible for any evil thing happens in the company or organizations. After that, the whole work of CEO is divided into four parts first one is the marketing second is the production after that the finance department and last one is the research teams. For any product the marketing is essential and for that CEO recruits a sales marketing manager or sales manager to get better marketing scheme for the products. And under those sales managers, different salesman comes who sales the new product door to door and promotion of the product is done by them (O'Neill et al 2016). Another team is the production team which produce the product, for production and the take care of the overall production of the product CEO appointed a production manager who smartly takes care the production of the ongoing project and different employees related to the project and if any conflict is raised between the employees then the production manager must resolve the conflicts. The most important role of the production manager chooses the correct resources for the ongoing project for better and quick result for the stockholders and company. And after completion of the project, a quality analyzing team is created for the checking of the completed product. Another team is the finance team under which the human resource managers and it department are created by the administration. The function of the human resource manager is to get new employees and provide their salary and to check the overall financial growth of the organization. Another part is the research team which examines the total growth and loss of the company and the future scopes for the growth of the company. The IT is the department which resolves all the issues related to production and marketing department. As the demand of new products is rising day by day and the main role of research department comes into play to get knowledge of the new product and know what is the needs of the customers (Shafritz et al., 2015).

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The advantage of the organizational structure:

For the different types of work in a different working structure in ASDA, the qualification of employees must be high, and they must have good working skills to work efficiently. Therefor the production of the company must be increases and the productivity of the good quality product will occur (Ashkenas, et al 2015). For the better coordination between the employees between different levels, the responsibility between the employees will increases. Because of organizational structure, the conflicts can be resolved in a very period of time.

The disadvantage of organizational structure in ASDA:

Because of various department in the management of ASDA sometimes the lack of coordination between different employees will occur as a result the productivity and marketing sector get affected. And the organizational structure of ASDA various department has a different number of managers in it and the capacity to do work and the thinking of each manager will occur differently from each other. As a result the managers cant performs their work properly because of different level of thinking. Sometimes bureaucracy among the different employees occurs, as a result, this leads to lack of productivity of the ASDA (Goetsch et al., 2014).

Task 3

LO3: Use contemporary examples to demonstrate both the positive and negative influence/impact the macro environment has on business operations.

3.1- Using PESTLE identify the positive and negative impact the macro environment has upon the business operations of your chosen organization. You should support your answer by specific examples from your chosen organization [P4].

There are several factors affect the growth of the business. The factors are regarding micro and macro. To identify these factors, different analysis is conducted by different organizations (Yüksel, 2012). It is necessary for an organization to act upon these factors as these factors may change the course of the business. The best method possible to identify these factors is PESTLE analysis. PESTLE analysis is an approach, method or tool used by different organizations in identifying the factors involved that generally affect the business in some way or the other (Jurevicius, 2013). There are six factors in PESTLE analysis, and those are Political, Economy, Social, Technological, Legal and Environmental (Gillespie, 2007). The PESTLE analysis of ASDA has been conducted below to understand the factors that are affecting ASDA in one way or the other. There are both positive and negative effects of these factors and both the effects of the factors have been discussed below.

Political factors

The government mainly takes part in these factors. The rules, regulation and legislation set by the government affect the company’s business and operations (Ho, 2014).

Positive effects: Government policies like a decrease in tax rates and business-friendly regulation positively affect the business of ASDA. Favourable rules and regulations help the company is growing. Export and Import regulation generally affect the retail industry and friendly rules in that part helps the company in saving costs as well (Sarbahand Otu-Nyarko, 2014).

Negative effects: There are national, international and other rules set by the European Union. These rules have affected ASDA in a great way regarding employment. The European Union on several occasion has increased the tax making it difficult regarding the capacity of the people.

There are other political issues like political conflicts war and other issues that also affect the business and its operation in a great way.

Economic factors

The economy of a country play a vital role making the country grow in that particular country or region To make the business grow the company needs to settle in a country where there is economic stability (Dockalikovaand Klozikova, 2014). In this case, as well there are both positive and negative effects.

Positive effect: The stability of the country London favours business, As the stability of the country is stable people living there has the buying capacity and can buy items.

Negative effect: The main component of the economy of a country is the tax process. The tax process of London has hugely affected the reputation of ASDA as a tax avoider. There is pressure maintained by the government side to solve related issues that have occurred between the government and ASDA.

The price of the products of ASDA is kept low to attract the customers. The question now arises that for hoe long ASDA will be able to do so by making a thin margin profit.

Social factors

The world is constantly changing. These changes have an effect on the on the society as well. These changes also influence the people in changing their lifestyle, tend sand other things which affect the performance of an organization (Theaker, 2017)

Positive effect: When people change their taste and preferences on a regular basis, it gives ASDA to move to innovation and suffice the needs of the customers. This eventually satisfies the customers and build customer loyalty.

The constant change in the environment brings a new demand from the customers hence making them buys products, which help the company increase their sales and eventually incur profit.

Another change that been witnessed in the society craves for healthy food and being healthy. This has increased the demand for organic fruits and food and has upscaled the sales in this sector.

Negative effect: Frequent changes increase inventory costs, and that may affect the company. ASDA should be good with the inventory management and make sure their new arrivals and current trend always attract the eyes of the customers.

Technological factors

Technology is frequently changing n the recent time. Frequent change in technology gives the company both positive and negative effects (Koliosand Read, 2013).

Positive effect: Adapting to new technologies and implementing them in the business gives organizations an extra edge over their competitors. ASDA, in order to gain an advantage over its competitors it needs to adapt to new technologies and implement them in the business, AI chatbots, Viral reality and Augmented reality are the latest technologies that are being incorporated by the retail industry in recent times.

Negative effect: These technological advancements are costly and need time and expertise to handle. The fact that competitors using these technologies before ASDA may run them at a huge disadvantage.

Legal factors

In legal factors, it is very simple to identify the positive and negative effects. There are certain rules of regulation and legislation that have been designed and developed. Every organisation must maintain and obey these rules and regulation.

ASDA needs to understand and follow all the rules and regulation. Failure to follow any will lead to legal consequences which will affect the reputation of the company as well as have to deal with monetary penalties.

Environmental factors

The change in the environment has made people realize the importance of environment conservation. In recent times, people have become more cautious and make every effort to save the environment or conserving it.

Positive effect: People are generally aware of air pollution, carbon footprint and other hazard are cautious about these. ASDA making an effort in encountering these problems or participating in a CSR activity will build up a reputation for itself. This will eventually increase customer loyalty and help attract customers.
Negative effect: There may be an instance that people might think ASDA is not abiding by the laws of nature and harming the environment in a certain way. This will displease the customers and sales may drop unless an extra effort is made to make them realize their contribution to conserving nature.

Task-4

LO4: Determine the internal strengths and weaknesses of specific businesses and explain their interrelationship with external macro factors.

4.1- Using SWOT or TOWS conduct an internal and external analysis of your chosen organization to identify its strengths and weaknesses. (P5)

To identify the internal factors mainly SWOT analysis is used. SWOT analysis is a marketing tool that is used by different organizations to identify the internal factors and make them correct if there is any fault found so that the business does not get affected and runs smoothly with the performance being at the top level (Bull et al., 2016). SWOT is an abbreviation form of Strength Weakness, Opportunities and Threats (Yuan, 2013). SWOT analysis of ASDA has been conducted below.

Strengths

Weaknesses

One of the strengths of ASDA is product line. ASDA has a variety of products, and it caters to different customers in the society. It has different types of food and non-food items. ASDA has also entered the market of telecom and financial services so in simple words it has products for everyone in the society.

Marketing strategies that have been incorporated by ASSDA are very effective, and results have been seen that these marketing strategies helped the company in attracting many customers.

Public relationship of ASDA is very effective. The company tries to keep in touch with its customers to ensure them the best after-sales service. Various methods are used to keep in touch with their customers, and it has been very successful to date.

ASDA’s contribution to the society is great, and hence they maintain a strong CSR. The CSR activities done by ASDA has helped them reform society and make people believe in their contribution to change the world differently,

The management of ASDA is very strong and versatile. They have been able to handle any situation and respond promptly to any challenge that has come.

Limited presence of ASDA in the global market is one of the major weaknesses of ASDA. In comparison to its competitors, the presence of ASDA in the foreign land is very limited and needs to act upon it very soon.

Unavailability of mini-stores is another weakness of ASDA. Mini stores help in reducing inventory costs and other.

Opportunities

Threats

ASDA still has many places unexplored. There are great changes of expansion with the retail supermarket. There are many developing countries where the demand is high and will benefit any organization that establishes themselves.

Online presence of ASDA has increased the opportunity for their products to get sold more. People now a day has a great presence on the internet and with the rise of e-commerce has developed the habit of buying thing online.

Inflation in price due to Brexit has witnessed low sales in recent time. Other issues like the rise in tax and unemployment have also affected the company and may affect the country in a great way in future.

Different policy changes in different countries are another concern for ASDA. Keeping a track to all these changes become difficult which may make them face the consequences in legal terms.

Table 2: SWOT analysis of ASDA

Source: Created by author

4.2- explain how strengths and weaknesses interrelate with external macro factors (P6)

In this part TOWS analysis has been conducted many organizations use TOWS analysis in identifying the internal; factors that affect an organization and find out a different solution to these problems that are witnessed regarding internal factors. The TOWS analysis of ASDA has been conducted below.

TOWS Matrix:

Strengths

1.ASDA has a variety of products, and it caters to different customers in the society

2. Marketing strategies that have been incorporated by ASSDA are very effective, and results have been seen that these marketing strategies helped the company in attracting many customers

3.. Public relationship of ASDA is very effective. The company tries to keep in touch with its customers to ensure them the best after sales service

4.Strong Corporate Social responsibility

5. Product innovation

Weaknesses

1. Limited presence of ASDA in the global market is one of the major weaknesses of ASDA.

2. Unavailability of mini-stores is another weakness of ASDA

3. No loyalty card

 

Opportunities:

1) Initiation of services in the field of telecom, financial services, jewellery and pharmacy

2) Expansion opportunity of ASDA in developing countries

3) Social media and online marketing

1) With wide product line ASDA wishes to cater in different other sectors. They have also shown the interest in expanding their business by making an entrance in different developing countries.

2) The opening of new retail stores in different parts of the world will allow them to gain new customers and build an entirely new customer base.

3)ASDA already uses an online presence to good terms and this strength can be used in marketing themselves as well. Usage of social media for creating awareness in another great effort in attracting customers.

 

.1) Introduction of new services may defocus themselves from their man product which may have an impact on their main business.

2) While expanding in other countries, it is very essential to understand and know the regulation of setting up a business in that country. Avoidance of which may lead to legal consequences.

3) Even though social media can be used to a great extent but it can also affect their reputation if there is any miscommunication.

Threats:

1) Low pricing pressure

2)High competition in the market

3) Presence of online retailers

1) There are different methods of cost-cutting in the business. Marketing strategies can be adjusted; value chain analysis can be redesigned to ensure that low pricing would not affect the company’s profit.

2)Innovation and sustainability can help in encountering high competition in the market

3) Strong online presence is another measure that can be taken to advantage and fight the online retailers.

1) Profits may is cut in the process.

2) New stores in different places may help in facing the high competition in the market

 

 

Table 3: TOWS analysis of ASDA

Source: Created by author

Conclusion

In this detailed study, the various organizational structure has been described by the learner with organizational stricter that would help the reader to understand the concept as well. It is the role of the organization to take care of the interest of the public in the organization. Along with this, the strategies for business extension in the market has been mentioned in the above discussion that has proved that an organization has several options to enter in the new market only it has to select the type of strategy as per the nature and type of market.

Reference

  • Ashkenas, R., Ulrich, D., Jick, T. and Kerr, S., 2015.The boundaryless organization: Breaking the chains of organizational structure. John Wiley & Sons.
  • Booth, P., 2018.Management control in a voluntary organization: accounting and accountants in organizational context. Routledge.
  • Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework.Ecosystem services,17, pp.99-111.
  • Dockalikova, I. and Klozikova, J., 2014, November. MCDM Methods in Practice: Determining the Significance of PESTEL Analysis Criteria. InEuropean Conference on Management, Leadership & Governance(p. 418). Academic Conferences International Limited.
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