Nigel spread and employs a larger portion of the

Nigel
Fisher                                                                                         student number 9640HNDBOPS   

In this Report I will be explaining the
different types and purposes of organisations as well as the different
organisational functions, objectives and how the correlation between these
factors involves stakeholders. Also, I will explain the responsibilities that a
business may have and how the different functions and interrelationships make
up a business model.

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·        
Below I will explain the different
types and purposes of organisations

Public Sector

The Public
sector is a part of any countries economy which facilitates the supply
of services to and for the government. The services that can come under the title
of public sector may include the Police force, the military, public transport,
public education, healthcare and a countries infrastructure management and
service i.e. Roadways, water supply, communications and electrical/power grids.
Elected members of councils and government also fall into this category as
officials whom work for the people to administer and control the different
departments. To facilitate payment for the various work carried out the public
must pay for the services provided through taxation. This can be a contentious
subject and a highly emotive one due to varying degrees of satisfaction with
the services success as perceived by the individual whose money is being taken
and used.

Private
sector

The Private Sector is the part of the economy,
sometimes referred to as the people sector, administered by groups or private
individuals to make a profitable income usually as a means of enterprise for
profit, not directly controlled by the government but must carry out its
business working under the laws of the country. In free economic countries it
is more likely that Private sector business has a more diverse spread and
employs a larger portion of the countries workforce than those in more
government controlled countries, where public sector business has the greater
dominance. Private sector corporations have the advantage of being able to move
their goals and aims quickly according to market trends. Country specific
regulations have seen disparity in working conditions and contracts within a
single company that has operations in different parts of the world. In some
cases, industries and individual businesses have decided to self-regulate by
applying higher standards than is legally required of them

Sole
trader

A sole trader is a person who starts a business
project for himself and trades under a business name. The law doesn’t
differentiate between the person and the company, they are one. As a sole
trader full liability of all owed money and services is with the individual. Taxation
is dealt with by self-assessment and all profits retained by the individual.

Partnership

When 2 or more people combine to set up a new
business or venture. They will be addressed as general partners and there will
be a legal document drawn up called a “partnership agreement”. Partners are
liable for business debts if one defaults the others are liable for any debts.

Incorporated
Company

Where the business and owner are separated legally
so the owner has no responsibility for the debts. There are three main types Ltd,
LLP, Plc.

 

 

 

Small
or Medium Sized enterprise

A business with less than 250 workers and with a
yearly profit of no greater than £40 million. Small businesses have generally
less than 50 employees and Micro- enterprises are usually below 10 employees. Small
businesses have an advantage that they can apply for government grants and
subsidies to assist with their financial requirements.

Voluntary
organisation.

Where
a business offers a service or commodity for the local community without making
a profit, any capital is distributed back into the company.

Charity

 Similar in purpose to a voluntary business but
the defining characteristic of a charitable business is defined by its
objectives to promote a humanitarian/ecological cause for the benefit of people
and the environment.

Co-operative

Co-op`s
are as defined as a” Firm owned, controlled, and operated by a group of users
for their own benefit. All co-op`s must adhere to ethical values of honesty, openness.
Social responsibility and a care for others. The best example is the self-titled
Co-op in the UK which is a multifaceted business from farming, banking to
funeral services all joined for the benefit of the community.

Franchises

A
larger company may sell the right to sell its products through a third party,
selling a well-known product already proven within the market place for a lower
initial investment. Examples of well-known Franchises: McDonalds, Kentucky
Fried Chicken, Subway and Europcar.

 

 

 

Joint
Ventures

Similar in principle to a partnership but may have
time restraints, used when different company products can be combined to
penetrate the marketplace more efficiently.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·        
Below
I will explain the different relationships of a business organisation and how
they relate to each other

Stakeholders

Stakeholders are groups
or individuals that are affected by and/or have an interest in the operations
and objectives of a business. Business owners are the largest voice in how the
aims of the business are decided, but other groups also have an influence over
decision making.  Customers are vital
stakeholders. Businesses that ignore the customer can very promptly find
themselves losing out on sales and profits. In a small business, the most
important or primary stakeholders are the owners, staff and customers. In a
larger business the shareholders are the primary stakeholders able to vote out
company directors if the business performs poorly. With smaller amounts of
influence and lower interest are secondary stakeholders Business classifies stakeholders
as three distinct categories. Internal who will be made up of predominantly staff?
External which will have no direct interest in the business as a profitable
concern but will be very closely watching and connected stakeholders who have
no day to day influence on the company but will monitor the company. The
different types of shareholders’ interests can cause conflict as one area may
wish to invest in an area of the business where the other group see no
advantage or profitability. So any business has to balance its need and
requirements to try to keep all the stakeholders as happy as possible.

Businesses have certain
responsibilities that they must try to achieve the first is all companies have
a social responsibility to ensure their products and services are as
environmentally friendly as possible and the perception achieved from the
customers is that the business cares for the environment it trades within.
Ethically businesses must be seen to be carrying out trading and manufacturing
using appropriate suppliers and products that have no negative impact on the
persons supplying or working for them. Businesses have a legal duty and
responsibility to follow regulations as laid out by Governments employment law
and statutes. An example would be the Health and safety at work act 1974 to
ensure business follows a parliamentary doctrine.

Businesses are
constructed of functional departments which can be variable but always
containing Marketing, Human Resources, Sales, (Production and Maintenance for
manufacturing), Finance and the Workforce. Each department has its primary
goals and collective aims for the company overall. Marketing will concentrate
on promoting the company in the environment it is operating, using advertising
and customer focus, Human resource will ensure the workforce is compliant with
legislation and that marketing is appropriate for the business and its
customers, Sales will have the responsibility to drive new business and
maintain customer satisfaction so  the
company is achieving targets, Finance will have the control of the accounts,
enabling a business to move assets from a department if required for promotions
or new product releases. The key point is that all the departments must work
together to achieve the targets set, adhering to the expectations and ethos
that the company promotes. It is for example incorrect and ethically wrong for
a company to market itself as an environmentally friendly business when it is
not following the standards it promotes.

Businesses are usually
constructed in a type of formation from the CEO down to the lowest worker and
can be categorised as structures. Organisational structure can be dependent on
the size or products of the company in question. A functional structure organises
all the activities of a business into departments of their own specific skill
sets, normally managed from above. This reduces management costs by having less
divisional managers, but can be restrictive for promotional opportunities, can
be negatively viewed by employees for career progression and lowering morale.
Divisional structure can be explained by using multi product businesses or
globally encompassing operations. One Business having different products using
each product line as a functional structure with control from a headquarters.
This type of business has a top-heavy management structure as each area
requires its own leaders and managers reporting to the head office. Implicated
expenses are higher as skilled managers are required to ensure profitability
remains. The Strategic business unit is a singular unit possibly part of a
global enterprise but separated for example by product and has its own manager
responsible, many large businesses may have multiple business units to
diversify their ability in the marketplace, the increased costs of running and
managing the unit can be high. A matrix structure is a company structure where
the normal reporting hierarchy is duplicated so an individual will report to
two managers; also reporting to cross departments for example engineers may
report to an engineering manager daily but may also report to another manager
if working in another area. Can be advantageous for information and reporting
purposes, improve the flexibility of workers, and negatively can cause
confusion for middle managers in who to report to and instability of workers.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·        
Below
I will demonstrate the advantages and disadvantages of A MACRO environment.

The MACRO environment
is an overall picture of all areas that contribute factors into the world
surrounding and influencing a business externally these are explained as
factors and are Politically driven, economically driven, sociologically influenced,
Technological advancement, Legal requirements and Environmental responsibility
or PESTLE for short. These factors are all monitored and influence a business’s
decision on marketing approach and can affect performance, growth and
sustainability within a marketplace. Due to the uncontrollability of the
factors business must be quick to adapt to remain viable as these influences
can shape the future as factors change.

The advantages of a
study in the macro environment are that it can identify the threats to a business
by providing a set framework for analysis, assists with strategic planning,
also provides insight into prospective opportunities for exploitation and investment;
by using the different personal skill sets within a business you have a more
diverse forum for future decisions. The disadvantages of a study in the macro
environment are that too much information received can be interpreted in many
ways, not always useful. Business time and money restraints may limit the
amount of people that are involved watering down the knowledge and skills
available. The study must be carried out regularly or the results will be
distorted. From the other hand too, many assumptions made could result in the
analysis being subjective. The Micro environment is the area directly servicing
the company itself, its own suppliers and their issues, the consumers of the
product and the direct market place it`s goods are selling, both Macro and
Micro are generally beyond the control of marketing but must be adapted to
promptly to ensure prolonged sales and survival. Business Dictionary 2018.
Macro. Online available at https://www.Business Dictionary.com accessed Jan
2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·        
Below
I will conduct analysis of specific businesses to identify the strengths and weaknesses
and explain how they interrelate

 An example of negative impacts upon business
operations would be Woolworth`s, a popular high street department store, who
initially were very popular with consumers but failed to keep abreast of the
rise of the internet, reliant on music sales via cd and records, unable to see
the approaching online music business as a threat, with technology advancing
and online music streaming the demise of the record/cd as a popular outlet
meant sales dropped. Unable to ensure a foothold online due to new businesses
taking centre stage they failed to market themselves fast enough. So, social
factors i.e. people purchasing, habits changing along with media change, technology
advancement and economic variety due to financial restraints of the 1990`s, the
pricing of records/cd`s was much higher than that of internet music all these contributed
to a loss of market share and the inevitable financial ruin of Woolworths. On
the positive side of a company, within the macro environment, using PESTLE and
remaining or improving its position is Apple. As a Consumer electronics giant
it has adapted with social and economic tenacity from a small computer manufacturer,
who would have potentially not survived, switching focus heavily into modern
technology and media and with the rise of the internet along with people’s
awareness and embracement of technological advancement Apple reinvented itself
and has been at the forefront of new media devices.Wikipedia.2018.Apple. Online
Available at:https://en.wikipedia.org/wiki/Apple Inc. accessed Jan 2018

External macro factors
have a complex and large influence on business thinking, looking at factors
like inflation, unemployment and economic growth; these can have either a
positive or negative effect. Business A can have a weak or less profitable
turnover than company B who provide similar products with base materials
sourced from different countries. Business A sourced material from its home
country, where inflation has dropped and now has the potential to purchase base
materials cheaper than before, increasing its profit margin, as well as
potential sales, as inflation rates are linked to public spending. Business B
now finds its sales under threat, as its base source inflation rates have increased
reducing profitability. Business A can reduce the cost of its goods and still
maintain a healthy balance sheet. Business B would struggle to compete in the
same market and would have to monitor the costs involved. Businesses must
balance all the external macro factors and should focus on the one that has
changed the most, while keeping the others in stability. Businesses can then
look at their strengths, weaknesses, opportunities and threats (SWOT acronym)
to determine their strategy going forward. If legislation changes it affects
how or where a business conducts its operations, it must adjust accordingly as
this would be a threat to its trading potential, investment may be required
which will have monetary consequences so the growth of the economy, inflation
rates and public spending must be taken into consideration before any decision
is processed. Viability of a product in new and up and coming markets and
sustainability in the current fast-moving world are crucial for survival. The ever-changing
gaming world has shown how new technological milestones have forced smaller
manufacturers to fall by the way side. Only the companies with huge R and D
departments have continued renewing their products alongside public demand.
Examples would be the Sony PlayStation, Microsoft X Box vs. Nintendo Wii and
Atari, Sega,3DO, SNK and Magnavox. Microsoft and Sony have cornered the mass
market with marketing, media and using in house technology to promote their
products globally and are now household names for games consoles. The other
manufactures have had to try to carve out a business in the niche markets
remaining. 

 

 

 

 

 

·        
Applying
the pestle model to support a detailed analysis of the Macro environment within
a company

The basic principle and
concept of electronic books came into fruition as early as 1968 under the title
Dynabooks Alan Kay 2000. The original format although initially found to be
welcomed by consumer groups, the unexpected explosive response from the market
was never expected. With the advent of hand held devices specifically for the
reading of e-books they are increasingly in demand due to accessibility and
cost.

Today the bookselling
market has three major players, Amazon, WH smith and Waterstones with
supermarkets following closely behind. All have different approaches to
marketing and selling books with Amazon leading the market on e-book sales
alone. I will be looking at how Waterstones kept themselves viable in a market
swamped with a new technology using Pestle framework.

Political

In the UK a book
selling company has a steady and resolute political environment in which to
continue its business and none which would have a negative effect on its
business.

Economic

Reading articles online
and in the business sections of the Guardian https://www.theguardian.com/books/2017/feb/03/balancing-the-book
the current book market as a whole is worth in excess of £3.44 billion.
Perception among purchasers is that full priced books are expensive and after
the recessions of 2008 -2009 many small independent book stores collapsed, as
people spent on necessities rather than luxury items. Waterstones as a result
lost sales and had to change focus. Originally part of HMV up to 2011 it was
sold to A&NN Capital Fund due to losses and poor performance as a whole                                                www.waterstones.com

Social

Every age group reads
at some point, although the different categories of books match the sex, age
and professions as would be expected. Waterstones have kept all variety of
books well sorted into discernible groupings. People’s perception of e-books
and the readers themselves (including my own opinion) is that they are useful
to use but although cheaper to buy the readers take away the enjoyment of
owning and displaying an actual book.

Technological.

The largest threat to
Waterstones has been the rise of the e-book, their cheap price in comparison
and accessibility. Downloaded from online services and stored on an electronic
device with the capability to store many novels.Waterstones originally had an
e-book agreement with Amazon to sell e-books and readers through their stores
but relinquished this deal after sales did not meet the targets required and
they  encountered infringements of copy
right laws. Concentrating on a restructure of 
its stores and giving more ownership to the store managers to arrange
the stores on a regional basis, introducing quiet areas with coffee shops in
store has resulted  in a step back
from  technology which appears to be more
favourable to the buying public. www.waterstones.com

Legal

E- Books have come
under increased scrutiny for forgery and product liability during their
increase with piracy a big issue along with all digital media. Paperback books
have a long history involving authors and publishing houses so legal issues are
known and controlled.

 

 

Ethical

Paperback books can be
made from recycling processes and have transformed the literacy of civilization
for centuries. Often removed from circulation by Governments that may not agree
with the views inside but fortunately with freedom of speech the UK has not
encountered such non egalitarian attitudes.

E-books have along with
all digital media been under the spotlight for piracy law and counterfeiting
online, reducing the income for the publishing houses and author.

Conclusion

It can be seen that the
e-book phenomenon will stay and as technology improves will be part of the
future for book lovers the world over. Actually owning a book and having
imagery on the pages is still a criteria for many buyers especially children.
Many categories of books remain in the physical as reference and learning aids
would be required to be referred to. Waterstones has managed to survive the
e-book transformation by adapting its stores to be a more customer friendly
relaxing experience. As of today they have increased their profits and look
forward to continued growth www.waterstones.com

 

Summary

As shown above, the
business and its environment, plays a huge role in how the structure of a
business is formulated, with external influences contributing to the dynamics
of the various departments and how these can change rapidly. Businesses must
keep abreast of their markets and customer requirements using analysis and
predictions to sustain them in today’s marketplace. With unpredictability and
many unknown forces changing the world’s economy, businesses on any scale, must
be able to adapt and market themselves correctly within their available financial
resources.

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