BUSINESS ENVIRONMENT Richard Docc- Hamilton College- www.hndassignments.co.uk www.hndassignments.co.uk

AC1.1: Identify the purposes of different types of organisation www.hndassignments.co.uk

There are broadly two types of legal entities: 1. Private Sector 2 There are broadly two types of legal entities: 1. Private Sector 2. Public Sector www.hndassignments.co.uk

Government run organisations at local, regional and national level Public Sector: Government run organisations at local, regional and national level Some services are exclusively provided by public sector organisations Most of the organisations charge minimal cost to the customers (Perry & Rainey, 1988) E.g: Royal Mail, Govt Corporations, Govt Departments www.hndassignments.co.uk

Organisations are owned by individuals Private Sector: Organisations are owned by individuals Firms operate to generate profit while providing services or selling goods Individual owners reap the profit and income from the company Most of the businesses operate to cater goods and services with better quality (Stacey, 2007) www.hndassignments.co.uk

Types of business organisation: Overview Sole Trader Partnership Franchises Co-operatives Public sector Public Limited Company (plc) Private Limited Company (Ltd) www.hndassignments.co.uk

AC1.2: Describe the extent to which an organisation meets the objectives of different stakeholders www.hndassignments.co.uk

Organisation consists a variety of stakeholders who come with different needs and objectives It is crucial for the firm to fulfil the needs and interests of its stakeholders (Carroll, 1991) www.hndassignments.co.uk

Stakeholders Investors: They provide the firm with capital Investors are concerned with their return on investment, and risk associated with it They take decisions about buying or selling their investments based on information While they are invested in the firm, they need dividend from their investments (Daft, 2010) www.hndassignments.co.uk

Stakeholders Employees: Employees are concerned with their job stability, which is related to the profitability of the firm They are the driving power of the firm towards productivity Employees are interested in compensation, retirement benefits, and opportunities at workplace www.hndassignments.co.uk

Stakeholders Lenders: Lenders need confidence on the organisation to decide whether to further extend lending facility They make use of the information to decide the viability of loan repayment and interest payment by the firm   www.hndassignments.co.uk

Stakeholders Suppliers and other trade creditors: Integral part of the firm’s production and service delivery process Need information which reflects the firm’s ability to repay trade credits Decide on the performance of the firm whether to continue the relationship or not www.hndassignments.co.uk

Stakeholders Customers: The primary objective of the firms is to cater to its customers efficiently Based on the firm’s performance, they decide their loyalty www.hndassignments.co.uk

Stakeholders Governments and their agencies: Decide the regulations (tax rates, interest rates, etc) which affect the operation of the firm Need information about the activities of the firm Examines the legal and regulatory compliance from time to time Allocates resources to the organisation www.hndassignments.co.uk

Stakeholders Public: Organisations have a long reaching impact on every member of the society Responsibility of the organisation to contribute towards community development causes Performance of the firms decide the employment level in the society (Mitchell, Agle, & Wood, 1997) www.hndassignments.co.uk

AC1.3: Explain the responsibilities of an organisation and strategies employed to meet them Employee Responsibility Govt. Responsibility Social Responsibility Environment Responsibility www.hndassignments.co.uk

There are four major responsibility of an organisation which are handled by employment of proper strategies: Employee Responsibility Govt. Responsibility Social Responsibility Environment Responsibility (Leach, Stewart & Walsh, 1994) www.hndassignments.co.uk

Employee responsibility: Develop abilities and competencies of employees Human resource development Build better relationship between the organisation and the employees Govt. responsibility:  Abide by the regulations, law and order Honestly pay taxes and duties Help the govt. in developing the economy and employment www.hndassignments.co.uk

Social responsibility: Customer satisfaction Social responsibilities (CSR) Contribute towards developing the local communities Environment responsibility Take action towards reducing plastic usage, wastage, and harmful materials usage, etc. Take responsibility to plant trees Increase awareness about environment within and outside the firm (De Leede, Nijhof & Fisscher, 1999) www.hndassignments.co.uk

Thank You www.hndassignments.co.uk

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References Carroll, A. B. 1991. The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders. Business horizons, 34(4), 39-48. Daft, R. L. 2010. Organization theory and design. Stamford: Cengage learning. De Leede, J., Nijhof, A. H., & Fisscher, O. A. 1999. The myth of self-managing teams: a reflection on the allocation of responsibilities between individuals, teams and the organisation. Journal of Business Ethics, 21(2-3), 203-215. Leach, S., Stewart, J. D., & Walsh, K. 1994. The changing organisation and management of local government. London: Macmillan. Mitchell, R. K., Agle, B. R., & Wood, D. J. 1997. Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of management review, 22(4), 853-886. Perry, J. L., & Rainey, H. G. 1988. The public-private distinction in organization theory: A critique and research strategy. Academy of management review, 13(2), 182-201. Stacey, R. D. 2007. Strategic management and organisational dynamics: The challenge of complexity to ways of thinking about organisations. New Jersey: Pearson Education. www.hndassignments.co.uk