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LO1 Explain the different types of organisations including their size and scope
Pass, Merit & P1 P2 M1 D1

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LO2 Demonstrate the interrelationship of the various functions within an organisation and how
they link to organizational structure
Pass, Merit & P3 M2 D1
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Pearson
Higher Nationals in
Business
Unit: Business and Business Environment

Assignment 01
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Higher National Certificate/Diploma in Business
Assignment Brief
Student Name /ID Number
Unit Number and Title Unit 01:Business and Business Environment
Academic Year 2017/18
Unit Tutor
Assignment Title Understanding different types of organizations in different

perspectives and link between organizational structure and
organizational functions
Issue Date
Submission Date
IV Name & Date
Submission format
The submission is in the form of an individual written report. This should be written in a concise,
formal business style using single spacing and font size 12. You are required to make use of
headings, paragraphs and subsections as appropriate, and all work must be supported with research
and referenced using the Harvard referencing system (in-text and end-text referencing).
The recommended word count is 2,000–2,500 words for the report
Unit Learning Outcomes:
LO1 Explain the different types of organisations including their size and scope.
LO2 Demonstrate the interrelationship of the various functions within an organisation and how
they link to organizational structure.
Assignment Brief and Guidance:
Scenario:
Suppose you are recently recruited as a Business Analyst to a leading multinational company
which expects to diversify its product portfolio to the different industries. As your initial project,
you are required to prepare a management report to the Board of Directors on “Analysis of the
Different industries and their environments” taking into consideration a selection oforganisations
of your choice:
------------------------------------------------------------------------------------------------------------ ----------
----------
You are required to investigate and explain three different types of organisations, their size and
classification to highlight differences between them. This should include their legal structure, size
and scope, as well as their key stakeholders.
For one of the organisations you must then explain the various functions within the business and
create an organisational chart to explain the interrelationships between different functions. You
must also explain how this would be different in the other two organisations.
This will be presented as a report to the CEO and should include the following:
1. Introduction to provide an overview of different types of organisations and the growth of
the international business environment.
2. An explanation of each of the chosen organisations, including:
 background details of the organisation;
 the products and services they supply;
 the size and scope of the organisation;
 their vision, mission and business objectives;
 the organisational and legal structure;
 and information about their stakeholders.
3. In detail, explain the functions of the chosen organisations, using an organisation chart to
show how the functions interrelate and an explanation of how they relate to structure.
Business and Business Environment
Grading Rubric
Grading Criteria Achieved Feedback
P1 Explain different types and purposes of

organisations; public, private and voluntary
sectors and legal structures.
P2 Explain the size and scope of a range of

different types of organisations.
P3 Explain the relationship between

different organisational functions and how
they link to organisational objectives and
structure
M1 Analyse how the structure, size and
scope of different organisations link to the
business objectives and product and
services offered by the organisation
M2 Analyse the advantages and
disadvantages of
interrelationships between organisational
functions
and the impact that can have upon
organisational structure
D1 Provide a critical analysis of the
complexities of different types of business
structures and theinterrelationships of the
different organisational functions.
Nehari Senanayake Page 1

Business Analysis Report
Presented to
The report discuss what would be the best sector which NIKE can grew up with current
situation by analyzing purpose, products, scope and the complexities of different
sectors.
Board of Directors
Nike Inc
United States.
Presented By
S P N Senanayake
Business analyst
Nike Inc.
July 25 Th, 2018

Acknowledgement
In performing my assignment, I had to take the help and guideline of some respected person, who
deserve my greatest gratitude. The completion of this assignment gives me much pleasure. A special
gratitude is given to my lecturer for her guidance when doing my project. I would also like to expand
my deepest gratitude to all those who have directly and indirectly guided me in writing this
assignment.

Table of Content...
Acknowledgement ..................................................................................................................... 3
Introduction to the Nike ............................................................................................................ 6
Company Overview ............................................................................................................................... 6
History ................................................................................................................................................... 6
Products ................................................................................................................................................. 6
Mission .................................................................................................................................................. 6
Introduction to provide an overview of different types of organizations .................................. 7
1.1 Public Sector........................................................................................................................ 7
1.2 Private sector ....................................................................................................................... 7
1.3 Voluntary Sector.................................................................................................................. 8
1.4 Growth of the international business environment .............................................................. 9
Background details of the organizations & the size and scope ........................................................... 10
2.1 Public sector organizations ............................................................................................................ 10
2.1.1 Scope of Public Sector Organizations ........................................................................................ 11
2.1.2 Legal Structure of Public Sector ................................................................................................ 12
2.2 Private Sector Organizations ......................................................................................................... 13
2.2.1 Scope of Private sector organizations ........................................................................................ 14
2.2.2 Legal stricter of private sector .................................................................................................... 15
2.3 Voluntary Sector............................................................................................................................ 16
2.3.1 Lions club Scope ........................................................................................................................ 16
2.3.2 Legal structure ............................................................................................................................ 17
2.4 The products and services supply .................................................................................................. 17
2.4.1 Public Sector Organizations ....................................................................................................... 17
2.4.2 Private Sector Organizations ...................................................................................................... 18
2.5 Stake holders of each sector .......................................................................................................... 20
2.5.1 Internal Stakeholder Roles ......................................................................................................... 21
2.5.2 External Stakeholder Roles ........................................................................................................ 22
Conclusion ............................................................................................................................... 22
Organizational chart of each organizations ......................................................................................... 23

3.1 Public Sector Example .................................................................................................................. 23

3.2 Private Sector Example ...................................................................................................................... 24
3.3 Voluntary sector example .................................................................................................................. 25
3.4 Organizational Functions and impact on the structure .................................................................. 26
3.4.1 Functional Structure ................................................................................................................... 30
3.4.2 Divisional Structure .................................................................................................................... 30
3.4.3 Matrix Structure ......................................................................................................................... 30
List of Tables
Table 2.1.1 – Public sector organizations and Size ................................................................. 10

Table 2.1.1.1 – Scope of the public sector organizations ........................................................ 12
Table 2.2.1.1 Scope of Private sector organizations ............................................................... 14
Table 2.3.2.1 Legal structure of voluntary sector.................................................................... 17
Table 2.4.1.1 - 0 Motive of the public sector .......................................................................... 17
Table 2.4.2.1– Relationship between size, structure and the products of private sector ......... 20
Table 2.5.1 – Stake holders of each sector .............................................................................. 20
List of Figures
Diagram 2.2.1 How to measure the size of private sector .................................................. 13

Diagram 3.1.1 – organizational chart of public sector ....................................................... 23
Diagram 3.2.1 – organizational chart of private sector ..................................................... 24
Diagram 3.3.1 – organizational chart of Voluntary Sector ............................................... 25

Introduction to the Nike

Nike is a multinational company with the biggest market share in the sportswear industry. Nike also
has Avery advanced technology, which give competitive advantages. This report will analyze the
best product portfolio to the company in different industries. Moreover, size scope and structure of
the company and how those should be linked to achieve vision mission of the company.
Company Overview
History
Nike was founded in 1968 by Phil Knight, who is currently the owner, chairman and CEO of Nike,
and his coach Bill Bowerman. In the late ’70, Nike is the most well-known shoe company in the
world, not only producing shoes, the only product other sports equipments. In the ’90 with the born
of Reebok, Nike faced lots of competition. There are times that Reebok surpassed Nike in the market
share. In order to regain the position as the market leader, Nike has diversified its products,
especially shoes, for different kinds of sports. In 2006, with the combination of Adidas and Reebok,
2 biggest competitors, Nike face a great threat in losing the market.
Products
In the ’70, Nike focus only on producing shoes, especially running shoes and in ’80, Nike expanded
its products to multiple kinds of sport. Nike currently focuses on soccer, basketball, running,
baseball and tennis. Besides producing shoes, Nike also produces sport apparels. The products of
Nike usually stick with an image of a famous athlete, for example: Michael Jordan in basketball,
Tiger Wood in golf or Ronaldo in soccer…This method is also an effective marketing campaign.
Moreover, in recent years, Nike also develops a new kind of service which allows customers to
customize the own shoes and then send the order to Nike. This is a breakthrough in satisfying
customer’s needs and wants.
Mission
“To bring inspiration and innovation to every athlete in the world.”
(Nike.com, 2017)

Introduction to provide an overview of different types of organizations
Organizations gives the meaning of collection of people working together in order to achieve a
common objective by satisfying needs of the society for a financial benefit.
Organizations can be categorized based on
1. Size
2. Sector
3. Activity
In this report, it mainly focuses about the sector wise analysis. There are different types of business
according to sector,
1.1 Public Sector

The public sector refers to all the businesses and organizations, which are accountable tocentral or
local government. And funded directly by the government and tend to supply public services rather
than produce products for a profit.
(The Revision, 2016)
 Main Purpose will be Social well-being but many multifunctional activities are included as
utilizing scared resources with low opportunity cost. At the same time looking for some profits as
well.
In the process of achieving the Purpose,
Public sector organizations often provide services to people regardless of person’s ability to pay. For
example, free education given in public schools without considering parents income.
Governments routinely hire private corporations to provide goods and services for the public sector.
Examples include the manufacture, construction or maintenance of aircraft, military hardware,
electronic and communications equipment, computers, Infrastructure facilities.
(TechTarget:, 2016)
1.2 Private sector

This is the part of economy that is running by individuals or companies with the massive intention of
earning profits.
E.g.
1. Sole proprietorship
2. Partnerships
3. Private Limited companies
4. Public limited companies
5. Franchises

Profit becomes the main purpose of this sector. Why profit is important to Private sector?
It is a measure of success of an organization as well as investors will have a look by considering
profits weather to invest or not.
Profit is needed to at least to cover up the expenses of the business.

There are some sub purposes to achieve the main purpose,
1. Increase the market share
2. Public reputation
3. High sales
How private sector is going to achieve the purpose?

1. Satisfying societal needs through products
2. Through private – Public partnerships
3. Issuing shares
4. Attracting customers through advertising, branding.
5. Making public reputations through CSR projects
1.3 Voluntary Sector
This is a type o organization which people are voluntarily formed and working together in order to
help others.
Some of these organizations have a mix of paid and volunteer staff, like most charities. Other
organizations are much more loosely defined, like community groups, and can be composed entirely
of volunteers.
Examples of organizations in the voluntary sector include:
World Vision, American Red Cross, Human Rights Watch, Environmental Protection Agency
(EPA), World Wildlife Fund
One way to think of the voluntary sector is that its purpose is to create social wealth rather than
material wealth. In this process organizing,
1. Blood Donation programs
2. Helping to needy people as well as animals
3. Raising Funds
4. Organizing Walks
5. Environmental Protection activities

All of above activities are done to achieve the purpose at the same time these organizations need
some earnings to pay some fees or expenses for that, organizational members are paying annually or
monthly fee.
(Privacy Sense. com , 2016)
As a common characteristic all of above, sectors have to respect the other rules of the state.
Human rights, Labor laws, Environmental laws, Equal pay Act, etc.
As per the above facts, it is very much clear that; sector differentiated the purpose of the business.
Even though businesses need profits, public sector is not depending on profits. Public sector ofently
try to provide better social welfare with a satisfaction where as private sector focused on profits.
Voluntary sector is going parallel with public sector but the purpose become different as voluntary
sector focus primarily on help the needed people at the same time there may be conflicts among
private public and voluntary sectors in the journey of achieving own purposes. Legal structure
becomes much important to all those sectors. Private sector has comparatively low rules and
regulations compared to the public sector where as voluntary sector is not much bonded with rules
and regulations there may be restrictions according the type of voluntary sector such as incorporated
or unincorporated.
1.4 Growth of the international business environment
The study tests the hypothesis that developing countries with low levels of public and private sector
transparency attract lower levels of Foreign Direct Investment inflows. It also tests the hypotheses
that private sector transparency in developing countries has a greater impact on inward Foreign
Direct Investment than public sector transparency. A cross‐sectional model was tested for 58
developing countries (using regression analysis) over the 2003‐2006 period.
(www.emeraldinsight.com, 2018)
Even in the voluntary sector growth of international business can be seen but not as the private and
the public sector organizations. Voluntary sector needs the reputed name in order to gather
international funds but private and public sector can engage in international business because they
are engage in product transactions.
Conclusion is Private sector businesses have more advantages in developing international business
than public and voluntary sector. Commented [D1]: Student has explained about three
organizations which operating in three different sectors

Background details of the organizations & the size and scope
2.1 Public sector organizations.
Generally, Public Sector organizations are bigger in size. Since the large amount of controlling
interest is with the government and in involves in providing common wellbeing products or services
in mass scale, the organizations are naturally and comparatively bigger. Size can be categorized as
1. The Number of Employees
2. The Turnover
3. Amount of Capital Employed
4. Value added to the GDP
(Statistics Sweden, 2016)
Public Sector Organizations

Number of employees working – Average more than 2500 employees
Annual expenditure – E.g. Total expenditure 2015 – 4,260,830 (Ministry of Public affairs Sri
lanka)
Total Expenditure 2015 – 1,400,000 (Ministry of Wildlife Resources Conservation Sri Lanka )
Contribution To the GDP – GDP From Public Administration in Sri Lanka increased to 229336
LKR Million in the fourth quarter of 2016 from 193736 LKR Million in the third quarter of
2016. GDP From Public Administration in Sri Lanka averaged 178337.93 LKR Million from
2010 until 2016, reaching an all time high of 229336 LKR Million in the fourth quarter of 2016
and a record low of 142035 LKR Million in the first quarter of 2011.
Table 2.1.1 – Public sector organizations and Size

(Trading Economics, 2016)
(Parliment of Sri Lanka, 2017)
Sizes of a Public sector organizations are difficult to analyze as all of those organizations are dealing
with huge expenses and revenues. Can be analyzed only as this organization is comparatively
incurring low expenditure, earning revenue than this organization, more employees are working than
this organization etc.

2.1.1 Scope of Public Sector Organizations
Organization Scope Explanation

The Ministry of Public The Ministry of Public Scope reveals the limitations
Administration Administration and in the business operating
Management, which is the areas and aid to achieving
apex of an excellent public objectives of the
service is shouldering its organization.
responsibilities as the e.g.
vanguard being an example To identify Training
to all Ministries and public Requirements of Public
institutions Sector to facilitate and
conduct Training Programs.
Limitations –
Resource limitations in
providing training programs
to public servants.
Aids-
Motivation within the Public

servants in achieving goals.
Due to diplomatic
relationships ability to hire
foreign lectures, provide
foreign trainings.
The Ministry of Justice The Ministry of Justice 1. Scope reveals the

performs an important task operational area which
for the betterment of the business exists.
public by strengthening the 2. Formulation of
mechanism for the policies, plans and programs
empowerment of an in respect of the machinery
independent Judiciary for administration of justice.
earning public trust and 3. Implementation and
confidence to ensure the direction of such policies,
process of efficient plans and programs within
administration of justice in the time limit agreed with the
the country. national planning authorities
and within budgeted

resources.
4. Implementation of all
matters systematically and
efficiently in relation to
overall administration,
including prevention of
delays in the administration
of justice within the court
system.
Table 2.1.1.1 – Scope of the public sector organizations
(Ministry f public administration and management , 2017)

(Ministry of Justice Sri Lanka, 2017)
Since the number of employees are higher in these organizations, the scope of these organizations
are taller, in order to maintain control and better supervision. For E.g.: Organizations like Army,
Medical Hospitals, Police, and Government Universities are having a tall structure to make it easy in
controlling. However, this narrow scopes have its own drawbacks such as lack in creativity and own
decision-making spaces.
2.1.2 Legal Structure of Public Sector
1. Ownership and the controlling is with the state of the country

2. Central government pays for the public goods and merit goods through taxation (e.g. Income
Tax), whereas local governments pay for the services provide, through Council Tax (formerly
Community Charge and, before that, through Rates).
3. (The Revision, 2016)
4. Accounting And Auditing is Compulsory
5. Winding up of an organization is only with a court order.

2.2 Private Sector Organizations
The value
of capital
employed
Size of a private The

Annual number of
sector organization
turn over employees
can be measured by
The market
share of the
business.
Diagram 2.2.1 How to measure the size of private sector
European Union defines small enterprise as an organization that employs less than 250 staff and has
a turnover of less than 40million dollars and Medium size as employs more than 250 staff and has a
turnover more than 40 million dollars.

2.2.1.1 Scope of Private sector organizations

Enterprise Characteristic Size Scope
Marina Foods PVT Annual Turnover – Medium Size Its primary business
Limited 2.9 billion LKR business. focus is to supply the
The number of domestic market with
employees – more high quality edible oil,
than 2000 fats and margarine to
consumers, bakery
trade, industrialists and
hotel and restaurants
John Keells Holdings Annual turnover - Large or Multinational Managing hotels and
PLC 93.28 billion business resorts in Sri Lanka and
The number of the Maldives to
employees – more providing port, marine
than 3000 employees fuel and logistics
services to IT solutions,
manufacturing of food
and beverages to
running a chain of
supermarkets, tea
broking to stock
broking, life insurance
and banking to real
estate,
Differ from which

Average number of Small Scale business operational
Sole Proprietorships employees- businesses areas.
House hold businesses Maximum 10
Annual Turnover –
will be differ from
business to business
Average turnover in
Sri lanka is – 554,484
LKR
(Department of Senses and Statistics Srilanka, 2017)
(NMK Holdings, 2017)
John Keels Holdings Annual Report – 2016

Organization Type Size of The Organization Scope of the organization

Sole Proprietorship Small Wide
Partnerships Small – Medium Wide. Single person oversees
a large sector of the business
Private Limited Companies Medium – Large Comparatively Narrow to the
above two
Public Limited Companies Large Typically Narrow. But Wide
Scopes can be seen in modern
organizations in order to
boost creativity and
leadership inside the
organizations.
Franchises Large and Geographically Typically Narrow. However,
Spreader being customized according
to the geographical operations
and geographical sizes.
2.2.1.2 – Size and scope of the private sector
Scope of the Private sector organizations are embedded with the Purpose of profit maximization as
well as scope runs to the all-functional areas of the business. However, the comparison is in general.
There might be extreme incidents as if a sole proprietorship is functioning with thousands of
employees or a PLC is with only few employees.
2.2.2 Legal structer of private sector
Partnerships and sole traders Limited liability companies Franchises

Registration is not Obtaining Licenses and A contract is forged between
compulsory can be registered the franchisor and the

in the department of registrar Permits franchisee

of companies
unlimited liability – Register with the Inland
Revenue Department and
. Even if the owner does not Tax Authorities
draw on his profits, And still
taxed. Losses can be offset – Opening a bank account or
against tax on other income opting for bank facilities for
business requirements
Submit Articles of
Association
Tab
Give public notice of
incorporation le
2.2.
2.1 – Legal structure of private sector
2.3 Voluntary Sector
2.3.1 Lions club Scope
Lions help where help is needed – in our own communities and around the world – with unmatched
integrity and energy. Since 1917, Lions have strengthened communities through humanitarian
projects and hands-on service.
Number of members - 1.4 million members
The size of the volunteer sector organizations cannot be pre-defined. Since there are huge and spread
volunteer movements like Lions Club, AIESEC, Rotract, There are small movements as well for a
single cause or for a limited number of geographical areas or members. However, the scope is
always wide in these organizations in order to maintain member involvement and generate new ideas
According to the size, scope of the business may differ. All the public sector organizations are
difficult to compare as those are generated larger and provide massive services to the public. Size
and the scope of a business have positive relationship where as scope become large when size of the
business increases. In sole tradership business scope, become limited, as size is small. Most of the
voluntary sector organizations are larger as some have branches all over the world. As those are
operated, all over the world scope become wide. Perhaps products decide the scope of a business.
However, size and the scope needed to identify clearly by a business to build up the future business
activities.

2.3.2 Legal structure
Unincorporated Incorporated
Unlimited personal liability (joint & several) Limited personal liability
Ownership of property by individual people Ownership of property by the organization
No statutory framework – no governing law Clear statutory framework (with penalties for
non compliance & automatic fines for ate
returns)
No real accountability (unless a charity) Clear accountability both to members/
shareholders and to a regulatory body
No automatic set up/running costs Set up and ongoing costs
Table 2.3.2.1 Legal structure of voluntary sector

(Community Impact Bucks, 2017)
2.4 The products and services supply
2.4.1 Public Sector Organizations
Public Sector Organizations, Such as Government Organizations, Departments and State Owned
Companies are having a prime motive of supplying public wellbeing products and services. E.g.
Health Ministry and Government Hospitals Providing Health Related Services to the
general public
Police, And Tri – Forces Ensuring Defense of the Country and Law
and Order
Public Transportation (Ceylon Railway/CTB) Transportation Services to the general public
State Engineering Corporation Developing and Building Constructions
Table 2.4.1.1 - 0 Motive of the public sector
It is noticeable that these products are not profit oriented. Objective is to provide the products to
many citizens as possible. Moreover, served / produced in mass scale since the target market is the
entire public.
These kinds of organizations require a large number of investments and funding from the
government, which makes them very large organizations in size (As previously stated, the size could
be defined by many approaches.) Moreover, when it comes to organizations with huge number of
assets and human resources, the supervision and management takes time and effort. To mitigate the

said issues, the structures of the organizations are often tall and closely monitored. Managers have a
narrow scope of subordinates. This sometimes leads to the generic fallbacks of tall organizational
structures, such as lack of working will, stress, low creativity, higher officers getting unnecessary
authoritative power etc.
2.4.2 Private Sector Organizations
Private sector organizations are producing products and services but at a motive of profit
maximizing. The products are practically cannot be categorized according to the organization type.
In order to review the link between the scope, size, and the products / services of the organization,
the following chart is used
Product Nature of the Organization Scope of the Structure of Remarks
Category Customer Type and Size in organization the
general organization
Consumer Personal Sole Wide One Person or Smaller
Goods Proprietorships/ Very Few – Market, Few
Partnerships : Flat Structure varieties,
E.g. – Bakeries, Low Capital
Carpenters and People
Private / Public Tall Typically a Large
Limited tall Market/
Companies organization Number of
E.g.: Marina, Customers/
Unilever Product
Varieties
Franchises Internationally Very Large
E.g. – KFC, Customized Flat. Geographical
Pizza Hut According Locally – Market and
to Depends on Number of
Franchisee the size and Customers
Location area
and Size.
Typically
Tall
Consumer Personal Sole Wide One Person or Smaller
Services B2C Proprietorships/ Very Few – Market,
Partnerships – Flat Structure Low Capital
E.g.: Salons, and People
Lawyers, House Services are
Plan Drafters delivered
personally

E.g.: ikman.lk, Customers/

SLT, Kangaroo Services
Cabs, NSB Varieties
E.g. – Uber Customized Flat. Geographical
According Locally – Market and
Location area
and Size.
Typically
Tall
Industrial Industrial Sole Wide One Person or Smaller
Goods B2B Proprietorships/ Very Few – Market, Few
Eg – Furniture Low Capital
Manufacturers, and People
Handcrafters
Eg: Hardware Customers/
Manufacturers, Product
Whole sellers Varieties
E.g. – Customized Flat. Geographical
Authorized According Locally – Market and
office to Depends on Number of
automation Franchisee the size and Customers
system dealers – Location area
(Softlogic) and Size.
Typically
Tall
Industrial Sole Wide One Person or Smaller
Services Proprietorships/ Very Few – Market, Few
Eg – Legal Low Capital
Consultancy, and People
Auditors
Eg: Banks, Customers/
Logistic Product
Services Varieties


Eg – DHL Customized Flat. Geographical
According Locally – Market and
Location area
and Size.
Typically
Tall
Table 2.4.2.1– Relationship between size, structure and the products of private sector
However these organizational structures and scopes can be different according to the company
culture, production methods use (Job Production / Flow Production / Batch Production) and the
seriousness of the product to the customer or end production of the industry (Products which need
the accuracy level very high: Airbag sensor of a vehicle), or companies which involves in
customized, tailor made products.
2.5 Stake holders of each sector Commented [NS2]: Select one example from each sector and
name stake holders and explain
Table 2.5.1 – Stake holders of each sector

Source – Google Images
Even though each sector has different stakeholders the common objective of these stakeholders are
to gather information about the business to invest their money and take economic decisions.
Government become the common stakeholder f each party in order to collect taxes.

There are two types of stakeholders as internal and external where internal parties are inside the
organizations such as employees and external stakeholders are outside as mentioned above. however
both external and internal stakeholders can have impact on the business.
2.5.1 Internal Stakeholder Roles
Internal stakeholders usually have a financial interest in the organization. These include
shareholders, the board of directors and investors. These stakeholders are said to have a vested
interest in the success of the company because of a financial investment. As such, they usually have
more influence than external stakeholders.
One of the main roles internal stakeholders have is voting rights based on the number of shares
owned or the percentage of the company owned. The board of directors usually votes for things like
new acquisitions, liquidations, key position hiring, and oversight and budget items including
distributed profits. Those with larger stakes in the company might meet with leaders, brainstorm
development or marketing ideas, and identify new areas for market penetration. (Chron, 2017)

2.5.2 External Stakeholder Roles
External stakeholders generally do not have "skin in the game," meaning not invested any personal
or organizational funds to the company. These stakeholders do not vote on company decisions.
However, the external stakeholder is concerned with decisions a company makes and may meet with
leadership or present information to the board of directors to review ideas, community concerns and
other issues.
The roles of external stakeholders often reflect the community, government or environmental
concerns. For example, an automotive manufacturer seeking to build a new plant might need to meet
with the city council and the environmental protection agency representatives to review potential
benefits and disadvantages to the community and environment. Ignoring external stakeholders could
lead to stalling or blocking of projects. It is best to allow external stakeholders a voice in the process
and brainstorm with them regarding solutions that work for the company and the community alike.
(Chron, 2017)
Conclusion
Nike is the clear-cut leader in the sporting goods and apparel industry and have created a stronghold
on the market that no one can seem to take. Nike have excelled in the market because of innovation
and being the first to market. The area that has propelled Nike to the top is their ability to create an
elastic product through endorsement deals. Nike continuously attracts and signs the top athletes in
each professional sport to lucrative deals to endorse the products. Sponsoring world-sporting events
like the Olympics and the World Cup has also propelled Nike to the top of the industry. Nike does an
outstanding job of relating products to the needs and wants of its consumers and delivering a product
that they have been longing for. (coursehero, 2017)
As per the above suggestions, explanations and clues Nike can diversify business to a diversified
product. According to business analyst suggestions, Nike can generate energy drink combined with
energy food restaurant chain for sportsmen in each country. It will increase the reputation of the
Nike. Moreover, Nike can earn massive profits by entering in to the public sector also. As state has
the control, Nike can get massive support from state because Nike has a highly reputed brand
promise all over the country. In addition, Nike has more branches in all over the world, Nike can
engage in to the contracts with public sector organizations. Such as – Programs to develop sports

skills of Public School students and offering scholarships, Open a Nike stall in schools for
comparatively low prices etc.
Organizational chart of each organizations
3.1 Public Sector Example
Diagram 3.1.1 – organizational chart of public sector

Source – Google images

3.2 Private Sector Example
Diagram 3.2.1 – organizational chart of private sector

Source – Google images

3.3 Voluntary sector example
Diagram 3.3.1 – organizational chart of Voluntary Sector

Source - Google images Commented [D3]: You have to include the organizational
structure pertaining to the selected organizations.
Commented [D4]: You have explained as general That is not the

expected way. You should select there organization from each
sector and describe with regards to those companies by taking
examples.
Commented [NS5]: To above selected organizations find the
organizational chart nd explain

3.4 Organizational Functions and impact on the structure
Basically organizations comprised of 5 major functions according to Samson and Daft ( Samson &
Daft, 2012).
 Production
 Marketing
 Research and development
 Administration
 Human resource
 Accounting and finance
 Purchase
The Production function undertakes the activities necessary to provide the organization’s products or
services. Its main responsibilities are:
 production planning and scheduling

 control and supervision of the production workforce
 managing product quality (including process control and monitoring
 maintenance of plant and equipment
 control of inventory
 Deciding the best production methods and factory layout.
Although many of the principles of good management in a manufacturing environment also apply in
organizations that provide services (rather than manufacture products), service businesses, such as
banking and professional firms of accountants and solicitors, do have a number of distinctive
features which have implications for how it should be managed.
Services are less easily standardized than manufactured products and so service quality tends to be
more variable. This makes human resource management and motivation more critical ( Zeithaml,
Bitner, & Gre, 2009).
Services are often ‘intangible’ (i.e., something that cannot be precisely measured or assessed) and
multi-dimensional – what exactly is the ‘service’ being offered by a bank, a private hospital or
educational establishment? This can make attracting customers more difficult as it often depends on
promoting an intangible item.
Unlike manufactured products, services cannot be stored, but must be consumed as produced or
wasted. This creates additional problems matching productive capacity with customer demand.
Ascertaining the cost of individual services is often also problematic, as the cost structure of many
service businesses is such that costs are often shared among different services. This makes, among
other things, pricing and the analysis of profitability of different services more difficult than with
most manufactured goods

The Research and Development (R&D) function is concerned with developing new products or
processes and improving existing products/processes (Stenhouse, 1975). R&D activities must be
closely coordinated with the organization’s marketing activities to ensure that the organization is
providing exactly what its customers want in the most efficient, effective and economical way.
The Purchasing function is concerned with acquiring goods and services for use by the organization.
These will include, for example, raw materials and components for manufacturing and production
equipment. The responsibilities of this function usually extend to buying goods and services for the
entire organization (not just the Production function), including, and for example, office equipment,
furniture, computer equipment and stationery. In buying goods and services, purchasing managers
must take into account a number of factors – collectively referred to as ‘the Purchasing Mix’,
namely, Quantity, Quality, Price and Delivery.
Quantity. Buying in large quantities can attract price discounts and prevent inventory running out.
On the other hand, there are substantial costs involved in carrying a high level of inventory.
Quality. There will usually be a trade-off between price and quality in acquiring goods and services.
Consequently, Production, R&D and Marketing Functions will need to be consulted to determine an
acceptable level of quality, which will depend on how important quality is as an attribute of the final
product or service of the organization.
Price. Other things being equal, the purchasing manager will look for the best price deal when
procuring goods and services, although price must be considered in conjunction with quality and
supplier reliability, in order to achieve best value, rather than lowest price only.
Marketing is concerned with identifying and satisfying customers needs at the right price (Simon,
1998). Marketing involves researching what customers want and analyzing how the organization can
satisfy these wants. Marketing activities range from the ‘strategic’, concerned with the choice of
product markets (and how to compete in them, for example, on price or product differentiation) to
the operational, arranging sales promotions (e.g., offering a 25 per cent discount), producing
literature such as product catalogues and brochures, placing advertisements in the appropriate media
and so on. A fundamental activity in marketing is managing the Marketing Mix consisting of the
‘4Ps’: Product, Price, Promotion and Place.
Product. Having the right product in terms of benefits that customers value.
Price. Setting the right price, which is consistent with potential customers’ perception of the value
offered by the product.
Promotion. Promoting the product in a way, which creates maximum customer awareness and
persuades potential customers to make the decision to purchase the product.
Place. Making the product available in the right place at the right time – including choosing
appropriate distribution channels.
(Open University , 2017)

The time between placing an order and receiving the goods or services, the lead time, can be critical
for production planning and scheduling and also has implications for inventory control. Suppliers
must therefore be evaluated in terms of the reliability and capability for on time delivery
In short, the ‘purchasing mix’ can be considered as making sure that the organization has the right
amount, of the right quality, at the right price, in the right place at the right time!
The Human Resources function is concerned with the following,
Recruitment and selection. Ensuring that the right people are recruited to the right jobs.
Training and development. Enabling employees to carry out the responsibilities effectively and
make use of the potential.
Employee relations. Including negotiations over pay and conditions.
Grievance procedures and disciplinary matters. Dealing with complaints from employees or from
the employer.
Health and Safety matters making sure employees work in a healthy and safe environment.
Redundancy procedures administering a proper system that is seen to be fair to all concerned when
deciding on redundancies and agreeing redundancy payments.
The Accounting and Finance function is concerned with the following:

Financial record keeping of transactions involving monetary inflows or outflows.
Preparing financial statements (the income statement, balance sheet and cash flow statement) for
reporting to external parties such as shareholders. The financial statements are also the starting point
for calculating any tax due on business profits.
Payroll administration Paying wages and salaries and maintaining appropriate income tax and
national insurance records.
Preparing management accounting information and analysis to help managers to plan, control and
make decisions.
It does not matter how good the organization functions are there have to be interrelationship between
the organizational functions. If not business won’t be able to achieve the ultimate objective which is
profit maximization or shareholder wealth maximization.
Having an interrelationship between organizational functions is crucial for the achievement of
business objectives.
For an example, close collaboration is essential between Production and various other functions
within the organization such as
Research and Development, concerning the implications of product design for production methods
and cost
Marketing, concerning desired product functionality, appearance, quality, durability and so on
Finance, concerning the availability of funds for purchase of new equipment and the acceptability of
inventory levels.

Human Resource Management, concerning staff motivation implications of job design and
production methods
Other functions should also be interconnected in order to achieve the maximum return from the
organizational resources and offer the best possible quality product for the customer
(Open University , 2017)
There is no structure that can be perceived as the “greatest” type of organizational structure. An
organizational structure that can be categorized as being appropriate is depended on the goals of the
organization, the environment that the organizations is doing business in and the type of work
carried out by the organization. Most, if not all organizations, two types of structures exist. The first
one is the formal structure, the documented one that describes ranks of individuals, authority
channels, departments and grouping of elements. The second one is the informal structure, the
undocumented one that describes how participants interact with each other in an organization.
Whereas the formal structure comments how participants are expected to relate to each other, the
informal structure is how they actually do interact with each other (Styne H & Nicholas J.M, 2012).
Even though effectiveness is a fundamental subject in the study of organizations, it still remains one
of the commonly mentioned yet least understood concepts in organization theory. Failure to
understanding organizational objectives, the environment it operates in, the markets, how it does its
business, how it is structured and all the elements of an organization leads to faulty assumptions of
performance (Bedeian A.G, 1986). Once an organization has made a decision on how it expects its
employees to act in the workplace, what employee attitude it expects, what it wants its employees to
achieve, it can then implement its structure and promote the growth of culture morals and customs to
achieve these anticipated boldness, manners and objectives. Structure does not only lead to
increased organizational capabilities, but also the processes that result in increased performance
(Wolf D, 2002; Clemmer J, 2003).

Organizations are set up in specific ways to accomplish different goals, and the structure of an
organization can help or hinder its progress toward accomplishing these goals. Organizations large
and small can achieve higher sales and other profit by properly matching the needs with the structure
use to operate. There are three main types of organizational structure: functional, divisional and
matrix structure(Daft, 2008).
(Houston Chronicle, 2017) Commented [D6]: You have to describe the interrelationship
between different functions of the selected organization by taking
examples. After that you have to explain how do the functions link
with organizational objectives and the structure of the
3.4.1 Functional Structure organizations. You have to describe these things with relating to the
selected companies by you, not as general. If that company has
different functions in each of their product category then the
Most businesses adopt a functional organizational structure: Different functions go into separate structure would be divisional , if the company has difficult
objectives to achieve then their structure should include enough
departments that report to department managers, who then report to someone higher up. If the people to achieve those objectives, if the organization has objective
company adopt a functional structure, it has the advantage of clear lines of authority, and allows to increase market share through providing innovations then they
should have good R & D functions like wise you have to explain with
each employee to concentrate on her particular mission. The drawback is that the company can end relevant to selected companies
up with departments that don't talk to each other or cooperate well. A customer may get bounced
from department to department if his problem doesn't relate to one particular function.(Houston
Chronicle, 2017)
3.4.2 Divisional Structure
A divisional organizational structure spreads functions across different branches: If company has
different product lines, the division for each product line has its own marketing, R&D;, sales and
accounting departments. The advantage of this approach is that each branch has the personnel to
carry out all necessary functions. The drawback is that with employees in each division performing
identical functions could end up with a lot of redundancy and inefficiency.
(Houston Chronicle, 2017)
3.4.3 Matrix Structure
Using a matrix structure in the business can give greater flexibility in business functions than a more
hierarchical organization. In a matrix structure, each employee works in a function-based
department, such as marketing or finance, but can be assigned to projects under different managers
and teamed with employees who have different functions. This structure adapts organizational
function to changing organizational needs. The drawback is that the chain of command in a matrix
may become cloudy and conflicted.
If staff is having trouble visualizing a proposed structure, company can use an organizational chart to
see it clearly. The New York and Erie Railroad developed the first organizational charts in the 19th
century as a way to improve management efficiency. Chart shows how the authority and control
running between different departments and levels of management. A well-designed chart will make

it easy to see who makes decisions, who reports to whom and how organization divides its operating
functions.
Communication is one of most important function that helps organization to stay efficient and
productive. One of the more important forms of organizational communication is inter-departmental
communication, the Institute for Public Relations notes. The importance of communication between
different departments in an organization becomes most apparent when that communication breaks
down. Implementing policies to strengthen inter-departmental communication help to underscore its
importance and maintain an efficient flow of information
Accurate and efficient communication between departments builds confidence within the
organization. When departments trust each other to deliver accurate information, this eliminates the
extra fact-checking step that can slow down productivity. Departments should ensure that the
information sharing within the organization is reliable to help improve operational efficiency.
Customer Service
When communication between inter departments break down customer service may affected. For
example, if a client continues to receive a bill for an invoice that was already paid because the
accounts receivable department is not communicating properly with accounts payable, then there is
the risk of losing repeat business. To retain clients and insure the flow of repeat business, need to
maintain a high level of customer service. When the departments in company are efficiently sharing
information, then clients can be properly attended to, and customer service improves.
Efficiency
Sales and production people should have accurate connection as sales people know the trends in
market and the product demand. If production people was unaware of an increase in product
demand, then company will loss revenue. The accurate exchange of information between
departments improves the ability to meet sales objectives, to get product to distribution points and to
have contracts and documents reviewed by the proper people. Information exchange allows for a
productive exchange between engineering and marketing about the release of a new product and gets
information on prospective employment candidates to the human resources department. Improving
communication between departments improves the efficiency of the overall operation of the
company.
(Course Hero, 2016)
Conflict
A breakdown in communication at any point in the organization can result in conflict. If the shipping
department is not notified of, an important shipment in time to make next day delivery, then that can
cause a conflict among several departments in the organization. When departments engage in
conflict, the productivity of entire organization is affected.

As an example
In a matrix structure, individuals from the marketing, finance and product departments may confer
with one another to formulate strategies. The specialized information exchange allows managers to
respond quickly to the needs of customers and the organization. However, this structure has certain
complexities such as
Internal Complexity
A disadvantage of the matrix structure is that it can result in internal complexity. Some employees
may become confused as to who their direct supervisor is. For example, an employee may receive
different directions concerning the same thing from supervisors in different departments. The dual
authority and communication problems may cause division among employees and managers.
Miscommunication and ineffective managing can result in employee dissatisfaction and low morale.
Prolonged issues may cause an organization to experience high employee turnover. (Chron, 2017)
Expensive to Maintain and Internal Conflict

Another disadvantage of the matrix organizational structure is that it is expensive to maintain. A
company's overhead cost typically increases because of the need for double management. The extra
salaries an organization must pay can put a strain on its resources. The sharing of employees may
cause unhealthy competition between managers within a company. The expertise that employees
bring to the table makes them valuable, which causes managers to seek their assistance. The
competition for scarce resources may cause hostility within the workplace and hinder production.
(Chron, 2017).
In a business, owner must identify what is the suitable business structure. It may vary according to
the type and the number of employees of the business. Perhaps, it may be affected by the external
environment as well as business culture. However, each business structures have different types of
complexities according to the nature of authority delegated. Companies should be able to identify it
clearly and face effectively. Above area covers the advantages, disadvantages and complexities
business structures.

Self-criticism
The assignment covers the information about two organizations namely, Nike and Macdonald’s. As
this is my first assignment, I have gone through most difficulties and hardships. At the same time I
have learn most important and valuable information and gather knowledge about this subject.
Strengths
1. Guidance and the support of class teacher

2. Finding information become easier
3. Able to submit the assignment before due date
Weaknesses
1. Finding accurate information become difficult.

Gantt chart
JULY AUGUST
Description
Week 3 Week 4 Week Week Week Week

1 2 3 4
Gather
information
Task 1
Task 2
Task 3
Formatting
and
finalizing

References …
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environment/conclusion. [Online]. Available at http://businesscasestudies.co.uk/mcdonalds-
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[Online].Available at http://www.businesslincolnshire.com / [Accessed on June 13 2017]
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[Accessed on July 13 2017]
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[Online] Available at https://www.coursehero.com/file/p7m8ec2h/Why-is-it-important-for-an-
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http://www.statistics.gov.lk/VisionMission.as p [Accessed on July 15 2017]
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[online].Available at http://smallbusiness.chron.com/importance-communication-between-different-
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15 2017]
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[Accessed on August 13 2017]
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HigherNationals

Pass, Merit & P1 P2 M1 D1

Grade: AssessorSignature: Date:

Grade: AssessorSignature: Date:

Unit: Business and Business Environment

Word Processing Rules

1. I know that plagiarism is a punishable offence because it constitutes theft.

Student’s Signature: Date:

Student Name /ID Number

Unit Number and Title Unit 01:Business and Business Environment

Academic Year 2017/18

Assignment Title Understanding different types of organizations in different

IV Name & Date

The recommended word count is 2,000–2,500 words for the report

Unit Learning Outcomes:

Grading Criteria Achieved Feedback

P1 Explain different types and purposes of

P2 Explain the size and scope of a range of

P3 Explain the relationship between

Nehari Senanayake Page 1

Business Analysis Report

July 25 Th, 2018

Nehari Senanayake Page 2

Nehari Senanayake Page 3

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3.1 Public Sector Example .................................................................................................................. 23

Table 2.1.1 – Public sector organizations and Size ................................................................. 10

Diagram 2.2.1 How to measure the size of private sector .................................................. 13

Nehari Senanayake Page 5

Introduction to the Nike

Nehari Senanayake Page 6

Introduction to provide an overview of different types of organizations

1.1 Public Sector

In the process of achieving the Purpose,

1.2 Private sector

Nehari Senanayake Page 7

Profit is needed to at least to cover up the expenses of the business.

How private sector is going to achieve the purpose?

1.3 Voluntary Sector

Examples of organizations in the voluntary sector include:

Nehari Senanayake Page 8

1.4 Growth of the international business environment

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Background details of the organizations & the size and scope

2.1 Public sector organizations.

Public Sector Organizations

Table 2.1.1 – Public sector organizations and Size

Nehari Senanayake Page 10

2.1.1 Scope of Public Sector Organizations

Organization Scope Explanation

Motivation within the Public

The Ministry of Justice The Ministry of Justice 1. Scope reveals the

Nehari Senanayake Page 11

Table 2.1.1.1 – Scope of the public sector organizations

(Ministry f public administration and management , 2017)

2.1.2 Legal Structure of Public Sector

1. Ownership and the controlling is with the state of the country

Nehari Senanayake Page 12

2.2 Private Sector Organizations