Question :
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The purpose of this assignment is to evaluate the factors of business environment as well as their impact over organisational decision making. In this regard, it is needed to evaluate available potential strategies for firm that can assist in reducing negative impact of such factors.
- Analyse various categories of organisations as well as their size and scope.
- Evaluate the interrelationship between different functional department of British airways.
- Identify the positive and negative influence of external environmental factors upon business operations and functions of British Airways.
- Discuss the strength and weaknesses of British airways and identify its interconnection with macro environmental factors.
' Answer :
INTRODUCTION
The business environment encompasses all internal and external forces that can impact business decisions. These forces include economic, social, political, and technological factors that are beyond the company's control. The business environment is also dynamic, involving changes in technology, shifts in customer preferences, and new market competition. Predicting future developments in this environment can be challenging, and such changes can directly and indirectly affect all business activities and procedures. It is crucial for companies to identify opportunities that allow them to outmaneuver competitors, rather than falling behind (Cai and Yang, 2014). Additionally, recognizing future threats serves as early warning signals, helping firms maintain a competitive edge. This assignment focuses on British Airways, the largest airline and travel agency in the UK based on fleet size. In January 2011, British Airways merged with Iberia to form the International Airlines Group, a holding company registered in Spain and based in Madrid. The assignment will also describe the purpose and legal structure of the three main economic sectors: private, public, and voluntary. Furthermore, it will explain the different departments within a company and how they contribute to achieving organizational goals and objectives.
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TASK 1
P1 Types and Purpose of organisations
In this present scenario, every business association is tend towards gaining high competitive advantage without putting extra efforts; for this they designs and develop several products and services to attain customers at marketplace. There are several business organisations, i.e. for profit, non-profit and non-government organisations which works in a society by having their own aims and objectives.
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For profit organisations
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Not for profit organisations
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Non-government organisations
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These organisations have a variety of goals and mission is to generate maximum profits by producing effective products and services that are valuable for buyers (Chavis, Klapper and Love, 2011).
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A non-profit business organisation does not gives priority to profits and instead of this they are dedicated towards promoting social causes for a specific standpoint. Services offered by these associations are strive to resolve life threatening problems and issues.
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A NGO is formed by ordinary citizens which operates autonomously of government. Its a registered trust under public trust act or a society under socieities registration act; which works for social welfare and social benefits.
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For profit business organisations tend to generate funds from various sources, i.e. local investors, bank loans, sales revenues etc. If products and services of the firm have high potential market growth then they are able to gain funds from national and international investors.
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These associations seeks out private donors, government grants, corporate sponsorships etc. whereas crowdfunding is also treated as online fundraising concept for non-profit organisations (Commander and Svejnar, 2011) .
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Funds in non-governmental organisations can be raised by government and volunteers, but it also manages a non-governmental position with no specific need for government council.
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These companies targets large market in comparison with non-profit organisations. In this, managers are focused on arriving wide range of customers and establish healthy and positive relationship with them.
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Instead of providing a product or service directly, non-profit organisations delivers a specific message to customers with their offerings.
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NGOs would thus also have a tendency to more directly deal with social issues such as slavery, child labour, prostitution etc.
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British Airways
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Easy Zet
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Wiz air
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Size
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It is a large size business association which operates over the world. There are over 200000 employees are currently working with over the world.
The overall revenue of British Airways is £11,443 million.
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There are over 11,655 are presently working with the company;. The annual revenue of the firm is £5.047 billion.
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The firm is widely presented in Europe by having a worforce of over 13000. Annual revenue of Wiz air is £6.89 billion.
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Legal
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It is a public limited company which is established by British government to manage the two nationalised airline corporations.
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Easy Jet plc is listed on the London Stock Exchange.
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Scope
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In 2011, BA was merged with Iberia and then generated international group of airlines; its a holding company registered in Madrid.
IAG is a third largest group of airlines in respect of generating revenues.
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The organisation provide its services at various routes in Europian nations and now trying its functional in other developing countries with an aim of gaining high competitive edge.
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The organisation has a largest fleet in airline company which deals in European countries.
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Apart from this, majorly there are three types of business organisations which are breifly described as under: -
Public sector – It is one of the important part of an economy which tends to provide basic products and services to people. Public sector organisations are intermixture of local government, its chartered bodies and regulatory agencies. In UK, public sectors accounted for 30% economic growth and development (Cuervoâ€ÂÂCazurra, 2011). These corporations are owned and handle by government and its related bodies by having an aim is to provide best and efficient products which are able to satisfy consumers' needs and wants in the best possible manner.
For example - Department for Culture, Media and Sport comes under public sector organisation which ism liable for managing cultural, sports and media in UK. It was founded in 1997 which also look out for tourism leisure in England.
Purpose – The main motive of public sector enterprises is to promote self reliance in national economy. In UK, most of the public sector enterprises are situated in backward areas in order to eliminate regional imbalances and improving living standard of society as well.
Private sector – It usually comprises with organisations which are run and operate with individuals and group of persons who looks out to generate high profit margins. In this sense, they are focused on generating new and innovative products which are able to satisfy customers' needs and wants in the best possible manner (Gebauer, Paiola and Edvardsson, 2010). Companies which comes under this sector are known free from government involvement; individuals are liable to take all imperative decisions in private companies.
For example – British Airways is a leading private business association which is a global airline offers year around low fares with an extensive global routes networks. The firm was founded in 1974 by having fleet size of 270 and it serve its services at 183 locations. The overall revenue of British Airways is £11,443 million whereas its net income is £1,473 million. Currently, the firm has employed 30000 persons who serves effective services to customers over the world.
Purpose – The main purpose of private sector organisations is to become efficient at marketplace by cutting operational costs. Although, these companies gives priorities to profits and may end the service if it does not find it profitable to run the service.
Voluntary sector – It usually comprised with those associations which are implemented for social benefit and social welfare and there no or little intervention of government. In UK, it is estimated that the voluntary sector contributes £11.7 billion to UK gross value added which is equivalent to 0.8% of the whole of the UK GVA.
For example – Oxfame is a popular charitable organisation in UK which focused on the alleviation of global poverty and boom up living standard of people. The firm was founded in 1942 which focuses on advocacy, pro-migration, policy research etc. The firm organises several programmes which tends to address the main causes of poverty and determine relavant solution for the same.
Legal structure of business organisations: -
Sole proprietors business – These business are owned and controlled by one person, it is very easier to set a sole proprietor business as it requires low costs. Here, the owner is wholly liable for bearing all profits and losses of the business (Halbert and Ingulli, 2011).
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Advantage
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Disadvantge
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Avoids the expenses of forming a partnership or corporation
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Unlimited liability for all debts of overall business
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Sales can take place at the discretion of sole proprietor.
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Only an individual has all responsibility to share all losses.
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No need of corporate tax payments.
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Investors dont prefer to invest in these businesses.
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Partnership - it is kind of business which is owned and controlled by two and more persons which equally contribute in implementing resources within business.
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Advantage
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Disadvantage
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Simplicity and flexibility
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Business income and expenses are reported on the basis of separate tax return.
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Combine capital
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Disagreements can occur
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Spread workload and share decision making
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Partnership might be dissolve if a one partner dies.
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Limited companies – It involves public and private limited companies. Limited liability company follows a hybrid structure which allows business owners to limiter their personal liabilities.
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Advantages
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Disadvantages
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A limited liability company provides more protection as well as separations to businesses.
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In this profits and losses are not taxed at corporate level.
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Reduces administration costs.
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High costs involved in formulation of LLP's.
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No requirement to make information public.
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Compulsory audit in every financial year.
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Corporations – In this, owners has their own legal rights and corporations can be sue, be sued and sell property.
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Advantages
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Disadvantages
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No federal income taxes
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Limited to a maximum of 100 shareholders
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Ability to raise investment money
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Pays taxes on profits.
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P2 Size and scope of business organisations
On the basis of size and scope business organisations are classified into four parts, such are stated as under: -
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