Unit 1 The Business Environment
Pass Criteria 3
P3 – Describe how each business is organised
P4 – Explain how their style of organisation helps them to fulfil their purposes
Organisational structure is the way in which the internal stakeholders of a business are
organised. Both M&S and the NHS organise their structure by functional areas. A functional
area is a group of people within a company that have a particular purpose, so each
department has its own speciality. Another type of structure is by dividing it up into
geographical areas, so if a company operates in the south east and the south west of the UK
then the company can be divided up between these two places, or another example is it
being divided up into international areas. Product groups is a different way that companies
can be structured and can be used by companies if they want to focus on specific products
to make them better. The last type of structure is by the type of customer as different
customers can have different needs so they can focus and improve the way they handle
them, for example an apple grower can have two types of customers these types are a big
business or individual customers, the big business will want to buy in bulk whereas the
individual customer may only want a few apples.
They are different ways that companies can use the organisational structure, these ways are
based on; function, geographical areas, product groups and types of customers. M&S and
the NHS are both big organisations and to ensure the success of both businesses the work
that needs to be done needs to be divided up. Both M&S and the NHS divide their
organisation up in the same way this is; finance, marketing, production, customer service,
sales, human resources1 and are called functional areas. Dividing a business up into financial
areas helps business to establish lines of control to help with communication. Dividing up
the business also helps as it divides up the work to be done and ensuring the work to be
done is possible. The lines of control are useful for employees so they know what they are
responsible for and what other employees are responsible for, which helps departments to
work smoothly.
There are two ways that companies can structure their organisation structure. They can
either use a flat structure or a tall structure, there are advantages and disadvantages to
both.
Flat structure Tall structure
Advantages Disadvantages Advantages Disadvantages
Gets everyone Decision making can Very clear reporting People can feel like
involved take longer because lines they are stuck in the
you have to consult system
lots of other people
Better The functions of Easy to know who is Slower decision
communication each department meant to be doing making
can get confused what
Greater team spirit The highest person Allows for close
may end up with too supervision
big of a job
Pass Criteria 3
P3 – Describe how each business is organised
P4 – Explain how their style of organisation helps them to fulfil their purposes
Organisational structure is the way in which the internal stakeholders of a business are
organised. Both M&S and the NHS organise their structure by functional areas. A functional
area is a group of people within a company that have a particular purpose, so each
department has its own speciality. Another type of structure is by dividing it up into
geographical areas, so if a company operates in the south east and the south west of the UK
then the company can be divided up between these two places, or another example is it
being divided up into international areas. Product groups is a different way that companies
can be structured and can be used by companies if they want to focus on specific products
to make them better. The last type of structure is by the type of customer as different
customers can have different needs so they can focus and improve the way they handle
them, for example an apple grower can have two types of customers these types are a big
business or individual customers, the big business will want to buy in bulk whereas the
individual customer may only want a few apples.
They are different ways that companies can use the organisational structure, these ways are
based on; function, geographical areas, product groups and types of customers. M&S and
the NHS are both big organisations and to ensure the success of both businesses the work
that needs to be done needs to be divided up. Both M&S and the NHS divide their
organisation up in the same way this is; finance, marketing, production, customer service,
sales, human resources1 and are called functional areas. Dividing a business up into financial
areas helps business to establish lines of control to help with communication. Dividing up
the business also helps as it divides up the work to be done and ensuring the work to be
done is possible. The lines of control are useful for employees so they know what they are
responsible for and what other employees are responsible for, which helps departments to
work smoothly.
There are two ways that companies can structure their organisation structure. They can
either use a flat structure or a tall structure, there are advantages and disadvantages to
both.
Flat structure Tall structure
Advantages Disadvantages Advantages Disadvantages
Gets everyone Decision making can Very clear reporting People can feel like
involved take longer because lines they are stuck in the
you have to consult system
lots of other people
Better The functions of Easy to know who is Slower decision
communication each department meant to be doing making
can get confused what
Greater team spirit The highest person Allows for close
may end up with too supervision
big of a job
