Question 1: Explain how the functions in LMB work together to achieve its

objectives? (P3)

(P3 Explain the relationship between different organizational functions and how they link
to organizational objectives and structure)

Organizational structures are dependent upon the business function of the organization because
organization always makes their organization structure and objective based on the role they
serve to the customers. The function of organization is depending on different functions such
as human resource, sales and marketing, research and development, production and operations,
customer service, finance and accounts, administration and IT. Marketing is considered as
bridge of relationship with the market in order to satisfy the customers

LMB Makes objectives so they can increase productivity in the organization, and they create
an effective organizational assembly so they can maintain a respectable movement of command
in their organization. Business function of LMB. is to serve customers with their product and
services and uphold a uniformity as well as control in the organization. Consistency can be
maintained in the LMB. Through actual amount of control and organization can monitor their
business doings through their structure.

It has been observed that the organization follows bureaucratic leadership strategy to manage
their operation. According to the bureaucratic leadership style the higher level managers decide
or develop the strategy. After that the employees and team leaders have to fulfil the goals or
strategy in mentioned timeframe.

LMB can achieve a better functionality if everyone connected with any project has a good
knowledge regarding his or her role. Therefore, effectiveness in the setting of real objective
and organizational structure can help LMB to achieve organizational functions because it helps
employees to know regarding their role with effectiveness.
 Question 2: Assess the main issues with Jack’s organizational structure and
the impact it has on the functions. (M2)

(M2 Analyze the advantages and disadvantages of interrelationships between

organizational functions and the impact that can have upon organizational
structure.)
Structure extent of any organization are connecting with the goal of the business organization.
It is seen that any organization set a huge target as their objective only when they have a good
organizational structure. If the organization have few people in their organizational structure
and no one has knowledge regarding their role and subordinate then it is not possible for them
to reach the target because then it is impossible to achieve this because of less clarity in the
role.
On the other hand, any business organization set their objective based on their size. If the size
of the organization is enormous and invests huge money, then they set the big target as their
business objective. However, every organization has some common objective that is serving
customers and earns profit, but the profit level differs with the size. For example, LMB will set
a small target as their objective but their competitors will set the huge target as their
objective. Below are the advantages and disadvantages of interrelationships between
organizational function and the impact that can upon organizational structure of LMB.

Advantages:

 Inter employee relationship amongst different organizational function assistances any

organization to maintain cooperation
 It also upsurges association among employees and increases effectiveness in business
 It escalations the profit level because every employee of various functional departments shares
their information.

Disadvantages:

 Every employee from various branch knows the others job responsibility and operations of
others branch so they can utilize those information to harm that branch
 It increases competition among different functional branch.
Question 3: Suggest a structure that might work for the current LMB, considering its
business type and resources. (D1)

(D1 Provide a critical analysis of the complexities of different types of business structures
and the interrelationships of the different organizational functions.)
The various organizational structures include the various tasks it performs or the basic activities
on which the existence of the company comes into force. In our case we took case study on
company LMB a Book retailer which sells books and provide service. It defines interaction
between various business activities and level of authority subordinate relationship runs through
various levels of business organization. The various business functions for LMB, sales and
finance. Business can be set up in various organizational functions but for smooth flow of
business the proper organizational structures has to be maintained.

These organizational structures which work around the organization like LMB are as

Functional structure

LMB should works clearly on superior subordinate relationship management. This clarifies the
roles and jobs of various employees working in different departments for separate units. This
helps in employees on concentrating their particular job and has a clear mind of his/ her
authority and responsibility of work.

Divisional structure
Merits: As the LMB has 4 different book Stores which operates in different area, each store
should have separate divisions such as research and development, marketing, sales, finance,
accounting and auditing. But the organizational goals and objectives should be same. There are
different basis on which departments are formed like function, product, place and project where
job has to be performed. This is very important area that should focus future for the company.
LMB should increase their product line by increasing titles and standard organizational
structure.
Demerits: Different employees working the same task for different product lines which
increases the redundancy of work.

Matrix structure
Merits: Using a matrix structure in LMB business can give you 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 they 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.
Demerits: Authority or chain of command is difficult or clumsy for the same function working
under different departments and another most important aspect to look forward is that it
increases high administrative cost with high aspect of conflict. Further there can be confusion
on authority and subordinate relationship due to its cloudy formation

Hybrid organizational structure

Merits: It helps in coordination of alignment of corporate & divisional goals with great
flexibility in decision making with great efficiency & expertise that helps in achievement of
overall goals & objectives of organization.
Demerits: There can be possibility of conflicts with further increase in administrative cost and
there is very slow response to unexpected situation.
1. Explain the different types and purposes of organizations; public, private and
voluntary sectors and legal structures. (P1)

In the world of business are 4 most common types of organizations, which are:
1. The sole trader
2. The partnership
3. Companies
4. Franchising
5. Charity organizations
The sole trader
One of the most common forms of the business is the sole trader and is including in a wide
range of activities (e.g. Mobile fitters, mechanical work, plumbing, electrician work’). A very
big percent of sole traders operate in the construction industry and in retailing, some of them
in finance, and in catering. To set up a sole trader business no complicated paper work is
required. Every decisions can be made quickly. Close contact can be kept with customers and
employees. Very good point of the sole trader is that all of profit go to the sole trader, who also
has the satisfaction of building up his or her own business.
There are also some disadvantages. If you are sole trader you have to make all the decisions on
your own, and you may have to work harder and longer (what do you do if you are sick or want
a day off?) Like a sole trader you do not have limited liability, and you have to provide all the
finance yourself. As a sole trader you need to be a jack-of-all-trades, and just because you are
a good electrician does not necessarily mean you have a head for business strategy.
The partnership
The partnership can contain between two and twenty partners. However, the Partnership Act
of 2002 has made it legal for some forms of partnership e.g. big accountancy firms to have
more partners who also enjoy limited liability. People in business partnerships can share skills
and the workload, and it may be easier to raise the capital needed. For example, a group of
doctors are able to pool knowledge about different diseases, and two or three doctors working
together may be able to operate a 24 hour service. When one of the doctors is ill or goes on
holiday, the business can cope. Partnerships are usually set up by writing out a deed of
partnership which is witnessed by a solicitor and sets out the important details such as how the
profits and losses will be shared. Partnerships are particularly common in professional services
e.g. accountants, solicitors, vets.
Companies
The Company should be owned by shareholders where the Directors give the direction of the
business. The major decisions are made by the Chief Executive AND Specialist managers will
be appointed to run the company on behalf of the Board. The company is a legal body in its
own right with an existence that is separate in law from its owners. The Shareholders put funds
into the company by buying shares. New shares are often sold in face values of”1 per share but
this does can be different for every one organization.
Limited liability is a form of business protection for company shareholders (and some limited
partners). For these individuals the maximums sum they can lose from a business venture which
they have contributed going bust is the sum of money that they have invested in the company
– this is the limit of their liability. Every company should be registered with the Company
House, and should have an official address. The limited companies have Ltd after their name.
The Ltd is smaller than public companies, some like Twix and Mars are very large. Shares in
a private company can only be bought and sold with permission of the Board of Directors.
Shareholders have limited liability.

Franchising
Very big part of the retail sales today are made from organizations which operating under the
franchise s like Subway’s which has a brand franchise. The franchising is becoming more and
more popular in today’s business world. Franchising actually is using of already popular brand
names. A franchise grants permission to sell a product and trade under a popular name in a
particular area. The person taking out the franchise puts down a sum of money as capital and
is issued with equipment by the franchising company. The company selling the franchise is
called the franchisor and a person paying for the franchise is called the franchisee the benefits
for franchisee from trading under a well-known name and enjoys a local monopoly. Training
is usually arranged by the franchisor. The franchisee is his or her own boss and takes most of
the profits.
Charity organizations
The charity organizations is a nonprofit organization, which can be run publicly or privately.
Some charities may be centered on religious, educational or other public interest activities that
are philanthropic in nature. Depending upon the location of the charity, the legal definition of
what constitutes a charitable organization may vary according to its country of origin.
Therefore, the tax implications for a charity will also depend upon the region or country in
which the charitable organization operates
2. Explain the size and scope of each of the types of organizations. (P2)
There is provided a scenario in which being the client manager of the HSBC Bank in the branch
in Holborn. The branch manager has asked to explain about the various aspects related to three
types of organization which can be approached to give loan, mortgage and other business
services which can make impact on the overall effectiveness of the HSBC bank’s performance
(BANICA, et. al 2015). These different types of organizations are different in sizes, scope and
their link with their organizational objectives and functions and services. For this purpose we
will study about three different types of organizations and their different aspects.

Sole trader-

This is one of the different types of organizations which are involved in different activities and
have various characteristics and attributes. Sole trader organizations have single owner and can
be small or huge in size based on its functions and activities provided by the company
(BANICA, et. al 2015). Sole trader is the most common form of organizations and business
which can be approached effectively by any bank to provide loan and mortgages and any other
services. There is effective liability of the owner to run and manage all the activities in the
organization. There is prepared financial statements in the organization in which there is
included balance sheet in which there are recorded all the assets and liabilities of the
organization and there is no requirement to maintain any profit and loss statements and cash
flow statements.

The organizational structure is narrow in this type of organization as in there is limited

functions in the company which can handle by limited people. There is effective scope in the
organization as in there is all the power to take decisions are with the owner and there is
requirement and low funds which make it possible to start something new. There is effective
link between organizational performance and activities with the objectives of the organization.

Partnership-
Partnership firm can be executed between two or more partners and registered in Partnership
Act 2002 in which the partners work for specified objective to be achieved in specified time
period. The size of the partnership firm depends on the level of operations handling by the
organization (Cheeseman, 2016). the scope of the partnership firm is expanded as in there is
unlimited liabilities but now there registered partnership firms having limited liability which is
also known as limited liability partnership in which there is limited liability of the partners in
the firm. The profits of the firm are divided among the partners in the proportion of the capital
and all the expenses are also payable by them in this portion.
The structure of partnership firm is horizontal and there are taken decisions by mutual concern
which makes impact on entire activities and performance of the partnership firm. Financial
statements are prepared in the partnership firm in which there are defined all the important and
essential aspects of the partnership firm and its running that make effective communication.
There are required to be followed all the rules and regulations defined in partnership act.
Financial statements of the partnership firm include profit and loss appropriation, balance sheet
and partners ‘capital accounts to be maintained in effective manner.

There are various activities which are associated with the objectives of the partnership firms.
In the present business environment there are various partnerships between different
organizations that are making effective results and making it more successful. It is required to
have effective control and management between these activities and objectives to achieve
efficient results in the organization (Cheeseman, 2016). The products and services provided by
the company are effectively influenced with the structure, size and activities of the partnership
firm.

Company-
Company is registered entities under the companies act which have effective rules and
regulations to be followed and which is started with the efforts of the promoters why make the
proposal to start the company and make proposal for that. There are members and directors in
the company who run all the activities in the company. The capital in the company is collected
by the way of issuing share capital among general public by which the shareholders of the
company become owner of the company and have right to vote in the decision making of the
company (Clark, 2014). The structure of the company is vertical and hierarchal in which all the
authorities and responsibilities are transferred from top to bottom and decisions are taken by
the management of the company. Size of the company can vary in accordance with the
execution of activities in the company.

The scope of the company is wide and includes various aspects which can effectively improve
performance and profitability of the company. There are prepared financial statements and
analysis of them can help in taking effective decision in the organization that can make impact
on overall effectiveness of the organization. Objectives of the company vary and make impact
on the overall activities of the company. Organizational objectives make impact on the various
aspects that can make impact on overall effectiveness of the organization. There are defined
various activities in the process of production of products and providing services in the
organization which can make impact on the overall performance in the organization.
Franchising
Franchises: A franchise is a system where entrepreneurs purchase the rights to open and run a
business from a larger company. Franchising in the United States is widespread and is a major
economic powerhouse. One out of twelve retail businesses in the United States are franchised
and 8 million people are employed in a franchised business.

Charity
A charitable organization is a type of non-profit organization (NPO). It differs from other types
of NPOs in that it centers on philanthropic goals as well as social well-being (e.g. charitable,
educational, religious, or other activities serving the public interest or common good).
Charitable organizations often depend partly on donations from for-profit-organizations. Such
donations to charitable organizations represent a major form of corporate philanthropy.

3. Analyze how the structure, size and scope of different organizations link to the
business objectives and product and services offered by the organization. (P3)

Structure, size, and extent of any organization are connecting with the goal of the business
organization. It is seen that any organization set a huge target as their objective only when they
have a good organizational structure. If the organization have few people in their organizational
structure and no one has knowledge regarding their role and subordinate then it is not possible
for them to reach the target because then it is impossible to achieve this because of less clarity
in the role. On the other hand, any business organization set their objective based on their size.
If the size of the organization is enormous and invests huge money, then they set the big target
as their business objective (Wardet al.2011). However, every organization has some common
objective that is serving customers and earns profit, but the profit level differs with the size.
For example, Zaffirson food will set a small target as their objective but Associated British
Foods Plc. will set the huge target as their objective.

Organization set their business objective by reviewing their business scope. If the scope of any
organization is to serve national customers, then they will set business objective accordingly.
On the other hand, if they see that they serve international customers then they will set their
business objective accordingly. According to the product and service, an organization set their
structure, size, and scope. If any business organization sees that, their product does not require
massive organizational structure; then they do not set that. On the other hand, if the scope of
business of any product or services is vast only then an organization creates massive
organization size and creates a scope, otherwise, they create small sized organization.

Task 2 (This is relevant to P4, M3, P5, P6, M4 and D2)

1. Identify the positive and negative impacts the macro environment has upon
business operations, supported by specific examples. (P4)
As stated by Childand Möllering (2013), in the macro environment, new risks are always
appearing, and it became harder to identify for any organization. In the case of retail, it is not
possible for any organization to reject the change as they raise and they have to adapt those
changes. Macro environments include economic, societal, technological, and governmental
influences. Technology has several active and negative impacts on the business operations.
Technological
Advancements can provide different business opportunities to the Associated British Foods
Plc. if they can take it. Technology opens home shopping networks, new retail markets, web-
based retailer and other online market and provides extra online market to any organization
(Craigand Campbell, 2012).Therefore, it increases point-of-sale to increase sales by allowing
any organization to process cash, debit and credit card system. However, these technological
advancements have one negative impact i.e. online customer’s only selects those organizations
that have real technological proficiencies. If Associated British Foods Plc. cannot apply
effective technological advancements then they can lose their competitive advancements. Law,
policies, and different governmental regulation have a positive and negative impact on the
business. If governments help any Associated British Foods Plc. by providing different
governmental assistance, loan, and subsidiaries and assist them to establish their organization
then it can positively help any organization. On the other hand, tax rates on any corporate
organization may negatively affect any organization.

A robust economy can increase the disposal income of customers, increase their sales and help
them to sell more goods and services (Demirguc-Kuntet al.2011). On the other hand, on the
lethargic economy may decrease the disposal income and causes less amount of spending in
the market. After that, it leads to declining level of sales and forces retailers to lower their
pricing strategy. The retail industry is always under pressure to become a socially responsible
organizations if they must sell environment-friendly products, removing controversial products
from the market, placing warranties in the market, etc. However, there are several cases where
social factors and government overlap each other in different areas and may harm different
organizations.

2. Apply appropriately the PESTLE model to the organization to support a

detailed analysis of the microenvironment within it. (M3)
Political; here we can consider political, but not legislative, problems. It’s not question about
only for local and foreign governmental activity here, but also the activities of organizations
(such as NGO’s) and special-interest groups and the pressure they bring to bear on government
policy. We should also consider the government’s general policies, plans and attitudes towards
economic development in the country over the medium to long-term. Also, consider the
possibility of elections and the possible outcome, whether peaceful and whether a political
transition may take place.

Economic; This environment, perhaps more than any of the others, is the one that most
influences business decisions, especially in developing economies that are prone to sudden and
significant economic shocks from external sources. Businesses can be affected directly by some
economic changes (e.g. interest rate changes on a business that borrows significant amounts)
or indirectly (e.g. interest rate changes affecting the disposable income of the consumer).

Social; in this environment we consider the business’ broader market, i.e. its customers and
their changing attitudes and values and the general trends that affect the way the market buys
products and services.

Technology; the way in which technology has become more influential in all our lives is well
known. However, how has it influenced the way in which businesses connect with their
customers? Obviously, the rise of the Internet has changed the way many businesses deliver
their products to the end-user and, indeed, there are many businesses that only now exist
because of the presence of a suitable technology like the Internet. In this environment we should
consider the impact that the possible changes in technology will have directly on the business
‘perhaps in the way it manufactures its products, in the level of competition that it might
encounter from businesses that were not in the same market place in the recent past, or, as
mentioned above, in the way in which it delivers its products or services to the customer.

Ecological; there are two aspects to this environment. Firstly, the ecological issues have to be
considered and, of course, not all businesses are affected by these concerns. In this part of the
analysis we should consider the ecological impact of the business’ operations, remembering
 that negative public perceptions can have a significant impact on a business’ reputation and,
ultimately, its level of sales. Secondly, there are some issues regarding the way in which the
business treats its physical environment ‘ not in an ecological sense ‘ but in the way in which,
for example, it plans its operations so that disturbance and noise are minimized.

Legal; This environment is similar to the political environment which we discussed earlier but
analysis is restricted to only legislative issues, especially focusing on the effect that up-coming
legislation may have on the business. This would include both changes to existing legislation
and completely new legislation. Mostly, changes in this environment would have a direct
impact on the business.

3. Conduct internal and external analysis of the organization in order to identify

strengths and weaknesses.(P5)
According to Mohamedand Lashine (2012), internal and external analysis of any organization
highlights different factors that affect any organization. It is seen from the external and internal
analysis of the organization that one of core strength of Associated British Foods Plc. is their
diverse range of products. Internal and external analysis can help Associated British Foods Plc.
to identify their strength and weaknesses o they can reduce their weaknesses by developing
different effective strategy.

Strengths:

 They are the leading market player with diversified product range
 They have geographic diversification
 The company has a good corporate culture that increases the loyalty of both the customers and
employees towards their organization
 They have the huge loyal customer base.

Weaknesses:

 They invest huge money on their one business allied bakeries, but due to less amount of
investments in other business they may suffer
 They are suffering from limited liquidity position
 They are facing some problems to implement some common norms and standards because they
do not follow national culture
 4. Explain how strengths and weaknesses interrelate with external macro factors.
(P6)

Strength and weaknesses of the Associated British Foods Plc. have direct contact with the
business and it can directly affect their business. On the other hand, macro environmental
factors affect the performances, decisions making, strategy and working on the business.
Strength and weaknesses affect the nearby environment in which organization operates, but
macro factors affect in the entire geographic region in which a firm operates (Montazemi,
2010). Therefore, if any firm does not perform well in the home country and they have different
weaknesses then they may face several difficulties to achieve globally. Therefore, the
organization must make their internationalize strategy by reviewing their strength and
weaknesses.

If Associated British Foods Plc. has strength in the national market, then themanagement of
the organization can take the immediate decision regarding their business-based in that
strength. On the other hand, if Associated British Foods Plc. has several weaknesses, then the
managementshould be alert to implement different business strategy, and for this reason, they
may face difficulties to perform well (Schiffer. and Weder, 2010).

5. Show how the SWOT analysis developed in P5 influence the decisions of the
organization. (M4)
SWOT analysis of Associated British Foods Plc.:

Weaknesses:
Strengths:
1. They have some problem with the
1. They are very prevalent brands, so they limited liquidity position
now have high customer loyalty 2. Heavy investments in the allied
2. They have wide assortment of business bakeries reduce the investments in
operations other business subdivision of them.
3. One of the leading market player 3. They have some problem to implement
4. They have geographic diversification the common ethics as well as norms
5. This business has a strong tradition that that mainly ascends due to the lack of
helps the organization to silhouette the national cultures in different
commercial culture of the organization geographical areas.
 and develops the loyalty of both the
customers and employees.

Opportunities:
Threat:

1. They can capitalize for their future

1. Enlarged level of consolidation
growth
2. Changing demand of the customers
2. They can invests in the biofuel
and financial crisis
production because there is enough
3. Cut in the sugar production of
possibility for growth
European Union.
3. There is numerous growth in the new
4. Faces a threat due to the growing
markets
level of rivalry because due to the
4. Entering in the new market can help
international developments they are
them to enlarge their market share
facing threats from different
globally and upsurge the steadiness in
multinational organizations
their sales and revenues
5. They are facing threats regarding
5. They can get a steady enlargement in
galloping prices for foods that
their brand through merger and
diminution their performances in the
acquisition strategy and products or
market.
service diversification

SWOT analysis is one of the subjective methods that are involved in trying for attaining an
objective. SWOT analysis also involves in the specification of the objective and identification
of the external as well as internal factors that are unfavorable and favorable for the achievement
of the objective of Associated British Foods Plc..SWOT analysis can be utilized as one of the
business tools that can help Associated British Foods Plc.to take advantages of one's abilities,
talents as well as opportunities (Montazemi, 2010). SWOT analysis can help Associated British
Foods Plc. Organization to summarize and clarify the key issues and opportunities regarding
any business and helps the organization to make decisions so that they can develop new
objective and strategies. SWOT analysis helps any business organization to maximize strength
and minimize their weaknesses so they can take opportunities from the market and decreases
threats.
 6. Show how the PESTLE developed in M3 influence the decisions of the
organization. (D2)
From the external and internal factors, it is clear to me that Associated British Foods Plc. has a
strong strategic position and has a good set of loyal customers so they can easily enter the new
market. Along with that, they also have loyal employees and switching rate among employees
are very less so they can expand their business in the different geographical region. I have seen
that they are operating in the market with five businesses that are Grocery, sugar, ingredients,
retail and agriculture. Therefore, it is clear that they have an effective product differentiation
strategy and along with that they follow a price differentiation strategy so they can easily grab
the customers not only from the UK but also from other organization. However, I have seen
that during their operation in different countries, they have faced a wide range of competition
from other organization and along with that; different political and legislative factors of those
countries affect their business in greatest extent.

I have recognized that Associated British Foods Plc. has a good source of revenue because they
have so many businesses but they are suffering so much during their expansion due to tax rates,
FDI of different countries. I know that in different countries rate of tax is different, in some
countries, corporate tax positively influence any organization and give them handsome
opportunities to do their business. However, in some countries government charge huge
amount of money as the tax so business in that country may suffer. During the inflation and
economic crisis, different countries responded differently, some of the countries has recovered
them, but some of the countries did not recover themselves. Therefore, I have gained the
knowledge that monthly disposal income is different in different countries. Therefore,
according to my knowledge Associated British Foods Plc. Must invests in a different country
by reviewing the monthly disposal income of the customers in that country.
I have seen that Associated British Foods Plc. have a business opportunity in the different new
market so they can invest money in new markets but they must consider the culture and society
before investments because different countries have a different culture and different people like
different types of product and pricing strategy. People from some developed countries wants a
high quality product, people from some countries want to get the product at low pricing
strategy. On the other hand, some people want to get the superior quality product at low costs.
It is seen that Associated British Foods Plc. do not have effectively represents in the web and
they do not have effective technological advancements. Therefore, according to me, it is
important for them to increase technological advancements in the organization to grab the e-
shoppers. I have recognized from the analysis that, Associated British Foods Plc. is an ethical
and socially responsible organization but to grab the attention of the ethical customers they can
increase their sensitiveness regarding the environment. According to me, every organization
must follow all of the law implemented by the government even it incurs some loss. In this
case, Associated British Foods Plc. Must follow all of the law.

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