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Name: Manzar Khan

Class: Level 3 Business

Assignment: Business Environment.

What is Organisation?
Organisation is a type of entity that is formed for the purpose of providing some sort of services
or products to the society.

Types of Organisations:
i. Business Organisation
ii. Non Business organisation

Business Organisation
Business organisation is a type of organisation that purpose is to provide satisfactoryproducts
and services depends on what the company is based on, only to generate profit from the
customers or buyers for the company’s own benefit.

For Example:
McDonald’s is a private business organisation that is known for its quality of fast food and in
return they demand profit from its consumers.
Types of Business Organisation
There are three types of business organization:

 Sole trader
 Partnership organisation
 Conglomerate organisation

Sole Trader:
An Individual who owns an informal type of Business Organization which is managed and
controlled by him/herself is called a Sole Trader

Purpose of sole trading:


The main purpose of sole trading is profit which the owner receives for him/herself and gets to
keep the entire amount because of not having to work with other members. To start a business by
yourself and not being associated with other members or partners gives the sole trader the
advantage of working on flexible times.

Advantages of sole trading


There are many advantages of sole trading and the major one is that the trader gets to keep all the
profit because of not having to work with or under anyone. Another advantage of sole trading is
maximum privacy and flexible working which is why many traders choose to do sole trading.

Disadvantages of sole trading


Though there are many advantages of sole trading there are still some draw backs like you have
unlimited liability for debts as there’s no legal distinction between private and business assets,
the other is all the responsibility for making day to day business decisions is yours.
Real Life Example
Ingvar Kamprad startedhis career as a sole trader who is the founder of IKEA and is worth an
estimated €65.5 billion.

Partnership Organisation
A partnership is a business where there are two or more owners of the company. Most
partnerships are between two to twenty members but there are still some big organisations which
consist around hundred members.

Purpose
Purpose of partnership organisation is to have the work equally divided which gives its members
the advantage of receiving more investments and helpsincreasing sales.Partnership agreements
Increase the credibility with potential customers and suppliers who may see dealing with the
business as less risky than trading with just a sole trader.

Partnership deed
• Amount of capital each partner should provide.
• How profits or losses should be divided.
• How many votes each partner has based on proportion of capital provided.
• Rules on how to take on new partners.
• How the partnership is brought to an end, or how a partner leaves.

Advantages

 two heads or more are better than one


 your business is easy to establish and start-up costs are low
 more capital is available for the business
 you’ll have greater borrowing capacity
 high caliber employees can be made partners
 there is opportunity for income splitting, an advantage of particular importance due to resultant
tax savings
 partners’ business affairs are private
 there is limited external regulation
 It’s easy to change your legal structure later if circumstances change.

Disadvantages

 the liability of the partners for the debts of the business is unlimited
 each partner is ‘jointly and severally’ liable for the partnership’s debts; that is, each partner is
liable for their share of the partnership debts as well as being liable for all the debts
 there is a risk of disagreements and friction among partners and management
 each partner is an agent of the partnership and is liable for actions by other partners
 If partners join or leave, you will probably have to value all the partnership assets and this can be
costly.

(Partnership – advantages and disadvantages, 2017)

Real life examples


One example of a Partnership business is the relationship between Red Bull and GoPro. GoPro
sells more than portable cameras, while Red Bull sells more than energy drinks. They are both
lifestyle brands that have similar goals.

(Partnership Business Examples)


Companies
A company is a form of commercial business that is formed by one or more shareholders to
provide goods and services to the public which could be for making profit or sometimes
voluntary purposes.

Purpose
A Company is formed for different purposes but the major purpose of forming a company is to
build a well-known foundation and make more and more profit. Though making profit out of
business is usually the most important factor there are some business which are run just to serve
public and are non-profit organization.

Advantages and disadvantages


The following are the Advantages of owning a company:

 liability for shareholders is limited

 it's easy to transfer ownership by selling shares to another party

 shareholders can generate more profit if the sales increase

 the company can expand more into different markets

The following are the Disadvantages of owning a company:

 Company can be hard to establish and maintain


 Reporting and keeping the data safe and secure can be complex
 Lack of customers can cause a big loss for the company.
Real life examples
Apple is a prime example of a well-established company based in California that manufactures
digital devices such Phones, laptops and tablets.

Types of Companies
There are three types of companies:

1. Private limited
2. Public limited
3. Single member

Conglomerate Organisation
A conglomerate is an organisation that is made up of a number of different, seemingly unrelated
businesses. In conglomerate one company owns a controlling stake in a number of smaller
companies which conduct business separately. Each of a conglomerate's business runs
independently of the other business divisions but the subsidiaries management reports to senior
management at the parent company.

Purpose
The Purpose of Conglomerate organisation is to expand the business and to penetrate into
different markets according to the individual needs which helps grow the business more and
helps generate more profit for share holders.

Real Life Examples


Nestle is considered one of the biggest conglomerate organisation because of its wide range of
products divided into different sectors.

Public Sector organisation


Public sector is a type of organisation that is owned and operated by the local government and it
exists to provide services for its citizens. Public sectors are mostly nonprofit organisations.
Advantages and Disadvantages

 Provides some of its services to all consumers

 As a public sector organisation, it faces little competition

 Provides services that could be unprofitable if provided by firms in the private sector

 Provides goods and services for those members of the community who cannot afford
them

 As there's no profit motive, there's often a lack of innovation

 A change of government is likely to mean changes in priorities and so changes in funding


and spending

(Get revising, 2018)

Real life examples


Muhammad Ali Jinnah Hospital is a Public sector owned by the Government of Pakistan and is a
nonprofit organisation.

Private sector
Private sector is a type of organisation that is owned and run by an individual or a group of stake
holders rather than the local government. Private sectors are mostly profit organisations and their
main purpose is to generate more and more profit.

Advantages and Disadvantages

 One of the advantages of private limited company is that members are well known to
each other; however control is in the hands of owners of capital.
 In the management of affairs and conduct of business is greater flexibility.
 One of the disadvantages of a private sector is that it restricts transferability of shares by
its articles.
 The number of members in any case cannot exceed 50.
 In stock exchange shares cannot be quoted.(business study notes)

Real life examples


Doctor's hospital is a private organisation run by private entities that is run to provide services to
the public and is a profit organisation.

Semi Govt organisation


A semigovernment is an institution that is both public and private which means that it combines
elements of government bureaucracy with a private company.

(study.com)

Advantages and Disadvantages


Semi government organization does have a lot of advantages such as: multi-talented individuals
from both sectors working together as a team but it still has some drawbacks such as poor
forecasting or sometimes change in an economic conditions.

Real life examples


PSO Pakistan state oil is a semi government company based in Karachi, Pakistan and it is the
biggest state oil company in Pakistan and is recognized internationally.
SELECT OEGANISTION 1:

NIKE

Nike is an American multinational brand that produces quality products mostly sportswear such
as: Snickers, Jumpers and Trousers etc. It was founded in 1964 as Blue Ribbon Sports by Bill
Bower man a track and field coach at the University of Oregon and his former student Phil
Knight. They opened their first retail outlet in 1966 and launched the Nike brand shoe in 1972.

HISTORY:

Nike may be one of the youngest of the major brands, but it is the dominant brand around the
world. In 1963-1964 when University of Portland track coach, Bill Bowerman, and Phil Knight,
a mid-distance runner joined forces to import and provide low-cost, high tech running shoes
from Japan in order to provide alternatives to the German-dominated athletic shoe market.
Operating under the name Blue Ribbon Sports, Bowerman and Knight began to sell the Japanese
Onitsuke Tiger (now known as ASICS) running shoes. Jeff Johnson, a former rival of Knight,
joins the company in 1965 as their first full-time salesperson and sells shoes from the back of his
van at local and regional track meets until opening Blue Ribbon Sports’ first retail outlet at 3107
Pico Blvd, Santa Monica California. Click here to see a picture of the Blue Ribbon Sports
location in the present day. This store is no longer in existence, but the address remains.

Blue Ribbon Sports officially incorporates in 1967 and does business under this name until
approximately 1970 when Bowerman’s desire to improve on the shoe designs of Onitsuke Tiger
and Knight’s ambition to do more than simply import and resell running shoes. Inspiration must
have struck Bill Bowerman over breakfast one morning because he borrowed the family waffle
iron and pour rubber into to create the prototype for the now famous Nike Waffle Outsole. This
invention led Bowerman and Knight to begin designing other shoes, and the company’s new
name, Nike, Inc. was born when Jeff Johnson, dreams of the Greek goddess of victory, Nike. A
succession of shoes, many based on the waffle outsole follows. Some of the most famous are the
Waffle Racer, Air Force One, Air Max 93, Max 95, and Air Max 97.
 1971 Nike’s Swoosh design logo was created by Portland State University graphic
design student Carolyn Davidson when asked by Knight. He needed a logo to put on
the side of his company’s shoes. At the time she was paid $35 (US), and also worked
for Nike for a few years until they needed a full ad agency. Twelve years later, in
1983, Ms. Davidson received a gold Swoosh ring with an embedded diamond at a
luncheon honoring her, along with a certificate and an undisclosed amount of Nike
stock, in recognition of the Swoosh design logo.
 1979 Nike’s Air technology patented by inventor M. Frank Rudy is introduced in the
Tailwind running shoe. Gas-filled plastic membranes are inserted into the sole of
running shoes to provide cushioning.
 1980 Nike completes an initial public offering of 2,377,000 shares of Class B
common stock on December 2.
 1982 The Air Force 1 basketball shoe becomes the first Nike court shoe to make use
of the Air technology.
 1984 Nike signs Michael Jordan to an endorsement contract and releases the first
model of his signature shoe, the Air Jordan. Originally, the NBA banned this new
shoe, drawing a tremendous amount of publicity. The introduction of the Air Jordan
shoe was a key event in Nike’s successful development.
 1986 Nike revenues surpass $1 billion for the first time.
 1987 The Nike Air Max shoe is introduced, which uses a much larger Air cushioning
unit, and for the first time is visible at the side of the midsole. This was the first of
many generations of Air Max-branded technologies. A television ad featuring the
Beatles’ song “Revolution” was the first and only time that a song performed by the
Beatles was used in a TV ad.
 1988 Nike introduces its “Just Do It” slogan.
 1989 Nike introduces a new type of footwear designed specifically for cross-training,
and features two-sport athlete Bo Jackson in a series of memorable ads called “Bo
Knows.”
 1990 Nike opens the first Niketown store in downtown Portland, Ore., and the store
quickly earns numerous retail design and business awards. Over the next 10 years,
Nike will open 14 more Niketown stores across the USA and in England and
Germany.
 1993 Nike introduces an innovative sustainability program, Reuse-A-Shoe, which
collects athletic shoes, separates and grinds them up into Nike Grind. this is used in
the making of athletic courts, tracks and fields.
 1994 Nike signs a long-term partnership with the Brazilian national football (soccer)
team, launching a company-wide effort to become the world’s leading football brand.
 1996 Nike signs Eldrick “Tiger” Woods soon after the young golfing phenomenon
gives up his amateur status. Woods becomes the standard bearer for Nike Golf as that
division gains market share.
 1996 Nike causes controversy with advertising campaign at the Summer Olympics in
Atlanta which features the slogan, “You Don’t Win Silver – You Lose Gold.” Nike’s
use of this slogan draws harsh criticism from many sources, including several former
Olympic silver and bronze medalists.
 1996 Nike opens Niketown New York, its signature ‘flagship’ store located in
midtown Manhattan.
 1998 Phil Knight formally commits Nike to strict standards for manufacturing
facilities used by Nike, including: minimum age; air quality; mandatory education
programs; expansion of micro loan program; factory monitoring; and enhanced
transparency of Nike’s corporate social responsibility practices.
 1999 Bill Bowerman, co-founder of Nike, dies on Dec. 24 at age 88.
 2000 Introduction of the Shox athletic shoe technology.
 2002 Rap Star Nelly releases a chart topping song about Air Force Ones.
 2003 Nike makes a successful bid to buy bankrupt rival Converse Shoes for $305
million.
 2003 For the first time in the company’s history, international sales exceed USA
sales, as Nike continues to develop into a truly global company.
 2003 Nike is named “Advertiser of the Year” by the Cannes Advertising Festival, the
first company to earn that honor twice (also 1994) in the festival’s 50-year history.
 2003 High school basketball star LeBron James signs with Nike, while Syracuse
University star Carmelo Anthony signs with Jordan Brand. James and Anthony finish
1-2, respectively, in rookie-of-the-year balloting.
 2004 Phil Knight steps down as CEO and President of Nike, but continues as
chairman. Knight is replaced by William D. Perez as CEO of Nike, effective Dec. 28.
 2004 Annual revenues exceed $13 billion.
 2004 In June, Chinese animator Zhu Zhiqianq, of Xiao Xiao fame, files a lawsuit
against Nike for plagiarizing his cartoon stickmen in their commercials. Nike
representatives deny the accusations, claiming that the stickman figure lacks
originality, and is public domain. Zhu eventually wins the lawsuit, and Nike is
sentenced to pay $36,000 to the cartoonist.
 2005 Nike launches the Air Jordan XX, the 20th edition of the iconic Air Jordan
basketball shoe series.
 2005 Nike launches the Nike Considered line, an effort to reduce waste and introduce
eco-friendly products.
 2005 Business Week Magazine features an article about the enduring popularity of
the Nike Air Force One.
Major Nike Product Lines

 Air Flight
 Air Force Ones
 Air Jordan’s
 Air Max
 Air Penny
 Air Trainer
 Kobe
 Lebron James
 Nike Basketball
 Nike Blazer
 Nike Court Forces
 Nike Dunks
 Nike ID
 Nike Retro
 Nike SB
 Nike Vandals

(History of Nike, n.d.)

AIMS:
Nike’s main aim is to keeping the good quality of their manufacturing products and keeping the
good reputation in the market. Another goal of Nike is to keep evolving their brand so that it
stays relevant like it has been for the past decades.

(Reference.com, n.d.)
MAJOR CUSTOMERS:
Nike targets different customers with different products and strategies but their major goal is to
always target the people that are involved in some sort of sports cause this is what the brand is
mostly based on. Sportsman are Nike’s major customers so Nike uses different techniques to get
their attention by advertising athletes and their endorsements and organize different segments
which helps Nike get the most customers.

SELECT OEGANISTION 2:

Gourmet

Gourmet is a multinational brand conducting its business from Pakistan and it’s also considered
conglomerate organization because of its extension into many different sectors. Though gourmet
is mostly known for its Food products it also has its business investment in a News channel
known as GNN (Gourmet News Network), Furniture, Restaurant.

HISTORY:
Gourmet was founded in 10 September 1987 in Lahore by Mr. Ch. Muhammad Nawaz Chatha
and started its operations as a bakery and confectioner shop. Gourmet Food introduced new
services such as Gourmet Dairy products, Restaurant, Beverage, catering and increased its
complement of products and outlets capability.

AIMS:
Aim of Gourmet food is very clear judging by their tag line “Chamkegharghar me” which
generally means “It blesses every home” so the main aim of gourmet food is to become a well-
known brand not only locally but internationally so they keep develop their products and
penetrate into different markets.
MAJOR CUSTOMERS:
Gourmet is considered a conglomerate organisation because of its investment in multiple sectors
and different manufacturing products.

Stake holders and its types


A Stake holder is a person who has some sort of link with a company or an organisation which
could be direct or indirect. Though some stake holders are not directly linked with a company
but some of their decision can still affect the way company operates.

There are 3 types of stake holders:

1. Internal Stake holders


2. External Stake holders
3. Interface Stake holders

Internal Stake holders


Internal Stake holders can also mean direct stake holders. Entities that are directly involved with
company’s work and the profit it generates.

The following are considered internal stake holders:

1. Owner
2. Employees
3. Manager

External Stake holders


Though External stake holders aren’t fully involved with a company they still care about how the
company is conducting its business and in what manner they should or should not operate the
way they currently are.

The following are considered external Stake holders:


1. Government
2. Communities
3. Customers

Interface stake holders


Interface Stake holders are the type of stake holders who function both internally and externally
and can also be affected by company’s decision.

The following are considered Interface stake holders:

1. Sponsors
2. Medical staff
3. Raw material suppliers

Stake holders of Nike:

 BSR, Tara Norton, Managing Director


 Calvert Investments, Mike Lombardo, Vice President
 Ceres, Amy Augustine, Senior Director
 Clean Production Action, Mark Rossi, Executive Director
 General Motors, Sharon Basel, Senior Manager Sustainability
 MIT Sloan School of Management, Jason Jay, Senior Lecturer and Director,
Sustainability Initiative at MIT Sloan
 Solidaridad, Madhyama Subramanian, Program Manager
 WWF, Lindsay Bass, Manager, Water Stewardship
 WWF, Nicole Tanner, Senior Specialist, Water Stewardship
 NYC Comptroller’s Office, Millicent Budhai Robinson, Assistant Comptroller

(Stakeholder Engagement on FY16/17 Sustainable Business Report)

Stake holders of Gourmet:


Stake holders Engagement strategy
The following are stake holders engagement strategy:

i. Inactive
ii. Proactive
iii. Reactive
iv. Interactive

Inactive
Inactive strategy involves no engagement what so ever, they do not engage with their stake
holders and have no concern with their needs regardless of losing their loyalty.

Example:

LESCO (Lahore Electric Supply Company) uses the Inactive strategy because no matter how
their stake holders react they still conduct the business according to their rules and do not make
any changes with their system.

Proactive
Proactive strategy involves professionalism that means actively dealing the stake holders and
consider their needs and wants in advance.

Example:

Facebook is a prime example of Proactive dealing because of it surveys and active reactions to
their users security issues.

Reactive
Reactive strategy is applied when stake holders put a pressure on the management to take action
and make changes to the system.
Example:

When a local food company was inactively dealing with its customers and was providing
unhygienic food so PFA (Punjab Food Authority) took action against it and pressurized them to
maintain the hygiene.

Interactive
Interactive strategy is used to work according to the customer’s needs and demands to put a good
impact on its stake holders and keep a good reputation.

Example:

BETS Institute applies interactive strategy with its students and takes their feedbacks on daily
basis to make their management better.

Business Activities
The Following are Business activities:

 Primary
 Secondary
 Tertiary

What is Primary Activity?


Primary activity is harvesting the natural extracts and collecting products from earth all kinds of
raw material then turning them into different assets is called Primary Activity.

What is Secondary Activity?


Secondary activity is conducted once the primary work is done. It involves manufacturing and
constructing of the collected material.
What is Tertiary Activity?
Tertiary activities involves service and giving non tangible value to its customers. For Example:
companies that work in this sector include banks, consulting and public transportation. Most
companies that are involved in tertiary activities do not have operations involving primary or
secondary activities.

LocalOrganisation
A local organization is a type of organization that is run at a particular place or area and is only
performs locally. A local organization can either be private or public both depends on who’s
owning its share.

International organization
An International organization is a type of organization that is operated in one particular place or
a country but also deals with international customers living abroad. Though international
organization supplies its product internationally it doesn’t operate or have any franchise in the
countries they supply their products to.

Multinational Organisation
A Multinational organization is very much like internal organization but the major difference is
that unlike international organization it operates at multiple places and has multiple franchise
depends on the global demand of the brand.
P3

Product and Market structure of


Nike

Men Women Boys Girls Customize

Nike by
Shoes Shoes Shoes Shoes
you

Clothing Clothing Clothing Clothing By sport

Shop by Shop by Shop by Shop by


Icons
sport sport sport sport

Shop by Shop by Shop by Shop by


brand brand brand brand

Icons Icons Icons Icons

This structure shows the product and market divisional structure of Nike. Nike has divided its
products in different sections according to its targeted customers.
Area
Structure of
Nike

North South Middle


Europe Asia Pacific Africa
America America East

Being a Multinational brand Nike has made multiple head offices in different parts and areas of
the world and actively operates all of its officesin different continents and countries.

Product and
Market structure
of Gourmet

Beverages and Sweets (Mithai


Bakers Dairy
Juices and Icecream)

Gourmet is a conglomerate organization and has its business operating into multiple different
sectors. This chart only shows the food manufacturing sector of the gourmet products known as
“Gourmet foods”.
Area structure of
Goumet

Lahore

Multan

Sialkot

Wazirabad

Faisalabad
Sarghoda
Rawalpindi

Sheikupura

Gujrat

Jalalpur Jattan

Sheikhupura

London
New York City

Sahiwal

Chakwal

This is the Area structure on Nike showing its branches in different cities of Pakistan and in each
city gourmet has multiple branches in different areas of the city. Gourmet also has its branch in
New York and London which makes the gourmet brand a multinational organization.
What is Organisational Structure?
Organisational structure is a structure made to show the duties divided into groups in any
organization from top to bottom to determine the position and the roles of the stake holders and
their power of control in the organization.

(organizational structure)

Key Elements:

 Work Specialization
 Departmentalization
 Chain of Command
 Span of control
 Centralization and decentralization
 Formalization

Work Specialization

Work specialization is used to divide work to a certain degree and to separate the different
activities performing in an organization. Work specialization also helps creating Productivity and
efficiency.

(Examples of Work Specialization)

Departmentalization

Departmentalization is a method used to divide different groups of work areas in an organization


into different departments and each department is managed by its own manager.

(Robbins, Judge, & Vohra, 2013)

Chain of Command

Chain of Command describes the unity of a department or a group at a work place because it
requires the group to follow and report their head. Chain of command can break if even one
individual from the group reports someone else other than their manager or leader.

(Robbins, Judge, & Vohra, 2013)


Span of control

Span of Control is a term used to define how many individuals and workers at an organization
can work under a manager and if the manager is willing to direct them effectively and
professionally.

(Robbins, Judge, & Vohra, 2013)

Centralization and decentralization

Centralization and Decentralization are the two different types of structure used to describe
where the authority of making decisions stands. Centralization of authority means the power of
planning and control and it’s in the hands of the top level management.

(Difference Between Centralization and Decentralization, 2015)

Formalization

Formalization is used to describe the written rules and regulations set by the management or
authority for its employees to follow strictly in order to work formally and professionally in the
organization.