The following fact sheet is being submitted, which illustrates the types of organisations in the energy sector.
LO1: Different Types, Sizes And Scopes Of Organisations
P1Distinct types and purpose of the organisation
Public sector
Purpose
The retail energy market in the present times is a vital driver for accelerating the industrial growth of a particular nation. There are three primary forms of corporate structure, including public, private and voluntary sectors. All public sector energy markets are owned and operated by the province on account of its inhabitants (Andrews, 2020). Much of the money used in this field comes from federal, state, and municipal taxes and fees, as well as transfers of funds from those levels of government.
Legal structure
Departmental undertaking: The term "Departmental Undertaking" refers to a government agency's official business of delivering "essential" services to the public, such as transportation and communication.
Public corporation: A legal entity may be formed when a legislature or state government passes a "Special Act" outlining the entity's mandate, authority, and organisational structure.
Government company: The Companies Act recognises a Government Corporation as a legal entity. In addition, the Act's requirements are fully applicable to the firm.
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Companies in the “private sector” are not controlled by the government and operate for profit. The private sector is responsible for 99.9 percent of all economic activity.
Legal structure
Sole proprietorship: One of the primary benefits of a single proprietorship is how easy and inexpensive it is to set up.
Partnership: In a general partnership, two or more persons own the firm equally. As per the terms of their partnership agreement, they split both the company's gains and losses.
Limited partnership: A “limited partnership” is comparable to a universal business in terms of fundamental form and tax ramifications, but it enables one or more limited partners, often known as "silent partners," to hold a share of the firm.
Limited liability company: The limited liability company (LLC) is a commercial procedure that combines the advantages of a business and a partnership.
Voluntary sector
Purpose
The "voluntary sector" refers to the segment of the energy market whose organisations' primary mission is to promote culture rather than make a profit. These enterprises and organisations go by a few different names: the third industry, social order, and the not-for-profit industry. The majority of people who donate their time work in the nonprofit energy industry.
Legal structure
Unincorporated association: Membership organisations may be either incorporated or unincorporated. It is free to take whatever form its members envision and to engage in any endeavour they deem worthwhile. It's the least expensive, fastest, and least complicated method to get an organisation off the ground.
Charitable trusts are ruled by a panel of associates and are one form of non-revenue establishment. It is not possible to become a member at large, and the committees are appointed rather than chosen.
P2 Size and Scope of Organisations
Dimensions and breadth of several organisations in the energy market are discussed in this section. It goes without saying that each given sector will have a wide variety of businesses, each with its focus and size. The goals and objectives, organisational structure, methods of operation, financing mechanisms, and services provided all have a role in determining a company's size and scope. These characteristics might indicate if the company is relatively small or somewhat large.
There are usually few employees, and the firm is run on a modest scale as a small business organisation. It might be a new company with a regional focus and budget or an established company that has shrunk in size. Depending on the nature of the enterprise, it may be organised as a sole proprietorship, partnership, or limited liability corporation (Wang, 2020).
A microbusiness is defined as an organisation with less than ten workers. Every year, millions of tiny enterprises add significantly to the world's total economic output.
Startups and established businesses may fit the definition of a medium-sized organisation if they have a similar scope of activities and available resources. Manufacturing, service providing, and social work are only a few fields where a modest scope of activities may be appropriate in the energy sector (Paice, 2022). It might be engaged in producing a product or delivering a service, or it could be doing social work for a significant segment of the population. These businesses aim to make a profit in the competitive market of the energy sector. Dividends are earnings distributions to an energy market company's owners, shareholders, and investors. Institutional investors and bank loans are the most common sources of capital for such businesses. The government owns most businesses in the public sector. They exist because the government mandates it to serve a vital purpose in society. Social work, scientific inquiry, and resource gathering are just some of the many hats these companies wear. An energy market organisation established by the government to research a particular subject is an example of a government organisation. Accountants, physicians, attorneys, engineers, and many more all have professional organisations. Chartered accountants, for instance, sometimes band together to create their own professional organisation to better serve the needs of the companies for whom they act as accountants. They provide aid in community service, study, teaching, and medical treatment. “Medical research organisations” (MROs) are a kind of NGO that were established by medical experts to study and treat health-related issues and problems. Charities, foundations, trusts, and climate change groups are all other types of non-governmental organisations.
Organisation Name
Background
size
Number of employees
Revenue
Product
Number of Local and International branches
Market segment
British Gas
Founded in February 1997.
Serves over 9 million houses,
13,016
5.3 million from the electricity supply
6.3 million from the gas supply
Gas and electricity
19 local branches
Domestic and professional market
Npower
Founded in 200.
Headquarters in Swindon, England
Serves over 20,00 businesses
5700
17.6 million
Gas and electricity
774 local branches and 20 international branches
professional market
ENGIE Energy
Founded on 22 July 2008.
Headquarters is located in La Défense
Serves over 6 million people.
171,100
9.5 million
Electricity and utility
More than 20 international branches
Business and domestic
Table: Different Energy Companies
M1 Linking Of Size And Scope To Objectives Of The Business
The way an organisation is structured might provide light on the duties assigned to various managers and executives. Furthermore, it demonstrates how information is shared and reported, as well as the techniques and channels used in the flow of organisations. There is a direct correlation between the mission of a firm and its structure, size, and scope A well-structured organisation is the only kind capable of establishing lofty objectives, it has been found. If a company's organisational structure is flat, with just a few people at the top, it will be difficult for those workers to understand their roles and those of others who report to them.
In contrast, in the retail energy industry, firms of all sizes alter their objectives appropriately. Large, well-funded organisations usually have aspirations that are far-reaching.
LO2: Interrelationship of Various Functions
P3: The Relationship Between Different Organisational Functions
Figure 1: Flow chart of different functions in a business
Business function
HR enact several policies in manufacturing, and the Positive outcomes in production operations are achieved by the use of various methods, equipment, and procedures, which have an immediate impact on expanding production capability, delivering more goods, increasing sales, and maximising profits. The company's people resources are crucial to the success of each of these elements.
The supplier is the middleman who transports manufactured items to the end user. A manufacturer is a person or company that generates goods. The corporation itself is the buyer of shares. It's included in the details of the product.
The finance department helps manufacturers by providing money for parts monthly. A measure of the company's success based on its capacity to maximise earnings.
Attracting new clients and nurturing existing relationships are two of the marketing and sales most important responsibilities for the company. The end objective for both is to increase earnings. The manufacturing unit offers the final products for sale, while the marketing section assists in bringing in orders.
Research and development, or R&D, is the process through which businesses create and distribute novel or enhanced goods to customers in the interest of increasing profits. The research and development department helps in manufacturing through different upgraded resources.
M2: Interrelationship between organisational functions
Figure 2: Interrelation between different organisational functions
Three is an interrelation between HR and other departments illustrated in the above figure. According to the figure, HR recruits labour for the production unit. The production unit assists the core management with the help of the decision-making process. There is regular and effective communication between HR and the core management. The human resource department also allocates employees to the sales and marketing teams. Lastly, the sales and marketing department is also connected to the supply and distribution unit.
LO3: Contemporary Examples For Demonstrating Both Positive And Negative Impeach Of The Macro Environment On Business Operations
P4: Specific Examples For Demonstrating The Negative And Positive Effects Of The Macro Environment On Business Operation
The macro environment of an organisation refers to the operation procedure of that organisation in macroeconomic conditions. It mainly deals with the product price, production rate, and spending on the product. Macro environment analysis of the organisation would help to understand the working strategies and procedures of the organisation (Team, 2023). This analysis can also be used in tandem with the performance of the organisation. This macro analysis is performed to understand the positive and negative effects of this environment on the operations of the energy industry. This macro environment has many consequences on the operation of the energy industry.
Natural Factors: There are various natural factors on which the supply of energy is dependent. For the production of energy, various natural resources are important such as gas, coal, minerals, oils, and many more. All these factors impact the energy industry in a positive and negative manner.
Political and Legal Factors: Different political influences and legal rules and regulations affect the business operation of the energy industry positively and negatively.
Social and Cultural Factors: Along with this, the external and internal culture also affects the business operation of the energy industry (Levi et al 2019). Because the production of energy depends upon society’s need for energy.
Technological Factors: Technological factors also influence the macro environment on the business operation positively and negatively (Egli et al., 2018). If this industry starts to use different upgraded technologies, then it will create positive publicity for the company. But if this industry can not maintain these technologies, it will hamper the business.
Demographic Factors: The most important factor that affects the macro environment on the business operation of the energy industry is demographic influence (Team, 2023). A good demographic condition in the country will help the business operation of the industry, but a bad demographic condition can harm the business operation, and it will reduce the number of economic resources.
Environmental Factors: The environment also affects the macro environment of the business operation of the energy industry in the UK positively and negatively. The macro-environment affects the business from many aspects. It can enhance the business when the climate is in favour and there is a sufficient supply of natural resources. Digitalization also helps this industry to spread over the UK.
M3: Application Of The Pestle Model To Support A Detailed Analysis Of The Macro Environment In An Organisation
The PESTLE analysis of a particular organisation references its external factors like political, economic, sociological, Technological, legal, and environmental. All these factors influence an organisation externally to boost its business (Achinas et al., 2019). This analysis can be used in different businesses.
Figure 3: Factors of PESTLE analysis
The PESTLE analysis of the Energy Industry in the UK
Political
The basic law and regulations of a country are evaluated by the influence of the political power of that country. It helps the energy industry of the UK to run its business smoothly (Thomas et al., 2021). The political rules determine the tariff, legal framework, tax rates, patents, and copyright. Different political policies help this industry to expand all over the UK.
Economic
The business of an organisation gets significantly affected by the country's economic condition (Pan et al., 2019). The performance of the energy industry depends on the economic status of the UK. In favourable economic conditions, the energy industry of the UK is performing very well.
Sociological
The social and cultural influence of the business of the energy industry is positive and negative. It aims to produce more energy in order to serve the whole country.
Technological
Different updated and advanced technological factors affect the energy industry dynamically. It helps to spread energy services across the country (Achinas et al., 2019). This process has a positive effect on the organisation, but the use of these technologies can increase the price of energy.
Legal
aspects are essential in order to run the business of the company smoothly. The energy industry of the UK also follows the legal rules and regulations of the UK in order to comply with the organisation of the government. As a result of this government compilation, the customers grow a porosity view of this energy industry.
Environment
This factor is used to change the company’s mode of work in order to meet the customers' expectations and preferences (Andriuškevi?ius and Štreimikien?, 2021). The changing climate, planning issues near protected areas, and difficulties in rural areas influence the business of this energy industry in the UK. This industry committee to reduce its waste product, and it will use green energy resources in order to produce energy. This will result in zero carbon emissions.
Figure4: Traffic Light Chart
LO4: Internal Strengths And Weaknesses Of Specific Businesses And Their Interrelationship With External Macro Factors
P5: Internal And External Analysis Of British Gas In Order To Identify Strengths And Weaknesses
Every company has its own strengths and weaknesses, and these strengths and weaknesses can be identified by the analysis of various internal and external factors. To identify the strengths and weaknesses of British Gas, some internal and external factors has analysed. These factors are
Customers’ expectations: British Gas supplies plenty amount of energy all over the UK, which satisfies the need of the customers. This makes the customers happy. It also provides home delivery options for the gas supply.
Time: This energy brand provides energy to the remotest part of the UK, and it supplies the energy in a very time-effective manner. The power cut problem is very little with this brand.
Quality: The voltage of the electricity is stable, and there is a little problem with the power cut. Along with this, the gas supplied by this company is also of good quality. There is no risk of any kind of accident.
Climate: Climate is also a great factor for analysing the strength and weaknesses of the company. If the climate is in favour, then British gas can provide a good and satisfied service to its customers.
Economy: The economic factors of British gas also affect its business. The growth rate of the company depends upon its price, interest rate, tax, and other financial aspects.
P6: Strengths And Weaknesses Interrelate With External Macro Factors
Every organisation has its own strengths and weaknesses in its business, and these strengths and weaknesses are interrelated with external macro factors. The external elements of the business are much more influenced, and it is very difficult to identify which external factors are affecting the macro environment of the organisation. A proper analysis of the susceptibility and the strengths of the company gives exponential success to the organisation. SWOT analysis is the best way to identify the company's capability, opportunity, vulnerability, and hazards. This is the fastest way to analyse the business opportunity of British Gas. The political issue is just a problem among a lot of other problems which affect the growth and the business of the company. The business of the energy industry has been affected by social issues greatly. Society is the main factor behind the good and bad business of the company or industry. The energy industry in the Uk faces many problems regarding political issues, technological issues, and society, but it still finds its opportunity to grow in the market. Apart from these, the economic issues are also an important factor for analysing the strengths and weaknesses of the company because it also affects the macro environment of the company greatly.
Internal and external factors affect the business of the organisation or the energy industry. The internal factors of British Gas are strongly connected with the external factors of the energy industry. Both factors affect each other in their business and the decision-making process. Positive strengths allow the company to grow and search for different opportunities to expand in the market (Barrington, 2021). This factor reduces the negative effects of the macro environment influence, and it also reduces the threats and dangers to the company. The competition in the market also gets reduced with this positive strength. British Gas sometimes fails to grab opportunities, and its frequent price hikes are causing a fall in the energy market, which is affecting the macro environment. These negative effects reduce the market stability of British Gas, and it can face a great loss.
M4 Swot/ Tows Analysis To Justify The Effect Of Internal And External Factors On British Gas
SWOT analysis is the process of analysing the strength and weaknesses of an organisation by analysing its internal factors (Kenton, 2022). The SWOT analysis of British Gas will provide information about for factors of the company. The factors are strengths, weaknesses, opportunities, and threats.
Strengths
British gas is the largest energy supplier company in the UK. It supplies electricity and gas. Almost 12 million people use this service in their homes and businesses. Along with gas and electricity, it also provides appliances, plumbing, drains, and other domestic services. This company has also introduced advanced technologies to its organisation for better customer experience (Rahman, 2023). It creates a good reputation for this company.
It has two specific tariffs one is variable, and another is fixed. These two tariffs make the subscription plan easy for the customers.
Weaknesses
One of the biggest weaknesses of British gas is its frequent price hike. These price hikes have caused a reduction in the customer base of this company. This company has lost almost 823,000 customers because of a 12.5 % price increase (Rahman, 2023). This company faced a loss of over £1 billion in 2020 because of the loss of customers due to price hikes. As a result, this company has come to number 7 out of 15 energy companies in the UK.
Opportunities
It has a prosperous future, and it can grow its business in the commercial and domestic fields of the UK (Kenton, 2022). It has the potential and technologies to provide service to a number of people at a time.
Threats
British Gas is facing great competition from the other gas and electricity supplying brands of the UK (Rahman, 2023). Its main competitors are EDF Energy, EON, npower, ScottishPower, and SSE.
There are also some legal challenges that are creating threats for this company. Ofgem has ordered this company to pay £9.5 million in 2017 as compensation for wrong billing and delivery.
D2: Critically Evaluation Of The Impacts That Both Macro- And Micro-Factors Have On Business Objectives And Decision-Making
Different environmental conditions like macro and micro environments have a significant effect on the business of the organisation. The managers of the organisation decide the appropriate micro or macro-environmental condition for the growth of the organisation. Both these environmental conditions shape every business dynamically and generate more revenue (Barrington, 2021). The energy industry in the UK follows these two environmental conditions to enhance its business. It helps in decision-making, which can be positive or negative. The businesses of this industry are evolving around technology.
Microenvironmental factors are involved with the internal environment of the organisation. These factors include
Decision making: Porter's Five principles and SWOT analysis give a strategic view of how the organisation can compete in the evolving market. The energy industry of the UK makes its strategic decisions depending on the analysis of these two.
Suppliers: Every business needs different raw materials. There are different contractors who supply various raw materials, instruments, and other necessary elements (Impact of micro and macro factors on your business, 2022). This supply process impacts the business of an organisation greatly because the whole process depends on the supply of the raw material. So, the performance of the energy industry depends upon the suppliers.
Competition: The competitors who provide similar services to the market are a great threat to the organisation (Barrington, 2021). Every organisation should make decisions by judging or anticipating the strategies of rival companies.
Customers: With time, the customers' demands keep changing, and every organisation should make the decision and produce products according to customers' needs (Impact of micro and macro factors on your business, 2022). This will bring economic growth to every organisation.
Macro factors are the external factors of the organisation which regulate the operation of the business. These factors are
Technological Factors: This is the age of technology, and every business has its own modern technologies in order to expand its business (Shah et al., 2018). This technology also has a great effect on the macro and microenvironment of the energy industry. It makes the sustainability of the organisation easy or hard.
Social and Cultural Factors: The management of an organisation should analyse the social and cultural aspects of the location before making any decision (Shah et al., 2018). Because the service provides by the organisation impacts society.
Natural Factors: The production of every organisation depends on natural factors. These natural factors include renewable and non-renewable resources for production.
Economic Factors: Economic factor is the key macro-environmental factor for an organisation because it decides the economic growth of the organisation (Barrington, 2021). This factor includes price hikes, interest rates, taxes, and many other financial matters.
Conclusion
Different internal and external has a great effect on the operational function of every organisation. It impacts the function and the growth of the organisation. The corporate climate has dynamic possibilities regarding the size, shape, and aspects of the organisation. A good and efficient manager is required for every organisation because he can connect the services in terms of size and opportunities of the company. Along with this, the organisational function and structure are important for the growth and proper function of the organisation. These organisational structures and functions are interrelated with the benefit and drawbacks of the organisation. In addition, the macro-environmental analysis is very important to innovate different strategies for the environment. These strategies can relieve the internal and external problems of the organisation, and it also has both positive and negative effects. This macro-environmental can be analysed by the use of two tools, namely PESTLE and SWOT. These two analyses give the positive and negative effects of the macro environment on the operation of the business.
Reviewing the whole extent of operations is an integral part of setting a company's goals. Any company whose mission includes providing services to consumers throughout the country would naturally be national in scope. But, if they realise they have a global clientele, they will adjust their strategic plans appropriately. Structure, size, and scope are all determined by the product or service being offered. An organisation will not establish a complicated management structure if it concludes that doing so is unnecessary to achieve its business goals, such as increasing product sales. Conversely, if there is not a significant market for a firm's products or services, the corporation is unlikely to bother establishing a huge, comprehensive organisation.
Thanking you
Yours Sincerely
David Thomas.
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