Purpose, Function and Legal Structure of Business


  • Unit No: 1
  • Level: High school
  • Pages: 17 / Words 4320
  • Paper Type: Assignment
  • Course Code: N/A
  • Downloads: 808
Question :

 This assessment will cover certain questions which are like:

  • What are the purpose, function and legal structure of the business?
  • Give the effective size, scope framed in Tesco in relation to working.
  • Elaborate the external and internal factors.
Answer :
Organization Selected : Tesco


Business environment is described as sum total of all internal (employees, directors, customers, etc.) and external factors (political, social, technological etc.) which directly or indirectly affect business in the open marketplace (Ayios, 2018). Scanning of the business environment is done in order to better tap the useful resources needed by the firm and then converting into goods and services. This report is based on Tesco which is a leading retail business in United Kingdom. It came into existence in the year 1919 by Jack Cohen. This successful company has opened its stores in other nation like Asia and Europe. This assignment covers various types of public, private and voluntary sectors purposes size, scope and legal structures. Relationship among organizational functions is studied in order to fulfill the emerging needs of the customers. Macro environment positive and negative aspects is examined in order to make improvements in the loopholes. SWOT and PESTEL analysis is conducted to grow the business in other nation successfully. The strengths and weaknesses interrelated with macro factors are evaluated to attain productive outcomes.


P1 Discuss Distinguish Types, Purpose, and Legal Structure of Public, Private and Voluntary Sectors.

In order to grow the business in the cut throat competitive world public, private and voluntary sector contribute on their own level. All this sector work day and night to raise the economy standards of the nation. All this three type of business are providing huge job opportunities to a large section of the people and are directly or indirectly reducing employment from the country (Fabus, 2018). They play a vital role in making the nation financially stable. By this other businessman will be interested to expand their business in this particular nation as it is financially strong. Public, private and voluntary sectors purpose and legal structure are explained as under:


Public sector

Private sector

Voluntary sector


Those organizations which are owned, managed and operated by government. In this type of organization works towards the upliftment and welfare of the people living in the nation.

Private sector are those businesses which are owned and managed by individual or groups. All the decisions for the businesses are taken by the owner, director or CEO of the company. There is no role of government in it.

In society this type of businesses is mainly working for the upliftment of the community and their people. They help people in all possible way to solve their problems.


The purpose of this type of enterprise is not to generate huge revenue instead to work for their welfare. But in order to run the public sector business smoothly in the open market place they charge nominal fees from the people.

Private sector main purpose is to maximize huge profit as compare to rivalry. This type of business mainly focusses on meeting the needs and demands of the customers so that sales ratio can be raised and revenue and generated to a large extent.

This types of business are non-profit firm whose purpose is to serve better for the society people and to raise their living standards.


In United Kingdom Network Rail is the best example of public sector. They are held accountable to look after the maintenance of the Great Britain railway network.

Hennes and Mauritz is a multinational clothing retail company. It is widely well known for fashionable clothing which it offers to their targeted customers across the globe. It is one of the private sector firm in UK

In United Kingdom Cancer Research UK is an awareness charity who is well known for decreasing the number of death ratio caused by cancer by making people aware about its symptoms.

Legal structures

The legal structure of public sector are:

Central government: With the help of income tax central government is able to collect huge funds from general public (Geissdoerfer and Evans, 2018).

Local government:

Through council taxes local government are able to accumulate huge cash amount.

State government: In this case they hire or own some of the businesses which are not controlled by central government or they interfere in it.


The legal structure of private sector are as follows:

Sole proprietorship: This type of businesses are owned and operated by individual on small scale like, taxi drivers, grocery stores, Hair cut salon etc.

Partnership: In this case with mutual understanding contract is signed in which ratio of profit and loss is mentioned.

Limited company: This is a legal structure which limits the liabilities of the firm’s members in relation to their contribution.


The legal structure of voluntary sector are as follows:

Trust: It provide services to the people based on the trust and faith of the people though it is not a legal entity.

Unincorporated Association: Here, group of people come together willingly to form clubs and society in order to meet the particular purpose.




P2 Illustrate Size and Scope of Numerous Types of Organizations.

In cut throat competitive world organisation need to expand their business so that they can survive for longer time duration in the market. The size and scope of private, public and voluntary organization in United Kingdom are discussed as under:

Hennes and Mauritz Private Sector Business:


The vision statement of Hennes and Mauritz private sector is to operate the business in such a way that it is sustainable in all aspects like, economically, socially and environmentally (Hamad and ElGohary, 2018). Employees are motivated to perform the task effectively so that productive outcomes can be attained easily.


The mission statement of Hennes and Mauritz is to offer high-quality clothing at best prices to their potential customers. By this set goals and objectives can be attained easily.

Size and Scope:

Hennes and Mauritz has five thousand stores across the globe and are meeting the emerging needs and wants of the customers easily. The scope of this business is too high as the demand for fashionable clothes are raising day by day. In today's world customers are demand quality products as their disposable income has raised (Kaplan, 2019).

Business Objectives:

The objective of Hennes and Mauritz is to render trendy and fashionable clothes to the customers according to the dynamic environment.

Products or Services:

Business provides trendy and high-quality fashionable clothes to the targeted customers and to raise their sales ratio as compare to the rivalry. By this maximum profits can be earned easily.

Legal Structure:

Stefan Persson has owned Hennes and Mauritz and it is a public limited firm in the global market.


The different stakeholders of Hennes and Mauritz are, customers, suppliers, government, directors, owners, managers and so on.

Network Rail is Public Sector Business:


Network Rail vision statement is to provide safe and comfortable journey to the travellers till they reach the final destination.


The mission statement of Network Rail is to increase their railway network across United Kingdom and to provide safe railway services to the customer

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