Introduction 

 A business organization is a form of entity that aims at providing goods or services produced
using economic resources and exchange for money or other forms of resources. Though the main
motive of most of the businesses are to attain profit, there are different types of businesses
depending on the ownership structure of a business.  This report aims at discussing different
type, size and scope of businesses, interrelation of business performance with the organizational
structure, and the impacts of micro and macro environment on a business. It will also cover the
business type of Nando’s and analyse environmental factor using SWOT and PESTLE analysis. 

Company’s overview 
In 1992, Nando’s first restaurant was opened in the UK concentrating on takeaway food. Initially
it was owned by a private equity company but later on Robert, son of the chairman Dick
Einthoven, took the control. In 1993, Nando’s expanded its businesses focusing to a mixed
service from takeaways. Now this business has almost 20,000 employees in more than 400
branches in the UK as of 2020. In 2010, it was awarded in the big category for having best place
to work by Sunday Times. In the time of lockdown, around 400 stores of Nando’s were closed
that reported with a loss of 99 million pounds but in May 2021 it started reopening stores to
serve customers indoors. In 2019, Nando’s in UK had a revenue of 779m and pre-tax profits of
96m with 13% growth from that of previous year. 

Literature Review
Different types, sizes and scope of organizations
There are different types of businesses operated in the UK. These businesses differ from one
another in terms of ownership structure, formation of the business, tax exemption,
responsibilities assigned and profit distribution, etc.

Sole trader businesses are the easiest form of business. There is almost no legal requirement of
forming such businesses. Only the owner needs to notify the HMRC for income tax purpose.
Any individual can start with a sole trader with a limited amount of capital but carries unlimited
liability for all debts and other legal actions. Having no registration at Companies House, sole
traders lack of legal entity. He possesses the whole responsibility and power to make decisions
and operate the business and thus, enjoy the entire profit. Though such businesses operate in a
small scale business but has the highest number of enterprises among all types of businesses.
Such businesses create huge employment opportunity in the UK.

Due to limited liability and inability to control business, individuals started with partnership
businesses where two or more individuals carry a venture with an agreed ratio of capital
contribution, responsibilities sharing, profit and loss distribution. Partnership businesses carry
with utmost faith among partners. Individuals in the partnership business carry unlimited liability
as unincorporated entities. Each partner is responsible for others’ misdoing, underperformance.
Each partner pays income taxes on their earnings from the partnership business.

Though sole trader and partnership businesses carry benefits in terms of reduced regulatory
issues fewer filing requirements, unlimited liability works as an incentive to register such
businesses as a limited company in the Companies House. Private limited companies can be
formed complying with company laws which require at least one director, registered office in the
UK. The name of a limited company must comply the prohibitions stated in the Company Act.
Registered companies enjoy the rights of legal entity being separated from the company owners.
Owners in a limited company carry liability up to the unpaid portions of the shares not their
personal assets be exposed any way. Once registered in the Companies House information
regarding formation and current appointments become public and it helps to ensure the expected
level of transparency.

Like private limited companies, public limited companies also have legal entity, carry limited
liability to the investments of the shareholders. But public limited companies’ share can be
traded in the secondary market but investors in private limited companies cannot trade their
shares. Thus, public limited companies can raise capital from the public market when it requires
to expand business operations. Moreover, the number of shareholders in private limited
companies is limited to 20 but there is no boundary in case of the number of shareholders in
public limited companies. The operating costs in public limited companies are higher compared
to that of private limited companies and the organizational structure of a public limited company
suits for larger scale enterprises.

The interrelationship of functions on organizational structure

Organizational functions vary according to the organizational structure. Every business requires
a planned structure based on the type, size and operational contexts to operate efficiently.
Organizations with functional structure have many departments where hierarchy gives a chain of
command. Managers possess a clear sense of authority to formulate goals and direct employees
who can concentrate on their jobs. But lack of cooperative environment among departments
make the business underperforming.

Larger organizations with many product lines have divisional structure that requires to carry all
functions related to each product line under separate functional groups such as sales and
accounting, marketing, R&D, etc. But as employees in each group perform separately, it may
result in redundancy and inefficiency.

Hierarchical organization requires to follow the level of hierarchy rigidly but matrix structure
helps with greater flexibility. Employees in matrix based organization are assigned in separate
departments such as marketing, accounting or sales but each employee may require and be
allowed to work under different managers or teams whenever required following changing
circumstances. But the chain of command can be disrupted, conflicted or cloudy and thus,
employee can perform inefficiently.

Tall structure gives a long chain of command along with the hierarchical level in the
organization. It’s most common in military. Corresponding to the growing size and operations of
a business, the management levels in an organization increase and thus, the structure becomes
taller. A CEO sits on the top and various managers are under him according to their job title. In a
flat or vertical structure, organization involves fewer number of management levels. Compare to
the vertical structure, managers or employees in flat organization enjoy greater autonomy in
decision making.

Impact of internal and external environment on business performance

Examining internal and external environment is highly important to identify the factors that may
affect the operations of a business to formulate effective strategies and plan for the business.

Businesses use SWOT analysis to have a full awareness of the internal and external environment
that exhibits strengths, weaknesses, opportunities and threats for a business. Such analysis helps
a business to make effective decisions. SWOT analysis helps to identify challenges and ways of
overcoming such limitations.
The four elements from external and internal environment affect the strategy, initiative or action
undertaken. Strengths and weaknesses are from internal environment i.e., organizational
resources, skills and experience of the employees and managers available. Such commonly
considered resources from internal environment are locational advantages, facilities occupied
and equipment already installed that can be used with economies of scale, financial resources
that are used to fund for the business capital to extract investment opportunities available from
external environment, employees, managers, target customers and other human resources,
patents, trademarks and copyrights and access or hindrances towards natural resources.

No business can spare the influences of the factors from external environment. Such factors pose
opportunities or threats to a business. No business can control or manage such factors. Market
trends, national or international economic issues, financial trends, demographic characteristics,
regulatory frameworks in terms of environment, economy or politics, customers and suppliers
power, etc. create such opportunities or threats for every business.

PESTLE framework is popularly used to analyze macro environment of a business so that a

business can develop strategic plan to minimize negative impacts on its operations.

Political factors

Government tries to control businesses intervening in the market by changing trade tariffs, fiscal
policies, tax policies, etc. that affect the business environment significantly.

Economic factors

Economic factors carry direct influence on long term operations of a business. Inflation rates,
GDP rates, unemployment rates, foreign currency exchange rates, interest rates, etc. are the
major factors that need to be evaluated carefully.

Social factors

Demographic characteristics such as age, gender, education, etc. cultural and religious trends,
population analytics give a great insight into the market.

Technological factors
Rapid development and innovation in the field of technologies bring dramatic changes in
businesses in terms of manufacturing and distribution processes, operations that give economies
of scale to the larger organizations.

Legal factors

There are some laws from national government in any country and internal organizations such as
WTO, ILO that need to be complied with to operate businesses. Moreover, there are specific
laws for businesses that companies need to follow for themselves.

Environmental factors

Environmental factors are crucial for certain industries such as chemical based manufacturing
industry, tourism, hotel, etc. These businesses need to carefully assess the environmental issues
before outlining any strategic plan or initiative.

The influence of globalization on organizational strategy and decision

making
Globalization leads to the trans-border businesses which has resulted in overwhelming
competition in national and international markets. Giant businesses from other countries are also
operated in the local markets, competing with small-scale businesses. Simultaneously it has
created opportunity for local businesses to operate beyond national border facing with a little
barrier in terms of tax, trade tariffs, etc. A business can go foreign countries meeting demands in
local markets to reach the larger pole of potential customers. Increasing demand in international
market will facilitate the business with economies of scale both in production and distribution
channel. Moreover, a business specially globally operated one that underperforms in a particular
country or market will lose the potential customers in other countries because information is
transmitted around the world within minutes and customers check customer reviews, news, etc.
surfing internet-based media. Competitors’ can easily track what your business doing due to the
globalization and thus, they can develop strategy to outperform your business. So, any business
that operates in local or international market needs to consider these impacts in formulating
strategy and decision making. Otherwise no business can sustain competitively in the market.
Discussion and analysis
Justification for Nando’s type, size and scope
Nando’s is regarded as one of the top restaurant businesses in the UK that have brought dramatic
changes in the field of fast food businesses in the UK. It offers with healthier options compared
to usual offerings of takeaway joints. Nando’s are attractive for its non-standardised architecture
that gives a real restaurant feel.

Nando’s is a family owned private business. The entrepreneurs who began the business once still
own it. Enthoven family is the main backers and investors in the business to expand and operate
both national and international market. Once started its operations in UK in 1992, it has been
growing aggressively taking advantage of cheaper property market. In 2012 when it had only
2005 branches, Nando’s had registered a profit of £14.7million with a 26 percent growth from
the previous year. Now it has 400 Nando’s in the United Kingdom & Ireland and it serves almost
800,000 customers per week. Nando’s do not offer any franchise in the UK and iIreleand rather
in South Africa, Australia and New Zealand. The managing director for Nando’s UK and Ireland
Rob Papps, now the Group CEO, played significant role in Nando’s becoming one of the highly
successful and admired restaurant chain in the UK restaurant sector. The privately owned
business can grow more dynamically in the UK focusing on the geographical markets where it
hasn’t reached yet. Due to its popularity in the current market it can easily grow in the markets
where it hasn’t started but has huge customer base with the same food habit and consumption
pattern in the UK.

Nando’s organizational structure and interrelationship with business

functions
Organizational functions and structure in a business influence each other. Organizational
structure defiens how employees, work and resources are formally divided, grouped, shared and
coordinated. Nando’s have specialization in making peri peri chicken burgers but it also offers
salads and fries. Nando’s peri peri sauces is also popular among customers in the UK. The
structure of Nando’s has impacts on business functions.

Following tall structure, Nando’s branches in the UK are operated by the Group business of
Nando. The 400 branches in the UK and Ireland are under control of a managing director who
reports of the Group CEO. Each branch in the UK has a restaurant manager, under that are the
two assistant managers, then a trainee manager as executive under each assistant manager and
below that are the floor managers- the trainee floor manager, floor manager and shift running
floor manager. The floor manager handles all staffs in each branches. Each employee and
manager in Nando’s has clearly defined roles and responsibilities, with designated job title.
Employees at Nando’s branches are assigned with their respective jobs. Being a take-away
business, many people are not working at each of Nando’s branch. The chef are responsible for
preparing foods maintaining quality on time, packaging employees prepared these foods for
delivery or to serve in the dine, staffs serve the foods, the cleaner cleans the dishes and
restaurants and a manger in operations is responsible to supervise and handle all operational
activities in Nando’s branches. This has positive impacts such as the performance of the staffs
can be easily evaluated and thus, receive bonuses based on their performance per month. The
manager and staffs do not have much workload even. The way Nando’s branches operates it’s
evident that the organizational structure Nando’s follows is right for it in terms of the work
specialization, chain of command, span of control, formalization, departmentalization, and
centralization.