The Business Environment

Both businesses BP and the BBC have organisational structures. The reason of an organisational is to put in order the workforce to make sure that the organisation is capable to complete vital tasks and goals. Creating a structure with clear roles, functions and levels of authority and systems help make sure employees are working together as a team to accomplish everything the business must do. The term span of control is the number of people that one manger on the hierarchy looks after. The more people under the control of one manager the wider the span of control. Less people mean a narrower span of control. For example a BP the board of directors have a large span of control as they look after the chief executive and he/she controls executive committee. Whereas the manager of refining and marketing only has to look after the employees in that department meaning the manager has a narrow span of control.

The term span of control is the number of people that one manger on the hierarchy looks after. The more people under the control of one manager the wider the span of control. Less people mean a narrower span of control. For example a BP the board of directors have a large span of control as they look after the chief executive and he/she controls executive committee. Whereas the manager of refining and marketing only has to look after the employees in that department meaning the manager has a narrow span of control.

Within an organisational structure there are levels of hierarchy. Levels of hierarchy show which levels of management and employees report to whom. For example at BP employee will have to report to their department manager, who will then report to managers and executives, who then have to report to the Chief Executive Officer, who then has to report to the Board of Directors. At the BBC the employees in each department; Operations, BBC North, Finance, Vision, Future Media has to report to department managers who will then report progress and information to the Directors and BBC Direction Grou). The higher you are on the organisational structure an employee is then the higher they are on the hierarchy so they will have a large amount of people giving information to them and the higher you are on the organisational structure the higher levels of responsibility you have as you have more employees to look after.

The BP organisational structure is flat. This means that there are fewer managers within the organisation and less managers in the organisation it means that each manager has a wide span of control. The advantages of a wide span of control are that there are less layers of management to pass a message through, so the message reaches more employees faster and as well as this it costs less money to run a wider span of control because a business does not need to employ as many managers. The BBC organisational structure is a matrix structure meaning that people work together on project in teams with people from different departments. The structure is narrow meaning that BBC has a narrow span of control. The advantages of a narrow span of control is that is allows managers to communicate quickly with the employees under them and control them more easily, another advantage that a narrow span of control is that a wide span of control requires a higher level of management skill to control a greater number of employees, so there is less management skill required.

This keeps employees involved and employees that feel part of the business are motivated to do the best they can for the organisation. In both organisations tasks are divided within the organisation so that they can be completed on time. For example in BP the business is split up into functional areas. These functional areas are finance, marketing, human resources, corporate affairs, sales, operations and research and technology as well as many others. These functional areas mean that different tasks can be completed using their specialised skills. This allows deadlines to be met and completed to a high quality because employees are able to use their specialised skills. For example an accountant in finance department would complete the accounts better than an employee in the sales department because they are trained to complete that task. The BBC also has different functional areas to separate tasks.

The BBC has functional areas of finance, audio & music, operations, vision and future media. This allows the BBC to separate job tasks to utilise the employee’s job skills so that the best possible job can be done on a task and targets can be met. Another way that both organisations divide tasks is through having branches of the business in various geographical locations for example the BBC has British Broadcasting Corporation as well as BBC North and BBC International. This different branch allow the BBC to keep international and UK business separate and reduces the work load on one business as the BBC doesn’t have to run the UK industry as well as international business which may lead to employee becoming confused over what work is for which organisation. The BP organisation is split up into BP Gas, BP Solar and BP Ultimate this splits up the organisation so that employees can focus on either gas, solar or petrol.

Splitting up the businesses means that they work separately to be able to meet the aims of each branch of the business so that employees can focus of completing one set of aims for one branch of the business. The functional areas of both businesses are both similar and different. Both organisations have the functional area of finance. The role of the finance functional area is to record financial transactions between the business and customers and suppliers. The role of finance is also to record revenue and expenditure and from those accounts finance can decide how much money each other functional area has to spend. For example finance will give marketing a certain amount of money to complete market research and advertisement so that marketing don’t just keep spending money and end up losing the company money.

Another functional area that is common in both the BBC and BP is human resources. Human resources role in BP and the BBC is to make sure employees receive on and off the job training so that employees are safe whilst working in the workplace and they have the sufficient job skills to be able to complete tasks to a high quality. BP employees need specific training because they are working with highly flammable materials so need training on how to dispose of hazardous materials and what to do if there was an accident. As well as finance and human resources the BBC and BP both have the functional area of operations. At the BBC the Operations Group is responsible for strategy, policy, distribution, property, legal affairs, fair trading and business continuity, including managing BBC buildings and major infrastructure projects. At BP operations work on shore and on oil rigs and jobs roles include identifying and resolving technical problem as well as advising on health, safety and environmental issues.

The BBC also has the functional are of Audio & Music. The audio & music group is responsible for the BBC’s entire national radio network and for the production of the classical and popular music on the BBC’s 8 national TV channels, 10 national radio stations and 40 local radio stations. On top of that the BBC also has the functional area of Future Media. The future media division is responsible for all of the BBC’s digital media services, which includes the BBC website, mobile phone applications and radio and TV channels. The ‘Vision’ functional area is a very important area of the BBC as they are responsible for deciding what TV programs are broadcasted on TV. They are also responsible for producing, scheduling and broadcasting the content on all of the BBC’s 8 national TV channels and other regional channels. The final functional area of the BBC is the News Group. The news group are responsible for all the news that is found on the BBC News Channel. News group are also responsible for all current affairs and sports output.

Some other functional areas in the British Petroleum organisation are commercial and sales. The commercial functional area is responsible for new products as well as performance management. The ‘Sales’ department at BP is involved in promoting the BP products, which are fuels, lubricants and other petrochemicals across, the global markets. Another functional area of BP is Legal. They’re aim is to resolve employee allegations this is an employee’s claim or assertion that another employee or employer has done something illegal or wrong, this is usually problems over an employee’s contract of employment or allegations of discrimination within the workplace. They operate the three legal systems including employment law and licensing regulations. The legal team helped to secure the rights to one of the largest oil discoveries in the world.

Functional areas rely on each other because to be able to complete their aims they will need the other functional areas to complete their aims. For example ‘sales’ rely on ‘marketing’ because the product needs to be good and advertisement needs to inform consumers and persuade them to buy the BP produce. If marketing isn’t sufficient then the sales team will not make enough sales to meet the board of director’s targets.

All functional departments rely on finance as finance decides how much money each department has to spend. The functional departments need to be given enough funds to be able to complete their aims.

In the BBC the ‘vision’ and ‘audio & music’ group need to communicate as TV shows that the vision department creates will need sound tracks and other audio so vision relies on audio & music making the music that they request otherwise the TV program will not be the high standard that customers expect.

Both British Petroleum and BBC outsource different outside companies to come and complete tasks within the business. At BP they have outsourced IBM to handle maintenance for BP SAP apps. They also outsourced IBM for data centre management assignment which includes monitoring, backup and recovery and database and middleware management. BP has also outsourced Accenture. Accenture complete the finance and accounting within the BP organisation. Accenture now complete the accounting functions for BP’s U.S upstream, downstream and chemical business. The BBC outsources their IT department to Siemens.

Siemens are now the IT contractor and complete their tasks like running the extensive BBC website and maintaining the BBC internet servers. Organisations outsource other companies to complete roles in the business, because the business they outsource are specialised and experienced in the job they do and outsourcing is a lot cheaper than running it inside the organisation as the outsourced company already have the training and facilities to complete the job to a high standard. Outsourcing is cheaper as the BBC recorded savings of £20 million.

BP’s organisational structure allows them to control their activities and fulfil their core purpose. The organisational structure of BP is tall and flat because the structure has many levels of hierarchy and managers have a wide span of control. A wide span of control means that BP can complete their activities because there are less layers of management for messages to be passed through so messages are passed through the organisation quickly. As well as this a wide span of control means that BP’s costs are reduced because the business doesn’t need to employ as many managers.

The BBC’s organisational structure is a matrix structure. This means that people work together on projects in teams with people from different department. This helps the BBC fulfil its purpose of enriching people’s lives with programs that inform, entertain and educate because with team working together they can communicate easier and discuss ideas meaning the best quality TV programs are produced as different functional areas will know the tasks that they have to complete.