Types and Purposes of Organisations

This report covers different types and purposes of organisations such as public, private, and voluntary sectors. It explores the characteristics, benefits, and legal structures of each sector. The relationship between organisational functions and their connection with objectives is also discussed.

Business Environment

INTRODUCTION
Business environment refers to internal as well as external forces that have influence on the
business activities. These factors mid range from policies of government to legal application.
These are very dynamic and ever changing with the time and fluctuations in the business world.
Organisations make plans and strategies in order to overcome the challenges possessed by such
forces. It is important to to increase the overall performance and sustain in the competition for a
long time. Business environment presence threats as well as opportunities for any business which
should be identified and evaluated. There should be effective management and strategies to use
the resources in changing environment so as to maintain the performance, increase profitability
and growth. In this report, TESCO has been chosen which is a British multinational groceries
and general merchandise retailer having its headquarters in Hertfordshire, UK. Furthermore, this
report covers different types and purposes of organisation such as public, private and voluntary
along with their size, scope and legal structures. In addition to this the relationship between
different organisational functions and their connection with objectives, identification of positive
and negative impacts of micro environment. These have been followed by an internal and
external analysis of a particular organisation together with SWOT analysis.
TASK 1
P1. Different types and purposes of organisations
Organisations can be established in public, private or voluntary sectors by considering the nature,
legal structures and other benefits. These sectors have their characteristics along with the benefits
and demerits which should be considered before establishing an organisation. Some entities in
the respective sectors have been provided below:
Public sector- This sector is associated with the government and provides a range of
governmental services example infrastructure, public transportation, public education etc. British
Broadcasting Corporation (BBC) is a public service broadcaster located in Westminster, London.
it is one of the oldest and largest organisation in the field having more than 22000 employees. Its
purposes are to provide impartial news and information with a view to engage the world and help
them understand. To support learning for people of all ages, to show most creative, quality

content and to reflect United kingdom by reflecting culture and values. It has been established on
the royal charter where an agreement is made between Secretary of State for Culture, Media and
Sports.
Private sector- This sector comprises of individuals and companies who run the organisation
with the motive to make profit. The government of the country does not hold or on any shares or
activities. In simple terms, there is no involvement of the government. In this category, TESCO
has been chosen which is a retailer in groceries and general merchandise. Is operating at
international level by making its present in many countries. Also, it is one of the leading and
successful companies in this industry. The main purpose of Tesco is to make profit by creating
value for customers to earn their lifetime loyalty. Also, to offer a wide range of products and
services from groceries, household products, clothing to insurance with a view to meet the
requirements of customers. It has been incorporated by forming MOA signed by its directors and
shares were subscribed by the shareholders. The directors hold the power to make decisions and
strategies which are applied within the organisation.
Voluntary sector- The entities in this sector half no profit making motive. It is entirely different
from private sector. It is directed towards the betterment of society and organisations are non
governmental nonprofit. Sometimes, it is known as the third sector, community centre nonprofit
sector. Oxfam as an organisation in which industry which is focused on eradication of global
poverty. It was founded in 1942 and comprises of 19 independent charitable organisations having
the same objective. It was registered in accordance with UK law. The headquarters are at
Nairobi, Kenya. The purpose is to help people earn a living and provide them basic necessities in
the situations of vulnerabilities. It supplies food and send children to school and stand against
injustice. The legal structure a not-for-profit limited liability company which forms council of
trustees.
P2. Size and scope of range of different types of organisation
The size and scope difference in all the three sectors which have been mentioned above. Every
organisation has their purposes which are based on the size and scope. These two factors have
been explain with reference to the entities presented above. These are as follows:
BBC- When this company was established, the services were limited to the regions of United
kingdom. After gaining success, it started broadcasting the news through television, radio and
online in 28 languages. Therefore, the scope is quite wide as it services are provided throughout

the world. It employees over 20000 staff in total in which more than 16000 hour in public sector
broadcasting. In addition to this, 35,402 are the individuals who are in part time, flexible and
fixed contracts.
TESCO- This organisation is one of the leading entities in the industry deals. Retaining services
of selling tea products and services is not just limited to the national boundaries of UK. There are
many markets in Europe and Asia along with USA where it sells the products and services. This
is to capture wide markets and make the position more stronger. It is planning to expand its
business in other countries as well for gaining a competitive advantage at international level.
According to the data provided by Tesco, approx 500,000 people are working in the company at
worldwide level. Also, it has around 7000 stores in different parts of the world.
OXFAM- This entity has wide scope which extends to all those people who are fighting
inequality to beat poverty together in different locations of the world. There are many countries
who have participated in the activities of Oxfam. It helps in providing dignity and opportunity
for underprivileged people. The working of Oxfam extends to who almost over 90 countries and
they all share six goals and vision working towards removing poverty. It has spent around 1.27
million dollar and read more than 22.2 million people as a part of long term development and
humanitarian assistance programs. Along with this, 5,300 people around the world are associated
with this organisation and there are 22,000 volunteers in volt who help in achieving the
objectives.
TASK 2
P3. Explain the relationship between different organisational functions
Organisational function refers to main process or set of activities which are undertaken by a
department or areas of a company. These may range from operations, human resources,
information, finance and many more. The relationship between these functions has been
provided as follows:
Marketing- The activities undertaken by marketing department about researching the current
requirements and demands of the customers. This unit provides valuable information which
helps organisation produced new products with enhanced quality in order to increase customer
satisfaction. Tesco has been improving in providing better services on the basis of data provided
by marketing department. This hurts the organisation to connect in a better way with the outside
world. It helps in achieving competitive advantage. Production department provides all the

specification of the products that are being manufactured so that marketing function such as
raising awareness of the newly developed product can be raised among the customers. This helps
in gaining success.
Finance- This function is connected with expenditure or utilisation of financial resources for
different operations and processes. On the basis of reports provided by finance team, The entity
makes business plans and strategies for enhancing the performance and retain the position in the
marketplace. In order to manage the cash flows, why should be adequate funds which should be
monitored regularly and a comparison should always be made against the standard to determine
the associated risks. In the context of Tesco, it helps in achieving the long as well as short term
financial goals by paying off all the related obligations. Human resource, marketing, production,
operations etc. Communicate their individual need for farmers which can be allocated to carry
the activities. Allocation of financial resources is done by finance department.
Accounting- The functions accounting includes tracking the transactions occurring on daily
basis regarding different account such as purchases, sales etc. With the function of accounting,
cash flow maintained in an efficient manner. The requirement of additional funds is determined
by accounting department. This helps in in achieving the objectives within the available
resources leading to higher growth and productivity. Organisational structure can be maintained
only if there is adequate funds together with close monitoring. All other units give the
information of their respective transactions to accounting department in order to assist in making
entries in me journals and books keeping a record of all the transactions.
Human resources- This is related to the management of human capital within the organisation
for achieving good performance. Another aspect is legal provisions which are applicable on a
company. These are also included in policies to be implemented within the organisation.
Training, development sessions etc. Can help the employees of Tesco to show their creativity
and innovation in achieving goals and objectives. This further fulfils the needs and expectations
of customers. This function fulfils the vacant positions before it is too late. Attractiveness of an
organisational structure helps in getting best candidates for available job positions in the
company.
TASK 3
P4. Identify the positive and negative impacts the micro environment has upon business
operations together with specific examples

Macro business environment our forces present outside the organisation which are beyond its
control. A business can be affected majorly from the pressure put by such factors. Therefore, it is
essential to conduct an evaluation and analysis of all the macro environmental factors for
determining the risks so that appropriate strategies can be made in order to mitigate them. Pestel
analysis is a framework used for assessing the impact of such forces. It has been conducted in the
reference of Tesco which is as follows:
Political factors- These are related to the activities of the government which affect the
businesses. Text policy, foreign trade policy, trade restrictions, environmental law, labour law
etc. Are some of its examples. There is increased intervention of the government. Tesco is an
international company operating in many countries at global level. It has to comply with all the
requirements of various nations advisor business can be affected in a negative manner. For
example, import duty on goods can affect us go because it import some inventory from outside
UK like China and East Asia. Apart from this, the withdrawal from EU membership has greatly
increase the risk factor in in carrying the business activities from different countries in Europe.
Economic factors- These are connected with the forces that prevails in an economy and affects it.
Some examples are interest rates, tax rates, wages, inflation, reception and many more. investors
judge the attractiveness of an industry on the basis of economic factors. With regards to Tesco,
labour cost in UK can affect the supermarkets. For instance, the minimum wage rate is is
increased in last few years which has caused upward shift in the cost involved in UK. Also, it
should make strategies to balance the cost, prices and profits. One of the major reasons is the
brand reputation. For this purpose, it can opt for diversification in international market for
achieving the the increased shares.
Social factors- These are the outcomes deriving from culture, environment, community, family
etc. Every society holds some norms which are followed by the people living in there. These are
the factors which greatly impacts a business as it operates within the society by using their
resources. Tesco always conduct researchers and evaluate the trends and patterns followed by
customers when it comes to shopping. It is useful in in providing the quality and products
expected by the customers. This has made Tesco realise that customers are looking for super fast
delivery with flexible goods return policy. also there should be one stop shopping for them to
increase their satisfaction and convenience.

Technological factors- These are connected with the technological capabilities and evaluating
the alternative which are available within the industry. It includes advancement and development
of new technologies which can help bring innovation. In the context of Tesco, it embrace
advancement in technology as an opportunity by adopting retrial technologies. Also, it makes
huge investment in research and development to find the the appropriate technology which can
help it sustain in the market. For example, it has introduced RFID technology which increase in
store experience for customers, the stock is automatically counted and remove after sales etc.
This has made the working more easier increasing high efficiency.
Environmental issues- The factors of connected with ecological that influence the living people
in a society. It covers the laws which have been enacted for protecting the environment after
considering the damages. Companies are facing immense pressure from government agencies to
address environmental issues. This is to increase the accountability for their actions to the
society. Tesco has a team which look after the ways of collecting unwanted plastic bags from
customers and recycle them. As the company is committed to use the renewable sources and
generate electricity out of it. This is going to reduce the admission of harmful gases and carbon
footprint.
Legal factors- There are some laws present in legal system which are applicable on companies
operating in UK and other countries. Tesco has faced many controversies and legal actions in the
past on different factors. So, it has become more consistent towards fulfilling the legal
requirements in order to avoid breaching or contravention of law. The can leads to to financial
burden for settling the legal matters.
TASK 4
P5. Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses
Weaknesses and strengths are two aspects of every business which are affected by various
factors whether internal and external. These have impact on business operations in negative as
well as positive. These should be evaluated and analysed for determining the actual scenario to
make strategies accordingly. SWOT analysis has been conducted for Tesco which is as follows:
Strengths

 It is one of the leading groceries retailers in UK which has huge sales and revenue as
compared to other supermarket chains in the country. Also the annual operating profit
increased in past few years.
 It has market dominance in the context of market share and it has been gaining popularity
in other nations as well.
 It has around 6800 stores in 14 countries making it a company having global presence.
 The number of stores are being increased every year as the operational plan is to to
introduce new stores in different locations.
 It offers diversified product range by products by following diversification strategy which
has made it successful.
 It uses advanced technology for enhancing shopping experience of its customers this lead
to higher satisfaction.
Weaknesses
 Tesco has filled in conducting business in America and Japan in 2012. the field export
operations force the company to close doors in Japan after 9 years and then US after 5
years.
 It has been charged with the acquisition of false accounting declaration and miss
representation of profits.
 The profit is affected it is of high debts and credit card liability.
 The low cost strategy has chances to reduce the profit margins.
 Sum of its stores perform very poorly.
Opportunities
 It has introduced a new store called Jack’s which is discount store and has shown
significant growth. This unlocks the opportunity to grow the business and successfully
complete as a low-cost rifle with other competitors.
 It can get collaborated or strategic alliance with other reputed companies. Does can help
it provide even wider range of products to attract the customers.
 There is an opportunity for joint ventures in the regions where Tesco stores are
underperforming. the local companies can provide profound market knowledge which
can help in improving performance in such regions.

 Online shopping trend is something which has emerged as a powerful opportunity for
Tesco. Along with this, it can provide home delivery services.
 Tesco can make plans of expanding the business in developing or emerging countries
such as Turkey or Indonesia. This can help it gaining competitive advantage.
Threats
 The exit from EU referendum has declined the trade deals and cost have increased which
is a threat for Tesco.
 Government regulations, legal and tax matters along with other economic crisis have
hamper the performance of Tesco. The impact of these factors can affect the operational
efficiency and performance for a long time.
 It has been involved in some of the controversies which has taken down the brand image.
In future, if such charges are likely to be imposed on the company then and it is going to
lose customers.
 There are many companies who are giving tough competition to Tesco such as Walmart,
Aldi etc. it is getting tougher for TESCO to survive in the market.
P6. Explain how strengths and weaknesses interrelate with external micro factors

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