Difference between Organizational Forms and Interrelationship between Operations

This report discusses the difference between different organizational forms, such as private sector, public sector, and voluntary sector, and the interrelationship between different operations of a business to achieve organizational objectives. It also explores the macro and micro environment of the organization, including PESTLE analysis and Porter's 5 Forces.

BUSINESS AND
BUSINESS
ENVIRONEMENT

Table of Contents
INTRODUCTION...........................................................................................................................4
PART 1............................................................................................................................................4
Difference between different organizational form......................................................................4
Legal structure, size and scope of different organization form...................................................5
Interrelationship between different operation of the business to achieve the organizational
objective......................................................................................................................................6
PART 2............................................................................................................................................8
PESTLE.......................................................................................................................................8
Poter's 5 Forces...........................................................................................................................9
Vrio analysis..............................................................................................................................10
Strength and Weaknesses...............................................................................................................11
Swot...........................................................................................................................................11
Twos analysis............................................................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business Environment is sum or collection of all internal and external factors such as
employees, customers needs and expectations, supply and demand, management, clients,
suppliers, owners. Tesco is the largest retailer firm of the UK. Tesco used to offer variety of the
different retailer product in the market. Tesco used to operate in 13 different countries in total.
This report has been divided into 2 part. 1st part of the report highlights the difference between
different organizational form and also highlights the difference on the basis of legal structure,
size and scope. After that report highlights relationship between different type of function in the
organization.
2 part of the report highlights the macro and micro environment of the organization. After
that organization highlights the VRIO analysis of the organization, with the help of the same
internal and weakness of the organization. After that the report highlights the SWOT analysis of
the organization and also highlights the TWOS analysis of the business to ascertain the internal
and external position of the business.
PART 1
Difference between different organizational form
Private Sector: It is the type of the organization which is carried out by the entrepreneur
with the sole motive of providing product and service of the company to earn good sort of
revenue from the market. This type of structure of the organization comes under profit making
organization. For example Tesco is a private structure organization, who used to run with the
sole motive of satisfying need of the customer and in return expect good sort of money from
them (Belleflamme and Peitz, 2015). Private sector organization are renowned as private ltd in
legal structure
Public Sector: Public sector organization are the organization in which operation of the
business is carried out by the government of the nation. This type of organization generally used
to operate with the motive of satisfying the need of the customer. This type of organization
comes under both profit making and non-profit making organizational Sector. Generally
state or regional government of the nation has more that 51 percent of the share to be called that
firm as a public sector organization (Bendell, 2017). For Example: NHS is one of the Public
structure organization. Public enterprises are legally renowned as public ltd.

Voluntary Sector: Voluntary structure organization is an individual or the group of the
individual who used to come together to take corrective action to reduce the different issue faced
by the nation as whole. For Example: Oxfam comes under voluntary structure organization.
Voluntary structure organization is non-profit making organizational Sector. This type of
firm generally renowned as NGO. Non governmental organization.
Organizational Structure on the basis of the size of the company
Micro Business organization: It is the type of business enterprises which used to has
less than 10 employee in the firm and turnover of the organization is less than £2 million a year.
Small street stores and mobile vans comes under this categories.
Small Business organization: Small business organization are the one who used to have
less than 50 employee in the organization and turnover of the company is less than £10 million a
year (Besley, 2015). Small service providing firm are the example of of small business
organization.
Medium Business organization: Medium business organization are the one who used to
has less than 250 employee in the organization ad turnover of the firm is under £50 million in a
year.
Legal structure, size and scope of different organization form
Private sector organization, is legally renowned as a private ltd company. This type of
organization can be operated as a sole trader and in the partnership way as well. This type of firm
used to operate at both small as well as at the big size in the nation. Also, scope level of Private
sector organization is very high as this type of firm has the opportunity to operate at global level
to offer their services. Tesco also used to operate multinational to earn good sort of profit to
achieve their objective in the market. In total of 13 countries where Tesco used to provide their
services. Product which is offered by the Tesco are different variety or range of retail product for
their own company or other big renowned company product (Crnčan and et.al., 2017). They used
to provide the service of this product at their own companies outlets. As objective of Tesco is to
build good customer base to earn good sort of profit from the market.
Public Sector Organization, at the same time used to renowned as public ltd company.
This type of organization is also operate by a single government in a form of sole trader
organization. Also, used to operate in the form of partnership also but in that case 51 percent of
the share is enjoyed by governmental organization only. Scope of this sort of organization is not

that wider as they generally used to operate in the nation itself. At the same time it has seen that
public organization are bigger in size as compare to private sector. NHS, objective is to serve the
nation of the people and provide them good remedies to overcome different medical issue. For
the same purpose organization used to operate at wider level, as organization has 1600 hospital
which used to provide the free of cost or treatment at cheaper rate in their hospita (Gupta, 2016)l.
Also, NHS with the help of different promotional tool used to educate the consumer in the
market about the different ways to have healthy lifestyle.
Voluntary Sector Organization, also used to operate at the global level, as they also has
wider scope as compare to the other two form of the organizational Structure. Generally this type
of firm are form at the time of partnering of more than 2 non governmental organization. Oxfam
is example of the same as Oxfam is result of 19 independent company organization coming
together to form the same. Main objective of Oxfam is to reduce the level of the poverty at the
global level. Legal structure of the organization also help the organization in doing the same as
all the 19 independent charitable used to perform different activity at their level to reduce
poverty at the global level (Organization Structure, 2018)
Interrelationship between different operation of the business to achieve the organizational
objective
There are many different type of the organizational structure which is followed in the
organization to carry out different operation of the business (Formal Organization – Functional
Organization, 2019). Some of the organizational structure are as follows:
Functional structure: It is the type of the structure in the organization in which
organization used to makes the different group or department in the organization and all the
organization generally used to operate their operation in the organization (Helpman, 2016).
Operation of different department are planned in a way that it help them in achieving the goal
efficiently.
Hierarchical Structure: It is the type of the structure in the organization used to
delegate the different power to the other entity in the organization. In this structure the power is
generally centered at the top level and delegated to the different level. In this structure all the
command are passed on by the senior level and all the other level authority has to follow the
same in the organization. Tesco in generally also uses the same in the organization in which all

the decision are made at the headquarter of the organization and all the supermarket and chain
store has to follow the same in their organization.
Matrix Structure: It is the type of the organizational structure in the organization in
which the company used to make the different reporting structure for the different employee in
the organization. In this structure all the employee are given with the dual reporting relationship
in the organization (Storey, 2016). This structure is not followed by the Tesco in their operation
as they believed that this structure used to create the issue of complexity in the organization, as
they are has to report the same to more than one reporting party in the organization.
Relationship between different function
Human resources and Marketing function: Human resources function of the
organization help organization in maintaining and building good human resource in the
organization. At the same time marketing department of the company used to provide the
different valuable information to the Human resource department, on the basis of the same they
used to plan different recruitment function of the organization. This help organization in
maintaining good human resource in the organization, which help company in achieving the
organizational goal efficiently. At the same time Human resource department provides good
human resources to the marketing department to carry out different marketing activity of an
organization.
Marketing, procurement and manufacturing function: All of these three type of the
function in the organization help organization in achieving the organizational goal efficiently in
the organization. As marketing department of organization used to provide different marketing
information to the to the procurement department and on the basis of the same organization used
to procure good resources in the organization to carry out different operation of the business
(Gürel and Tat, 2017). At the same time the resources which is procure by organization is used
by manufacturing department to manufacture different product in the organization. This
relationship help company in building good quality of product in the company, which eventually
help the company in achieving the goal of the business very effectively in an organization.
Financial and other function: Financial function of the organization is linked with
variety of the other function of an organization. As financial department of the organization used
to allocate different budget to the different department in the organization and different

department in the organization used to plan different activity with regards to that allocation. This
eventually helps the company in enhancing the quality of work in the organization and help
organization in achieving the organizational goal very efficiently.
PART 2
PESTLE
Political Factor: This factor is positive for the Tesco as there is good level of political
stability in the organization. This creates the positive impact on the operation of the business as
organization can stay with the same strategy for longer period of time in the organization
(Szeliga-Duchnowska and Goranczewski, 2017). At the same time political decision like Brexit
has created negative impact on the performance of the business, as it get difficult for the
organization to procure the goods and raw material that easily from the neighbor countries.
Economical Factor: This factor can also be called as a favorable factor. As economic
condition of UK is very strong, as a result interest rate and inflation rate are favorable in the
nation, which help organization in raising different fund require to carry out operation of the
business. At the same time cost of water in the nation is too high, this eventually increases the
cost of of the company in long run of business. As organization has to pay more amount of
money to draw water in the organization.
Social Factor: This factor is not that favorable for the Tesco. As need and preference of
different consumer in the organization used to change on regular basis this eventually used to
drive company in changing the product line of company which impact the efficiency of business.
As Tesco used to has good amount of the resources they generally looks at this resources as a
opportunity to develop the unique product and satisfy the need of the customer in long run of the
business. To overcome the same issue in the organization, organization has to plan the different
production of the product in the organization in a way that it help organization in satisfying
social as well as environmental need of the nation.
Technological Factor: This is the type of the factor which is moderate for the
organization. As in the rapidly changing environment organization is able to serve the people
more efficiently in the market (Hamilton and Webster, 2018). At the same it also used to impact
the efficiency of the business in long run as it demands a good amount of cost to maintain
different technology in an organization. Waste management technology is the another factor

which is prevailing in different organization, as this used to increase the procurement cost of the
company, at the same time it used to help the company in getting cost benefit also in the
organization.
Legal Factor: This factor is not favorable for the Tesco, as they has to compile with
variety of different type of laws and regulation in the market to carryout different operation of
the business. This used to has a negative impact on the business. At the same time this used to
help the organization in building good goodwill as compiling all the activity helps the
organization in presenting good case of the company in front of the consumer.
Environmental Factor: This factor is favorable factor for the organization, as
organization used to adopt different recycling material for the process of packaging different
product of the company. This factor also affect the company in the negative ways as company
has to invest good amount of resources to overcome environmental issue in the nation. Climate
risk is the another factor which may affect the organization. As uncertainty of the climate in the
UK used to sometime impact the efficiency of the organization in transporting different
resources from one place to another.
Poter's 5 Forces
Competition in the industry: There is very high level of competition in the industry, as
there are many different retail organization which used to operate in the organization. This
eventually used to has a very negative impact on the performance of the business as organization
used to take very different decisions to overcome different competition in the organization. At
the same time as organization is having a very good product line in the market to get a
competitive advantage in the organization.
Potential entrant into the industry: This force is also not that favorable for the
organization, as there are many different type SMEs which used to operate in the organization.
They generally used to bring the good level of innovation in the market, which sometime get
difficult for the organization to survive (Kljucnikov and et.al., 2016). At the same time as Tesco
is having a good resources and product line in the organization, it eventually help the company to
survive the same. Also customer base of the company also help the company in surviving the
same.

Power of Supplier: This factor is favorable for the organization, as with the help of the
good relationship with the different supplier in the organization, organization is able to maintain
a good supplier relationship in the organization. This eventually help the organization in getting
good result out of the market. At the same time as number of competitor is high in the industry
sometime organization is not able to get the required raw material and product in the market.
Power of customer: This factor is moderate for the organization, as customer in the
market is having good sort of choice to select the vendor of their choice. This gives the good
hand of the power to the customer in the market. At the same time as organization is build a good
customer base in the organization, this help the organization in overcoming variety of the
different problem related to customer retention.
Threat of Substitute: This factor is also somewhat favorable for the organization, as
organization used to offer the variety of the different product in the organization (Cepel and
et.al., 2018). This eventually used to eventually help the organization in overcoming the different
issue related to the threat of the substitute product in the organization. Reason behind the same is
that substitute of product are also generally offered by the company in the market.
Vrio analysis
Valuable Rare Imitable Organization
Financial
Resources
✔ ✔ ✔ ✔
Local product ✔ ✔
Employee ✔ ✔
Patents ✔ ✔ ✔
Financial Resources: Financial resources of an organization are highly valued, as
organization has earned a good amount of the profit from the market by carrying out different
operation of the business. This is also very rare for the company as this level of financial
resources are found by many rare company. This type of financial resources are very difficult to
imitable as well. This resources are well organized by the organization to carry out different
operation.

Local product: Local product of the company are very valuable for the organization as
they are differentiate in nature. Local food product of the company is not that rare as many
company has same product. Also any body can imitate this resources of organization. At the
same time product of the company is well organized in the organization.
Employee: Employee in the organization are also very valuable as they are the one who
used to carry out different operation of the business, at the same time they are not that rare
commodity as many organization can have the same employee and they can imitate the same
with the help of proper training to the employee (Helpman, 2016). At the same time employee of
the organization is well organized in the organization.
Patents: Patents are not that valuable for the organization as they used to offer the
product of different company in the organization. Also, patents of the organization are rare and
non imitable as it is subject to security. At the same time patent of the company is well organized
in the organization.
Strength and Weaknesses
After going through the VRIN model it can be said that the biggest strength of Tesco is
the financial resources of the organization. As they are having very good financial resources.
Also Human resource which is possess by the organization is one of the biggest strength of the
company.
At the same time it can be said that the organization has to make sure that they used to
bring good sort of change in the product line. As they are having common product line, which is
very big issue for the organization. This can be overcome by the organization by bring the new
product in the market in the name of the organization.
Swot
SWOT is the framework used to analysis the internal position of the business.
Strength
Financial position: Biggest strength of the company is the financial position of the
business in the market. As organization used to dealt in the market from many years and is able
to bring out the good amount of the profit from the market also, this has eventually build a good
financial position of the company in the market. This help the company in procuring different
resources in the organization.

Goodwill and customer base: This is another biggest strength of Tesco, as Tesco is able
to earn the good amount of the goodwill from the market due to the quality of the product which
is offered by the company in the market. This has also helped the company in building a good
level of goodwill in the market. At the same time organization is also having a good customer
base in the market which eventually help the company at the time of overcoming different
competition factor in the organization.
Weakness
Profit margin: As organization used to dealt in the heavily competitive market, they
have to compromise some sort of profit in the market to be competitive. This eventually used to
lower down the profit margin of the company in the market. This used to impact the performance
and revenue of the company to some extent.
Employee turnover: It is another big issue in front of the organization, as it has seen that
there is high level of employee turnover in the Tesco. This eventually used to create the situation
where organization has to invest a high number of the resource in the organization to recruit the
new employee. This used to increase the cost of the company in long run of the business.
Opportunity
Technology: Tesco can look to adopt new operational technology in the organization,
this will eventually help the company in getting good sort of advantage in the cost of the
company product. This may help the organization in getting rid of the issue which they are
facing due to competition.
Expansion: Tesco is having a good opportunity to expand their business in different
nation. As this will help the company in seeing the wider number of the customer and will also
help organization in getting different advantage of operating at global level (Hamilton and
Webster, 2018).
Threat
Legal: It is one of the biggest threat in front of the organization, as organization used to
operate at the global level they have to change the policy of the company in the market to get
competitive in the market. This used to impact the efficiency of the business in long run.
Competition: It is another threat for the organization in the market, as organization has
to take many defensive action in the organization to overcome different type of competition
offered by different company. This can affect the organization in long run of the business. As

organization has to check the strategy of the company on regular basis, which used to impact of
the business in long run.
Twos analysis
TOWS analysis is a variant of a SWOT analysis and is an acronym for Threats, Opportunities,
Weaknesses and Strengths
EXTERNAL FACTOR
I
N
T
E
R
N
A
L
F
A
C
T
O
R
STRENGTH WEAKNESSES
OPPOURTUNITIES Biggest strength of the
company is the financial
position of the organization, as
they had earn good amount of
revue from the market. This
used to open up the good
opportunity for the market to
adopt new technology in the
organization and also
organization can look to
expand their business as they
will find it easy to raise
different funds in the market to
carryout different operation of
business.
As the profit margin is one of the
biggest weakness of the company.
Organization can look at
overcoming the same in the
organization with the help of
adopting new technology in the
organization. As adopting new
operational management technique
in the organization will help the
company in saving the different cost
of the comp[any. Which will
eventually help the company in
maximizing the cost of the company
in long run and also will help the
company in improving the level of
efficiency in the organization.
THREAT As organization is having the
threat of high competition in
the organization. Organization
can overcome the same threat
with the help of the strength of
the company. As organization
is having good goodwill in the
Another threat for the company in
the market is the employee turnover
of the company. As there is high
level of employee turnover in the
organization. Organization in
generally can compile the activity of
the business with the different legal

market. Organization can look
to use different promotional
activity in the market to
promote the product of the
company (Gürel and Tat,
2017). This will eventually
help the company in getting
good customer toward the
company and sustaining
different competition in the
market.
policy related to the employee in the
organization. This will eventually
help the company in presenting good
case of their in front of the different
employee in the organization. This
will help the company in building
good working environment in the
organization. This will eventually
help the company in overcoming
different issue related to the
employee turnover in the
organization.
CONCLUSION
After going through the above report it has been summarized that there are three different
type of organizational form that is public, private and voluntary organization and used to has
very different type of legal structure and scope of the business. After that report concluded that
there is relationship between different function of the organization, which help organization in
achieving the organizational goal effectively in the organization. After that the report concluded
that organization is having very strong financial position and goodwill in the organization this
eventually help company in attracting the good amount of consumer toward the company. At the
same time element like price and competition in the market used to impact the organization in
very negative way. In the end the internal analysis shows that there are many different type of
option which is also in front of the organization to use strength and overcome the weakness, with
the help of looking at the different opportunity. At the same time this also can affect the
organization as there are many threat for the organization as well in the market.

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