Business and Business environment

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Business and Business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1 types and purposes of organization which are public, private and voluntary and its legal
structure........................................................................................................................................3
P2 size ans scope of different types of organization....................................................................4
M1 structure, size and scope of organization link to business objectives...................................5
P3 Relationship between different organizational functions and their link to organizational
objectives.....................................................................................................................................6
M2 impact of organizational structure.........................................................................................7
D1 analysis of complexity in different types of business structure.............................................7
P4 positive and negative impacts macro environment have upon business operations...............7
M3 pestle model to support macro environment of organization................................................9
P5 internal and external analysis of organizations to identify strengths and weaknesses...........9
P6: How strengths and weaknesses interrelate with external macro factors in TESCO............11
M4 SWOT/TOWS analysis and justify how they influence decision-making..........................12
D2 impact of micro and macro factors on decision-making......................................................13
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment is the surrounding in which organization work. Positive business
environment can lead to growth of the company. Tesco is the multinational retail company which
is based in UK. NHS provide heath services. BFS is a voluntary company which work for
society. This report will discuss types, size and purpose of organization with its legal structure.
Further, explain relationship between organizational functions and will also identify macro and
micro environment of business.
MAIN BODY
P1 types and purposes of organization which are public, private and voluntary and its legal
structure.
Public sector:
Public sector is the government owned organization and also known as not for profit
organization (Khan, Çera and Nétek, 2019). This sector provides services to public and work for
public welfare. The main purpose of this government owned bodies are they provide goods and
services to the public which include police, military, infrastructure and the services which can
make society better. National health service is the health care system which is publically funded.
They offer good healthcare services to the people and give their contribution in the society. NHS
is the leading company of UK which provide healthcare services. The legal structure of company
is providing all kinds of medical services to the community. This is helpful for company in
gaining sustainability and also contributing in the society.
Private sector:
Private sector include those organizations which is owned by individuals or group of
people. The main aim of company is earning profit. There purpose is to carry business operations
in such a manner that profit can be maximized. They contribute in the economy of the country.
This company represent growth and development and generate income for the country.
Therefore, contributing in the GDP of country. Tesco is the private multinational British
company. The company is known for high sales and good revenue which prevails development
in the country also. Tesco have wide product portfolio which help in taking the competitive
advantage. legal structure of Tesco is, the company is operating in many countries and is
established geographically. They run supermarket, super shops, convenience store and deals in
wide products.

Voluntary sector:
Voluntary sector means those organizations which work only for society (Belás and et.al.,
2019). They are not concerned about profits. The main purpose of company is serving society
and solving issues which is prevailing into the society. They do not care about profits and the
activities which they carry are also not done with the aim to earn profit. They work on common
issues which adversely impact the society. British heart foundation is the voluntary company
which work on decreasing the death rate which is related with cardio disease. The organization
fund into treatment, diagnosis and prevention of heart disease. Legal structure of company is
they take voluntary donations to meet their objectives.
Sole trader:
It means which the business or company is run by individual or solely. The individual is
responsible for its operation and profits and losses by the company.
Partnership:
Partnership means when business is owned and run by two or more partners. Partners
contribute capital so that business can be run. Profits which is earned by the company is divided
between all partners at agreed share.
P2 size ans scope of different types of organization
Micro enterprise Small enterprise Medium and large
enterprise
Size The size of these
enterprises are very
small where the
number of workers are
also less and require
very less investment to
start the business
(Gaganis, Pasiouras
and Voulgari, 2019).
Small enterprises are
small but big as
compare to micro
enterprise. These
companies are
independently owned
and also have small
number of workers
which carry business
operations. There aim
is to work for long
period and increasing
Medium and large
enterprises include
multinational company
which can be the
private company or
voluntary company.
There number of
employees are more as
compare to small
enterprises. They gain
sustainability so that

sales and revenue. work for long run.
scope These companies have
good scope in the
developing countries
as developing
countries promote
micro companies very
much. They contribute
in the growth of the
economy and
providing income
opportunities to the
citizen. They operate
on less business costs.
These enterprises can
be public firm or
private firm as well.
There size is micro but
contribute great in per
capita income.
It includes private
companies which is
owned by individual
or partners. They aim
to increase the size of
company and can
become large
organization. There
focus is one increasing
sales so that company
can get good profit.
They are big
companies which earn
large revenue.
(Komljenovic, Loiselle
and Kumral, 2017)
There main aim is to
maximize profits by
observing market
trends. They take
every opportunity
which comes in
market so that can take
competitive advantage.
Revenue which is
earned by company is
used for business
operations and some
capital are also
preserved for future or
emergency use. Tesco
if the large enterprise.
M1 structure, size and scope of organization link to business objectives
Three types of organization which are Tesco, NHS and BFH which have different
structure and scope have different organization objectives. Scope of private sector like Tesco
mainly focus on profit making only and which is helpful in the economic growth of country.
There objectives are to take competitive advantage and building brand recognition. They offer
wide products and provide employment to large number of employees. Voluntary sector which is
BHF having objective to serve the society. They work on serving that sector of society which are
affected with heart disease. They found that heart problem is increasing day by day. So the

organization work on spreading awareness and providing treatment to patient who are concerned
with heart problems. NHS which is the public sector, they aim at serving society although they
also take care about profits but not over society (Khajeheian, Friedrichsen and Mödinger, 2018).
They fulfil their objectives but take care about community.
P3 Relationship between different organizational functions and their link to organizational
objectives.
Organization have many departments which are linked with each other so that business
objectives can be achieved.
Human resource and finance department:
Human resource team are responsible for recruiting and selection of right employee for
the right position. Finance department are entitled with all finances of company and know
company's financial position. HR which going through hiring process have to give advertisement
to attract candidates and for that they require money. Budget is passed by finance department so
that HR can carry hiring for company. HR team of Tesco when work with finance team help
company to achieve its objectives in terms of getting efficient employees in company's budget.
Human resource and marketing department:
Marketing department work on doing marketing of the company so that can increase
sales and enhances reputation of the company in the market. Human resource provide good
employees to marketing by hiring such candidate who have marketing knowledge and skills
(Perera, 2017). HR help marketing team in getting efficient workforce so that goals of company
can be achieved.
Marketing department and research and development department:
Marketing department do face to face contact with customers. So they better know
demand and preferences of consumers. Marketing team of Tesco work with R&D department by
giving knowledge about the market trends so that research team can produce innovative products
and services accordingly.
Marketing team and finance team:
Marketing team have to carry on different marketing activities which incur costs. So
finance department give budget to marketing team and in that budget only, marketing team have
to carry all activities. Finance team provide budget so that expenses cannot go out of budget and
company do not bear extra expenses by their profits.

M2 impact of organizational structure.
Tesco is using hierarchical structure as the organization is large in size. It can be said that
it uses functional organizational structure (Islam and Mamun, 2017). Company have different
departments which help them to function smoothly. Hierarchical structure is used because
organization comprises of many layers. Tesco have many employees a company cannot handle
every employee, so they had made different departments which carry different activities. Tesco
uses functional structure so that can effectively manage different countries, departments and
employees. This structure also help company to achieve objectives and goals. Company can
monitor performance of their workforce and motivate them to work hard so that can enhance the
productivity.
D1 analysis of complexity in different types of business structure
Sole proprietorship:
Sole trader means which business is owned by single individual. Its structure is complex because
all the losses is bear by single individual only. Here it can be said that here is high risk.
Limited liability company:
Limited liability company are big company. There operations are complex because it includes
high number of employees and managing and monitoring their performance are completes in
nature.
P4 positive and negative impacts macro environment have upon business operations
macro environment:
Macro environment prevails in the economy on large and does not only present in the
particular region. Its factors include inflation, fiscal policy, employment rate etc. pestle
framework is used to understand this in more depth.
Pestle:
Pestle analysis is the technique which is used to analyse external environment of Tesco. It
includes six factors which are as follows:
political factors:
These factors help us to know that how government can influence particular industry or
economy. It includes trade, tariffs, tac policies etc.
Positive impact:

Tesco gives employment opportunities in the country in which it work which help them in
increasing sales and getting diversified and efficient employees.
Negative impact:
When recession comes then the government of the country pressurize Tesco to give jobs to local
people (Dalirazar and Sabzi, 2020).
Economic factors:
It is related to the economic factors which affect the company. It includes inflation rate, foreign
exchange rates, interest rates etc.
Positive impact:
Through diversification company is getting huge success and reach towards the global market.
Negative impact:
When the inflation rate rise, it will affect the price of products and services and will adversely
impact spending power of customers which can reduce demand for company's goods.
Social factors:
These factors analyse social environment which include cultural trends, population etc.
Positive impact:
In the holiday season like UK and US there is high demand of goods of Tesco.
Negative impact:
The demand of customers are influenced by social conditions and sometimes create hurdle for
company in increasing sales.
Technological factors:
It means that innovation in the technology can affect the business operations which incudes
automation, research, market trends etc.
Positive impact:
It helps Tesco to operate with advanced technology which further help company in getting
competitive advantage.
Negative impact:
Adopting advanced technology is costly and cut down profit margin of company initially.
Legal factors:
It includes laws and policies of the country from which business operations gets affected. It
includes safety laws, consumer laws etc.

Positive impact:
Tesco uses this factor for promotional purpose. They had started offer of getting discounts on
groceries if fuel is purchased from them.
Negative impact:
Tesco has to face impact of laws which is introduced by government under which company
cannot increase price of products very frequently.
Environmental factors:
When the company is affected with the environment. It includes weather, climate, environmental
offsets etc.
Positive impact:
Tesco is doing corporate social responsibility and contributing in saving environment which is
helping company in improving image of company (Gürel and Tat, 2017).
Negative impact:
Government forces company to adopt renewable resources so that environmental issues can be
minimized.
M3 pestle model to support macro environment of organization
Pestle involve six factors which are:
factors
political It is concerned with factors which are related to tax, tariffs etc.
economic It includes factors which affect the company from changes in
economy.
social Company gets influenced with the preference and cultural trends
of society.
technology Change in technology affect business operations.
Legal Company affect with laws and policies laid down by government.
environment These factors include environmental change which can bring
positive or negative aspect.

P5 internal and external anaysis of organizations to identify strengths and weaknesses
Swot analysis will be used to do external and internal analysis of companies. Swot
framework have four dimensions which are as follows:
Swot analysis of Tesco:
strength:
The biggest strength of Tesco is their market share (Tesco SWOT Analysis 2020: A Detailed
Report., 2021). Company have increased market share as compare to their competitor which help
them in getting competitive advantage. Through online selling during the pandemic also
company sales has increased which helps in maximizing revenue. Tesco is very prompt in
adopting advanced technology which reduces its costs and increases the profits. Employees of
tesco are efficient and have notably given good performance.
Weaknesses:
Tesco is continuously getting complaint regarding quality, although company is working on it.
But is affecting company's reputation. Company is not following food safety measures which is
provided by the government and as a result criticized by people. Company has changed
leadership style and focusing more towards online business and due to this offline sale of
company is getting affected.
Opportunities:
After this pandemic unemployment rate has increased. Tesco is having many stores so company
can get low wage labour. Online sales are on boom which is the opportunity for company. Tesco
can give heavy discounts in online sales so that more customers gets attracted towards it and that
can increase sales of company.
Threats:
After Brexit supply chain of company can get disturbed and now company will not gets benefit
of getting low paid employees from EU. As government has restricted on the free movement of
workers from EU.
Swot analysis of NHS:
strength:
The competitor of the company are very less. Medical services which are provided by national
health services are unique and patient feel good while getting treatment from NHS. NHS is

continuously growing and adding services everywhere which help the company to beat
competition. Company have good relations with health partners.
Weaknesses:
Population is increasing day by day and due to that company is not able to serve properly as
demand for health services are rising. Patients have to wait long for their turn and company is
also not able to take all emergency cases (Longhurst and et.al., 2020). Some employees of
company are not behaving good because oh high work pressure.
Opportunities:
Company can use social media platforms to spread awareness amongst society related to health
and also can inform new health facilities which is launched by company as social media covers
large audience.
Threats:
Employee turnover rate of company is increasing.
P6: How strengths and weaknesses interrelate with external macro factors in TESCO
Internal and external environmental factors of the company affect their businesses to the
great extent and both these have interrelation with each others. Internal environmental factors are
all about company's strengths, weaknesses, opportunities and threats. External environmental
factors cover political, economic, social, technological and other factors. In regard to Tesco, it
can be said that it is well-being-known retailer and has improved image in the market.
Interrelation of strengths and weaknesses with external factors are:
Strengths and social factors: As per the social factors, customers needs are getting
changed and they are becoming health conscious. They want qualitative products and for that
they can even invest higher prices. Whereas, it is found that Tesco has several convenient stores
and provide valuable products to customers and this strength makes it able to increase customers'
retention rate (Song, Ming and Liu, 2017). So, it can be said that this strengths helps it out in
satisfying social factors and satisfying society members. It shows interrelationship between
internal and external factors. These interrelationship can improve decision-making process.
Weaknesses and legal factors: It is found that Tesco decided to close around 43 stores
that put around 2000 jobs at risk. For increasing profit margin and sales it is found that manager
made some changes and due to this Tesco was fined by serous fraud officer in the UK. It had to
pay around SFO£129 million. This weakness is interrelated with legal factors. As per the legal

and political factors, companies are required to fulfil all rules and guidelines otherwise they will
have to pay fine (SWOT of Tesco, 2021). It happens as this company did not follow rules and it
affected its image. So, it can be said that there is strong interrelationship between internal and
external factors.
Opportunities and technological: As per the technological factor, retailers of the UK
are required to invest in advanced technologies. It can only help them out in being in the market
and taking competitive advantages. Whereas, it is found that Tesco have opportunities of
expanding business because of ability to make use of technologies. So, it can be said that
technological factor is associated with internal factors and opportunities. From this relation, it
can be said that it can help in making better decision regarding improving strategies, investing in
technologies and others.
M4 SWOT/TOWS analysis and justify how they influence decision-making.
There is relationship between strengths, opportunities, strengths and weaknesses and
others. All these relationship and internal factors can help in making better decision such as:
Internal Factors
External
factors
Strengths Weaknesses
Opportunities Strengths/opportunities
 Tesco is well-
established
business with
around 28.4% of
grocery market
share. With this
strength it can take
opportunity to
move into growing
organic food
market.
 Improved relation
Weaknesses/opportunities
 Declining sales of
non-organic food is
weakness but it is
making company
able to focus on
producing organic
food. So, by
supplying fresh and
organic food it can
increase sales.
 Profitability and

with suppliers can
help in better price
negotiation. This
strength and ability
can provide
opportunity to
increase profit
margin and price
advantage
(Kuldilok,
Tokrisna and
Boonchowong,
2018).
liquidity is another
issue and
weaknesses but
opportunity like
focusing on
emerging health
food market by
customers, can
solve this
weakness.
Threats Strengths/threats
 Tesco is the market
leader and it is its
main strength. But
increasing rate of
discount store and
this threat can
snatch this
opportunity of
becoming the
market leader.
Weaknesses/threats
 Increasing discount
stores are
decreasing sales of
Tesco. This threat is
putting pressure on
Tesco to focus on
opening more
convenience stores
and providing
discounts that can
also decrease profit
margin.
D2 impact of micro and macro factors on decision-making.
Social factors like change in cultural change can affect business in reaching their objective.
Technological changes also impact decision-making of business. As business make decisions by

studying market trends and after decisions are made and technology also changed then new
decision have to make by company.
CONCLUSION
Through this report it can be concluded that every company have different structure
based on their size and type. Report has evaluated relations between organizational functions.
With the help of pestle and swot strength and weakness of company is highlighted.

REFERENCES
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sustainable buildings using PESTLE technique. International Journal of Construction
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Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and SMEs'
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energy in the light of PESTLE & SWOT analyses for island countries. In Smart Energy
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improvement in a complex operational and business environment. International Journal
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Kuldilok, K., Tokrisna, R. and Boonchowong, K., 2018. Economic and Marketing Capability
Improvement for Small Scale Aquaculture Farmers through Community Organizations.
Journal of Fisheries and Environment. 42(1). pp.33-52.
Longhurst, G.J. and et.al., 2020. Strength, weakness, opportunity, threat (SWOT) analysis of the
adaptations to anatomical education in the United Kingdom and Republic of Ireland in
response to the Covid‐19 pandemic. Anatomical sciences education. 13(3). pp.301-311.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Song, W., Ming, X. and Liu, H.C., 2017. Identifying critical risk factors of sustainable supply
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Online
SWOT of Tesco. 2021. Online Available through: <https://howandwhat.net/swot-analysis-tesco-
tesco-swot-analysis//>
Tesco SWOT Analysis 2020: A Detailed Report., 2021. [Online]. Available through:
<https://pestleanalysis.com/tesco-swot-analysis/>
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