Business and Business Environment

This document provides an overview of different types of organizations, including public, private, and voluntary sector organizations, and their purposes and legal structures. It also explores the interrelationship between different organizational functions and their linkage with organizational objectives and structure. Additionally, it discusses the positive and negative impact of PESTLE analysis on the macro environment of public and private sector organizations. The document is relevant for students studying business and business environment.

BUSINESS AND BUSINESS
ENVIRONMENT

BUSINESS AND BUSINESS ENVIRONMENT
INTRODUCTION
TASK 1
P1. Different types of organizations with their Purposes and Legal Structures
P2. Size and Scope of various types of Organisations
TASK 2
P3. Interrelationship between different Organisational Functions and Their Linkage with
Organisational Objectives and Structure
TASK 3
P4. Positive and Negative Impact of PESTLE Analysis on Macro Environment of Public and
Private Sector Organisation
TASK 4
P5. SWOT Analysis of Both Public and Private Sector Organisation
P6. Interrelationship of External Macro Factors with Strengths and Weaknesses
CONCLUSION
INTRODUCTION
Business Environment consists of all the factors which are not in control of business
organizations. Such factors are there in it which is responsible for circulation of both internal and
external operation in an organization. It involves shareholders, customers, suppliers,
technological advancement and existing market condition. Various business organizations like
public , private and voluntary sector has to keep themselves aware about changes in market
situation and has tom quickly has to respond over it. Tesco PLC is an public limited company
which is one of the biggest retailer of grocery products, which has ranges of household products
and non households products. This file is based upon public, private and voluntary sector
organization and their size, scope, purpose and legal structure is covered. In the end external
factors and strengths and weaknesses are explained.
TASK 1
P1. Different types of organizations with their Purposes and Legal Structures
Organization is human associations that have been formed in order to achieve a particular
objective or goal. Mai n aim of these organizations is to earn profit and use it for social welfare
of people present in the society. Various types of organizations are explained as follows:

Public sector Organizations: These types of organizations are those which are owned
and funded by government on behalf of public. Primary objective of such public organization is
not only to earn profit. Their main focus is over welfare of public and society. Example for such
organizations is BBC. It is a public organization that gives broadcast services all over the world.
Purpose – Purpose of public organization is to provide product and services to public
with optimum utilization of resources (Kato. and Charoenrat, 2018).
Legal Structures
a. Central Government: Funds are collected through Income tax generated from public.
b. Local Government: Funds collected in the form of Community charges and are
known as Council Tax (O’Rourke, 2017).
c. State Government – Specific powers that is applicable on particular departments.
BBC is central government owned public sector organization.
2. Private Sector Organizations - Such organizations are controlled by an individual
who is private. Owner of private organization is an individual or a group of individual. This can
be understood through an example of Tesco PLC. It is an private organization indulge in retailing
business in various countries. Purpose – Aim of private organization is to earn profit and to provide adequate
competition to public sector based organizations. This encourages efficiency.
 Legal Structures:
a. Sole Proprietorship: In these types of organization thee person himself is responsible
for providing of goods and services to its customers. All this is done with the aim of earning
profit. It is necessary for obtaining of license from local authority in these kind of business
organization (Viesi. and et. Al., 2017).
b. Partnership: Partnership is an association in which more than two individual come
together to for an organization. Under this an agreement has to be signed by partners which
bounds to bear both profit and loss together.
Limited Company : The entity needs to be registered to become a limited company. The
limited companies profit belongs to the company not to the shareholders. Shareholders get the
profits in the form of dividend The corporation tax must be paid by company on the profits
earned in each year.
Tesco PLC is a limited company and is governed by company laws.

3. Voluntary Organizations – Voluntary organisations involves a group of individuals
who willingly enter into an agreement to form a organisation in order to accomplish a objective.
Oxfam is a global charitable organisation structure who works towards reducing the poverty in
the nation. Purpose : The aim of Voluntary organisation is to work for the betterment of social
welfare. Social welfare not only includes development of individual but also growth of
society as a whole.
 Legal Structure –
a. Trust – it is not an legal entity which means they cannot enter into agreement under
their own name. So, that is why trustee becomes personally liable.
b. Unincorporated Association – These association is not a legal entity. Hence there is
no limitation of liability as they entered into the agreement on the behalf of charity and are
personally liable.
Oxfam is a trust based voluntary organisation.
Small And Medium Size Enterprises: These are those types of enterprises which are of non-
subsidised and independent firm. Employee under this are very few than given number of
employees. AZIO is an SME which deals with formation of electronic key boards.
Purpose- Aim of these organizations is to set-up business for establishing itself in the market.
Gain profit.
Growth of International Business Environment
As continuous production of similar products in market has lead to a pointof saturation in
the market. This has made increase in growth at global market. During past few years trade
barriers has been implied by government which has opened doors for doing business in
international market. Also profitability can be earned for long-run from this. Now businesses are
able to diversify themselves globally.
P2. Size and Scope of various types of Organisations
British Broadcasting Corporation (BBC) : It is an public owned company means is
owned by government. They are largest broadcaster all over the world. Funds generated by
licenece fee that is paid by UK households (Rahbauer. and et. al, 2016).

 Background: As BBC is an public owned company that has been incorporated in the
year1992. It is funded by UK households and businesses that use televisions. Also there
are nine TV channels of radio broadcasting but TV licensing is the trademark of BBC.
 Product or Services offered : BBC provides 9 national TV channels that includes BBC
News, BBC One , BBC Two BBC Online, BBC iPlayer and many more.
 Size: Number of members working in this is 20000.
 Scope: Emerging market conditions has resulted into expansion of its market to various
countries like China, Japan. In which there more emphasis is upon entertaining its
customers.
 Vision: Vision of this organization is to become more creative for spreading all over the
world.
 Mission: The mission is to inform, educate and entertain the people's lives with their
programmes and services.
 Business Objectives: Objective is to establish BBC and provide specialist content for
educational purpose across UK. Also has to provide imperial news and information for
helping people understand situation of world and engage with world.
 Stakeholders: Presenters, Program holders and editors, BBC Trust , local community ,
government are the internal and external stakeholders of BBC.
TESCO PLC: Tesco is a public limited company that is founded 100 years back. This is largest
retailing store across the world that offers wide range of goods and services related to household
and groceries.
 Background: Tesco is a public limited company that is part of private sector
organizations. It one of the largest retailers in the world which sells a variety of products
such as grocery items to non household items (Bonafede. and et. al, 2016).
 Product or Services offered : The products offered by Tesco ranges from all grocery
products to non household items as well like clothing , electronics etc.
 Size: Tesco is a British multinational grocery which currently had 6,800 stores across the
world and more than 4,00,00 employees.
 Scope: Scope of Tesco i to expand its market by dealing with frozen food items that is
going to provide customer easy to cook facility.

 Vision: Tesco's vision is to become the highly valued business by the customers and to
earn trust and loyalty from their target customers.
 Mission: The mission of Tesco is to grow profitability and to earn the lifetime loyalty
from their customers.
 Business Objectives: Tesco aims to create wide range of healthy products by cutting
their prices and offers more discounts. Their objective is to develop a online website
which would helps to create more customers.
 Stakeholders: The stakeholders of Tesco include their employees, suppliers who supply
products to Tesco, their customers who buys their products and services and also their
trade unions.
OXFAM: Oxfam is an non-profit group that has an extensive collection of functions like
working towards tackling poverty and natural disasters.
Background: Oxfam is a type of voluntary organisation structure that is an global
organization. It deals with poverty and ending of injustice. An non-profit group that performs
various operations like poverty, disaster reliefs.
Product or Services offered : Oxfam works for fair trade, education, health, poverty,
natural disasters, livelihoods etc.
 Size: Oxfam works in 94 countries across the world, with almost thousands of local
partner organization. They works towards social welfare with more than 50,000
volunteers worldwide.
 Scope: As the population is exploding, poverty is increasing and the organisation has a
wide scope of uplifting the conditions of people (Bonafede. and et. al, 2016).
 Vision: The vision of Oxfam is made the world without poverty where people are valued
and treated equally. They believe that people together can create a fair world, free of
poverty.
 Mission: Their mission is to become the favourite charity of people by convincing them
to donate the funds for their organization.
 Business Objectives: Objective is to provide good solutions to the injustice of poverty.
There aim is to empower the people to create a secure future from poverty.

 Stakeholders: The trustees of Oxfam, staff and their volunteers , suppliers and
communities where they operates are included in stakeholders of Oxfam.
AZIO: It is an UK based SME that deals with selling of electronic key board in the market
and is formed for achieving profit. Purpose of this organization is to earn profit and establish
itself in the market. These organizations mission is to expand its market. Stakeholders of
these companies are these agencies provide loan for setting –up businesses.
Major difference between small scale and large scale SME, is that in small scale industry 1 to
99 employees are there whereas in medium scale there is 100 to 499.
TASK 2
P3. Interrelationship between different Organisational Functions and Their Linkage with
Organisational Objectives and Structure
Department of organization is majorly dependent upon each other in direct and indirect
manner. Tesco PLC is a public limited company and their main motive is to earn profit. This
profit can be earned only when there is coordination in there working pattern.
1. Marketing and Human Resource Department : Marketing is majorly dependent upon
HR department for its promotions and marketing (Graafland. and Smid, 2017). Human
Resource is responsible for hiring of people related to marketing activities. Coordination
is key feature for both the departments of Tesco, which is going to help them by
increasing of activities related to promotion that helps in providing profit within a
business.
2. Purchasing Department and R & D Department: Expansion of market and research
done is dependent upon quantity of purchasing. This is dependent upon expansion of
market. So, for uplifting market shares in various countries, Tesco has to analyse market
condition for which is to be done by research team (Wickert, 2016).3. IT Department and Finance Department : Department of IT of Tesco needs funds to
upgrade delivery process and also online shopping facility. So, its finance department
need to focus on planning and organiozing. As without funds difficulties is there for IT
sector for upgrading of software.
Organisational Structures of Public and Private Sector Organisations

1. Hierarchical Organisational Structure - In this type of organization structure where
hierarchies helps in organizing of people into departments. In this the authority needs to
check all over the organization. BBC is required to follow this structure and is divided in
a format which involves BBC Trust, Executive Board, Executive Team and Management
Board.
Tesco is following hierarchical organizational structure in which a department that is at
top-level has various responsibilities and authority with them. Regional Manager is top
most in store level organizational structure.
.
2. Matrix Organisation Structure – In this structure there is more than one boss of the
employees. This happens due to diversity in its operations. This can beb understood
through this example in which Earantha is following matrix structure for its
organizations, this helps in promoting of various projects. Under a team structure in
which different teams are used for a specific project.
TASK 3
P4. Positive and Negative Impact of PESTLE Analysis on Macro Environment of Public
and Private Sector Organisation
British Broadcasting Corporation
Political Factors: Under these kind of factor government and its policies like taxation,
international trade are to be present. As BBC is controlled by government and has its operations
in welfare of public. Positive impact over BBC is going to be only when it is not going to follow
rules and regulations formed by EU. Due to Brexit. Negative impact is going to be there when
there is going to change in environmental policies and BBC has to face lot of difficulties in
getting license. Providing to other companies for broadcasting.
Economic Factors: Interest rate, inflation rate and income is covered in it as these factors has
direct impact upon economy and also upon growth rate of BBC. Positive impact is that increase

in GDP of UK is going to increase fees for license. So, funds is going to increase. Negative
impact is that rise in cost for purchasing rights of events is going to reduction in profit for BBC.
Social Factors: Social influences includes all kind of culture and customs exiting in a
society. Positive impact on BBC is that due to high literacy rate in UK expansion of content is
possible. Negative impact is that people of different religions, culture is going to increase cost of
broadcasting of different channels (Sadeghi. and Biancone, 2018).
Technological Factors: Such factor include technological advancement that is taking
place in an organization or all over the world. Positive impact is that faster and better internet
services helped in attracting customers. Negative impact is that technological advancement has
increased competition.
Legal Factors: These includes all types of laws like antitrust , discrimination and employment.
Positive impact is that difficulty of rivalry news agencies to get license is going to give positive
competitive advantage to BBC.
Environmental Factors: These factors which are related to flour and fauna. Other
environmental factors are also there. Positive impact on BBC is that proper waste mangment is
there which has increased customer support. Negative impact is that coverage of changes in
environment has to done under difficult conditions.
.
TESCO PLC
Political Factors : Positive impact of these factors is that because of change in policies
and rules has resulted into low changing rates. Negative impact is that import duty charged has
affected Tescos profitability.
. Economic Factors: Positive impact is that purchasing power of people is high and can
afford quality products which ahs increase its market. Negative impact Brexit has brought
inflation in UK which has lead to increase in price of products and has caused loos to
company.

Social Factors: Positive impact is that due to chsnge in customers preferences. Tesco has
to increase its grocery which increased customers. Negative impact is that due to change
in customers behaviour products sales has fallen.
Technological Factors: Positive impact is that Tesco has developed facility of online
shopping that has attracted customers. Negative impact is that direct compoetiton with other
retailers stores has resulted into low profits.
Legal Factors: Positive factors Tesco has to follow all laws prevailing to government in UK ts
customers. Negative effect is that Tesco has to work according to retail commission to avoid
legal issues.
Environmental Factors: Positive impact is that social awareness has to increase in
customers by waste management theories. Negative impact is that Tesco competitive position in
UK is getting influenced of environmental policies in negative manner.
TASK 4
P5. SWOT Analysis of Both Public and Private Sector Organisation
SWOT Analysis of BBC
Strengths
 BBC being largest and oldest
broadcaster globally that has helped in
making bigger image.is the largest and
oldest broadcaster globally.
 This has made customer attraction
possible at large scale.
Weaknesses
 Due to new coverage biased opinions
are there which has made loss in
financial terms.
.
 Operating cost is also high for BBC as
there competitors and business is
conducting at low cost (Sharma, 2018).
Opportunities
 Expanding them in emerging market
can be done because of it variety. More
Threats
 Other broadcasting channels are giving
them strong competition. Launch of

emphasis should be over kids
entertainment.
.
local new channel has decreased
popularity of BBC.
SWOT Analysis of Tesco
Strengths
 Tesco is one of the biggest grocery retailer that
has resulted into formation of brand image.
 Thsi has lead to increase in customer
Weaknesses
 Tesco is entirely dependent
upon UK market and has to
focus upon prioce of its product.
Opportunities
 Tesco can join those stores which are not
performing in market to increase its market.
 Tesco may increase its sales by promoting
online shopping.
Threats
 Fluctuation in currency
can ;lead to loss for Tesco..
P6. Interrelationship of External Macro Factors with Strengths and Weaknesses
British Broadcasting Corporation Political: Stability in rules and regulation is going to promote regulation of US and UK is
going to help BBC in very important manner Economic: Funds in the form of license fee to BBC has to be brough down byThe funds
in the form of license fee to BBC has been reduced by the Government. AS high cost is
going to cause loss to it.

 Social: BBC is successful in identifying the changing trends in the market which hs
helped in attracting wider customer base.. Technological: advancement in technology has helped in capturing market in faster and
effective manner. Legal: BBC is fully dependent on board of governance and is bound to follow rules set-
up by them.
 Environmental: Brand image of BBC has been brighten by making people aware of
environment protection ideas.
Tesco PLC
 Political: Reduction in import duty has resulted in covering countries like China and has
helped Tesco to establish successful manner.
 Economic: At the time of recession sales of goods increased which helped in sustaining
under recession.
 Social: Diverse range of products has helped in capturing of market and customers.
 Technological: Tesco has taken very good step by increasing online services for
shopping. That has made its sales faster.
 Legal: Following of rules and regulation set-up by government is going to help in
gaining stability in market.
 Environmental: Wastage of natural resources in supply of inventory has helped it in
becoming leading grocery retailer in market.
CONCLUSION
From the above file it is concept of business environment is clear which means dealing
with both internal and external factors. Further in this file various kinds of organizations are
covered explaining in detail about their purpose scope and objective. Then further PESTEL and
SWOT analysis is done. In the end strengths and weaknesses are covered with macro factors.
Both these analysis has played an important role in marking out those factors which are
important for positive growth of an organization.

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