Types and Purpose of Organizations

This report discusses the different types and purposes of organizations, including public, private, voluntary, and non-governmental organizations. It also explores the relationship between organizational functions and objectives. Additionally, it analyzes the positive and negative impacts of the macro environment on business operations.

BUSINESS AND BUSINESS
ENVIONMENT

TABLE OF CONTENTS
INTRODUCTION....................................................................................................................3
Scenario 1:.................................................................................................................................3
TASK 1......................................................................................................................................3
P1. Different types and purpose of Organization...................................................................3
P2 Explaining size and scope of different types of organizations..........................................4
TASK 2......................................................................................................................................6
P3 Explaining the relationship between different organizational functions related to their
objectives and structure..........................................................................................................6
Scenario 2:.................................................................................................................................7
TASK 1......................................................................................................................................7
P4 Identifying positive and negative impact of macro environment on business operations 7
TASK 2......................................................................................................................................9
P5 Internal and external analysis of Organization..................................................................9
P6 Explaining interrelation of strengths and weaknesses with external macro factors........11
CONCLUSION.......................................................................................................................13
REFERENCES.......................................................................................................................14

INTRODUCTION
For any organization it is very important to have a good business environment as it
can help them in enhancing their performance effectively in their respective industry or
sector. Business environment means all of the internal and external factors that affect how the
company functions including their employees, customers, management, business regulations
and supply and demand. These business environment can have a huge impact on the working
pattern of the organization.
Present report will focus on Tesco Plc which is a retail shop. This assessment will
explain various types and purpose of organization and their legal structure as well. It will also
discuss about the size and scope of different types of organization. Further, this study will
help in explaining the relationship between different organizational functions and their
relation with their objectives and structure. Impact of macro environmental factors on
business operation is discussed and conducting internal and external analysis for identifying
their strength and weaknesses is also analysed. Interrelation of these strength and weaknesses
with the external macro environmental factor is also explained in the last section of this
report, respectively.
Scenario 1:
TASK 1
P1. Different types and purpose of Organization
There are various types of organization which has different purposes based on their
function and regulation, respectively. Different types of organization is explained in detail
below:
 Public Organization: That part of the country’s economy that is supported and
controlled by the local, state or the national government and is paid for by the tax-
payers. It consists of both public goods and public services. It is governed by laws,
regulations and structural bureaucratic checks. Some of the public goods and services
included in public sector are infrastructure such as roads, bridges etc., public hospital,
public schools, and public transportation (Deasy and et.al., 2016). People who do not
pay the taxes cannot be excluded from using these services i.e , public services caters
to every citizen of the country irrelevant of whether they are the tax payer or not.

Different types of public sector organizations are (a) Public Corporation, (b)
Government Company, (c) Departmental organization, (d) Joint enterprise etc.
 Purpose of public organization: The main purpose of such organization is to serve the
public by delivering them the best services as per their requirements. This helps in
increasing their business as well which helps them in gaining a good revenue from it.
Public organization are mainly works on the principle that they will focus only to help
the public of their country in order to enhance their business effectively.
 Private Organization: Private organization, unlike public sector, is owned and run
by an individual, there is almost no involvement of the government in its operation.
The primary goal of a private sector organization is to earn profit and to capture
maximum market. organization which falls under the private sector are (a) Sole
proprietors, (b) Small and medium sized business, (c) Partnerships, (d) Large
multinationals, (e) trade associations, (f) Trade unions (Prajogo 2016). People
working in a private organization have more opportunities for a promotion, their pay
is generally higher, they have apparently better choices in career but on the other side
they have to give more hours of work in the organization, the competition is very
high, lesser job security as compared to people in public sector.
 Purpose of private organization: The main purpose of private organization is to
increase their business effectively in order to earn a good revenue which they can use
in their business. Other than this, they also focus on expanding their business more.
 Voluntary Organization: Voluntary organization are basically those organizational
bodies which work in the favour of helpful, needy, poor, old aged people or orphans.
These organizations do not have a staff on salary basis, people who work for these
organizations volunteer themselves for it without expecting any monetary profit.
Voluntarism means by will or freedom, people come and offer their services in order
to cater the needy people (Savrul, Incekara and Sener, 2014). It is not run with the
motive of earning profit rather they have a motive of making the society a better place
to live. There are different types of voluntary organizations such as charitable trusts,
NGOs, foundations, non-profit organizations etc.
 Purpose of voluntary organization: Main purpose of voluntary organization is to help
public by helping them. This also helps in increasing the economic standard of the
country. In this way they help the country to enhance their performance.

P2 Explaining size and scope of different types of organizations
The scope of an organization depends upon the type of services which it delivers to
their customers. This helps in enhancing the scope of different types of organization. There
are various type of organization, such as, sole trader, partnership, limited company, voluntary
organization, NGO, etc. Size and scope of these different organization,
 Sole Proprietorship: This is usually a small business which is operated by an
individual whose main purpose is to increase their business effectively. They are very
easy to set up and they generally requires a small amount of initial investment. The
holder of such type of organization has unlimited liability for any claim against their
business that can affect them to a large extent (Botha, Kourie and Snyman, 2014).
These businesses serve a community and are restricted to local boundaries because of
its size. Best example of sole proprietorship can include a local coffee shop.
 Partnership Organization: Partnership is the second type of organization and is
larger in size as compared to a sole proprietorship. This type of organization can have
a wide range of size, for example, from a two owners to multiple partners. It also
possesses the same unlimited liability characteristic which a sole proprietor has.
Having multiple owners, these type of businesses can produce a wide range of goods
and services, but is still restricted to a set location because of its size. This can
include, a construction company that builds houses comes in this type of
organization.
 Limited Company: Limited companies have been formed by two or mere
individuals. It has been found that business partner have to submit different
documents such as memorandum of association and articles of association. The
private limited companies must have minimum one share holder but organization can
offer large share to the public (Hair Jr and et.al., 2015). Scope of such companies is
very wide as these organization helps in increasing the economy of the country.
 Voluntary Organization: This type of organization has no limits in terms of
employees as this type of organization can have one, two or more than that
employees working. These organizations do not have a staff on salary basis, people
who work for these organizations volunteer themselves for it without expecting any
monetary profit. There are different types of voluntary organizations such as
charitable trusts, foundations, non-profit organizations etc (Hair Jr and et.al., 2015).

These type of organization has a huge scope as there are so many people who are
willing to work with them in order to serve their country.
 Non-Governmental Organization (NGO): NGOs are usually funded by donations,
but some avoid formal funding altogether and are run primarily by volunteers. NGOs
are highly diverse groups of organizations engaged in a wide range of activities, and
take different forms in different parts of the world. It has a long list of
organization working in different areas with varied scope of work. There is a huge
scope of such type of organization, as it can help them in improving their business
(Crane and Matten, 2016).
TASK 2
P3 Explaining the relationship between different organizational functions related to their
objectives and structure
There are various organizational functions which is operated in the organization.
Tesco Plc has so many organizational functions which is explained below:
 Human Resource (HR) Department: Human resources are the workforce that are
associated with the company, and human resource department is that department
which deals with the human resources of the company. This department is an
important aspect for the well-being of the employees in any organization. Main
objective of any human resource department is to successfully and effectively manage
the workforce of the organization in order to maximise their performance and thereby
help in achieving the goals of the organization. The human resource department has to
perform various tasks and functions, namely; Planning, organizing, staffing, directing,
controlling, training and development, appraisal etc (Rahman, 2016).
 Research and Development (R&D) Department: Research and development
department of the organization makes a track record of the current trends of the
market in their respective industry by analysing the needs of the customers and
market. Its main objective is to align the organizations production with the current
market needs and thereby boost their revenue. It performs functions such as studying
the market, research for a new product, updating existing products, etc (ZHAO and
et.al., 2018).
 Marketing and Sales Department: Marketing and sales department of the
organization deals in the promotion of the products using different techniques of

marketing such as internet marketing, door to door promotions, word of mouth and
increasing the sales of their products. The main objective of the marketing and sales
department of the organization is to identify the best techniques to make their product
reach as much as people possible and turn them into their customers. Functions
performed by marketing and sales department is to research and study the market and
plan out marketing strategies accordingly, pricing, after sales services etc (ZHAO and
et.al., 2018).
 Accounts and Finance Department: The department of accounts and finance
consists of those people who manages the accounts of the company and controls the
finance in the most efficient way possible. Its objective is to ensure that there is a safe
and secure flow of funds in and out of the organization and also to keep accurate
financial record. Their main function is to prepare accounts, analysing, making
budgets etc.
 Operational and Production Department: Operational and production department
of an organization concerned with the managing and controlling of the process of
converting raw material into desirable goods or services. The objective of this
department is to produce goods and services that are profitable for the organization
and also satisfactory for their customers, it also ensures to minimize the inputs as
much possible without hampering the quality of their product or service (Šomodi,
2017). For an effective operation and production management the department has to
perform various functions such as choosing the product and laying out a design,
planning the production process, quality checks etc.
 Administrative service Department: Administration and service department of an
organization can also be called as the bridge between all the departments of the
organization, its main objective is to ensure an undisturbed flow of information within
the various departments of the organization and that all the department of the
organization is working smoothly and efficiently. To be sure of this, the department
has various functions to perform such as, they have to manage all their operational
management effectively in order to enhance their performance (Oh and et.al., 2018).

Scenario 2:
TASK 1
P4 Identifying positive and negative impact of macro environment on business operations
This is the most important factor which can have an impact on the business activity of
Tesco Plc. Macro environmental factor are those which are external factors that has a huge
impact on them. This analysis provides great detail about operating challenges Tesco Plc will
face in prevalent macro environment other than competitive forces. These factors can be
evaluated by Pestle analysis which can help them in analysing these factors (Hatch, 2018).
PESTLE Analysis of Tesco Plc:
 Political Factors: These factors are very important for any organization as it can
affect their business to a large extent. There are various rules and regulations that has
been designed by the government which is mandatory for them to follow and
implement in their organization, For example, there are several laws, such as,
employment law, labour law, etc. which help an organization to perform their
activities perfectly. To increase their performance in the industry it is essential for
them to understand this factor effectively. Working in a retail sector, it becomes
crucial for them to follow all the levels of regulations present in the consumer service
sector. Political factors, such as, taxation, wages legislation, etc. can have a huge
impact on their business. For example, import duty on goods can affect Tesco because
it imports some inventory from outside UK like China and East Asia (PESTLE
Analysis of Tesco, 2018).
 Economic Factors: These economic factors are very important as it can give their
business a huge impact. There are various factors which is included in this, such as,
inflation rate, interest rate, foreign exchange rate, etc. These factors can labour cost
which can affect their business, such as, in 2018, United Kingdom minimum wage
was increased by 4.4% for individual who are older than 25years, respectively, which
can have a huge impact on their business (PESTLE Analysis of Tesco, 2018). This has
helped them in increasing their business. Other than this, factors like, cost, prices and
profit as well. Tesco should focus on their costing as this will help them in increasing
their sales and production.
 Social Factors: These are those factors which has a huge impact on their overall
performance. This factor is directly related to the purchasing behaviour of their

customers effectively. There are various social factors which can have a huge impact
on their services, such as, demographic factors, their purchasing behaviour, attitude,
income, age, religion, etc. Customer trends in shopping is continuously increasing in
today’s world, which Tesco has to consider very carefully. Tesco is relying on UK
customers and must understand and provide the services to meet these issues. It is
very important for Tesco Plc to deliver their services and products according to their
customer’s requirement and demand in order to increase their performance in the
industry (Burke, 2017).
 Technological Factors: Having all the latest tools and technology can have a huge
impact on their business as this will assist them in enhancing their performance in the
industry. This also aid in competing with their competitors as well. They have
introduced various technologies in their store, such as, RFID in order to increase their
in-store experience of their customers (Burke, 2017). They have also developed their
own website as well in which they have provided facilities to their customers in which
they can pay and buy their services. Adapting all these new and latest technology has
provided them an opportunity to make their business stable in the industry.
 Legal Factors: These legal factors can have a huge impact on their performance.
There is a strict code of practice in accordance with the Food Retailing Commission
(FRC) which checks whether they are conducting their operational activities perfectly
as per their guidelines. Other than this Tesco Plc has also faced some legal action
against their employees for age and gender discrimination, so it is very important for
them to perform their functions in legal manner in order to reduce or minimize the
impact of any such issues in the future (Wood, Wrigley and Coe, 2016).
 Environmental Factors: This factor can affect their performance a lot. There is a
huge craze in people to protect the environment. In this context, Tesco Plc is using
recycled paper bags which helps in reducing the use of plastic bags which has a huge
impact on the environment. Also, Tesco is using renewable sources and they will also
generate 100% of their electricity by 2030, possibly. The company has promised to
minimize up to 50% carbon footprint by the end of 2020. All these implementation
will help Tesco in enhancing their performance in the industry (Imrie, Dolton, 2014).

TASK 2
P5 Internal and external analysis of Organization
Tesco Plc is operating their business very effectively since very long. In order to
maintain this situation, it is very important to have knowledge of their internal and external
analysis of the organization. SWOT analysis will help them in analysing factors effectively
which will help the in understanding their strength, weaknesses, opportunities and threats,
respectively (Wood, Wrigley and Coe, 2016).
SWOT Analysis of Tesco Plc:
Strengths This factor helps in identifying strength of the organization which can
help them in improving their overall performance and revenue as well.
Various elements that contribute in this includes,
 They have worldwide recognition, which helps them to serve a
wide and diverse range of customers.
 Tesco Plc also has a strong product portfolio as well which assist
in providing their services and products across various customer
segment.
 The company has significant cash reserves and a wide range of
property in its portfolio.
 They have so many stores in different location to serve more
customers (Tesco SWOT Analysis, 2018).
 They also have improved their use of new and latest technology.
Weaknesses There are several weaknesses which Tesco Plc has to improve in order to
enhance their business effectively in industry. Some are explained below:
 Some of the subsidiaries of Tesco Plc are not in a functioning
state or are sensitive towards certain external factors, for example,
the recent credit crisis had a very negative impact on the Tesco
Plc finance profit levels, and it still recovering from that.
 Instead of focusing on other different ways to outperform the
competitors, they focused on the prices due to competitive
pressure which led to the washing away of some of the profit
margin of the retailers.
 Not all the retail stores of Tesco Plc has been performing well in

some of the countries. The possible reason behind this could be
that the market research has not been done properly.
 Instead of developing and focusing on the retails situated in other
countries, their primary focus is set upon the consumers of Europe
and UK.
 They are also trying to serve those markets which do not align
with their intentions or goals.
Opportunities It is very important for them to have a good utilization of all the
opportunities which is present in the market for them, for example,
 In the areas where Tesco Plc might not be able to perform up to
the mark, they can take help of the local companies for doing
market research to improve their performance.
 Tesco Plc can also consider opening online stores and delivering
products to the customer’s doorsteps.
 Private label markets can also provide certain opportunities
(Tesco SWOT Analysis, 2018).
Threats It is very important for Tesco Plc to have a good knowledge of the threats
which have a huge impact on their business, such as,
 Two factors that might affect the market share and profitability
are economic recession and credit crunches, which will eventually
result in the reduction of number of customers or the size of their
purchases.
 The competition in the market is increasing. There are many other
retail giants that are offering better pricing than Tesco Plc as well
as providing customers with greater variety of products. Also
being more innovative and having better knowledge to utilize the
technology, they have well established supply network which
leads them to move their goods faster than Tesco Plc.
 The prices of food items are also on a rise which will affect the
size of the consumer purchases depending on the amount of
money the can spend from their income (Lindgreen and Hingley,
2013).
 Increase in wages of the labours is also affecting the cost incurred
by Tesco Plc, which will thereby result in the pressure on the

pricing strategy for them.
 The cost of raw materials is also rising which is affecting the
profitability of Tesco Plc.
 Tesco Plc also has to follow the new rules and regulations laid
down by the government which means that they have to make the
required changes in their operating system.
P6 Explaining interrelation of strengths and weaknesses with external macro factors
There is a huge interrelationship between organization’s strengths and weaknesses
with their external macro factors. External macro factors are those are factors which includes
legal and regulatory framework, government policies, etc. which affects the overall
effectiveness of the organization. There is a direct link between their strength and
weaknesses, such as, Tesco Plc has a good brand value and image in the market which has a
huge impact on their performance that has a direct interrelation with their social factor as
well. Whereas, there are so many macro environmental factors affect the performances,
decisions making, strategy and working of the organization. Factors present as an
opportunity, for example, having all the latest tool and technology will help Tesco Plc to
increase their customer rate as well. This interrelation between strengths and weaknesses with
external macro factors helps them in enhancing their performance (Lindgreen and Hingley,
2013).
The working environment of the organization is affected by its strengths and
weaknesses. Brand image is considered as most important and main strength of an
organization which helps them in offering the best services to their customers which has a
direct impact on the political factors of the organization. The sudden change in tax rate of
government has directly influenced the brand image of Tesco Plc as well as on its
profitability rate too. The company has always focused on their sustainability which is
directly interrelate with the legal factors. With the help of all the opportunities present in the
organization, it can help Tesco Plc to improve their weaknesses effectively. It is important for
them to carefully consider their weaknesses as it increases the threats which affects the
functionality of the organization in adverse manner (Mollah, 2014). Apart from this, Tesco
Plc’s weakness, such as, they have to control their business activity in each country which
has to be managed properly which will help them in running their business effectively.

All these external macro environmental factors are not in Tesco Plc’s control, so, it is
very important for to manage all these factors effectively. To capture all the available
opportunities, their strengths assist them in a lot. Whereas their weakness factor helps in
increases the threats factor for Tesco Plc which can affect their business activity to a large
extent. Moreover, internal operations of Tesco Plc has a huge influence of these external
macro factors which implies that there is an effective link between each other in the business
operations of the company Tesco Plc. These impact can is directly related the social factors
associated with them. For example, they are very in identifying their customer's needs and
requirements which ultimately affects their sales and has a direct impact on their social factor
as well (Mollah, 2014). All macro factors has a huge connection with the strength and
weaknesses of the organization in order to enhance their performance as this will assist them
in increasing their business activity and to have a good overall revenue and profitability rate.
CONCLUSION
From the above report it can be sum up that it is very important for any organization
to manage their business environment as it will assist them in enhancing their performance.
Present assessment has explained different types of organization, such as, private, public and
voluntary organization and its legal structure as well. Further this report has also explained
about size and scope of different types of organization. For an organization it is essential for
them to understand the relationship between different organizational functions related to their
objectives and structure as this will help them in managing the business environment
effectively. Identifying positive and negative impact of macro environment on business
operations and performing internal and external analysis by using SWOT analysis process is
conducted very carefully by the firm. In the last section of this report, it has explained about
the interrelation of strengths and weaknesses with external macro factors as these helps in
enhancing the overall performance of the organization.

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https://www.marketingtutor.net/tesco-pestle-analysis/>
Tesco SWOT Analysis. 2018. [Online]. Available through:
<https://businessteacher.org.uk/swot/tesco.php>