Types and Purposes of Organisations in Business Environment

This document explains the different types and purposes of organisations in the business environment, including public, private, and voluntary sectors. It also discusses the relationship between organisational functions and objectives, and identifies the positive and negative impacts of the macro environment on business operations. The document provides specific examples to support the analysis.

Business & the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures......................................................................................................................1
P2 Explain the size and scope of a range of different types of organisations.............................4
TASK 2............................................................................................................................................4
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.......................................................................................4
TASK 3............................................................................................................................................5
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples................................................................................5
TASK 4............................................................................................................................................8
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses............................................................................................................8
P6 Explain how strengths and weaknesses interrelate with external macro factors...................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business organisation have to transact as well as interact with their surroundings. So,
both business and environment are wholly interrelated and mutually interdependent. Business
environment is regarded as that aspects of the atmosphere entities that influence their operations
as well as ascertain its efficaciousness. This assists entities to ascertain opportunities and threats,
provide guidance for growth, meeting competition and others in effective and efficacious way
(Trisakhon, Onputtha and Peamchai, 2018). As per the scenario the undertaken company is
TESCO which is a renowned general mechanised as well as grocery retailer and is established in
year 1914. It have various subsidiaries such as Tesco bank. Mobile and others as well as having
headquarters is in Welwyn Garden City, Hertfordshire, England, United Kingdom. This reports
covers several kinds and purpose of organisation, its size, structure, objectives and many more.
Moreover, several types of organisational structure, analysis of how PESTLE factors affects UK
retail sector, SWOT analysis and five forces analysis are explained. Apart from this, how
strengths and weaknesses which interrelate with external macro factors are also discussed in this
report.
TASK1
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures
There are some kinds of organisation that are profit, non profit and public.
Profit organisation, this mainly exits for generating profitability which is to take more money
than their expenditures (Linder and Williander, 2017). It is regulated through the sole proprietors
or owners. For example: TESCO, this is the private firm that deals in private sector. They have
more than 6569 stores that is situated in global marketplace. It operates into UK in successful
way. Product and services, it facilitates products such as groceries, clothes, foods and many
more. In respect of services, they render banking, mobile and others. Moreover, it also facilitates
home delivery services for audiences for providing them comfortability. The objectives of
TESCO is to facilitates standard quality electronics goods, clothing, groceries and online. In
addition to this, the purpose of TESCO is offerings clients and or shopper each day in
appropriate manner. Along with becoming leaders for targeted audiences and aids them to
facilitate effective quality of products or services. Legal structure, It is following the public
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limited legal structure that consists vast number of person who are performing or working for
their beneficiary. Size, in respective private organisation there are more than 460, 000 employees
who works and it has many subsidiaries like banks, Stores and many more. In order to enhance
profit and market, it has to spread their entities internationally at market area. Scope, the
practices of TESCO is considered as fundamental elements of strategies. So, their main scope is
to enter within market where it can sell their products or services in successful manner. Being a
large market retailer at UK, It plan to expand into U.S. which aids them obtain higher profit.
Not for profit organisation, this is regarded as the kinds of organisation which do not
gain profitability for their owners. The firms into this sector are tax exempt charities or another
kinds of public service entities (Dyllick and Muff, 2016). For example: OXFAM, it is a
charitable company that is founded in year 1942 and are focused on removing poverty, disaster
relief and so on. It concentrates on resources like gender justice and many more. Products or
service, they serve service such as provide shelter to disaster people and de create as well as
protect lives in case of crisis. Also, the essential objective is to render aids to person, safeguard
its lives as well as increase finance for fundamental services. The main purpose of respective
non profit organisation is to assists and create longer solution to poverty injustice people. Legal
Structure, the OXFAM legal structure is unincorporated association where they formed the
agreement among its workers. It concern on person rather than getting profit. Size, OXFAM is
the small firm that assists the residents of UK by reducing poverty, relief from disaster and so on.
It has approx 20 independent charitable entities which works to develop a poverty free country.
Scope, It is exploring their services into other part of world. They performs with partners
company and try male and female vulnerable to end misconduct or injustice which cause
poverty. Moreover, they also works for increasing voice of poor people that influence local and
internal decision which affect them a lot.
Public sector organisation, it is regarded as an entities which are developed because of
an regulation which is governed with the intent to enhance public welfare (Vij and Bedi, 2016).
For example: NHS is a public organisation into United Kingdom which is regulated and funded
through government. Products or service, this facilitates the health care as well as medical
services to people and also there is not nay restriction to pay total amount. Moreover, the main
objectives of this is to render the most raised standards care which are not only safe but also very
much efficacious. Purpose, it is concentrated upon rendering effective health care services to
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audiences by using limited resources which are available. The funds which firm receive from
individuals are totally utilised for public care only. Legal Structure, the public organisation like
NHS comply public corporation as legal structure as this is developed by parliament act. It is
funded by government for rendering service in respect of medical treatments and others. Size,
The national health services concern about facilitating medical as well as health care services to
public. Also, it is large in size that provide free services to the residential of UK. Scope, As the
respective organisation is assisting of about 64.6 million person within United Kingdom so their
scope is vast. Moreover, it concentrate to deal with one million patients within each 36 hours
which involves emergency services, routine check up and others.
Analysis these structure, size and scope is linked to the objectives of the various types of
organisations.
The organisational structure , size as well as scope is linked with many kinds of
organisation such as profit, non profit and public (Stacey, 2016). As profit organisation huge in
size so their scope is to also vast to spread its entities across the world. Also, their organisational
structure is functional as in this employees are categorised into the frame work as per their
department and they work accordingly. The whole these are establish to accomplish its business
goals efficaciously and appropriately.
Critical analysis of the complexities these various types of organisations face within
different organisational functions.
As per Berg , the organisational structure are the way through which many forms of
organisation are established. Various functions are worked in every kinds of entities with various
structure. But the nature of particular structure and interrelationship are differentiated from one
another which develops their firm and implication of its operation essential (TKlepac , 2019). As
many organisational has many organisational structure like flat, functional, hierarchy and many
more that has many complexities and difficulties such as miscommunication, inappropriate
understanding whom to report and so on. Also, whole functions of entities are interrelated with
another one as it assists all type of organisation to do effective investigation, perform marketing
function efficiently and so on.
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P2 Explain the size and scope of a range of different types of organisations.
There are many type of organisation and it have different size and scope. Such as Micro
organisation, it generally performs with less than 10 individuals as well as is initiated with small
amount of capital. It is specialises in facilitating products or services for its local places.
Small organisation, it is define independently owned as well as operated entities which is
limited in size (Appelbaum and et. al., 2017). Generally, it have less than 200 staff. Medium
organisation, this is considered as non subsidiary as well as independent organisation that
employ less than 500 workers. Moreover, it annually revenue will be less than 1 billion. Large
organisation, it is regarded as the entities which have at least 5000 staff and its annual turnover
should be above 1.5 billion euros. Also, its overall balance sheet is more than 2 billion euros.
TASK 2
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
Various kinds of organisation structures
In the business world there are various kinds of organisational structures that are
functional, divisional and matrix. Functional organisational structure set up in every portion or
part of an organisation and grouped accordingly to their purpose (Bucovetchi, Badea and
Stanciu, 2018). Respective structure works well for small businesses in which every department
rely on talent and knowledge of their workers.
In divisional structure that majorly used by large companies operated in wide
geographical area. The major need of respective structure as it can be able to met needs rapidly
and more specifically.
The third main kind of organisational structures is a hybrid of divisional and functional
structure majorly used in multinational organisations. It allows the benefits of functional and
divisional structures exist in one organisation. In context of Tesco they follow the hierarchical
organisational structure by focusing on different departments in the business to deal in proper
manner. Moreover. The relationship between various organisational function of TESCO are
Marketing with research & development, both the functions has to work together. Marketing
functions creates information which assists the manager of research and development to do
appropriate investigation to achieve profitable outcomes. Marketing manger of TESCO do
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market research for their product and tell to research & development manager. Therefore, it so
research and select appropriate technology for manufacturing as per customer needs effectively.
Moreover, if decision are already taken then they have to do modification effectually. Human
resource management with marketing, both the functions together works for accomplishing
objectives. As manager of marketing aids TESCO HR manager to recruit skilled candidates for
its firm to do its work appropriately. By utilising many tools various individuals may able to
apply many post and market department helps to identify talented one. As per the organisational
structure, the needs of personnel is determined through marketing function and human resource
function hire staff based on that.
The size and scope of operations can influence an organisation’s structure considering
international and global organisations (Cepel and et. al., 2018). As the operation size as well as
scope is bigger or small so the organisational structure are also developed according to that. For
example: TESCO is large in size so their scope is also at larger level as they can expand its
business operation at vast level this influences its organisational structure.
Organisation’s mission and objectives can determine the functional structure, as the
mission as well as objective are also through considering the functional structure of respective
company. For example: As TESCO mission is “it make what matters better, together”. And its
objectives is to render electronics, groceries as well as clothing products effectively so this
influence their functional structure that is hierarchical so that its mission and objective are
accomplished effectively.
TASK 3
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
This is essential for entities to analyse macro aspects for operating the enterprises in
efficacious and proper way. Macro environment is regarded as the set of external condition
which impact the growth of business in positive or negative manner (Safar and et. al., 2018).
Mainly, these components are uncontrollable as well as it has an affect into the whole
performance of firm. Moreover, it assists to observe and examine atmosphere by using PESTLE
analysis that may affects upon entities' s development. This kinds of analysis is done when
company enters within new market areas. TESCO have performed this particular analysis for
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finding both optimistic and pessimistic effects to practices of enterprises that are discussed
underneath:
Political factors: As the retail sector firm perform globally, the international political
factors largely influence firm's performance. This is define as factors that finds how as well as
what government intervenes countries economy (Stott, Stone and Fae, 2016). This consists
country's stability, legislation act, tax policy and many more. For example: With Brexit,
undertaken company have to goes through may problems as there is maximisation into price of
food items that have raised in September year 2016 as well as minimised sterling of pound. In
addition to this, the import of food have become so much costly for retailers. Positive Impact: Brexit has increased cost that leads to maximise more profit from
economic process of pre Brexit to post one.
 Negative Impact: It leads to maximising cost for food import from others nation which is
costly for TESCO.
Economical factors: These is regarded as essential point for TESCO as they are vary
much likely for leveraging cost, profitability, demand and other. Thus, the entities have to
become aware of any modification into policies like modification into taxation or any another
aspects that can impact the finance accessibility. For example: Brexit have affect upon TESCO's
economic development because of many aspects. That are as follows: Positive Impact: Due to existence within internal marketplace and diversification leads
towards the success of TESCO at competitive marketplaces which assist them in
maximising the share of market through 27.7%.
 Negative Impact: Brexit enhances the audiences spendings because of which many
aspects which leads towards reduction into the profit of TESCO.
Social factors: Because of many of social changes, trends shows that audiences within
UK has moved towards shopping into bulk as well as one stop shopping. This involves income
levels, health conditions and others (Breivold and Rizvanovic, 2018). For example: The
changing lifestyle of the person drives towards modifying in its purchasing behaviours which
may impact the profit of the TESCO. Positive Impact: The chosen entities can bring new technology and innovation which
fulfil the needs of clients in effective way for obtaining more profit.
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 Negative Impact: In case TESCO fails to attain modification of users requirements it has
to face problems in order to survive into respective market.
Technological factors: This is regarded as the factors that shows innovation into
technology that affects upon practices of sector as well as develop unfavourable and favourable
condition of market (Neelankavil, 2015). This consists automation, innovation and many others.
For example: Within UK retail market, the enhancement of technology have bring several new
opportunities for company such as TESCO. Also this makes its audiences task easier for
customers Positive Impact: TESCO use technology into entities which includes home as well as fast
delivery for reaching at targeted users which drives towards maximising its goodwill and
brand value.
 Negative Impact: Due to lack of new technology adaption in enterprises has impacted
undertaken organisation at market location which decrease profit and sales of enterprises.
Legal factors: For running the business practices, legislation like employment, patent,
copyright and many more have to be comply into its practices of enterprises. This modification
impacts undertaken organisation performance in order to attain goals. Positive Impact: The positive affects is that TESCO conduct their operations based upon
the FRC which is Food retailing commission which is a strict code of practices.
 Negative Impact: An undertaken organisation has to deals with fraud investor where they
have to pay 12million GBP to settle down legislation acts.
Environmental factors: It is the essential factors due to raise into scarcity of raw
materials, carbon footprints and others (Adegbite and et. al., 2018). This involves changes into
climate, weather and many more. Positive Impact: TESCO has motivate their audiences for shopping from websites that is
tesco.com where the drivers will not have to usage fuel saving routes as this assists them
in collecting useless plastic bags from people and recycle this.
 Negative impact: Recently, TESCO faced the demand for zero food wastages which
maximise as well as impact retail sector as it have not adopted such care of environment
into their enterprises (PESTLE Analysis of Tesco, 2019).
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TASK 4
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
In order to identify strength and weaknesses the respective organisation have performed
SWOT and Porter's five force analysis.
SWOT Analysis
This is defined as tool that is used by organisation for knowing about strengths,
weaknesses, opportunities and threats of business (Armeanu, Istudor and Lache, 2015). It
identify internal as well as external analysis of market for running business in appropriate
manner. They are as follows:
Strengths: Tesco is regarded as leading grocery and supermarket in UK. This has high
revenues as well as sales as comparing to other supermarket. It is operating more than 14
countries with 6800 stores. It has large market share in Asian market apart from North Amercia
as well as Europe. Tesco has diversified stores such as superstores, express, one stop, metro,
home plus and so on.
Weaknesses: There are some weaknesses of Tesco which create problems to run their
activities and operations in an effective and efficient manner. The respective organisation profit
is declined due to high credit and debt liability. It has adopted low cost strategy which leads to
decline in profit margins. Also it was charged for false accounting and misrepresentation of
profits.
Opportunities: Tesco has an opportunity to update and form entities associated to online
shopping and fast & home delivery services. This leads towards enhancing enterprise growth and
profit as well.
Threats: There are few threats for TESCO that works as barriers into its operations is
competitors as it impacts their growth as well as performance. Some of their competitors are
Walmarts, Aldi and many more (TESCO SWOT Analysis 2019 | SWOT analysis of TESCO,
2019).
Porter's Five Force Model
This is regarded as the model which finds as well as examine five competitive forces
which shape each sector as well as it aids to ascertain strengths and weaknesses of industry
(Caseiro and Coelho, 2019). Porters five forces analysis of TESCO is discussed underneath:
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 Rivalry: The UK super market is so much competitive as there are various entities such
as Morrisions, ALDI and others which performs into this. The major competitors
compete over goods, prices, promotion etc. which developed the level of its similarity
vary high. So, the competitive rivalry for TESCO is high. Bargaining power of buyer: The bargaining of buyers is very higher as the switching cost
within respective sector are low. So, buyer may easily switch to other one in case their
requirements are not fulfilled and happy with respective organisation product range,
client services and others. Bargaining power of suppliers: The bargaining power of supplier is low as TESCO its
products to above 1000 suppliers across world. So, in simple way they may negotiate
their product price while choosing that suppliers which provides goods at high quality. Threats of substitution: The threats of substitution into supermarket is medium as because
of economies of scale affects, TESCO may provides similar products at lowest price,
developing them in more attractive way to audiences. So, clients may buy similar types of
goods form another supermarket like ALDI and others.
 Threats of new entrants: Within supermarket, the threats of new entrants is low as firm
has to invest considerable monetary resources for setting up its presence within respective
market. But TESCO, required not to worry about it as for reaching up to its market share
as new firm has to put additional efforts.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
The external macro factors refer to the ones that affect the functioning of the organization
like demographics, economic, technological, social and political factors (Laursen and Thorlund,
2016). Both micro as well as macro factors significantly impact how an organisation operates
and therefore these factors should be considered carefully before making any decisions as a prior
analysis will help Tesco in understanding the dynamic nature of the environment. The
interrelation of strengths and weaknesses with these external macro factors is described below - Political Factors – Global political factors like tax rates, stability of the country
influence the overall performance of the company. The strengths and weaknesses of the
same are explained below -
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◦ Strengths : With an ongoing instability of finances in the world, the governments of
several countries are motivating the retailers to create jobs for the local residents.
Therefore, Tesco has an increased demand for its products.
◦ Weaknesses : High tax rates can pose to be weaknesses for Tesco as then it will have
to pay more prices to import the materials. Also, the customers won't be able to
purchase the products. Economic Factors – Economic factors like demand and supply, profits, prices etc.
should be Tesco's main points of concern as they influence the functioning of the
company.
◦ Strengths : Factors such as diversification and internationalization have proved to be
the key strategies in company's success.
◦ Weaknesses : Decline in the overall disposable incomes of the people, the people are
not able to afford products of high prices. Social Factors – Various trends have shown that people in the United Kingdom have
moved more towards shopping the products in bulk rather than buying one product at a
time (Harmon, 2019).
◦ Strengths : Customers are becoming more health conscious with time. Hence, the
company has increased the number of non-food items and kept them for sale
◦ Weaknesses : Not adopting to the eating habits of the customers will act as a
weakness and lead to a loss of customers. Technological Factors – Technological factors include introducing and implementing
the latest technology so as to improve the working environment as well as the customers'
experience.
◦ Strengths : Implementing new technology will lead to less billing time, facilities for
home delivery which will in turn help retain customers and attract more potential
customers.
◦ Weaknesses : Not adopting to the technology will lead to lagging behind in a highly
competitive environment. Environmental Factors – These factors include doing business in an ethical manner,
availability and scarcity of raw materials etc.
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◦ Strengths : Producing and manufacturing eco friendly and following ethical practices
will lead to more customers buying the company's products.
◦ Weaknesses : If Tesco will not follow various ethical environmental practices, it will
lead to a decline in the sales and overall customer base of the company. Legal Factors – These factors include health and safety, consumer rights and laws etc.
◦ Strengths : Following the legal laws and regulations will help the company to sustain
itself in a highly competitive environment.
◦ Weaknesses : Following legal regulations of each and every country can get a little
tricky as different countries have different set of legal laws.
CONCLUSION
As per the above report, this is important for organisation to analyse it as this assists
entities to ascertain opportunities and threats, provide guidance for growth, meeting competition
and others in effective and efficacious way. Moreover, there are different kinds of organisation
such as profit, non profit and public organisation all have different size, scope, structure,
objectives and many others. Also, the micro, small, medium and large organisation are
distinguish from each others. there are various kinds of organisational structures that are
functional, divisional and matrix. All organisational function are interrelated with one another.
Also, the PESTLE analysis are performed to know the positive and negative impact of external
environment.
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Online
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<https://bstrategyhub.com/tesco-swot-analysis-2019swot-analysis-of-tesco/>.
PESTLE Analysis of Tesco. 2019. [Online]. Available through:
<https://www.marketingtutor.net/tesco-pestle-analysis/>.
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