Business Environment and Operations Management

The provided document is an assignment that delves into the importance of a proper workflow and communication in place at the right time for smooth functioning in an organization. It draws from various references such as Kenney and Neely's (2013) work on measuring performance in a changing business environment, Ward et al.'s (2015) study on business environment, operations strategy, and performance, and Hill's (2018) book on international business. The assignment also touches upon the role of finance in the business environment, customer satisfaction, and internet commerce benefits from a small business perspective.

Business and
the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY .................................................................................................................................3
P1: Different types and purposes of organizations along with their legal structures..................3
P2: Size and scope of a range of different organizations............................................................5
P3: The relationship between different organizational functions...............................................6
P4. Identify the positive and negative impact of macro environment upon business operations.
.....................................................................................................................................................6
P5. Conduct internal and external analysis to identify the strength and weaknesses of the
organisation.................................................................................................................................8
P6. Explain how strengths and weaknesses interrelate with external macro factors..................9
CONCLUSION .............................................................................................................................11
References......................................................................................................................................12

INTRODUCTION
Business Environment refers to the business depends upon the various factors that are beyond the
control of enterprises but the business still rely on all of these factors which have a direct impact
on the operations of business or control the overall performance of an organizations with the
motive of to run the business as long term (Montaigne, 2014). In this report chosen company is
TESCO. The organization is a general retailer in England, UK. This company is the third-largest
retailer at worldwide in terms of gross revenue and ninth-largest retailer in terms of revenues.
TESCO deals in many categories of items like- clothing, furniture, financial services, internet
services, electronics, books etc. This report aims on different types and purpose of organisation
that work under public, private and voluntary sector along with they followed legal structure also
contains description of size and scope of these sectors. In addition, emphasis on relationship of
TESCO with different functions of organisations also effect of macro environment on business
operations. This presentation focuses on internal analysis of TESCO and how the internal factors
influence the decision-making of the company.
MAIN BODY
P1: Different types and purposes of organizations along with their legal structures
Public Sector: The companies which are under public sector are completely accountable to the
central government. The arrangement of finance to the public sector companies is done by the
government itself and these organization have to supply their services to the general public
instead focuses on profit making (Miller, 2018) The purpose of this sector is completely towards
the welfare of the society and as well as the citizens of the country.
The legal framework of public sector is discussed in below:
Central Government:- This government have more powers over a unitary state. It is
subdivision of federal government which have different powers at different level to control all
the activities at national level.
State Government:- This governments are those who work under and control of central
government. This government deals with internal security of the state and issue of other state as
well.

Local Government:- This government accountable for specific population, areas, an
organization and have authority to perform public activities. This government exist at lower level
of government.
Private sector: This sector is run by the companies or an individuals not by the
government. The government is not allowed to interfere in the businesses of these sector.
Although, private sector regulate its business under the legal provisions of the government by
following all the policies and procedures (Hill, 2018). The purpose of this sector companies are
to earn more and more profits by producing products by the use of resources.
The legal framework of private sectors are explained below:
Partnership: It is a form of business where two or more individual share profit and loss,
ownership and responsibilities to manage the company. The partners is not liable for the tax
separately as they have to pay the tax with their mutual consent on the behalf of the organization.
Sole-proprietorship:- This is simplest form of the business. An individual personally
starts a business and pay its tax liability by itself. The trader alone provide the finance and bear
the risk. On the other hand, they have full control over the company and enjoy all its profits.
Limited company: The company acts as a joint stock company in which shareholders
are the part of business. No any kind of shares sold to the general public. When a company
formed the documents which are required such as memorandum of association and article of
association to complete the legal formalities (Klapper and Parker,2015).
Voluntary Organizations: This types of organizations refers to the groups in which
individuals enter into an agreement to achieve a common goal. This types of companies are runs
with the motive of not for profit.
Legal structures of voluntary organizations are
Associations:- It refers to the group in which people associates together to carry out
some common objectives. It is the agreement between the associates who maintain the right and
duties which they have to perform with each other. It doesn't require any cost to set-up and don't
need to register this association. Each member is responsible to pay the debts (Ward and et. al.,
2015).
Company limited by guarantee:- It is refers to the company in which they don't have
any share or shareholders but assure some type of guarantee to pay certain amount as company's
debt and only pay debt up to the amount of guarantee.

P2: Size and scope of a range of different organizations
TESCO ( Private Sector)
Vision of TESCO: The company is full of opportunities which share innovative ideas
and want to gain maximum loyalty from the customers.
Mission:- Maintain lifetime loyalty by creating value for customers which is delivered
through treat the customer as they want to be.
Product and Services: Supermarket, Hypermarket, Superstore and convenience shop.
Size of the company: The size of employees of TESCO is 4,60,000 according to the data of
2017.
Scope of the company:- The area served by the company are United Kingdom,
Malaysia, Thailand, Czech Republic, Hungary and India (Kenney and Neely, 2013).
Objective of the Business:- The company aims is to provides employment to the local
communities where TESCO are established to minimize the unemployment.
Crown Prosecution Services(Public Sector)
Mission of the company:- Justice through effectively prosecuting crime, support each
other with our best.
Vision: To provide largest quality of services to the citizens.
Objectives: Want to improve the quality of life of Northern community and make them
independent.
services: The services of the company is to give advice to the police or other
investigating agencies about whether a suspect face criminal charges or not by following
investigation.
Size of the company: The company have 6000 employees at present.
Save the Children ( Voluntary Organization)
Mission: To enhance the quality of life of orphan children by changing the perception of
people towards them.
Vision: Build a environment for them where they have right of survival, development,
participation and protection.
Scope: The organization serve more than 120 countries all around the world.

Services: Savings to the young people and women and teach them how to save and
manage their own money. Health insurance and finance education to the poor community.
P3: The relationship between different organizational functions
Production and Marketing:- The production department which manufactures the
services on a continuous basis and according to the demand in the market. The department have
a complete control on overall manufacturing process of the company. Thus, if the marketing
department want to satisfy the need of its customers and grow in the market so, it is necessary for
them to have information about recent trends of market and as well as customers. The taste of
customers changes very rapidly (Ward, 2015) So, it the responsibility of marketing department
that they should provide complete information to the production department. Accordingly, they
will produce products according to the demand in the market and gives satisfaction and value to
their customers. The same information is used by marketing professionals at the time of
promotion of that product. If the marketing professional provide exact and full information to the
customer through their advertising then customer will purchase more as a result sales increases
and the objective of the company fulfils by earning more profit.
Marketing and Human Resource: The human resource department of TESCO keeps
every employee happy by the welfare of their staff as well as Business. The HR department of
company believes that if the company satisfy their employees at each level then they will get
motivated and work effectively and efficiently. The marketing and HR department of TESCO
highly inter-related with each other (Teece, 2017). At the time of recruitment in the company
marketing professional plays an important role by advertising of recruitment and selection
programmes also decides several means of advertisement to displayed to the targeted candidates.
TESCO also emphasis on providing best training and development programmes to their
employees and the best module of training is also frame by marketing professionals. If the HR
policy of the company framed and follows appropriately then the productivity of the company
increases also improves the performance and the business fulfils its objectives.
P4. Identify the positive and negative impact of macro environment upon business operations.
Macro environment is the external environment whose factors influences the strategies,
decision making and success of the business. It is important for Tesco to analyse the factors
which has an impact on its working. PESTLE analysis of the company is discussed below -

 Political factor – As the company operates globally, the political factors affects its
operations. These factors include acts of legislation, tax rate, foreign trade policy etc. The
rules and regulations of each country is different from the other as it operates in several
countries.
Positive impact – As the world is facing financial instability, the government motivates
retailers to create vacancies for people to reduce unemployment. Tesco is also involved in
providing opportunities for creating jobs. This will also help the firm to increase its productivity
with the help of its workforce.
Negative impact – In the international market, some countries apply high tax rate on the
goods, which increases the cost of the product. Thus, these became unfavourable for Tesco to do
business.
 Economical factors – These factors includes disposable income, economic growth, rate
of interest and inflation. Economical factors has a great impact on customer's purchasing
power which has direct influence on Tesco.
Positive impact – As the company is the market leader of groceries in UK, It provides
fresh stocks to its customers. This has build its goodwill in the market.
Negative impact – Tesco faces intense competition because of more competitors in the
global market. Sainsbury's uses price reduction as an important competitive strategy. This creates
negative impact upon its business operations.
 Social factors – Customs, values, beliefs and culture are the social factors within which
the firm plays.
Positive impact – As the consumers are health freak, there taste for food is changing
rapidly. Tesco is making some organic products by adapting changes, so that it can serve its
customers according to their requirements.
Negative impact – The company has its expansion in the global market were different
customers have different culture and belief. So, if the firm does not have proper knowledge
regarding the culture of the market in which it operates than this will create huge loss for Tesco.
 Technological factors – These forces includes research and development, automation
and awareness about technology. Technology advancement has created opportunities for
the retail industry.

Positive factor – Tesco facilitates online shopping with home delivery which made an
ease for customer and save their time. This help the firm to boost its sales.
Negative factor – Workers of the firm does not have much knowledge to use the new
machines. So, it is important for Tesco to train their employees effectively.
 Environmental factors – Environmental offsets, pollution, weather etc. are the
environmental forces that can affect the business operations of the company.
Positive factors – Tesco has adopted some ways to decrease the environmental problems
by making a commitment to reduce the carbon footprint by 50%.
Negative factors – The organisation should focus on waste minimisation by using some
techniques. So that environmental issues can be addressed and with this, cost of product can be
decreased which can also benefit to the firm (Timmers, 2018).
 Legal factors – Health and safety law, patent and copyright law etc. are some of the legal
factors.
Positive impact – Tesco must have proper knowledge regarding lawful activities of the
country where it operates. This will create a positive impact on its working.
Negative impact – Tesco should patent its products otherwise it won't be able to enjoy the
rights of sale and purchase.
P5. Conduct internal and external analysis to identify the strength and weaknesses of the
organisation.
SWOT is a technique that every organisation is using to understand its internal strength
and weaknesses and external threats and opportunities. This also help organisation to develop
their objective and to analyse internal and external factors that are good or bad for the those
objectives. It is also termed as tried-and-true tool of strategic analysis.
 Strength- These are internal characteristics of any business which make organisation
different from the other. Every company have their own strengths so do Tesco, the major
strength of this company is that it is considered as most profitable and largest
supermarket in world which is creating a tough competition for other brands. Other than
this company have good finance reserves which is its strength (Poon, 2016).
 Weaknesses – Tesco is mostly dependent on two countries namely UK and Europe for its
trade. The firm does not target any other markets where it works. It has not spent its time
on searching new markets. The products of the retail industry are of high cost which

allows the customer with low disposable income to switch to its competitors. This can
destruct its brand image.
 Opportunities – The industry has an opportunity to grow by providing online services to
its customers so that they can shop online. The firm should also facilitates home delivery
on the purchasing of its products. In some countries where the retail company is not
performing better, it is a chance for Tesco to improve its performance in certain areas by
taking decision of opening its joint ventures. This can be done by market research.
 Threats – Credit crunches and recessions will be a threat to profitability and market
share of the concern in many countries around the globe. This will decrease the number
of purchases done by the customers. Competitors are also creating threats to the firm by
using the low pricing strategy. Rise in the cost of raw materials also threatens the
organisations profitability. The policies of government also puts pressure on Tesco to
study the new rules and make the necessary changes in its operating structure.
P6. Explain how strengths and weaknesses interrelate with external macro factors.
The inter relationship of strength and weaknesses with the external factors are described
briefly as under -
 Political factor – Tax rate of one country differs from the other. If the tax imposed is
high in the country where the firm operates, than the initial cost of the product will get
increased. Thus, it is weaknesses for Tesco. The organisation is motivated by the
government and thus, involved in creating job opportunities for the individuals which
will increase the productivity as well as serve the society which is its strength.
 Economical factor – As the organisation is the largest super market in the world, so it is
increasing its goodwill continuously, which is its strength. The product of Tesco are of
high price and in few countries disposable income of the customer is low. So, they won't
be able to purchase the product and thus, switch to the competitive brand, which is the
weaknesses of the concern.
 Social factor - Nowadays, Tesco is making some organic products by targeting the
health freak consumers. This will help the firm to gain brand loyalty, which is its
strength. As the firm has global expansion, every customer has different taste and culture
so the industry faces barriers in trading, which is its weaknesses.

 Technological factor – The company focuses on online shopping which is a part of
technology. It benefits both the customer as well as firm, which is its strength. Many
workers does not have much knowledge about the modern tools and machines and this
leads lose and is a weaknesses for the company. So, proper training should be given to
the employees.

CONCLUSION
From the above report it is concluded that the companies are divided into three sectors.
As all are different from each other in terms of size, scope, functionality, product and services.
As some companies are focuses on the welfare of the society and want to improve the life of the
people by giving them support. Whereas some companies emphasis on the profit generation and
grow in the market. Additionally want competitive advantage to sustain in this competitive
environment by serving their customers. The various departments of an organization are inter-
related to each other and the work of one department is not completed without the other. So, it is
necessary that there is proper workflow and communication place at right time for the smooth
functioning of the organization.

References
Kenney, M. and Neely, A., 2013. Measuring performance in a changing business environment.
International Journal of Operations & Production Management. 23(2). pp.213-229.
Ward, P. T., and et. al., 2015. Business environment, operations strategy, and performance: an
empirical study of Singapore manufacturers. Journal of operations management. 13(2).
pp.99-115.
Hill, C., 2018. International business: Competing in the global market place. Strategic Direction.
24(9).
Miller, D., 2018. Relating Porter's business strategies to environment and structure: Analysis and
performance implications. Academy of management Journal. 31(2). pp.280-308.
Montaigne, A. R., 2014. Factors affecting information satisfaction in the context of the small
business environment. MIS quarterly, pp.239-256.
Ayyagari, M., Demigod-Kent, A. and Abramovich, V., 2014. How important are financing
constraints? The role of finance in the business environment. The world bank economic
review. 22(3). pp.483-516.
Timmers, P., 2018. Business models for electronic markets. Electronic markets. 8(2). pp.3-8.
Keiningham, T. L., Perkins-Munn, T. and Evans, H., 2013. The impact of customer satisfaction
on share-of-wallet in a business-to-business environment. Journal of Service Research.
6(1). pp.37-50.
Poon, S., 2016. Business environment and internet commerce benefit—a small business
perspective. European Journal of Information Systems. 9(2). pp.72-81.
Teece, D.J., 2017. Business models, business strategy and innovation. Long range planning.
43(2-3). pp.172-194.
Bowman-Amuah, M.K., Accenture LLP, 2013. Attribute dictionary in a business logic services
environment. U.S. Patent 6,601,234.
Ward, D.M., 2015. System and method for integrating a business environment with a process
control environment. U.S. Patent 5,463,555.
Klapper, L. F. and Parker, S. C., 2015. Gender and the business environment for new firm
creation. The World Bank Research Observer. 26(2). pp.237-257.
Eifert, B., Gelb, A. and Ramachandran, V., 2015. Business environment and comparative
advantage in Africa: Evidence from the investment climate data. Barque Mondale,
Washington: DC, pp.195-233.
Online
Functional Organization Structure, 2017. [Online]. Available through:
<https://pmstudycircle.com/2012/08/what-is-a-functional-organization-structure/>
(Kenney and Neely, 2013) (Ward, P. T., and et. al., 2015) (Hill, 2018) (Miller, D., 2018)
(Montaigne, A. R., 2014)