Business and the Business Environment

This document provides an overview of the forms and purposes of voluntary, private, and public organisations in the business environment. It also explores the interrelationship among different departments within a company and discusses the positive and negative aspects of the macro environment. Additionally, it provides insights into the scope and size of different types of entities.

Business and the Business
Environment
1

INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Various forms and purpose of voluntary, private and public organisation ............................3
P2.Scope and size of various kinds of entities.............................................................................5
TASK 2............................................................................................................................................9
P3 Interrelationship among various departments within company..............................................9
TASK 3..........................................................................................................................................11
P4 Macro environment positive as well as negative aspects.....................................................11
TASK 4..........................................................................................................................................13
P5. Strength and Weaknesses identification of entity with the help of internal and external
analysis.......................................................................................................................................13
P6 Strengths and weaknesses interrelate with external macro factors.......................................14
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................17
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INTRODUCTION
Business environment is defined as a sum of various forms of external as well as internal
factors that affect functioning of organisation, employees, demand and supply, business
regulations and customers (Business Environment. 2019). Each and every business entity
operates their functions in different environment that involve wide range of internal and external
factors that impact upon their operation (Andersson, Forsgren and Holm, 2015). It is essential for
an organisation to have proper understanding of all the factors prevailing in business
environment as to gain more competitive advancements from them. Above mentioned project
has been done on, Tesco, company operate their functioning as British multinational grocery and
general merchandise while performing their operation in retailing sector. Organisation offers
their products through supermarket, hypermarket, Convenience shop and superstore. Present
report has been made on different types of organisation with their size and scope. Swot and
Pestle analysis is being done as to evaluate organization weakness and strength as to overcome
challenges and ensure more growth developing opportunities. Further, in this project
interrelationship among different organisation is being defined.
TASK 1
P1 Various forms and purpose of voluntary, private and public organisation
Various forms of entities operations within business environment these organisations
conduct their functioning in public, private and voluntary sectors. Main motive of these
organisations is to satisfy customers need and help country to increase its economic growth and
revenue. It has been identified that, these entire organisational sector have different role,
responsibilities, scope and legal structure which is being further defined below:
Private sector: Entities operating in private organisation are managed and owned by firm,
private group of individuals and any other legal authority. They have main motive to earn a
large amount of profitability while satisfying needs of customers. These entities allocate their
funds from business entities, financial institutions, investors, bank loans etc.
For example Tesco performing operations within private sector as the company have their own
set of working structure and consumer regulation.
Purpose:
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Tesco operate the functioning as leading retailer in UK with the purpose to satisfy
customer need with qualitative products and services as to expand their business other
geographical locations.
Legal Structure:
Sole proprietorship: Entities who perform their operations within sole proprietorship are
managed, closely-held and contained by a single person who held the responsibility for the profit
and risk which is associated with organisational functioning.
Partnership: Partnership is being formed when more than two individual initiate business
with a written agreement in which they are liable for the profit and loss as per the legal
agreement which was duly signed by them.
Company: In this form, shares are mainly offered to general public via initial public offer.
These organisations have main motive to gain maximum profitability.
Public sector Organisation within public sector are fully and partially owned and
managed by government authorities and Institutions (Apăvăloaie, 2014). Main motive of these
organisations is to offer welfare to society while satisfying their needs rather than to generate
profitability. In this sector every business organisation have authorised with democratic role in
which they are entitled to undertake their own decisions. Along with this company’s within
public sector have influence and control of government regulations on their functioning.
For example NHS performs their functioning within U.K. This entity offer comprehensive range
of Healthcare services to individuals.
Purpose:
National Health Service (NHS) operates their functioning with a purpose to provide
health care services to citizens in United Kingdom along with high quality care for all
individuals.
Legal Structure: Organisations operate their operations in public sector or owned and duly
managed by government authorities.
State Government: Organisation those who perform their functioning in state government
segment are partially as well as wholly managed and owned by State government authorities or
institutions.
Local Government: Entities within this segment are managed and administered by local
government institutions.
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Central Government: Entities in this segment are majorly controlled and managed by
central government authorities.
Voluntary organisation Organisations performing their activities and functions in this
segment have an aim serve population with their humanitarian services (Botha, Kourie and
Snyman, 2014). Voluntary entities get funded by private organisations those who invest for their
goodwill. Individuals voluntarily come together to provide welfare services to society.
For example: Oxfam is a combination of 20 charitable entities those who offer their services in
drought, famine and other affected locations.
Purpose: Oxfam conduct their functioning with the purpose to increase living standards of
individual while reducing poverty. Organisation offer humanitarian services without having any
intention to earn monetary benefits.
Legal Structure: Legal structure is discussed below:
Unincorporated Organisation: In this an agreement is signed by individuals in which
they combined to work towards common aim rather than to earn profit. All the members are
responsible for all the obligations
Trust: Trust is mainly created by formal agreement among two persons those who offer
formative rights that are duly related with property.
Limited Organisation: In this there are limited numbers of members who are having
shares within company
P2.Scope and size of various kinds of entities
Various from of entities like public, private and voluntary those who operate their
functioning with different goals and objectives in a business environment (Saleem, 2015). These
organisations have different scope, vision, mission and organisational structure through which
they fulfil their goals in a well defined manner. Mentioned below certain element of these
organisations is being defined:
Public organization
NHS is a publicly funded Healthcare organisation within United Kingdom. It is mainly
funded by taxpayer and are appointed to provide free treatment to patients. This organisation
effectively works towards providing healthcare services to individuals in a best effective manner.
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Size: NHS is mainly made up of four separate systems and each of their service provides
a comprehensive range of Healthcare facilities to patients. Entity is having more than 1.6 million
people employed under their organisational structure.
Scope: NHS is focused towards offering services with an intention to fulfil expectation of
patients. Along with this entity is looking forward to provide their services via digital media in
order to provide medical assistance to maximum patience.
Vision and Mission:
NHS vision is to provide high quality Healthcare services to their patience while vision
statement of company indicates to expand their services to maximum population and join with
more digital partner in order to make their social care system more efficient with the help of
digital technology.
Organisation structure:
Figure 1NHS organisational structure
Sources: Organisation structure of NHS, 2019
Private organization
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TESCO perform their operations as leading multi groceries and general merchandise
retailing organisation in United Kingdom. Company offer their services worldwide and have
headquartered in UK.
Size: Tesco offer their products and services worldwide with more than 6800 shops.
Organization offers their products via super store, supermarket, convenient shop and
hypermarket. Tesco is having more than 450,000 employees within their organisational structure.
Scope: Tesco mainly focused upon offering their products and services with high quality
in order to satisfy their customers with best. Along with this company is looking forward to take
their business to digital world for maximum of their activities in order to so large base of
customers all around the world.
Vision and Mission:
Tesco offer the service with a mission to expand their business all around the world while
vision statement of company to serve their customers in a well defined manner as to ensure their
maximum loyalty.
Organisation structure:
Figure2: TESCO organisational structure
Sources: Organisation structure of TESCO, 2019
Voluntary Organisation:
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Oxfam is a combination of 20 charitable organisation those who effectively operate their
functioning to drought prone and other affected locations with a motive to increase living
standard of individuals.
Size: Entity provides their humanitarian services to maximum individuals those who are
affected. It is combination of 20 other charitable organisations.
Scope: As it is a voluntary organisation, they are not having any particular structure as in
this individual mainly perform their work from different locations. Along with this scope of
entity is to enhance their services area as to satisfy maximum individuals.
Vision and Mission
Main vision of Oxfam is to serve individuals with its humanitarian services while mission
of entity is to expand their area of service to more affected locations as to raise individuals
standards of living.
Organisation structure:
Figure3: Oxfam's organisational structure
Sources: Organisation structure of Oxfam, 2019
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TASK 2
P3 Interrelationship among various departments within company
There is different type of departments those who perform their roles and responsibilities
within an organisation with having common objective which is to fulfil aim and objective of
organisation. In order to ensure high profitability and long-term sustainability it is essential for
an organisation to ensure that all the departments perform their services with having formative
relationship. In TESCO manager hold the responsibility to make sure that there is a relationship
among every departmental unit in order to increase efficiency and productivity of organisation.
Mentioned below relationship within different department of Tesco is being defined:
Illustration 4: Organisational Structure
(Source: Organisational Structure, 2019)
HR and Finance Department:
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HR departments within entity is to hire potential candidates for every department within
organisation as per according to the job requirement within entity (Schaltegger, Hansen and
Lüdeke-Freund, 2016). Main responsibility of the department is to increase performance of
employees by providing them different training and development opportunities as per according
to the dynamic technology. By providing highly skilled and experienced candidates HR
department of Tesco aid finance department as with the help of this finance unit effectively
perform their business functioning that automatically increase company fund reserve capability.
While Finance Department provide adequate some of funds to HR department that benefit HR
unit to conduct their activities like selection, recruitment, training, in best effective manner.
Thus, this interrelationship of both the department benefit Tesco to satisfy their customers while
ensuring higher profitable growth.
R& D and Production Department:
Tesco R&D unit play key essential role, as this department engage in the service of
analysing needs and demands of customers and trends of current business environment. This
department benefit Production department by providing them adequate information related to the
change in technology and current behaviour of customers. With the help of this production
department produce products with unique innovative elements through which they enlarge
profitability share of company within marketplace. While production department aid Research
and Development Department by providing them information related to unique feature of the
product and service through which R&D department compare the same with other competitors.
With the help of this interrelationship overall profitability and productivity of Tesco effectively
strengthen that further benefit organisation to ensure more competitive advancements with large
market share holding.
According to above report, this has been evaluated that a formative interrelation within
every department of Tesco is important as it not only increase company sustainability but also
increase performance of employees. With the help of interrelationship organisation can
effectively able to fill the gap and can strength internal working structure through which they can
stay one step ahead of their competitors within retailing sector and gain more market share
holding with strong competitive advancements.
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TASK 3
P4 Macro environment positive as well as negative aspects
Tesco operates their functioning within retailing industrial sector that have different type of
factors within business environment. Thus, it is important for entity to analyse the impact of all
these factors in order to ensure smooth operations (Kolk, 2016). Mentioned below pestle analysis
is being undertaken by manager of company in order to evaluate different type of elements along
with their positive and negative impact upon business activities:
Political: It includes factors related to labour law, taxation policies, government regulations and
political impact upon functioning of organisation. It is essential for Tesco to evaluate political
condition within a country as to operate business functioning in a well defined manner. It will
help entity to adopt necessary and relevant laws in their organisational structure in well defined
manner.
Positive: This has been evaluated political stability of United Kingdom benefit Tesco to
expand their business operations with high profitability rate. It further benefits company to get
additional aid from government such as taxation relief that will stimulate high growth of
organisation.
Negative: Negligence of any political regulation within organisational working structure
main effect Tesco to face political threat that may not only impact upon organisational
profitability but also decrease goodwill of company in marketplace.
Economical: This element is related to economical aspect search as interest rate, borrowing rate
and more. All these factors are required to be duly considered by Tesco in order to overcome
economic fluctuations. This will benefit company to formulate strategies with the help of which
company can further perform their business services in more economical manner:
Positive: UK economy provides different types of growing opportunities with the help of
which Tesco can ensure more growth. Along with this, stability within UK economic
environment provides company to gain advantage of developing opportunities.
Negative: Due to Brexit there are many negative impacts that can be faced by Tesco such
as high rate of raw material and increase in transportation cost. This will lead company to face
number of problems that may impact upon their profitability.
Social: It indicates towards believes values, perceptions and preferences of society within a
country (Cohe and Kietzmann, 2014) . All these factors impact upon functioning of organisation
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thus, it is essential for Tesco to have effective understanding of society believes and values and
satisfy them accordingly.
Positive: With proper evaluation of society believes and values Tesco can effectively able
to ensure more loyalty from community through which they cannot only increased their
developing opportunities but can also ensure high goodwill.
Negative: Negligence of society believes and values lead company to face backlash from
community that may decrease image of company in retailing market segment.
Technological: Technology is evolving at fast rate thus it is essential what Tesco to implement
every update in technology within their workplace structure as to satisfy customer needs as per
according to market trend. This will help them to ensure strong competitive advancements.
Positive: With adoption of advanced technology in workplace structure Tesco can not
only able to increase efficiency of their organisational but can also able to increase competitive
image and high satisfaction rate from customers.
Negative: In order to implement technological change company is required to
continuously make investment of high funds related to maintenance cost. Along with this entity
is also required to provide effective training to every employee as to use the technology that
require more time which will effect company in number of ways.
Legal : It include rules, regulations and laws that has been framed by government and are
required to be abide by all organisation within retailing sector. There are different type of legal
obligation that are required to be implemented by Tesco in their working structure as to avoid
any penalty and legal issues.
Positive: By abiding all laws and legislations Tesco can conduct their functioning within
marketplace without any legal hindrances which will provide company with the benefit of long-
term sustainability with high goodwill in marketplace.
Negative: Negligence of any essential law impact upon smooth functioning of Tesco that
we not only damage company brand image but also lead them to face heavy penalties and legal
obligations.
Environmental : It is important for TESCO to conduct their functioning by having their focus
towards environment. In this company is required to ensure that their activities and functions did
not affect environment in any way.
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Positive: TESCO by contributing their concern towards environment can serve society
with best. It will not going to increase brand image of company in marketplace but also make
significant increase in overall profitability in best effective manner.
\ Negative: Negligence of environment may lead company to face many legal hindrances
and also affect entity by degrading its image among society. This will lead company towards
high financial problems.
TASK 4
P5. Strength and Weaknesses identification of entity with the help of internal and external
analysis
It is essential for an organisation to identify internal and external factors that are prevailing
in business environment in order to further develop strategies as to overcome their negative
impact upon organisational operations (Cairncross, 2014). In order to evaluate these factors
manager of Tesco is taking advantage of SWOT analysis which is an effective tool through
which company can effectively able to identify their strength, weakness, threats and can gain
advantage from opportunities as to increase their business profitability growth:
SWOT analysis of TESCO
Strength Weaknesses
 TESCO operate their functioning as
leading organisation in retailing sector.
Company offer high quality products
and services through superstore, hyper
store, convenience shop and
supermarket.
 Company having strong competitive
image in retailing segment
 Main weakness faced by company is
that it does not invest much upon digital
platform promotional activities.
Opportunities Threat
 Company is having an opportunity to  Company is facing threats from other
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enlarge their business operations
digitally and serve more customers
from different locations.
 By conducting their operations with the
help of joint ventures with local
vendors Tesco can effectively able to
expand their business operations.
rivals those who offer same product
range with affordable price to
customers within marketplace
 Brexit is also posing threat to
organisation that will somehow impact
on overall profitability of company.
SWOT analysis of NHS
Strength
 NHS operates their activities with
having highest number of employees
which is one of their major strength.
Weaknesses
 High nature of operations lead NHS
towards high operating costs that
automatically decrease profit holding
capacity of company.
Opportunities
 Strong brand image aid entity with an
opportunity to make entry in new
market segment and expand their area
of business services.
Threat
 Due to presence of small and medium
players NHS is facing threat as to have
strong presence in market.
P6 Strengths and weaknesses interrelate with external macro factors
In relation with TESCO mentioned below there is some certain strength and weaknesses
define:
Political
Strengths: Tesco is having strong relationship with government bodies in UK this benefit
company to conduct business in a well defined while ensuring high sustainable growth.
Weaknesses: Political fluctuations due to brexit impact upon smooth functioning of Tesco
that may further lead entity towards financial loss.
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Economical
Strengths: Strong economic conditions in UK benefit company to make significant
increase in their profitability reserve.
Weaknesses: Increase in economical fluctuations such as change in labor price will
impact on overall operating cost of entity.
Social
Strengths: By satisfying customers as according to their belief, preference and taste
Tesco ensure high profitability with more customers’ loyalty towards organizational offerings.
This will increase capability of company to provide welfare to society.
Weaknesses: Frequent changes in buying patterns of individuals may lead company to
affect their organisational operations in number of ways.
Technological
Strengths: By adopting innovative technology in company Tesco can make significant
increase in profit earning capacity of entity through which they can serve their customers with
high quality.
Weaknesses: In order to implement Technology organization requires high maintenance
cost that will impact upon overall budget of company.
CONCLUSION
According to given report, this has been analyzed that business environment includes
different type of internal as well as external factors that impact upon overall functioning of an
organization. Thus, it is essential for an entity to have proper understanding of all the factors
prevailing in business environment and further frame strategies to overcome their negative
impact. With the help of this company can effectively able to fulfill their goals and objectives in
a well-defined manner. It is essential for an organization to conduct their functioning with having
formative interrelationship between every department. In addition with this by conducting
SWOT and PESTLE analysis organization can effectively able to determine strength, weakness,
threats and can gain effective advancements of opportunities through which company can gain
significant increase in overall profitability of entity.
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Online
Business Environment. 2019. [Online] Available
through<http://www.businessdictionary.com/definition/business-environment.html>
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