Business and the Business Environment

This document provides an overview of different types of organizations and their legal structures. It explains the relationship between organizational functions and objectives. It also discusses the positive and negative impacts of the macro environment on business operations.

Business and the Business
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO1..................................................................................................................................................3
P1 Explain different types of organization and legal structures..................................................3
P2 the size and scope of a range of different types of organizations...........................................4
LO2..................................................................................................................................................5
P3 Relationship between different organizational functions and link to organizational
objectives and structure................................................................................................................5
LO3..................................................................................................................................................6
P4 Identify the positive and negative impacts the macro environment has upon business
operations.....................................................................................................................................6
L04...................................................................................................................................................8
P5 internal and external analysis of specific organizations ........................................................8
P6 Explain how strengths and weaknesses interrelate with external macro factors..................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business refers the process of earning money by manufacturing or buying and purchasing
goods or services. Business is a source of money which supports to enhance country economy.
While business environment mention the total of micro-environment and micro environmental
factor which enhances business. Macro-environmental factors are political, economical, socio-
cultural, environmental, technological and legal factor etc. these factor gives impact on
organization performance. While micro-environment factors are competitor. Customers,
suppliers, public, intermediaries and market etc. gives impact on organization. Swot also
consider in internal factor which gives impact on organization. Both factors are crucial for
running business and supports to takes competitive advantage in business market. In this report
will cover two project in which one project will cover different types and purpose of
organization such as public, private and voluntary sectors and legal structures.
MAIN BODY
LO1
P1 Explain different types of organization and legal structures
There are three types of organization which has different purposes such as volunteer,
public and private organization. These organizations give contribution to raise country revenue.
Organizations are -
PUBLIC SECTOR: It refers an organization which is granted and runs by government and
provides services or products to citizens. It is similar to volunteer sector because it doesn't
generate profit. The main purpose of this sector is to offer public services such as goods and
political services for example military, safety, public education and governmental health care
services. Such kind organization gets funds from government. Such kind organizations are
accountable for central government (Wood and Logsdon, 2017). Public sector provides there
types of services such as public goods, merit goods and essential services. These all services
provide by public sector thorough government. Public services are emergency services along
with armed services. Merit services are education, pharmaceutical and healthcare services. While
essential services are street lighting, refuse collection, street cleaning, parks, libraries and
swimming pools services to public. Central government and local government pays tax for public
services and merit services through income tax and council tax. To understand public sector
there is an example the British petroleum company.

PRIVATE SECTOR: an organization which runs by privately and offering goods and services
to customers. It supports enhance country economy. The main purpose of organization to earn
profit from customers by offering desired products and services to customers. Government
doesn't interrupt in private sector profit. These sector plays vital role in country such as it recruits
job opportunity for those kind people who don't have jobbed and these organization offers
critical goods and services to customers. Beside of this organization leads business growth in
country. Legal structure of private organization is that it operates separately under government
law. These type sector has limited liabilities and organization gets tax benefits when runs all
activities' government norms (Evans, and et.al., 2017). To understand the private sector there is
an example Tesco company. it is multinational privet limited company which has main purpose
to gives value t customers by offering expected products and services and generate profit s0 that
organization number one position in business market.
VOLUNTARY SECTOR: an organization which has primary duty to give impact on social
activities and focuses on supporting and springs advantage to the public without generating any
profit. This sector also known as community sector whereas organization doesn't earn profit for
self they earn money for public and offers them by helping. The main purpose of this
organization is to gives financial and goods services to such kind public who unable to survive in
country. For example civil society which gives financial and healthcare and educational supports
to public so that they enable to leave their life well-formed. Government isn't involve in this
sector. This organization gets funds from different sources such as government contracts, grants,
donation and public & private sectors. Thus, this sector gets funds to accomplish mission of this
organization. In this sector three legal structures are used by voluntary parties such as
unincorporated association, trust and private & public limited company . This sector is specially
designed for charitable purpose for the community profit but doesn't involve to enhance revenue
of country. There is an example to understand voluntary sector world YWCA. It is charitable
company which has main purpose to improve leadership and empower of women's and girls
across the world to gain human rights, healthcare, safety, justice etc.
P2 the size and scope of a range of different types of organizations
Private sector: private limited company operate privately without involving of government. In
this organization number of member can be minimum two or maximum two hundred member.
On the basis of member involvement organization can be small scale or wide scale in business

market. Such kind organization has scope in various sector such as fashion, technology, foods
and retail. Beside of this company can shares their goods and services in various market such as
super market, hyper market and global market (Prajogo, 2016). Through these markets'
organization enables to gain large profit in organization. Shareho9lder of company liable for
payment. To understand size and scope of private sector there is an example. Tesco is a British
multinational groceries' company and famous as general merchandiser retailer. England is
headquartered of company. Number of employees are 450,000 along with the highest revenue is
6,391.1 crores. Subsidiaries of this company are Tesco Mobile, Tesco Bank, Tesco Ireland etc.
Public sector: there is number of member are minimum seven or maximum unlimited. That why
liability of organization is limited. There are lots of shareholders liable for payment. British
petroleum company is good example to understand scope and size of organization. It is
multinational oil and gas company and revenue is US$ 303.73 billion. This is sixth largest oil
and gas company where number of employees are 73,ooo. It offers products services such as
petroleum, natural gas, motor fuel, aviation fuels and petrochemicals to public.
Voluntary sector: the world young women's Christian association (YWCA) is voluntary sector. It
works for women empowerment, leadership and women's rights. in this organization number of
member are included from different culture, faith, background, belief ad ages. This organization
is working in 120 countries and current world office is dependent on Geneva and Switzerland.
The main purpose of this organization is to leads sustainable development in world and crates
justice, gender equality and violence free world (Saleem, 2017). Organization provides services
mainly to women such as informal educational, information, workshop counselling and services
etc. this organization is operated in various countries for example china, Canada, Australia,
Norway, Denmark etc.
LO2
P3 Relationship between different organizational functions and link to organizational objectives
and structure
There are lots of business functions such as production, marketing, sales, research and
billing. While organization structure refers the relationship and correlation between the part of
companies and recognize what chain of direction operates through various level. Objectives of
organization gives direction to how to tackle function o business so that organization gets profit
in company and enables to achieve organization mission. Flow chart shows relationship among

organizational functions, structure and objectives. To understand the organizational functions
and their correlation with business objective a good example of Tesco company. Tesco follows
matrix organizational structure which provides flexibility in business functions. In matrix
structure, particular employees works in operation based department, i.e. marketing & finance,
production and HR department. Thus, matrix structure supports organization function in well-
formed. It has drawback that order of command in hierarchy becomes conflicted. Organization
operation correlate with business objectives. Organization functions-
Product department: production department takes care of product or goods quality where
organization enables to take profit to retail larger quantity of goods to customers. This
department also keep customer demanded product, in that state organization enables to give
value of customers by offering desired product to customers (Oriesek and Schwarz, 2016). Thus,
organization enables to achieve business objective by generating wide scale profit from potential
customers.
Marketing department: marketing department plays vital role in organization because marketer
research in market and understand customer demand and expectation regarding product and
services. Marketer analyses information and inform to HR department and product department.
Thus, marketer leads profitability for company and supports to retain business position in
business market.
Human Resources: HR department also plays vital role in organization because HR department
plays various function in organization such as planning, organizing, coordination and controlling
etc. beside of this HR department recruits employees who stands organization expectation and
supports to achieve organization objectives.
Finance department: This department supports organization to save extra money which is
expenditures non-profit things (Quinlan, and et.al., 2019). Thus, organization leads profit in
company. Beside of this department gives budget to marketer where marker have to promote
product and raises sell of goods. Thus, department helps company.
LO3
P4 Identify the positive and negative impacts the macro environment has upon business
operations
Micro-environment also known as external factor which gives impact on organization
performance. Macro-environmental factors are political, economical, sociocultural,

technological, environmental, and legal factor etc. while micro environmental factors are
supplier, customers etc. both factor gives impact on decision-making and business objectives.
POLITICAL FACTORS: political factors are tax rates, current and impending legislation,
political instability, unemployment rate, economical condition etc. these factor gives impact on
organization performance. For example Tesco is British multinational united state company.
Organization gets positive impact of political factor because there side government recruits job
opportunity for those people who doesn't have job. Tesco gets golden opportunity to recruit
number of employees in company (Aithal, 2016). There side government supports organization.
Thus, company enables to lead the highest productivity of employees at workplace and enhance
demand of product at various countries. Organization gets negative impact of company during
trading because in UK policies an organization can't trade their products in limited countries.
That why organization unable to retail their products on large scale. Thus, organization gets
impact on economical scale.
ECONOMICAL FACTOR: This includes interest rate, tax rate, inflation, law policies, wages
and governmental activities etc. these factor give positive and negative impact on organization
functions. For example when during inflation time all product cost becomes high, in that state
number of customer prefer buy large number of groceries rather to dine out because groceries
price is low then outside. Thus, organization gets positive impact on organization because
customer purchasing power enhance and on the basis of power employees' efficiency also high
up to retail products. Organization offers high standard quality products to customers so that they
get values of their money and retain for long time. Thus, organization enables to alleviate
economical scale in business market. Organization negative impact on organization operation
when organization retails their products on different countries where they have to face taxation
issues beside of this product quality issues. Due to high taxes and product quality enhance cost of
product that why number of customer purchasing power decreases. It gives directly impact on
operation because they have to change their product quality according to other countries norms.
SOCIO-CULTUURAL FACTORS: Demographical changes gives positive impact on
organization functions such as Tesco focuses on customer demand and according to them Tesco
provides food and non-food products so that they enable to give value to their customers. Such
kind changes gives positive impact on organization function because employees enables to give
values to their customer by offering expected products (Likoko and Kini, 2017). Thus,

organization retains number of employees and reach to other new customers. Tesco gets negative
impact when customers become health conscious, and they start to demand organic food. In that
state organization unable to complete their demands which gives negative impact on employees
services. Thus, organization unable to take competitive advantage.
TECHNOLOGICAL FACTOR: new technology gives positive impact on organization operation
because new technology enhance working efficiency of employees at workplace. For example
Tesco usage online technology where supplies large quantity of product through online delivery
due to this organization enables to cover larger number of customers and covers supermarket by
offering goods and service on affordable price. This technology has drawback it enhances cost of
products due to these products and goods become costly. In that state customer like to buy
offline rather to online media.
LEGAL FACTORS: Government policies and legislation etc. are legal factor which gives impact
on organization operations. Tesco has to face employment law policies. According to this
policies' organization can't appoint employees on law wages and company have to give health
insurance policies etc. it is good opportunity for employees because they get high wage but it
gives negative impact on Tesco because company unable to hire large number of employees in
company at high wage (Alsaad, Mohamad and Ismail, 2017). Thus, it leads low productivity of
employees at workplace.
ENVIROMENTAL FACTOR: Natural and technological disaster, climate change, pollution and
occupational hazard etc. are environmental factor. Organization gets positive impact of climate
change because organization enables to different variety of product according to season which
enhance Purchas power of customers. Thus, organization enables to give value to their customers
and alleviate economical scale of company. Organization gets negative impact when polythene
ban in UK, in that state organization unable to supply their product in another countries. In that
state organization usage cloth bag to retail their goods but cost of that bags are too high. Thus,
organization unable to gain profit from customers.
L04
P5 internal and external analysis of specific organizations
To understand macro environmental factor usage SWOT analysis.
STERNGTH: Tesco is a multinational grocery company which exists in number one position in
supermarket. It has the highest revenue in super market rather to other supermarket chain. In

supermarket Tesco is dominant grocery company which has 27 % market share contribution in
business market. Beside of this organization has 68000 stores which operates in fourteen
countries. Organization has large market share in Asian market. Tesco includes different forms
of stores such as Tesco homes-plus, Tesco metro, Tesco extra, Tesco express, one stop and
Tesco superstores etc. thus Tesco has diversifies stores. Tesco has the largest employees'
productivity in company because organization appoint 743k job recruitment to candidates. Due
to this Tesco becomes Europe largest private employer company. Organization exercises wide
scale technology to enhance customers shopping experience. Recently Tesco addressed new
technology RFID (Papilaya, Soisa and Akib, 2015). Through this technology products can count
automatically. Organization also takes help supply chain management to supply product on
larger scale to customers. These are strength of company which supports organization to enhance
purchasing power of customers and achieve goal of company.
WEAKNESSES: Tesco unable to give effective performance in specific market due to
insufficient research of market. Organization usage club-card scheme in business without
notifying customers in that state organization have to face angriness of customers. Tesco usage
low cost strategy to cover customers but it reduces profit margin of organization. Thus,
organization gets negative impact on economical scale and doesn't get competitive advantage in
business market.
OPPORTUNITY: organization golden opportunity to expand business in emerging market such
as South Korea, turkey and Indonesia where organization enables to gain profit and promote
organization brad in global market (Hillary, 2017). Organization gets opportunity from internet
because through internet, organization enables to do trade with other business. In that state
company gets profit in market. Tesco provides home delivery services to customers through
online delivery. Thus, organization enables to cover large number of potential customers.
THREAT: Tesco provides their services in supermarket and hypermarket that organization gets
the highest position and enables to takes competitive advantage but Walmart is also raised their
growth and performance and can become the biggest competitor, In that state organization
position can threat. Organization faces economic crisis and credit crunches issues due to
government regulation which gives impact on organization's operation efficiency and
performance of stores in different places.

P6 Explain how strengths and weaknesses interrelate with external macro factors
External macro factors are changes in technology, competitors, socio-economic factors,
government regulation etc. these factor gives impact on decision-making and objectives of
organization. Such as-
Competitors: competitors plays vital role in organization because they help to alleviate market
share by cutting cost and develop efficiency, innovates new product along with advance services.
In simple words competition refers to offers the standard quality product or goods along with
affordable prices to customers. Competitor supports to influence decision-making because
organization applies various strategy to take competitive advantage in business market. In that
state number of employees gives the good performance at workplace so that Tesco achieves
mission of company.
Changes in technology: New technology gives positive impact on organization performance
because it enhances employees efficiency of working at workplace. Due to this organization
enables to give product and services facilities to customers. Manager of company makes some
strategy to cover global market from their products and retain customer for long time so that
company enables to take objective of company (Frösén and et.al., 2016). Organization gets
negative impact on decision-making because number of customer unaware of new technology, in
that state organization unable to retail their products which gives impact on decision.
Government regulation: it gives negative impact on decision-making because company unable
recruit large number of employees in company due to discriminable law. According to this law
organization can't hire employees at low wage that why organization can't hire large number of
employees at high wage. Lack of employees productivity at workplace manager enables to set of
strategy so that individual employees give the best performance at workplace. Tesco unable to
take achieve \organization objectives.
Supplier: organization usage supply chain management to deliver products to customers so that
organization enables to achieve large profit margin from customers. That's why manager
establishes good relation with supplier by providing facilities at workplace. Organization sets
selling goal and supplier supports to achieve goal of company (Bashir and Verma, 2017.). Thus,
Tesco enable to influence decision-making and supplier also supports to achieve organization
goals.

CONCLUSION
This report has been concluded business and business environment. This report has been
covered private, public and volunteer sector. In this report has been covered positive and
negative on macro environmental factors and macro environment impact on business operations.
In this report also has been covered swot analysis. Beside of this has been explained strength and
weakness correlation with external macro factor. It has been explained interrelationship of
various functions within organizations and their function correlates with organizational structure.

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