Assignment: Business and the Business Environment (Doc)

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Activity 1.........................................................................................................................................1
Overview of various organisation and their legal structure........................................................1
Explanation of each organisation and their details.....................................................................2
Carrying out various function within the organisation...............................................................4
ACTIVITY 2....................................................................................................................................5
Different environmental factors affecting performance of an organisation using PESTLE for
decision making on micro and macro factors.............................................................................5
Impact of economic aspects on availability of capital, purchasing power, import and export
with example...............................................................................................................................8
Suggestions and recommendation's to control external factors..................................................8
SWOT ANALYSIS and its impact on decision making.............................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
A business is a financial process that includes the proper development of product or
services and sell them with the suitable purpose of generating high amount of revenue and
customer's. This is deeply influenced by the environmental factors that will impact the operations
and thus, will help in proper assessment of business operations and other activities that will help
in improving the sales and thus will guide various organisations to place their functionalities.
The present report will lay a detailed analysis on different types of organisations that will help in
proper assessment of the firm's and their operations.
The assignment will include the details of operations and organisations, their background,
products and services they offer, their size, scope and legal sructure of the firm with details of
their stakeholders. Also, the interrelationship of their organisational functions are been discussed.
Apart from this the advantages and disadvantage of different organisational structure is been
analysed with suitable assessment of external business environment and their relation with
internal strength and weakness of a firm.
MAIN BODY
Activity 1
Overview of various organisation and their legal structure
In a market, a wide variety of organizations operate that helps in the proper management
of the operations and thus, will lead to the setting or following of different operation's that will
help in improving the overall performance of the organisation (Chang, 2016). The three main
subcategories of the organizations operating within the market are:
Public limited firm: These are the organization's which operates with the governmental support
and thus, will look after the providing of good quality services to the customers without any
special focus upon the revenue generation of the firm. For Example, Tesco plc. They have the
legal structure of Public Limited Enterprise.
Private Firm: This are the privately owned enterprise, that are owned by a single person or a
family. Their main objective is to provide high quality services to their customers and thus will
help in improving the sales and revenue of the organisation to a greater extent. For example,
H&M. It is a Privately owned firm.
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Voluntary firm: This are the organisations that operates for the welfare and betterment of the
people and thus, will lead to the proper management of people or public welfare operations that
are been undertaken by the firm. They fall under the trust or limited liability enterprise.
Explanation of each organisation and their details
Each organisation that is been taken in the consideration within the market will have their
own operational and structural details that will help in proper assessment of the operations and
hence, will lead to the proper rise in the effective planning of their business operations as per
their classification. Some major organisations are as follows:
Public limited Firm:
These are the firm's that operates in the public sector and are completely owned by
government. They work for the betterment of people and thus, look after the providing of high
quality products and services without any profit measure (Types and Forms of Business, 2019).
Their objective is to provide high quality products and services to their customer's. For example,
Tesco plc.
About Company: Founded in 1919, Tesco plc is a UK based multinational retail enterprise. It is
world's ninth largest company on terms of revenue. The Tesco plc provides the services
including the food-and-beverages, clothing's, groceries and other house hold items. Other than
this, the organisation operates in media, telecommunication and banking sector.
Size and scope: It is third largest retail based company on basis of ninth largest retailer as per
the revenue in the world. It has a Net income of about £54 million and revenue citation up to
£55 billion. It has a work force of about 476,000 operating employee's. The company currently
operates in seven countries and plans to expand in Alaska and Middle Africa.
Vision and mission: The vision and mission of the firm is to provide high quality retail and
other daily usage products that are consumed and provide people with effective and high quality
products on a reasonable cost.
Organizational and legal structure: Tesco plc is known to have the tall/ Hierarchical
organisation structure with the operations in various countries. It follows the legal structure of
Public Limited Company (PLC). Its shareholders involve the subsidiary firms operating with
Tesco plc, the investors and the employee's operating within the firm.
Private Firm:
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These are organisations that are technically owned by a single person or family. They
have the objective of operating their business in order to provide services to people in return of a
good amount of revenue that is been generated by the sales. For Example, H&M.
About Company: It is Sweden based fashion enterprise that is known for luxury and high
quality clothing's for Men, women and children's. The firm provides a wide variety of fashion
based products and services including apparels, foot wears, perfumes and accessories. They also
provide 'theme based' clothing's as per customer's requirements.
Size and scope: H&M is world's second largest retailer of Luxury clothing's and operates in 42
countries with over 4,500 stores. The firm is known to have the collective work force of about
132,000 people. It is also available online in about 33 countries. The firm has the net income of
about $2.1 billion.
Vision and mission: The vision of the organisation is to provide high quality apparels and
fashion accessories to their customer's on a reasonable price range. They aim to expand their
operations all over the globe.
Organizational and legal structure: H&M is a matrix organisation and all the decision making
is been carried out by the centralized body, consists of owner or CEO of the firm. This helps the
government to improve their governance structure. The legal structure of the organisation is
Private limited company.
Voluntary Firm:
These are the firm's that aims to provide the wellness to society through their services. Their
objective is to make the world a better place for living. They work for a special social cause and
work for the betterment of people and society. For example, Oxfam.
About Company: Established in 1924, Oxfam is a voluntary firm that consists of 20
independent charitable organisation's operating for a specific cause all over the world. Their
major focus is to eradicate global poverty, with improvement in health, education, sanitation and
other social conditions.
Size and scope: It operates in about 90 countries with numerous volunteer's and aims to expand
its services within western and Middle Africa
Vision and mission: The mission statement of the organisation is to effective diminishing of
global poverty with removal of any sort of social prejudices and provide supportive living
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conditions. They aim to provide basic human necessities and rights to bring positive change in
life of people.
Organizational and legal structure: They have a flat organisation structure and the decision
making or policy establishment is effectively maintained using the direct communicational
approaches. It is a non profitable organisation and has a legal structuring of a trust or limited
liability company.
Carrying out various function within the organisation
The different organisation structuring have the suitable planning of the policies and
business operations and hence helps in the better rise in the functionality of an organization in
most appropriate manner. The basic organisational structuring consists of three major structures:
Matrix, Flat and tall/ hierarchical. Each structure is placed as per the operational capabilities and
effectiveness of executing the business operations. These structuring or organisational charts
helps the organisation to carry out their operations effectively and reduce the glitches or issues
that occurs while operating. The various functions, which are carried out within different
organisational charts are as follows:
Matrix Chart: They are the interrelated operations and hence, are very complex and
discrete in nature. Organization like H&M look after these structure by implicating a suitable
strategies and setting up of various divisions that look after the functionality and operational
capabilities of the organisation. The management within each division will look after the proper
communication that will assists in improving quality of services and meeting of operational
requirements of the firm to a greater extent. It also helps in improving performance of firm.
Advantage: It helps in proper interrelationship of the organisation and helps in suitable planning
of business operations.
Disadvantage: It may lead to conflict and conditions that can cause failure of organisational
structure of the firm.
Tall or hierarchical structure: This organisational structure has the advantage of having
an intermediate on the operational level that monitors the operations and helps in carrying out of
the operations and thus, will help in carrying out the communication in most effective and
suitable manner. The hierarchy will help firms like Tesco plc in improving the monitoring and
segregation of job responsibilities that supports a good rise in carrying out of business
operation's and action plans in an effective way.
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Advantage: The presence of a hierarchic structure will improve the monitoring capacities and
enhancing the communication process of the firm and maintaining performance of organisation.
Disadvantage: The communication is relied on the effectiveness of intermediate level. If they
fail, the whole organisation tends to suffer.
Flat structure: This is the simplest organisational structure with no intermediate
(Quinlan and et. al., 2019). It facilitates effective communication on a direct mode and hence
help in improving performance level of the firm like Oxfam.
Advantage: As the simplest structure, it facilitates an extensive and effective communication
among the members and thus, will help in proper assessment of operations that are been carried
out within the organisation.
Disadvantage: sometimes, monitoring the operations like role allocation and funding becomes a
hectic and time consuming process affecting the performance of the organisation.
On the basis of these assessments, the organisation can say that organisational structure
supports proper planning of business operations and activities. It will help in proper rise in
maintaining the facilities that will help an organisation, regardless to industry or sector in which
they operate, will help in improving the overall performance of the organisation and thus, will
help in suitable placing of operations carried out by an organisation like Tesco plc, H&M and
Oxfam.
ACTIVITY 2
Different environmental factors affecting performance of an organisation using PESTLE for
decision making on micro and macro factors
The business or a trade within an organisation is deeply influenced by the environmental
factors that persist within an organization or enterprise (Kljucnikov and et. al., 2016). The
environment or operational conditions will help in proper planning of policies or strategies
accordingly. There are basically two types of environmental conditions: internal and external
also known as micro and macro environmental factors respectively. The external environmental
factors will impact the operations of the organisation and hence will support operational
capabilities and hence, will impact the operations of organisation in a most effective way. For
example, the external environmental factors of Tesco plc can be monitored by PESTEL analysis
which is as follows:
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Political Factors: The political factors includes the governmental operations which are
required top be looked after by an organisation. The political instability, setting up of excise
duties, custom rates etc within the country of its operation. Organization like Tesco plc is
required to look after this factor and its elements like Brexit to effectively carry out their
operation.
Positive impact: A supportive political condition or environment will help in looking after the
proper management of the operations that are been carried out within the firm. This will act as an
effective help for the selected enterprise.
Negative Impact: Non supportive behavior from the political body within an organisation will
lead to the improper functioning of enterprise and may cause its failure (Hair Jr. and et. al.,
2015).
Economic factors: the financial conditions that are prevailing within operating country
of selected organisation will lay a deep influence on the operations and functioning of the
organisation. Elements like labor cost, minimum wage rate, fluctuations in exchange rates are
some bigger economic factors that can influence the performance of Tesco plc.
Positive impact: positive economic elements like rise in GDP, financial, stability on global;
level and rise in minimal wages will help in proper assessment of the operations that will help in
proper execution of the business operations of the organisation in most effective manner.
Negative Impact: the increase in the cost or raw material and other business operations have
raised the product pricing and thus, have reduced profit of the firm.
Social Factor: The customer's perception towards the product or service and the
shopping trends existing in the market will impact the sales of the organisation and thus,
influence the overall business operations within an enterprise. As with the passage of time,
people have started preferring one stop shopping, Tesco plc have emerged as a major retail
service provider in market.
Positive impact: A good social perception of the customer's towards the firm will act as the
major service provider within the firm. This will also play a very important role in improving the
sales and operations of the organisation (Charter, 2017).
Negative Impact: if the firm fails to convince its customer's for the delivery of quality services
and make suitable changes as per demands of customer's may lead to failure of the firm.
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Technological Factors: The technological advancement will help in the proper planning
of the operations which will help in improving the operational capabilities and effectiveness of
the firm. In order to embrace the changes in customer's trends and shopping practices, Tesco can
opt for online selling and e commerce facilities to maintain the connectivity with their customer's
in market. Sales through the company's website and incorporating RIFD technology are some
measures which will help in proper improvement of sales and operations of Tesco plc.
Positive Impact: This will save time and efforts of the organisation and customers to sale
products and make purchases. Also, proper assessment of the ongoing market trends can be
identified by the firm by analyzing online purchase practices (Kolk, 2016).
Negative Impact: Any sort of technological glitch or failure will impact the organization's
performance on an adverse level. Also, the data security of RIFD information is a big challenge.
Environmental factors: The rise in the environmental concerns and demands of the
customer's to use the organic products has made the organisation like Tesco plc top adopt
suitable measures like providing environment friendly products and reducing the use of plastics
and other harmful components within the operations and manufacturing processes that are been
carried out within the firm. Also, Tesco plc has opted many renewable energy sources in order to
reduce carbon footprint and usage of CFC's within the firm.
Positive Impact: following of the measures leading to fulfillment of environmental concerns
will lead the firm to maintain their performance. Also, it will improve the CSR measures and
reputation of the organisation.
Negative Impact: Failing to maintain environmental standards and policies will tarnish the
image of Tesco plc, affecting its business.
Legal factors: The changes in the law or policies, regulations by trade unions and other
legal obligation will impact the performance of the organisation. Legal factors are required to be
followed by Tesco plc in order to have proper operations and reduce any sort of discrimination at
work place. Also, following of operations will lead to following strict code of conduct within
organisation (Laudon and Traver, 2016).
Positive Impact: Following and maintaining the code of conduct and quality obligations will
help Tesco plc to sustain product or service quality. It also helps in improving performance of
organisation.
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Negative Impact: Failing to meet any law or legislative measure within the firm will impact an
organisation negatively, impacting its performance.
Impact of economic aspects on availability of capital, purchasing power, import and export with
example
The economic aspects of an organisation like interest rates or exercise duties will impact
the setting up of business operations. This will impact the trade relation of an organisation on a
higher level and thus will also influence the buying capacity of customers. The external
environment factors will help in proper assessment of operations that will help in improving
performance of Tesco plc:
Political: As the government will be deciding and planning the interest rates or excise
duties within the organisation, they will impact the sales and setting up of operations within the
organisation and thus will influence operations and other facilities within the firm. Looking at
these, the firm is required to maintain a proper policy and strategy that will help in maintaining
international trade(import/export), increasing buying power of customer and getting suitable
funds for business operations (Hamilton and Webster, 2018).
Environmental: following the environmental policies and regulations will help the firm
to place the service pricing accordingly. Other than this, looking at rise in environmental
concerns, investors will provide suitable funding or capitals and carrying out of the operations
that will impact the importing and export of goods and services by Tesco plc. Also, this
awareness will encourage customer to buy more and more environmental products and services.
Legal: Following legal obligations will help in improving the facilities and thus, increase
the sales and following of business activities effectively. Different laws and obligations are been
carried out within the firm that will influence trade practices within the firm and hence, improve
the gathering of business funds and enhancing buying capacity of customers.
Suggestions and recommendation's to control external factors
Different measures can be taken within the organisation in order to improve the sales and
make suitable decisions to have a good control over the external factors are:
 Suitable market research can be carried out within the organisation that will help in
improving the sales and establishing a store within a country or market and reduct
negative economic effect on firm.
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 Tesco plc can opt for analyzing different business and employ ability acts or laws that
will help in enhancing the quality of operations and thus, will lead the organisation to
mitigate any sort of legal or social restrictions (Hillary, 2017).
 Effective data security tools can be incorporated within organisation that will influence
the sales and increase customer and employee's trust level.
 Organic and environmental friendly measures can be incorporated within Tesco plc
which will improve the sales and setting up of business operation's within the
organisation.
SWOT ANALYSIS and its impact on decision making
SWOT ANALYSIS
Strength Weakness
 Tesco plc is a very well known name in
the European market and is known for
its effective customer service. This
provides it a competitive advantage
over its rivals.
 It has a wide product portfolio, which
makes it enables it to cater a wider
range of customers. It also helps in
improving and diversify its revenue.
 The subsidiaries and other supporting
organisations working with Tesco plc
are operating poorly and had lead to a
crisis condition that has affected the
organization's performance on global
level.
 The firm is largly dependent on the
stores of UK and other European
countries that has influenced its
performance in nation of other
continent.
Opportunities Threat
 Tesco plc, looking at the change in
demands of its customer's on constant
manner, can opt for strategic alliances,
agreements or acquisition in order to
meet its operational needs and attract
more and more buyers in the target
market countries that will influence the
 Economic recessions, fluctuation in
currency exchange rates and reduction
in number of sales and purchasing
power of buyers in many countries will
impact the sales and profitability of the
organisation in a very adverse manner.
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sales of the organisation in most
effective way. This can also include the
join venturing approaches within the
under performing market.
 Online shopping service with proper
home delivery facility will help the
organisation to attract and cater more
and more customers that will help in
improving the sales and thus will lead
the organisation to improve overall
performance of the firm.
 Also the rise in competition in the local
as well as international market will
influence the sales, marklet share and
revenue generation of the organisation
to greater extent. Thus, the organisation
is required to look after the operations
related to selling of goods and services
in much effective way.
Based on this analysis this can be said that the strength and opportunities of Tesco plc are
more feasible as compared to its weaknesses and threat factors. Some measures can be taken
that can turn its strengths and weaknesses into feasible opportunities and deciding suitable
policies such as:
 Suitable market research can be placed within the organisation that will help in
improving the sales and overall performance of the organisation.
 Joint venturing will help in not only meeting the customers needs but will also help in
maintaining the foothold within a new market (Prajogo, 2016.).
 Tesco plc can also work upon the improvement on the setting up of subsidiaries. This will
be a major contribution in improving its profitability.
 More emphasis can be given to stores in other countries to bring them in level to Tesco
plc outlets in UK and European countries.
CONCLUSION
On the basis of the assessment that is been carried out, this can be said that the business is
a very extensive process that is required to managed by an organization or individual. The
assessment of its environmental factors will help in improving the sales and thus, will enhance
the quality of operations and thus will lead the firm to improve the performance of organisation.
Various types of the organisation in different organisations are been analyzed with the
assessment of their size, scope, organisational and legal structuring. Also, the effectiveness of
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these organisational structure in achieving the organisational objectives are analyzed. Suitable
pestle analysis and SWOT is been carried out within the organisation that will help in proper
assessment of micro and macro environmental factors of the operation and thus, will lead the
firm to have a suitable growth improvement in performance.
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REFERENCES
Books and Journals
Chang, J.F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
Hair Jr, J.F. And et. al., 2015. Essentials of business research methods. Routledge.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Kljucnikov, A. and et. al., 2016. The entreprenurial perception of SME business environment
quality in the Czech Republic. Journal of Competitiveness. 8(1).
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Laudon, K.C. and Traver, C.G., 2016. E-commerce: business, technology, society.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171.
pp.241-249.
Quinlan, C. and et. al., 2019. Business research methods. South Western Cengage.
Online
Types and Forms of Business. 2019. [Online]. Available through:
<https://www.accountingverse.com/accounting-basics/types-of-businesses.html>
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