Business and the Business Environment

This document provides an overview of different types and purposes of organisations, including public, private, and voluntary sectors. It also explains the size and scope of different organisations and the relationship between organisational functions. Additionally, it discusses the positive and negative impacts of the macro environment on business. The document is relevant for students studying business and the business environment.

Business and the Business
Environment

Table of Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
P1 Explain different types and purposes of organisations; public, private and voluntary
sectors and legal structures.....................................................................................................3
P2 Explain the size and scope of a range of different types of organisations........................5
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure..................................................................................7
P4: Positive and negative impacts on the macro environment that has upon business..........9
P5: Internal and external analysis of specific organisations................................................11
P6: Explanation of strength and weakness interrelated with macro environment...............12
CONCLUSION........................................................................................................................14
REFERENCES.........................................................................................................................15
Books and journals...............................................................................................................15

INTRODUCTION
Business can be defined as a unit which generally deals in production services where
this sell the products and services to customers who want them for satisfying their needs.
Business environment is continuously changing their number of organisations which have
participated in it.in this report there will be discussion about the different type of purposes of
the organisation which are related to private public for voluntary sectors and their legal
structures.in the beginning of the report there is also discussion about the size and scope of
the different type of organisations(Erasmus, Strydom and Rudansky-Kloppers, 2016). This
report is also consists of explanation about the relationship between different organisation
functions and their working with their objectives and structure.in the middle of the report
there will be discussion about identification of positive and negative impacts of macro
environment upon the business with the use of pestle analysis. There is also identification of
internal and external analysis of some specific organisation to identify the strength and
weaknesses.in the end of the report there will be discussion about the strength and
weaknesses and their interrelatedness with external factors.
MAIN BODY
P1 Explain different types and purposes of organisations; public, private and voluntary
sectors and legal structures
Profit organization: These are those organizations which have main motive to earn
the profit. Theorganization always develops their infrastructure and other facilities for
earning the profit within the marketplaces. Example of these types of organizations
isSainsbury, Apple, Facebook many more which have the main motive is to earn a profit by
providing their goods and services.
Non-profitorganization: These are those organizations which have the main motive
is to serve the people by their goods and services.it journal include the government awesome
legal institute which have to stop the public with no intention of profit or earning money.
In business environment there are number of organization which is public, private,
voluntary and having different objective as well as purpose. Some of these are mentioned
below:
Public sector organization: It includes that organization which is governed by the
government of the nation or the government has some share within the organization(Hamilton
and Webster, 2018). Theseorganizations are generally managed by the private sector but all

functioning and shares are listed to the government. For example farmer credit system is a
government organization within United States of America.
Purpose
The main purpose of formation of farmer credit system is to provide the credits facilities to
different agriculturist inform of loans are support in a competitive price against commercial
banks for agriculture services.
Objective
Help farmers in raising the capital for cultivating their land and doing agricultural activities.
Features
Feature of public organization is that they provide the services to their customer without
intention of getting profit. They are like nonprofit organization but for running the operations
and increasing the investment they have to generate a small amount of profit which is also
used in welfare of customers and society.
Private sector organization: Private sector organizations are those which are run by
the individuals or by the use of corporate company. Private companies have both service as
well as profit earning object objectives. Theorganization which used to form for nonprofit
objectives are called nonprofitorganizations and the profit organizations are called companies
joint ventures partnerships and sole proprietor. These organizations are generally listed with
legal authority of the nation where the organization is running its operation(Prajogo, 2016).
For example, Tesco is a leading British multinational joint in retail sector where it provides
different products and services to its customer.
Purpose
The main purpose of Tesco is to provide goods and services to its customer where it can
increase its market share as well as profitability within the market for its smooth functioning
and long running of operation.
Objective
The main objective of test is to provide the services to its customer where it can satisfy their
needs and wants.
Features
The key feature of private sector organization like test century is that they provide
different innovative and new technological product to the market where market can grow

easily as well as the activities related to economic development and social welfare can be
fulfilled.
Voluntary sector organizations: these are those organizations which are directly
related to the welfare of the organization and provide the goods and services for the welfare
of society. These are generally nonprofit companies who provide services to the society and
the people of the society where there is no intention of earning money. For example, BMGF
is a multinational company which is famous for its social welfare schemes and fund donation.
Purpose
The main purpose of the organization is to provide fund to the needy and poor people
of the world and those people who want to develop a bring change within the
economy(World Bank, 2016).
Objective
To bring the stability within the world is the main objective behind the formation of
this company.
Features
The key feature of voluntary sector organizations or nonprofit organization is that
they provide services to the customer where there is no intention of profit or growth of
company. They only believe on social welfare as well as providing the services to their
customer without any interaction.
P2 Explain the size and scope of a range of different types of organisations
There are various types of organisation within the marketplace. These all organisation
have different size scope and objective which are different from each other. These
organisations are classified on their size bases which are micro small medium send large.
Micro/small: it includesthose organisations which have not more than 10 employees
within the organisation and are operated at a low level. These organisations are journal is
meant for earning small amount of profit with the easy available resources in nearby society.
Medium scale: these are those organisations which are formed for providing the
goods and services within the market at a high level then small and micro organisations and
low level than large scale organisation. These organisations have journal employee 100 to
thousand. They also compete with the market where they used to sell local products to local
society.

Large scale organisation: these are those organisations which include high
investment as well as good level of employees. Operate at a bigger level which has more than
thousand employees as well as global operations(Lee., 2017).
Basic Micro/small Medium scale Large scale organisation
INTRODUCTION Small scale enterprises
are those which have
low level of capital as
well as employees
within the organisation
and operate in local
area. For example,
MatefileThis is
operating at low level
where provide
designing solution to
employees within UK.
It is a software
solution provider
which is operating
at a medium skin by
providing the
software solution to
different companies
Sainsbury is a leading
British retail joint within
UK which is operating in
retail business by
providing goods and
services at different
departmental stores within
UK as well as at global
level.
GOAL To earn regular profit
for operating the
business.
To earn
profit as well as
growth for
expanding the
business
operations(Trad and
Kalpić, 2017).
To increase the profit as
well as continuous
development within the
organisation for bringing
the productivity and global
growth.
OBJECTIVES The main objective is
to provide designing
solutions to the
customers.
The main objective
is to provide the
software solutions
to customers for
earning money and
expanding business.
The main objective is to
earn the profit as well as
global growth where
company can increase its
operation and provide
different goods and
services.
MARKET
SHARE(BUSINESS
VOLUME)
Low level of market
share.
Medium level of
market share
According to data
presented by company it
have 30% market share
with in UK.
NO.OF
PRODUCTS
Single product 24 types of products Various type of production
services with different

/SERVICES and services departmentalization.
LEGAL
STRUCTURE
Sole proprietorship Joint venture Individual company
STAKEHOLDERS
SIZE
Customer and owner Customer, supplier ,
owner , invertor
Size of stakeholders is
quite large which includes
government, shareholders,
investors, suppliers,
employees and many
more.
EMPLOYEES
NUMBER
10 100 150000
PROFIT VOLUME Small Medium In billions
SALES/TURNOVER $10000 $100000 $5000000
GEOGRAPHICAL
AREA
Local area UK Whole globe
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure
Is important for every organization to establish proper relationship between different
departments and function of organization this will help the firm in getting maximum
advantage in the competitive environment as well as boost the productivity and
profitability(Foss and Saebi, 2018). In the context of Tesco, companies operating at different
level it also sell its product to different economy.so it is important for the organization to
establish good cooperation between different departments and functions for achieving the
objectives and establishing a proper structure. Some of these are mentioned below:

Finance and marketing department: there is a clear and effective relationship
between the finance and marketing department of Tesco. This is because finance department
actors in backbone of the organization as well as marketing department perform the function
for promotion of the product and services to the organization. It is important to set a good
relationship between finance and marketing department. For this test to use a better
corporation strategy between both of the department where finance department provide
finance to marketing department for performing its functions and attracting the customer
towards the organization as well as marketing department also enable the finance department
about the trends and potential of the market which help finance department in easily
allocation of the fund to different other department of the organization(Ruël, and Wolters,
2016).
Marketing and HR department: human resources department is the important part
of every organization as it provides employees for working where it also enable and help the
needs and requirements of the employees for performing the different task. In context of
Tesco, it always follows the good relationship between marketing and HR department. This is

because HR department provide the employees to the marketing department where they can
perform the activities of promotion and advertisement with the use of this work force. In
marketing department has the HR department in identifying the trends going within the
market and hiring those types of employees who have quality to perform the different task
assigned to them which are related to marketing.
HR and finance department: human resources department and finance department
have a critical relationship within the organization which is the backbone of the organization
for the success. In context of Tesco, company use different strategies which will help it in
maintaining the relationship between HR and finance department. For paying human
resources within the organization it is important to establish the proper relationship between
finance department and HR department where both the department co-ordinate with each
other and provide adequate information about the compensation for their employees(Hillary,
2017). In Tesco human resources department provide the information to the finance
department about the performance and amount which have to be paid to the individual who is
working within the organization.
Functional structure: Functional structure is the most common organisation
structure which is adopted by different organizations. It is also following the structure
organize different groups according to their skills and abilities.

So, from above it can be seen that effective communication and function within the
organization can be established between different departments for gaining the success and
achieving the Bose within the time.
P4: Positive and negative impacts on the macro environment that has upon business
The PESTLE analysis help the company to tackle the macro environment, the analysis
tell us that there is dual impact i.e.; positive and negative impact of the analysis. They are as
follows:-
Political factor: This are the factors which affect the company because of the change
in tax rates, political system, government regulation and many more which can impact the
company operation.
Positive impact:With some tax benefits in certain investment, and free trade services
to some business, it has bought positive impact on TESCO. The company is an old one so
they are getting political benefit as they are well known establishment so the contacts are
good.
Negative impact:due to increase in taxes, the cost of product is increasing which is
not good for the company. And with change in political policies the company get affected
negatively sometimes.
Economical factors:This factor includes the inflation rates, foreign exchange rates,
GDP rates and population which can impact TESCO directly. Economical factor relates to the
component which helps in determining the economy of the country(Peracek, Noskova and
Mucha, 2017).
Positive impact:with the increase in population in UK the demand for product also
increases which is a good thing for TESCO.
Negative impact: Interest rate in UK keeps on fluctuating so it is very possible that
TESCO have pay interest amount which is due, it can hamper their progress.
Social factors: It is the study of society and what they want, TESCO is trying to
study it all the time and they are trying to follow the trend and provide the service
accordingly(Aithal and Aithal, 2016). To do well updates according to the society needs is
required.

Positive impact: TESCO is analysing the public demand and they are trying to fulfill
them by meeting their wants.
Negative impact: Plus size clothing has become the need of the hour as obesity in UK
has increased, resulting in change in plans for TESCO.
Technological factor: The changes company need to made with regards of
technology comes under this. Company need to use updated technology if they want to do
well and compete in the industry(Alotaibi and Liu, 2017).
Positive impact: TESCO always try to set trend by introducing the new technology.
By doing that they are getting competitive advantage for a period of time. They realise the
technology is the most essential part of business environment and it can help in increasing the
productivity of the company.
Negative impact: Sometimes it affect the company as TESCO invest in costly
machines and they also spent a fair amount in R&D which can reduce the profitably by
increasing the cost of the product.
Legal factors: Legal factors refer to the policy set by the economy, their rules and
regulations which a company need to follow if they want to work in that country(PESTLE
Analysis for Tesco discusses its Business Environment, 2019). This involves different
legislations such as labelling act, minimum wages act, fair packaging, consumer protection,
right to informed, minimum wages and others which are important to continue a business.
Positive impact: TESCO take care of legal policies and follow all the guidelines
properly, which helps in gaining the trust of the public and retaining them in the process.
Proper information is provided to the customer regarding the product so that their is no gap.
Workers and employee are paid reasonably as they follow minimum wage act(Gino, 2018).
Negative impact:It can happen that organisation sometimes fails and discriminates
employee which is not correct(Safar, Sopko, and Poklemba 2018). It may hamper the
productivity. Not following the minimum wage guidelines may also affect the firm. The firm
need to see to it and if they fails to do any legal factor it may result in high penalty and
reputation loss also.

Environmental factor:The companies in UK and their citizen are concerned about
the environment of the country and TESCO is no different. The company gives importance to
sustainable development as they know that they have CSR towards the society.
Positive impact: TESCO is working on go green initiative, using resources to its full
potential, trying to use renewable resources. It will help the company to gain goodwill and at
the same time it will improve the environment(Alotaibi and Liu, 2017).
Negative impact:The company is harming the environment by doing industrial
activities which is not a good sight.
P5:Internal and external analysis of specific organisations
Internal analysis: It is a similar organizational process undertaken by the company in
order to successfully handle their business and make profit. The internal and external analysis
on the basis of Tesco is determined below:
Strength
 Tesco is one of the biggest retailers of
United Kingdom that offer daily utility
item, groceries and shopping material at
discounted prices. The price war of
company with other supermarket retailer
has significantly helped them to enhance
the footfall leading to high generation of
revenue. This fund is further used to carry
out portfolio investment successfully.
 The internal manager as well as staff of
company focuses to use the advanced
technology in order to enhance the
shopping experience of their potential
customers. Like, desirable software are
used to maintain the record of customer
and carry out active billing. Similarly, to
maintain plenty of inventories RFID
system is used by the entity so that
supplier remains updated about stock and
Opportunity
 Digital marketing tools help the company
to reach out to the mass market
successfully at real time. It is vital to
constantly work on the online platform
and appeal interest of existing and
potential customer through online
platform. Online catalogue as well as free
delivery of the products acts as a stimulus
in order to appeal the interest of target
market(Wasilewski, 2016).
 As company gain maximum market share
from its home country that is United
Kingdom so to build the desirable image
in the other parts of country the manager
of Tesco can form strategic alliance or
joint venture with other competitive. This
is the better way to reach out to the
international market and carry out

refill them on time (SWOT Analysis of
Tesco, 2019).
operation by taking calculative risk.
Weakness
 Being discounted store Tesco company
gets low profitability margin which
further affect the operational performance
of company (Sharafizad and Coetzer,
2016). This led company to control their
required expenditure on activities like
research and development which can
affect overall performance.
 Huge size of company has affected its
performance causing existence of
financial error as the company need to
incur credit expenditure continuously in
order to carry out the operations of
company. Thus, to attract desirable
investment it is very essential to
overcome the financial errors and carry
out appropriate methods to enhance the
inflow of cash.
Threat
 External condition due to political or
economic factor can directly affect the
performance of large organisation like
Tesco. During the tenure of British exit
Tesco faces immense decline due to the
imposition of various new tax reform and
increase in the prices of food item due to
inflation.
 The giant competitors of Tesco like Aldi,
Sainsbury and Walmart are growing with
great pace leading to threat on company
in terms to secure their customer base.
SWOT Analysis of Sainsbury
Strength
 Sainsbury is one of the oldest and
well known supermarket stores that
have effectively extended operation
all over UK by selling quality product
through its retail store or online
platform.
Opportunity
 Digital media acts as an opportunity as
company can effectively expand its trade
zone and can immediately cater the
changing requirements of customer.
Along with that results are generated at
real time due to which favourable

 The company offer huge employment
and training opportunity for its
employees that has effectively helped
to carry out diverse portfolio
investment successfully.
modifications can be promoted.
 Company can take the advantage of their
economies of scale in order expand the
operation in developing as well as
developed part of countries.
Weakness
 There exist intensive competition and
price wars within retail sector. But it has
been evaluated by the competitors that
company sell its products at preferable
high prices. This factor can confine the
profitability of entity.
 Different external factor like change in
the government policies, environment
condition and economic policies can too
affect the existence of firm. Like,
existence of Brexit affected the
profitability of company.
Threat
 Sainsbury company faces fierce threat
from competitive rivalries like Tesco,
Morrison, Lidl and so on. Being a big
discount store can affect the position of
entity.
 As these company operate in turbulent
environment due to which changes or
adoption of the hanging policies act as a
threat to company because reluctant
nature of employees towards changes can
affect the performance of company.
P6: Explanation of strength and weakness interrelated with macro environment
Interrelation between strength and weakness with macro environment
Basis Strength Weakness
Political The company have stable
political connection which
helps them to do well. UK
political factors don’t fluctuate
with a rapid speed so that’s
good for the company(Alaloul,
Liew and Zawawi, 2017).
If the government changes, it may
impact the operation of the
company. It may affect their
productivity and reduce the profit
also if the govt. Introduce some
policy against company interest.
Economical The inflation rate in UK keeps
on reducing as it is a
developed country. So that is
good for a company. Interest
rates are also constant which
The organisation need to be ready
to accept changes. Interest rate can
change overtime which may result
in new challenges to the company.

help their cause
Social Company works on analysing
the public and providing them
products accordingly. Good
relationship with the public
can help TESCO to get more
business and can results in
more development and growth.
Changes in trend and culture may
impact the company as the company
had to change their policy
accordingly which is difficult. The
reason is company is a large scale
company and its not easy to change
their operation in short span of
time(Rialp-Criado and
Komochkova, 2017).
Technological TESCO believes in to be a first
mover that means introducing
latest technology, which can
give them competitive
advantage
Cost can be high due to expenditure
on R&D and technology which may
result in increase cost.
Environment TESCO look forward to
practice sustainable
development which is good for
country. They are using
renewable resource and
promote optimum utilization
of resources
Industrial activities can impact the
environment and can make the
condition worse.
Legal Company try to follow
legal rule and regulations.
They try to a gain advantage
through it. As by following
govt. They can get public
goodwill which is good for
company (Abbas and Ul
Hassan, 2017)
.
Not following the rules may result
in heavy penalty and it may hamper
the reputation of the company.
CONCLUSION
It can be concluded from the above mentioned report that it is essential for the
organisation to identify the different branches within the environment for gaining the

maximum advantage and identifying its competitive rivalry. There is various type of
department within the organisation and it is important for the firm to maintain the cooperation
between all the HR finance and marketing department, where it can gain the maximum
competitive advantage. It is also analysed that there are number of factors like external and
internal which must be analysed by the use of SWOT and pestle analysis. This will help
company in gaining and identifying these factors and reducing their impact on it.

REFERENCES
Books and journals