Business And The Business Environment Rate Assignment

Business and the
business
Environment

INTRODUCTION
Business environment is a combination of external and internal factors which includes
supply, customers, demand, owners and many more. There are some activities present in the
environment which is developed by the government such as technological changes, exchange
rate, governmental policies and many more. As per the mentioned scenario, Merill Lynch is a
private investment organization which was developed by Charles E. Merrill in 1914. There are
some potential clients of Merill Lynch which includes private, public and voluntary organization.
TESCO is a private organization which mainly deals in household and grocery products. In case
of public organization, NHS is chosen as the base company mainly perform its functions in order
to enhance the standard of living. At last, Oxfam is chosen for the voluntary organization. In the
present report, various topics are going to be covered which includes scope as well as size of
organizations along with its inter-relationship with departmental functions. In addition to this,
PESTLE and SWOT analysis are going to be examined in detail.
TASK 1
P1. Explanation of types, size and scope of different organization
Public Organization: A public organization is the one in which government has the
absolute control and ownership. The products or services provided by such entities are for
creating a strong brand image. The objective is to help the society for their betterment of the
people living their (Al-Saleh, and Mahroum, 2015). With regard to this matter, National Health
Service (NHS) has been chosen which is a public organization that provides healthcare services.
Since, it is handled by government, services are given for free to people.
Objectives: NHS has motive of providing health related services to all the people without
any charges. It is free of cost for all the people. Further, it has aim of making the lives and health
of individual better.
Legal structure: In this, the decision making power is in the hands of government. All of
their decisions are implemented by state or central government for the conduct of activities
smoothly.
Stakeholders: The stakeholders of NHS include government, financial institutions,
patients, local authority, trustees, etc. who are capable of influencing the business substantially.

Private Organization: This kind of organization comprises of sole proprietorship,
partnership, company, agency etc. The objective is to make profit as opposed to public
organization (Andersson, Forsgren, and Holm, 2015). There is no control or intervention of
government in the business. TESCO has been chosen in the category of private organization. It
deals in grocery products.
Objective: TESCO is a multinational entity dealing in groceries in different nations. It has
headquarters in Welwyn Garden City, UK. The aim is to produce goods as per the expectations
of customers to provide them at economical prices. This is to create a leading position in
marketplace and achieve goals.
Legal structure: The decisions are made by directors or CEO who are the top authorities
of an organization. Every employee is required to follow the decisions. However, personnel may
contribute their ideas and views in decision making.
Stakeholders: It has stakeholders like investors, employees, customers, government,
community etc. who affect the performance of the organization.
Voluntary Organization: It is controlled and managed by the members who has
membership. The objective is not to make profit hence, it is also called non-government
organizations (Apăvăloaie, 2014). In this report, Oxfam has been selected which was established
by Cecil Jackson Cole in the year 1942. It has purpose to eradicate poverty from different
countries of the world.
Objectives: Eliminating poverty from the society is the main motive for which it has been
formed. It emphasizes to increase standard of living of people living in UK so that they need not
go through the situations of poverty.
Legal structure: It has trustees and other higher authorities who are responsible for
making decisions regarding the organization. These should be about development of people and
its staff working in there.
Stakeholders: The stakeholders have huge role in affecting profit of organization (Bah,
and Fang, 2015). Some of these are staff members, beneficiary, founder, project team, customers,
sponsors and so on.
P2 Explain size and scope of the organisation
There are three types of organisation i.e. public, private and voluntary. Size and scope of
these are discussed below -

Private organisation
TESCO is a British store dealing with groceries and merchandise. Headquarters of
TESCO are situated in England. This is the third largest retail business of the world. This
company has the ability to attract many customers and generate high revenue (Belás, and et.al.,
2014). This organisation has a wide scope in market because it is providing quality products to
people. This is operating in many countries and it has around 500,000 employees working in the
organisation.
Public organisation
NHS is a public organisation which is providing health services to people. This
organisation started in the year 1948 in England. This has a goodwill among people as this
provides free treatment to permanent residents of UK. This company has great scope in future as
it is planning to expand medical trainings in the organisation.
Voluntary organisation
Oxfam is a voluntary organisation that is founded in the year 1995. this was formed by
different group of semi government and independent organisations. The main objective of this
organisation is to work together and removing global poverty. This is done by helping poor
people across the world. This organisation has various volunteer services and the main objective
is to give a long lasting solution to poor people (Bocken, and et.al., 2013). The scope of this
organisation is vast as the main motive of this is to help poor people. This company focuses on
contributing in welfare of society and removing global poverty. This organisation has
opportunity to organise programs and camps to help poor people across the world.
TASK 2
P3. Relationship between various organizational functions
Organization have different kinds departments which perform together for attaining goals
and objectives. These may be marketing, human resource, customer service, finance etc. Every
department should be assigned individual tasks. With regard to TESCO, the company provides
retail service, brokerage and security dealings (Boons, and Lüdeke-Freund, 2013). These
services are completed by working effectively with each other by forming a co-ordination.
Hence, interrelationship in TESCO with all other departments has been elaborated below:

Sales department and marketing department: Sales department is responsible for
implementing policies in order to make high sales to customers. It uses techniques and
approaches for carrying out these activities. It has direct nexus with marketing department as this
unit helps sales unit to meet its sales targets with the application of marketing strategies in order
to attract customers. TESCO can achieve its goals smoothly through this.
Human resource department and IT department: Employees are required by every
organization in order to achieve the goals and objectives (Breckova, 2016). It is the responsibility
of HR department to assess the need to appoint skilled candidates who are capable of meeting the
goals efficiently. When it comes to IT department of TESCO, it builds software which can be
used by workforce in order to increase their performance. It is helpful in enhancing profitability
and productivity.
Market department and Finance department: Marketing team of TESCO has objectives
related to identifying preferences, tastes and demands of customers. The team member work
their ways to achieve these goals so that maximum satisfaction can be provided to customers
(Cai, and Yang, 2014). Finance department is responsible for making budgets as per the
information provided by different units which can be utilized by them to make profit and
mitigate losses.
TASK 3
Positive as well as negative impacts of macro environment
TESCO which is a private organization chosen as the base company in this report. It is
one of the biggest leading British multinational company mainly deals in general merchandise
retailer and groceries. Business functions highly affected by ample number of elements included
in both micro and macro factors. Macro factors are the one which mainly exists outside the
business organization and are not controllable in nature. These are the factors which influences
the decision making process and affects its strategies and performance (Charter, 2017). Some of
these factors includes economic, legal, social, political, technological and environmental.
PESTLE analysis of TESCO are going to be discussed in detail as follows:
Political factor: It refers to the factor which involves various governmental policies,
environmental law, labor law, tax policy and so on. These political factors affects the business
functionality in positive and negative manner. In the present context of TESCO, it has been

identified that it is a company which majorly deals in all over the world which includes Japan,
USA, Germany and many more (Erasmus, Strydom, and Rudansky-Kloppers, eds., 2016). For
instance, governmental policies and regulations of each and every country are different from
each other which might affect the revenue as well as profitability of the company. It is
considered as one of the most effective factor which influences the overall performance of
TESCO. Along with this, it will assist in developing effective strategies and policies so that staff
members will be able to perform their task in an effective and legal manner. Positive impact: It has been identified that political condition of the country is quite
stable, which support various organizations in order to create positive result (Erasmus,
Strydom, and Rudansky-Kloppers, eds., 2016). Along with this, it helps in taking
decision which is helpful for the company and gain more profitability at the marketplace. Negative impact: Apart from stable political situation, there are various terrorist attacks
take place in the country which affects the overall condition of UK in a negative manner.
This, as a result reduce the profit margin of the company at the competitive marketplace.
Economical factor: According to this factor, it has been identified that economic system
of UK is quite effective and positive in nature. It includes all the factors like exchange rate,
interest rate, employment rate and many more. These factors highly affect the performance and
profitability of the business at competitive environment. In the present context of TESCO,
economic position of the country which is UK is very strong (Grigore, and Drăgan, 2015).
Hence, this will help in generating more profit for the company. In addition to this, company
provide ample number of employment opportunities which as a result enhance the standard of
living among the country. Positive impact: Economic condition of the country is highly strong which assist the
company in a positive manner. It will create employment opportunities for the individuals
living within the country.
 Negative impact: On the other hand, it has also been identified that in UK tax as well as
labor cost is highly increased which affects the overall profitability and functionality of
TESCO.
Social factor: It refers to those factor which is mainly associated with the culture, belief,
tradition, background and perception of an individual person. It is required by the management
team to examine the demands, requirements and necessities of individuals in order to produce

high quality goods and services. In the present context of TESCO, it has been identified that the
brand image of company is very strong which helps them in order to attract customers towards
them. Reason behind this is that they manufacture goods and services according to the
requirements of consumers which helps them to satisfy their demands in a positive manner. Positive impact: One of the positive impact is that company face high level of
satisfaction by using the products and services offered by TESCO. Reason behind this is
that company produce goods according to the requirements of customers. Therefore, it
has been concluded that social factor highly affects the performance of company in a
positive manner. Negative impact: But on the other hand, it has also been identified that some companies
are forced to adopt CSR activities by the government of that country (Groşanu., and et.
al., 2015). This as a result affects the overall profit margin in a negative manner as
company need to contribute some specific amount of money to the development of
society.
Technological factor: It has been identified that technology plays very essential role in
the attainment of organizational goals and objectives. In reference to TESCO, it has been
identified that top level authority of the company update their technology in every two year in
order to beat the competition available at the marketplace. Along with this, proper training
sessions are given to the employees so that overlapping or wastage of production can be reduced. Positive impact: With the help of regular up gradation of technologies, TESCO will be
able to minimize the competition and enhance the profitability. This as a result, provide
positive result to TESCO and generate more profit margins. Negative impact: Continuous up gradation in technologies increase the cost of TESCO
which affects the overall business functions of the organization. This affects the profit
margin of TESCO at the competitive working environment.
Legal factor: It is the factor which includes all the legislation, laws, rule and regulations
developed by the government of UK. It is the factor which mainly includes various types of acts
such as anti discrimination law, equality act, health and safety law and many more (Hair Jr, and
et. al., 2015). In the present context of TESCO, managers of the company adopt various acts in
order to perform their task effectively. This provide security to the employees and enhance their
performance.

 Positive impact: With the help of adopting legal acts effectively, performance of
employees will be enhanced in a positive manner. This as a result helps in increasing the
efficiency of staff members working within the organization and generate more profit at
the competitive marketplace. Negative impact: Adopting legal policies and activities create various complexities in the
company which reduces the performance of employees as well as profitability in a
negative manner (Hamilton, and Webster, 2018).
Environmental factor: According to this factor, companies should perform their business
functions in such a manner that it will less affect the external environment. In reference to
TESCO, managers of the company adopt technologies which are environment friendly and
produce high quality goods and services which attracts large number of customers towards them. Positive impact: One of the biggest positive impact is that by using environmental
friendly technologies, positive atmosphere is created which assist in developing strong
brand image of the company at competitive marketplace.
 Negative impact: But on the other hand, adopting environmental friendly technologies is
quite costly which affects the overall cost of the company in a negative manner.
TASK 4
Internal and external analysis
TESCO is one of the largest and biggest leading British multinational organisation deals
in groceries and retailing stores. It is the company founded the year 1919 and currently having
almost 7000 stores across the world (Harrison, 2013). In order to examine the strength and
weakness as well as threats and opportunities for the company, management team of TESCO
decides to perform SWOT analysis.
Strength Weakness
 TESCO is the company which have
strong as well as positive brand image
at the competitive marketplace. This as
a result, helps them in order to generate
more revenue.
 Apart from this, TESCO provide range
 Similarly, company is having some
weaknesses which includes fall in rating
which affects the overall image of
organisation at the marketplace.
 In addition to this, TESCO is facing
legal problems which affects overall

of goods and services along with
unique quality which attract large
number of customers towards them.
 Also, company focuses on providing
high quality services to their customers,
so that they can satisfy large number of
customers (Hillary, ed., 2017).
functionality of the organisation. This
as a result reduce the profit margin of
TESCO.
Opportunity Threat
 By using latest technology, TESCO
provide online shopping facilities to
their customers, which enhance their
profitability as well as goodwill at the
competitive marketplace.
 Along with this, TESCO can merge
with other companies dealing in similar
or different goods and services. This is
one of the biggest opportunity for the
organisation.
 High level of competition available at
the marketplace might affect the overall
profitability of the company, which
becomes the biggest threat for the
organization.
 Along with this, regular changes in
government regulations might influence
the functionality of corporate in a
adverse manner (IşıK, Jones, and
Sidorova, 2013).
Interconnection of weakness and strength with the external macro factors.
With regard to TESCO, inter-relation among the weakness and strength of micro
environment are as follows:
Basis Political Social Economical
Strength TESCO need to adopt
each and every
regulations formulated
by the government so
that they will be able
to perform their task in
On the other hand,
management team of
TESCO produce goods
and services to their
customers according to
their requirement
TESCO generate high
level of employment
opportunity which as a
result assist in
enhancing the living
standard of individuals.

an effective manner. which helps them to
attain their goals and
objectives
successfully.
Therefore, it will
increase the economic
condition of the
country.
Weakness Regular change in
governmental policies
might affect the
business functionality
of the organisation in a
negative way.
In today's world,
individuals becomes
more health conscious,
which negatively
affects the productions
of TESCO. Reason
behind this is that they
produce high calories
food products.
TESCO is required to
maintain different
growth rate but on the
other hand, sometimes
it becomes difficult for
the organisation to
maintain the economic
condition of the
country effective.
Basis Technological Environmental Legal
Strength By using upgraded
technology,
management team of
TESCO will be able to
develop innovative
goods and services
along with maintaining
high quality.
Management team of
TESCO adopt such
technology which
helps in increasing the
positive environment
and reducing pollution
in an effective manner.
Biggest strength for
TESCO is that they
adopt every legal
policies effectively
which enhance the
overall profitability of
organisation.

Weakness Continuous change in
technologies largely
affect the revenue of
TESCO at the
competitive
marketplace (Ketata,
Sofka, and Grimpe,
2015).
There are some laws
which is related to the
environment need to
follow by TESCO
which highly affects
the profitability of
organisation.
TESCO is bound to
follow various legal
policies which
sometimes affect the
business functionality
in a negative manner.
CONCLUSION
As per the specified report, it can be concluded that external as well as internal business
environment highly affects the profitability as well as functionality of the company. SWOT as
well as PESTLE analysis has been conducted which assist in examining he current opportunities
and threats as well as external condition of the business environment. With the help of this
analysis, management team of the company will be able to develop strategies so hat they can
grab attention of large number of customers. Apart from this, it is the report which includes a
description of interrelationship of different department. Therefore, it has been concluded that
every department within the organization plays very important role in order to attain the
objectives within specific time period.

REFERNCES
Books and Journals
14

15