Business and Business Environment Report

This report examines the business environment, analyzing different types of organizations across public, private, and voluntary sectors. It explores their legal structures, size, scope, and the interrelationship of their organizational functions. The report further explores the impact of macro-environmental factors on business operations, using Tesco as a case study. It concludes by analyzing Tesco's internal strengths and weaknesses and their interrelation with external macro factors.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Different types and purposes of organisations; public, private and voluntary sectors and
legal structures............................................................................................................................3
P2 Size and Scope of different types of organisation.................................................................5
P3 Relationship Between Organisational functions....................................................................7
TASK 3............................................................................................................................................8
P4. Positive and negative impact of macro environment upon business operations...................8
REFERENCES..............................................................................................................................12

INTRODUCTION
Business and business environment is the sum of all internal factors such as employees,
customers expectation, demand and supply, management, clients, suppliers, owners, activities by
government technology, social trends, market trends, economic trends etc. Business and
operations are very much dependent over these factors because by combining all these factors a
business produces (Charter, 2017). This report includes three organizations such as public,
private and voluntary sectors. All these organizations are taken into consideration by explaining
its different types, size and scope. Apart from that, the interrelationship of various functions and
the way they link to organizational structure are also explained. The second half of this report is
based on a single organization to demonstrate the positive and negative impact of macro
environment on business operations. In the end, internal strength and weakness of the business
and their interrelationship with external macro factors is also determined.
TASK 1
P1. Different types and purposes of organisations; public, private and voluntary sectors and legal
structures.
In this section, there are three types of organizations taken into consideration in which
their types, purpose and legal structures are explained.
Public sector organization
These organizations are operated in order to provide services to the citizens of a country.
The organization in public sector is Bank of England which is central bank of UK on the model
of which different central banks are formed. The bank is headquartered at the Threadneedle
street in the city of London since 1734. This bank was established in 1694 and gained the tag of
world's eight oldest bank. The bank was operated by private stakeholders until it has been
nationalised in 1946. In 1998, the bank was fully owned by independent public organization and
operated by treasury Solicitor on behalf of government. Following are the purpose legal structure
and stakeholders of the bank.
Purpose
The main purpose of this bank is to promote the good of the people of UK by
maintaining monetary and financial stability (Purpose of Bank of England. 2019). Apart from
this, the bank has the responsibility of managing the monetary policy of the country so as to

maintain the financial stability within UK. Settlement of rate of interest, inflation, bank notes,
gold, prudential regulation etc. are some of the purpose of Bank of England.
Legal Structure
The legal structure of bank of England is of higher level. All the legal functions and
decision-making is done by the higher authorities settled within bank. As per the legal structure
of Bank of England, the higher official of legal observations are set according to the hierarchical
structure from higher level to lower level (Crane and Matten, 2016). Therefore circulation of
decision is done from the higher authorities and thus autocratic leadership is taken into
consideration. This style is helpful in legal structure so as to circulate effective communication
and making of decisions quickly.
Stakeholders
The stakeholders of the bank are its employees, customers, investors, shareholders etc.
All these stakeholders gets impact with the decision-making of higher authorities. The settlement
of monetary policy and other aspects within bank has a great impact over them.
Private Sector Organizations
Private sector organizations are the companies which has the main purpose of making
profit. The organization taken in this sector is Tesco. This is a multinational retail organization
which has its headquarter in Welwyn Garden City, Hertfordshire, England, UK. The company
mainly deals in providing service to the customers in almost 7 countries in Asia and Europe. The
stakeholders, purpose and legal structures of company are stated as follows:
Legal structure
The legal structure of Tesco is like corporate governance. The company assures its
stakeholders to achieve the target what they want to achieve (Dawson and et. al., 2016). Apart
from that the company is also assuring to reduce the carbon emissions from their plants and
therefore following the legal structure of UK also.
Stakeholders
The stakeholders of company are person or group of individuals, employees, investors,
shareholder etc. All these are impacted by the decision-making of company from the higher
authorities.
Purpose

The main purpose of the company is to gain profit by allowing better services to its
customers. The company wants to win the faith of customers in availing the quality of services to
its customers. In addition to this, the company has mission to be the champion for customers,
helping them to enjoy a better quality of life and easier way of living.
Voluntary organizations
Voluntary organizations are the companies which have main purpose to serve for the
betterment of humanity. These organizations are not settled to make profit. The organization here
taken is Oxfam which is an alliance of 20 independent charitable organization serving to
eradicate poverty from the globe. The purpose, legal structure and stakeholders of Oxfam are as
follows:
Legal structure
These organizations have unincorporated structure having association, trust, community
interest company etc.
Trust: These the organizations in which an individual is working in order to provide funds to the
welfare of community. The person who is trustee is responsible in managing all the legal aspects
of company.
Unincorporated association: These are the companies in which all the legal steps are taken by
the group of individual because they are operated by groups.
Purpose
The main purpose of these groups is to provide betterment of the society. These
organizations doesn't recognize the boundaries of nations as they can serves in many countries
(Deasy and et. al., 2016). Oxfam is company which wants the society to enjoy their lives ans
right, decisions and responsibilities. The mission of this company si treat every person equally in
the world.
Stakeholders
There are many stakeholders of the firm such as employees, trustees, investors, donators
etc. These stakeholders are affected by the operations of organization.
P2 Size and Scope of different types of organisation
Different business organizations with product and service, size ans scope, vision and
mission are mentioned below:
Public sector organization: Bank of England

Product & Services Size and Scope Vision Mission
The bank of England
provider services of
managing the
monetary system,
issuing bank notes,
prudential
management,
settlement of interest
rate, gold, inflation
etc.
The bank has a large
scope and it can be
calculated with its rise
in 1694. The size of
this bank is also large
as there are many
countries in UK also
of which Bank of
England is looking to
regulate.
The vision of company
is to make policy for
the year in 2020. This
will promote rules and
regulation of different
aspects within UK
The mission of bank is
to promote the good of
the people of UK by
maintaining monetary
and financial stability.
Private sector organization: Tesco
Product & Services Size and Scope Vision Mission
Tesco is providing
many services an
products to its
customers by
manufacturing them
such as beverages,
food, home, clothing,
mobile and
commercial services.
The scope of Tesco is
higher because it is
world's 9th largest
grocery store. Apart
from that, it has 7000
stores and having
largest store in
England with 17230
sq. mt.
Tesco is preferring to
provide its products
and services according
to the demand of
customers.
The mission of Tesco
is to generate value for
customers to gain their
loyalty for forever.
Voluntary sector organization: Oxfam
Product & Services Size and Scope Vision Mission
The services provided
by Oxfam is in the
areas of drought and
famine. The main
Oxfam is a group of
20 charitable
organizations working
together to eradicate
The vision of company
is to make sure that the
consumer will grab the
product and services
The mission of
company is to
eradicate poverty
across the globe and

motive of this
organization is to
eradicate poverty
across the globe.
poverty from the
world.
with pride and stay
conscious of all
company actions.
protect the life of
individuals with their
security rights.
P3 Relationship Between Organisational functions.
There are many functions within an organisation which are working together to achieve
the objective of company (Drucker, 2017). In case of Tesco these departments are integrated as
a unit of one authority and perform their operations in order to achieve them. The departments
within Tesco has different set of roles and responsibilities but have same purpose of operating
their functions. The departments within Tesco are stated as follows:
Marketing department
This is one of the most important department within an organization. This department is
helpful in advertising the products and services of company. In case of Tesco, the company when
engages in a new product or service or going to involve in a new market, this department is
helpful for it (Fan, Lau and Zhao, 2015). This department is helpful in providing the information
of feasibility of product, place of product, price and promotional activities which are helpful in
launching product. If Tesco is well known about these facts than it can easily achieve its

objective. The structure followed by Tesco is hierarchical, therefore to management has the
responsibility of finding the marketing areas and sustainability of their product. Thus Tesco can
achieve its objective with its structure also.
Human resource department
This department is responsible in providing the facilities of human resources so that their
management can be done with effectiveness. This department has the role of providing training
and development sessions of the employees of Tesco. This training session will help the
employees to learn the skills which are required in company. Thus the objective of company can
be achieved with the help of this department. Apart from that, the structure of Tesco will also
help the department to take necessary quick decisions which will help them to grow their
customer base.
Sales department
This department is responsible in dealing with the customers directly. The sales
department is responsible in delivering the goods and services of Tesco to the end user. They
uses different pricing and distribution strategies so as to deliver the product. A well trained sales
department has many cards in its pocket to sell the product of company. This department also
gives valuable feedback to the company in order to fulfil the needs and demands of customers
(Hillary, 2017). They allows the customer to choose any specific product from their shelf. Apart
from that, a sales person is responsible in selling the products of company therefore it is
achieving the objectives of company also.
All the above departments of company are responsible in achieving the objective.
Although these departments have different work but still they have common objective of Tesco.
These departments are responsible in providing smooth functioning of Tesco and also promotes
to attain the goals and objective of company. The organizational structure of Tesco is
hierarchical therefore the decision-making of company depends upon higher officials. Hence the
objectives of company are also set by those officials.

TASK 3
P4. Positive and negative impact of macro environment upon business operations.
There are many factors of macro environment which affect the functioning of firm. In
order to identify the affect of firm following are the factors based on negative and positive
aspect.
Political factor
This is one of the important factor through which Tesco can identify the political
condition of the country in which it has established its business (Hintermeister and O'keefe,
2015). Political factors include the political stability of government, duties on import an export
of business commodities, act of legislation etc. All these factors have both negative and positive
aspect on their operations.
Negative impact
The negative impact of this factor is that if there is not political stability in the country
than the rules and regulations set by the country will be variable. The company cannot sustain its
strategies and thus affecting the business operations.
Positive impact
The positive impact of this factor is that by identifying the taxation system of country, the
company can formulate its strategies accordingly. This will help them in implementing the
strategies and increasing customer base. Thus affecting the business operations.
Economical factor
These are the factors through which company can find the economic stability within
company. Apart from that, the company can also identify the purchasing power of customers,
demand, profits etc. All these factors have a vast impact on the business operations (Laudon and
Laudon, 2015). Tesco should be ware of every changes within the policies of economics so that
they will be ready to apply changes. The positive and negative impact of economic factors are
stated as below:
Negative impact
If all the economic factors are not identified by Tesco it can leads to a great financial loss
to the company. Therefore this factor affected the business operations of company
Positive impact

In case of Tesco, rebates or subsidies provided by the government of UK can leads to a
great benefit for the company.
Social factor
Social factors include the personal aspects of the customers towards the company or their
environment. Customers in UK are moving rapidly towards one stop solution areas where they
can purchase every product in one shop (Morecroft, 2015). Since customers are moving towards
the food which is hygienic for their heath therefore Tesco has a great opportunity to move its
requirements. Following are the factors through which positive and negative impact can be
determined.
Negative impact
If the company is not paying attention towards the social factors of customers than they
will not pay attention towards the product. This will leads to a great loss for the business
operations.
Positive impact
In case of finding all the social aspects of customers, Tesco can easily grab the
opportunity of increasing customer base. Hence, gaining productivity and profitability of
company.
Technological factor
This is the factor in which technology is taken into consideration for Tesco. The company
has installed two of the most important technology in their business operations. Firstly they
started delivering their products by purchasing online. Apart from that, different self service
checkout points has solved many issues for the customers (Moutinho and Vargas-Sanchez,
2018). On the basis of these technological factors, positive and negative aspects are stated as
below:
Negative impact
In case of not involving the technology into the premise of Tesco, the company can loose
their customers and thus affecting the business operations of company.
Positive impact
The positive aspect of this factor suggests that the company can gain a huge advantage
with the help of implementing the technology.
Environmental

This is the factor through which impact of company over environment is considered.
With the help of increasing pressure of environmental issues over companies, Tesco has
committed to reduce their carbon emission to 50% till 2020. Apart from that, the wastages of
company also gets reduced by protecting the environment. Positive and negative impact of this
factor on business operations is discussed below:
Negative impact
Ignoring the environmental factors can leads to serious dis-management of company.
This will leads to an adverse impact over the operations of Tesco.
Positive impact
Positive impact of considering environmental issue is that company will improve its
image towards the customers and thus increasing customer base. Therefore affecting the
operations of business.
Legal Factor
Government policies and frameworks also impacts directly over the operations of a
business. If a company is not following the regulations set by the government than it cannot
sustain its business for a long time (Pearson, 2017). In case of Tesco, UK government has
introduced food retailing commission (FRC) in 2004. In case of this, no company can change its
prices of food without prior notice. Therefore the impact of this factor over its operations are:
Negative impact
Without following the legislative rules and regulations of government, Tesco cannot
sustain itself in the competitive market.
Positive impact
The positive aspect of this factor is that company can increase its image in the minds of
customers. Therefore affecting the operations of business.
TASK 4
P5 Internal and external and external analysis of organisation and their strength and weaknesses
In present time, Tesco is being considered as one of leading British multinational
organisation which is performing its operations in grocery sector (Sodeyfi, 2016). Along with
this, Tesco is having more than 6000 stores in all over the world including Asia. In order to have

depend knowledge related to strengths and weaknesses of the company a proper SWOT analysis
has been below.
STRENGTH WEAKNESSES
 Grocery products with super quality is
being considered as one of the strength
of Tesco that helps them in improving
customers loyalty and it also helps in
building long relationship with
consumers across the countries.U
 Tescos promotional activities along
with its unique selling strategies are
also a part of strength that this
organisation is having in different
sections. This basically helps in
targeting customers at different
segments based on their requirements.
 Not only in United Kingdom but in all
over Europe Tesco has developed a
good reputation due to its Quality
Services and value added services like
customer service which resolve all the
queries of consumers in all over the
world. Because of this, government of
UK and of other countries as well
company gets proper support related to
rebates in taxation and so on.
 One of the major weakness of Tesco is
that it cannot perform well in
uncertainty is like Brexit. This has
reduced their market share in UK and in
other countries as well that are affected
by Brexit which impacts directly upon
their profitability and productivity at
the same time (Shchepakin and
Krivosheyeva, 2015). Due to following
the traditional approaches Tesco has
made list changes among their products
which basically shifts customers
interest towards other organisations that
are focusing on nutrients and changing
needs of them. Just because of, Limited
customisation and less expenditures
made on promotions has reduced their
customer base.
 Due to much political influence and
because of diverse culture face by
organisation and workforce Tesco has
become has become week in e
commerce section where it could
expand its business at its full.
OPPORTUNITIES THREATS
 Operating business online could be
considered as one of the basic and most
 Just after when Brexit will come to an
end, UK will become an open market

essential opportunity that can be
adopted by Tesco through which it can
focus on targeting customers with
ample number of needs or requirements
(Wack, 2017).
 Another opportunity that Tesco can
grab is in Health and beauty sector
because both of these sections in all
over the world are taking rise as people
are getting conscious about their health
and beauty at the same time.
 Using different payment modes and
supermarket through which a customer
could easily make payments can be
taken as an opportunity for Tesco
which is not adopted by any other
Organisation in grocery sector like
LIDL, ASDA and more.
where every single business
organisations from different countries
will try their level best to gain a good
market share and this could be
considered as a threat for Tesco
because it might impact upon their
profit margins
 Due to high number of stores in all over
the world around 6000 Tesco faces a
range of problems like developing
strategies for improving sales,
productivity, profit margins and due to
this other organisations like ASDA and
more taking advantage of it and this
could be considered as one of major
threat for Tesco.
 TESCO is having other multinational
competitors like, Sainsbury's, ASDA,
Morrison's and Waitrose in global
market that basically comes up with
new products in every quarter which
attracts Tesco’s customers.
P6 Interrelation of strength and weaknesses with external macro factors
External factor consist with both strengths and weaknesses which an organisation needs
to understand in order to run business in a successful manner (Rick and et. al., 2017). In the same
way, it is vital for Tesco as well to regularly examine external factors so that their strength and
weaknesses could be carried out. In this context, Proper analysis Of strengths and weaknesses
that are linked to external macro factors are mentioned below :
Political Factor: this is being considered as one of vital factor for an organisation there rules
and regulations are made by government and this helps in resolving political issues.

Strength: one of the major strength of Tesco is that it regularly adopts or abides
regulations all laws which has been adjusted by government of United Kingdom. On a regular
basis, Tesco make alterations and monitors their policies and looks into amendments made by
government in order to refurbish the policy for every single employee.
Weaknesses: Due to Brexit, United kingdom’s rules and regulations caring uncertainty is
which could impact upon Tesco’s profit margins and policies made by them. Proper changes
based on every single change that has been made by government need proper investment and
this could be considered as one of a weakness for Tesco because investment made on these
directly impacts of on profit margins of the company.
Economic Factor: another factor which is linked to economy of a country which impacts upon
decision making profit margins, revenue and other activities of a business organisation. Lending
rates, taxation rates, availability of raw material and other interest measures Assam of activities
that government of United Kingdom deals with and this is Tesco would need to understand and
then develop their own strategy for improving their existence (Sekaran and Bougie, 2016).
Strength: rate of interest which was Tesco playing to organisation onlending money has
got reduced to minimal as organisation basically does a lot for people who are in need. This
basically them to do their functions of import and export in best possible manner as they provide
their services in most of countries that are at growing stage.
Weaknesses: Due to Brexit, Tesco has been going through ample number of situations
like fluctuations in relation to interest rates of UK creates numerous obstacles in the growth path
of Tesco..
Social Factor: Community along with the society cultural values and beliefs of people do comes
under this factor. Tesco has been really very influential and has been performing well through
offering customers with quality products and value added services.
Strength: TESCO effectively take care of social believes and values which will benefit
them to raise their brand effectiveness in international market.
Weaknesses: TESCO is a multinational British cooperation provide their services in
seven Asian countries with more than 6,000 stores in different geographical locations. This will
create obstacles for company to collect raw material and other production resources (Shchepakin
and Krivosheyeva, 2015).

Technological Factor: Technology has been one of vital factor because it changes regularly and
do not stops with time. In the same way Tesco has also adopted updated technological tools for
payments and other things.
Strength: one of the major strength that Tesco has is that company offers customers with
ample number of payment methods and slowly organisation is also moving towards E-
Commerce through which they might become able to target a larger market in all over the world.
On the other hand, through using online payment method TESCO offer their product without
facing any issue related to payment.
Weaknesses: Major issue in present contacts is that Tesco is having weak online support
which is necessary to be modified by taking various advancements of innovation technologies
that require large capital investments. In addition to this, TESCO accepts online payment mode
for this it is require to secure their serve connections which further need large fund investments.
CONCLUSION
Considering above report, it can be concluded that business environment plays a crucial
role for an organisation when it comes to expand business or to run business in a successful
manner. Examining both internal and external environment could lead a company in making
right decisions that would help them in reaching to new heights. On the other hand, size, scope
and their vision and interrelation of ample number of units in company along with the
consideration of tools like PEST and SWOT an organisation good develop competitive
advantages.
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