Business Environment Factors and Performance

The report concludes that business environment consists of both internal and external factors which have an impact on overall performance and work quality of a firm. The assignment mentions various types of organizations, their scope, and sizes. Macro environmental factors are discussed as having an impact on business performance. Tesco is used as an example to illustrate the concept.

BUSINESS ENVIRONMENT

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types of organizations and their purposes..........................................................1
P2 Size and scope of several types of organization................................................................2
TASK 2............................................................................................................................................3
P3 Relationship among different organizational functions and link with objectives.............3
TASK 1............................................................................................................................................5
P4 Positive and negative impact of macro environment factors............................................5
TASK 2............................................................................................................................................7
P5 SWOT analysis of Tesco...................................................................................................7
P6 Strengths and weaknesses are interrelated with macro environment factors....................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment has been considered combination of both internal and external factors
which having impact of the overall performance of company. These types of factors may directly
effect to the existence of firm. Moreover, internal factors include employees, operation,
management, manufacturing process etc. On the other side external factors may consists
political, environmental, social and much more (Klapper, Lewin and Delgado, 2011). The
present report is based on Tesco which is United Kingdom based firm and provide varieties of
goods and services in international market. It is retail sector company which has numerous stores
in across the national boundaries. In present report will discuss different types of organizations
such as private, public and voluntary along with their scope and sizes. In this project discuss
about WaterAid which is charity firm and provide healthy water services in entire country. On
the other side, NHS as public firm which offer medical services to people. Also will conduct
SWOT and PESTLE analysis of Tesco which having positive and negative impact on
performance of firm.
TASK 1
P1 Different types of organizations and their purposes.
There are different types of business organizations established in market. These are usually
divided on the basis of their legal status, structure of organization as well as several types of
organization (Chavis, Klapper and Love, 2011). Mainly firms are established by private person
or government both. Types of organizations are like private, public and voluntary sector. Owner
is the person who start firm through follow rules and regulations specified by law. These are as
aligned below-
Private firm- These types of organizations are established by private person who is start
business with a aim is to earn profit and attract large number of customers (Craig and Campbell,
2012). Owners can be classified by individual person or group of person.
Also the single person can start business which is known as sole proprietorship. At the
time of start business owner have to follow rules, regulation, policies and procedure which are
imposed on imposed on them as per provision of law (Hamilton and Webster, 2015). Tesco has
been considered as private retailer which provides several goods and services in international
market in order to earn profit. It is UK based firm which provide several glossary products in
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international market. The main aim of this firm is to earn profit by offer various products to large
number of customers. Cited firm has around 200 stores in across the national boundaries.
Members of this firm are responsible to frame various plans and strategies in order to meet target
within stipulated time period.
Public firm- These types of firms are established by legal authorities. In public firms’
government hold more than 50% shares. The main aim of these types of firms is to provide best
quality of goods and services to large number of customer at reasonable price. It can offer goods
at reasonable price which can attract large number of people (Blanchard, Tolbert and Mencken,
2011). National Health Service (NHS), is the public firm which is established by government for
the purpose of raise standard living of people. These are funded by legal authorities and ensure
that products can meet expectation of people. These organizations have prime goals of being a
qualitative service provider at a cost that is reasonable for all. NHS provides best medical
services to people for secure their rights and interest. It can maintain heath care services for
protect life of people. Public firms having right to raise capital through issues share in market.
Shares can be purchased by local in order to collect interest amount for earn profit. The main aim
of these types is raise living standard of people not only earn profit. These types of firms can
allow the market to determine the value of entire business organization.
Charity sector- These types of firms are kind of voluntary sector. It can be established by
various number of people who having same goal or aim to start business. Usually, non-profit
organizations are established to provide best quality services to people (De Jonge, 2011).
WaterAid has been considered as non-profit marketing organizations. It provides fresh and
original drinking water to maintain health of people. This is positively contributing in contribute
in growth and development of country. Members are bound to use all their skills and knowledge
in order to meet target within stipulated time period and maintain performance in ethical manner.
Also they have to follow rules, regulation and policies which are imposed on them as per the
policies of law.
P2 Size and scope of several types of organization.
Every organization has been established with different sizes and scope such as private,
public and charity (Wild, Wild and Han, 2014.). The business environment is also becoming very
dynamic that is not very favourable for the business. There are different tools and techniques that
are used by managers in organize as to analyse the business environment.
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Private organization- These types of organizations can be established by individual person
or group of people (Boons and Lüdeke-Freund, 2013). The main aim of this is to earn profit and
provide best quality of goods and services to customers. Tesco is the international supermarket
which has around 200 stores all over country. Business organization has 20,000 employees in all
premises.
Public firms- The main aim of these types’ organizations is to provide quality services to
people at reasonable price. There are numerous branches that are spread across globe. NHS has
numerous stores in entire world (Tayur, Ganeshan and Magazine, 2012). It provides varieties of
medical services to people in order to maintain their health. Company has numerous stores in
entire United Kingdom. The financial condition of company is good and it is growing at a very
fast pace. It has come out of years of losses and is on right track to be a financially viable
organization. It has a very good history of being an unbiased news as well as story state.
Charity firms- These types of firms are established by individual persons who having same
goals and objectives. The main target of these types of firms is raise standard of living of people.
They have to follow entire rules; regulation, policies and procedure at the time of establish and
run firm (Carlin and Schaffer, 2012).
TASK 2
P3 Relationship among different organizational functions and link with objectives.
This is significant for a business company in order to ensures that all of it goals are being
meet it a set manner. If they are not being meet as per requirement, then management will need
to take appropriate actions as well as make sure that entire business functions within organization
work together. It is vital for entity to ensure that all of its departments are capable enough to co-
ordinate and co-operate at their best level (Klapper, Lewin and Delgado, 2011). Every
organization having several departments which play their own role. Members of each business
departments are responsible to use their efforts and skills in order to achieve target within
stipulated time period. It helps firms in achieving its goals as well as objectives in a more
effective or efficient and effective manner. There are several types of persons who are involved
as well as use efforts in entire core business process of Tesco.
Moreover, Tesco has been considered as international supermarket which offers various
types of goods and services to large number of people. Managers and leaders are the persons
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who assist management of Tesco in order to ensuring that all plans and strategies which are
implemented in appropriate and proper way. Such as accounting department is responsible
manage financial condition of entire firm (Aterido, Hallward-Driemeier and Pagés, 2011).
Manufacturing department has to purchase raw material from suppliers and start production.
Operators of business organization are required to undertake all basic targets which will
help in achievement of goals in a set period of time. In both of entity they act as a support staff
that enables firm in order to achieving set of goals and objectives. Several policies are imposed
on each and every business department of the company. Framing of planning and strategies is the
forecasting process which is responsible to be fulfilled by each and every member. This is the
best possible manner in order to attain target within stipulated time period (Blanchard, Tolbert
and Mencken, 2011). Managers and leaders are responsible to provide best possible working
environment to employees in order to keep them for long time. They have to conduct training
session for workers for the purpose of enhance their skills, knowledge and work experience. Also
they have to receive feedbacks from other members in order to analyse actual situation of the
company. As members of the firm, higher authorities of Tesco try to conduct market research
and collect current information about actual market demand of the targeted customers. These
types of functions are playing significant role in every business organization. Members of Tesco
are bound to provide best quality of goods and services to people in order to keep customers for
long time. Try to receive various advices from seniors for provide to meet expectation of people.
Through this process they can build trust among people and maintain better relationship with
them.
Finance- This is a business department which is keeps on analysing the several resources
as to ensure that all different functions have desired level of financial resources with them. It
documents all the expenditures as well as incomes as it tries to reduce any variances which might
cause imbalance at the time of future (Aterido, Hallward-Driemeier and Pagés, 2011). Members
who are involved in this process are responsible to set budget for achieve target in timely
manner. They have to follow rules and policies which are imposed on them. This is most and
significant department which is mostly used in every firm at every stage.
Human resources department- This department has been considered as most dynamic
and significant yet useful or available resource that has to be managed in a proper and efficient
manner so that maximum output can be meeting in an efficient as well as effective manner. The
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main function of this department is to recruit people who having appropriate skills and
knowledge according to the requirement of firm (Aterido, Hallward-Driemeier and Pagés, 2011).
They have to select person as per vacancies in the firm and select candidates who are interest to
do so.
Marketing- This is the effective business department which are inter links with other for
stating regarding several issues as well as problems that have to be addressed in best and timely
manner. This is considered as best business function prime goal which is used for the purpose of
promote goods or services of Tesco in a more effective and efficient manner so that consumer is
aware and pay attention (Aterido, Hallward-Driemeier and Pagés, 2011). There are various ways
in which it aids other functions. Such as it provides various types of data and information
regarding current market trends as well as customers’ expectation and requirements. This is
needs to be maintained in effective manner because such department is helpful to promote goods
and services in across the national boundaries.
Administration- It has been considered as significant department of the company which is
directly engaged in the developing different policies, rules or procedures that will direct entire
the efforts towards achievement of target, needs or objectives (Aterido, Hallward-Driemeier and
Pagés, 2011). Administration department can monitor overall work performance and quality of
existing employees. This process can motivate workers towards fulfil target within stipulated
time period at specified time period.
TASK 1
P4 Positive and negative impact of macro environment factors.
External environment having direct impact on every company as well as its basic
functioning. There are different factors that keep on changes as well as these have positive also
negative impact on several departments on company and profitability (Tayur, Ganeshan and
Magazine, 2012). Macro environment includes different types of factors such as, political,
economic, social, technological, legal and environment. With the help of this analysis Tesco can
easily meet target and maintain performance in effective way. This has been considered as
significant way to resolve things which arise among entity. PESTLE analysis is strategies as to
find out the issues, conflicts or changes that are taking place as well as their potential impact on
the business performance. Managers and leaders of the company are working in the banking
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giant have to assess several issues as to safeguard firm interest or take benefits from the potential
and effective changes.
Political factor- This type of factor that cannot able to control by the company as well as it
having impact on factors of this analysis or entire macro environment. Currently there is heavy
instability that exists within United Kingdom political environment that is hindering the
productivity or profitability of firm operating in entire country (Boons and Lüdeke-Freund,
2013). Members of Tesco have to manage efficient policies which can be change after the
process of Brexit. Government frame various rules and policies which are needs to be fulfil by
members of Tesco at the time mange overall performance. On the other side, legal authority is
trying to find new and significant ways to curb fake accounts as well as money laundering
situation which will have impact on overall business activities. Through this company can easily
meet target and manage performance as well.
Environment factor- The financial system is still in the revival mode as well as due to
confused political environment it is not in a perfect shape. There are positive treaties which are
being signed on the environmental pollution that will impact the overall business activities taking
place within United Kingdom (Boons and Lüdeke-Freund, 2013). At the time of inflation
situation legal authorities may increase rate of interest in order to control purchasing power of
people. This can maintain overall work quality and performance of company. Inflation rates are
able to generate a pressure on the banking sector for the purpose of make some appropriate
changes in their interest rates as per the monetary as well as fiscal policies in order to control
inflation situation in entire country.
Social factor- In this modern era, social structure is extremely complex as migration in
addition to globalization has entirely changed the way customers use to have preferences. The
taste as well as preference of people who are continuously using products and services of Tesco
is changing at a very fast pace that demand for the purpose of managed by members of cited
business organization (Boons and Lüdeke-Freund, 2013). Unequal contribution among people is
increasing day by day which has impact on the mental condition of employees. Such type of
contribution can reduce level of motivation of workers who are continuously working in
company from long time. So that, according to the rules framed by legal authorities for maintain
performance and work quality in international market.
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Technological factor- There is speedy changes because the computer has been introduced
in market. The edition process enhances cost but it aids in managing the overall efficiency as
well as effectiveness of Tesco. Members of cited firm have to use advance technologies in order
to promote their goods and services in across the national boundaries for attract large number of
people. It has direct impact on the work quality and performance of the company (Boons and
Lüdeke-Freund, 2013). Through this company can directly interact with its targeted customers
and improve communication with them. With the help of this concept billions of people can
identify actual update of company which is useful for them.
Legal factor- There are some changes which will take place within United Kingdom legal
system once the Brexit will be entire also there are significant changes that will be taking place
in the legislations. Each and every members of company are responsible to follow rules,
regulation, policies and procedure which are imposed on them as per the provision of law.
Owners of every firm have to follow policies of legal system at the time of established and
running organization. The impact of this macro environmental factor is usually is that it enhances
the operating expense incurred by firm but it improves quality of goods and services. Through
this company can easily meet target without any issues and complex situations (Boons and
Lüdeke-Freund, 2013).
Economical factor- This factor having direct impact on the financial conditions of every
company. Through this companies can maintain their financial position in market and able to set
their budget accordingly. This can also control banking sector as well as business activities. It
can provide an advantage to firm is to earn profit and manage performance at international
market (Boons and Lüdeke-Freund, 2013). Members have to provide equal opportunities to all
age group of people and must ensures that every employee get best possible working
environment and able to keep in long time. Rapid changes in policies are of legal authorities is
not beneficial for the overall performance of the company so that they have to manage
accordingly. This factors having directly impact on the overall work quality.
TASK 2
P5 SWOT analysis of Tesco
Strengths
Market presence- Tesco has been considered as UK based retail sector firm which
having ultimate market presence in international market. Through this company can build better
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trust among people and attract them as well. In order to achieve target, members of Tesco have
to identify current demand of targeted customers and try to offer products or services to them
accordingly. Members of firm are responsible to use all their skills, knowledge and experience in
order to meet set of target and maintain performance or work quality of entity (Carlin and
Schaffer, 2012). Tesco build ultimate brand image in across the national boundaries. Cited firm
has substantial brand equity in its name under global credit or respect for what it stands for in
terms of quality, work performance, selection or service.
Quality- Members of Tesco firm must ensure about quality of goods and services
provided by firm (Carlin and Schaffer, 2012). Cited firm use raw material from suppliers and
offer best quality of services to people. Through this process company can easily meet target and
increase level of profit margin.
Varieties of product- Tesco is the retail sector firm, so that it provides numerous goods
and services to people. Through this company can attract large number of people and able to
meet their level of expectation as well.
Numerous customers- In this modern era, various number of people use services of
Tesco. Large number of customers are connected with the company.
Financial position- Tesco hold better financial position in international market. Finance
and other departments of firms hold better position in market. Members of firm are responsible
to maintain record keeping data (Carlin and Schaffer, 2012). The cited business organization has
important cash reserves as well as a wide range of property in its portfolio yet improved, which
offers a strong and better financial position related to all types of economic cycles.
Use advance technology- Company has enhanced the use of advance technology for the
purpose of perform overall operations, creating greater cost efficiencies as well as improved
service experiences. Technologies help them to promote products and services in across the
national boundaries in order to earn better profit.
Weaknesses
Competitive pressure- Due to increase competitive pressure, mental condition of
employees may not be stable. It can reduce their level of motivation and work quality. Through
mental pressure no person can perform task in timely manner and reduce confidence as well. It
has been considered as biggest weakness for firm (Carlin and Schaffer, 2012). Competitive
pressures are majorly related with price wars that have worn large number of profit margin of
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cited firm when TESCO should have been focused on other ways to meet the effective
competitive advantage.
Team building- Members of Tesco not perform business operation in team. When
employees perform in a team then they can easily meet target. So that, leaders and managers are
responsible to motivate employees in order to complete target in team (Carlin and Schaffer,
2012).
Less focused- Due to reason of higher work pressure employees may become less
focused and not able to complete target within timely manner. It can reduce motivation amount
workers.
Opportunities
Job opportunities- Tesco is the largest supermarket of UK which provide various job
opportunities to large number of people. It can enhance standard living of people who are using
current goods and services of company.
Online shopping- There is important opportunity to grow online shopping for TESCO
and offer its home delivery service to various areas.
Threats
Increase competition- As a biggest supermarket, Tesco faces challenges which can
reduce performance. In this modern era, large number of organizations provide similar products
which also offered by Tesco.
Raise cost- Due to increase level of production and work quality, the operating cost
company also may increase. Members are responsible to use efforts in order to maintain
operation cost at the time of economic recession (Carlin and Schaffer, 2012).
P6 Strengths and weaknesses are interrelated with macro environment factors.
Strength and weaknesses of Tesco are interrelated with macro environmental factors. It
having impact on the overall performance and work quality of company. Furthermore, firm can
easily promote its goods and services in international market with the help of advance
technologies (Carlin and Schaffer, 2012). Also leaders and managers can conduct training
session for employees for the purpose of enhance their skills and knowledge. They can frame
various plans and strategies also implement the same in order to meet set of target. Use of
advance technologies is able to create opportunities for people who are seeking for best
opportunities to grow their business. Members are responsible to follow rules, regulation,
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policies and procedure which are imposed on them as mentioned under legal factor. Through
this, business functions manage smoothly and enhance work quality as well.
Political factor- With the help of use strengths and weaknesses company can easily meet
criteria of these types of factors. They are responsible to fulfil rules which are imposed on them
as per the policies of firm.
Environment factor- Members of Tesco aimed to use numerous measures in order to protect
environment. They have to use products which may not increase pollution in country.
Legal factor- Whenever, company is not able to fulfil rules provided by government then it
may have considered as biggest weakness of company. With the help of this company is able to
fulfil target within stipulated time period.
Social factor- Tesco provide equal opportunities to its employees who are working in a
company. It may have considered as biggest strength of firm (Carlin and Schaffer, 2012). This
process is able to motivate workers towards complete work with in stipulated time period.
Technological factor- Company provide various opportunities through use advance
technologies within premises. Firm can offer job opportunities to people who are seeking for the
same.
Economical factor- At the time of inflation situation in the country, members have to
maintain their strengths and reduce weaknesses. Otherwise, company may face financial crises
due increase inflation rate in the country.
CONCLUSION
Above mentioned report it is concluded that, business environment consists both internal
and external factors which having impact on the overall performance and work quality of firm. it
is stated that there are various types of organization are mentioned along with their scope and
sizes such as private, public and voluntary. Macro environmental factors having impact on
business performance. Both internal and external factors are interrelated with each other. Tesco
is retail sector firm which provide varieties of goods and services in international market in order
to attract large number of customers and earn better profit margin.
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REFERENCES
Books and Journals
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growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Blanchard, T.C., Tolbert, C. and Mencken, C., 2011. The health and wealth of US counties: how
the small business environment impacts alternative measures of development. Cambridge
Journal of Regions, Economy and Society. 5(1). pp.149-162.
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-
the-art and steps towards a research agenda. Journal of Cleaner Production. 45. pp.9-19.
Carlin, W. and Schaffer, M.E., 2012. Understanding the business environment in South Asia:
evidence from firm-level surveys.
Chavis, L.W., Klapper, L.F. and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
De Jonge, A., 2011. Transnational corporations and international law: accountability in the
global business environment. Edward Elgar Publishing.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp. 108-
123). Palgrave Macmillan UK.
Tayur, S., Ganeshan, R. and Magazine, M. eds., 2012. Quantitative models for supply chain
management (Vol. 17). Springer Science & Business Media.
Wild, J.J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.
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