Business Environment TESCO - Report

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 Different types and Purpose of organisation.....................................................................1
P2 Size and Scope of different types of organisation.............................................................3
LO 2.................................................................................................................................................6
P3 Relationship Between Organisational functions...............................................................6
LO 3.................................................................................................................................................6
P4 Positive and Negative Impact of macro environment on business operations..................6
LO 4.................................................................................................................................................8
P5 Internal and external and external analysis of organisation and their strength and
weaknesses.............................................................................................................................8
P6 Interrelation of strength and weaknesses with external macro factors..............................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is a sum of all internal and external forces that affect activities of
business. Factors in this include elements like, stakeholders, economic conditions, legal factor
and other technological elements (Business environment. 2018). In order to sustain for long run
it is important for business organisations to evaluate these factors and formulate strategies
accordingly. In this project, Crown prosecution is selected as public organisation, TESCO in
private sector and Oxfam in voluntary organisation. In this report discussions has been made on
different types and purpose of organisation with their size and scope. Along with this,
relationship between different types of organisational functions and positive and negative impact
of macro environment on business operations. Furthermore, interrelation of different
organisational units and strength and weaknesses of macro environment has been included.
Lastly, SWOT and PEST analysis of company is described in this report.
LO 1
P1 Different types and Purpose of organisation
Business environment is a combination of overall internal and external factors that put negative
and positive impact on their business functions. All these business organisation have their
separate purpose and legal structure. In a business structure, there are many different types of
organisations which is mentioned below in descriptive manner:
Private organisation: Private organisations mainly run their business operation in order
to increase their profit. Enterprises in private sector are owned and controlled by sole traders,
partners,franchises and co-operators. Their functions are generally regulated by employment law
and company law. TESCO is a UK multinational retailing organisation founded in the year 1919.
Company mainly deal in superstore, Hypermarket, supermarket and convenience shop.
Purpose: TESCO is a world leading multinational groceries retailer company. Company
is headquartered in Welwyn Garden city, Hertfordshire, England with a core purpose to “ Serve
Shoppers a little better every day”. Company believes to become the champion for their
customers by proving them great quality products and help them to enjoy their life in better
manner.
Legal Structure: Private organisation legal structure includes:
1

Sole Proprietorship: In this sector of private organisation, there is a sole individual who is
wholly responsible to run and control their business unit while bearing loss and enjoy profit of
company on simultaneous way. Examples of sole proprietor include, Hairdressers, market
traders, Newsagents etc.
Partnership: In this type of enterprises there are more there are more than one person who
is responsible to run a business unit. In this type of business structure, there is an agreement
known as partnership agreement which is duly signed by actual partners who is authorized to run
business and invest capital as per according to deed. Examples of partnership include,
Accountants, Doctors, teachers, veterinarians etc.
Public organisation: Organisations working in public sector perform their business
functions in order to satisfy needs of consumers in best effective way rather than to generate
profit. Companies in this sector are regulated by governmental law as per according to their
functional geographical area. Crown prosecution services is an principle public prosecution non-
ministerial government agency which was founded in year 1986 and headquartered in London,
SW1H. CPS agency engage in the process of proving legal advices to investigative agencies and
police departments.
Purpose: Crown Prosecution Services is an independent criminal prosecution agency.
Organisation perform their services with a core purpose which is to provide correct advices and
ensure that the right individual is prosecuted in right offence. CPS make sure that their lawyers
must abide Code for Crown prosecutors in order to prosecute a case for public interest. Agency
offer their services in England and Wales.
Legal Structure: Public sector legal structure include:
State Government: In these types of organisational structure, state and national authorities
share legal and political rights. In this, state government govern their own own decision without
taking and prior permission from central or federal government.
Local Government: In this governmental structure, there are numerous local authorities
who generally perform their basic activities in regional and local regional level.
Central Government: It is the most supreme system of any country. Central government
in United Kingdom hold absolute supremacy to make any formal decision in order to secure
national security rights, treasury budgets and overall security of country and people form
terrorism (Avramenko, 2012).
2

Voluntary organisation: It is a non-government, non profit organisation in which there
are group of individuals who are willingly enter in a agreement to form a organisation in order to
satisfy need of public and provide them welfare services. Organisations in these sector run their
activities without having motive to earn profit. Oxfam is a charitable non profit organisation
founded in the year 1942, England with a motive to eradicate poverty from all over the world.
Purpose: Oxfam is a commination of 20 charitable organisations. They perform their
welfare activities with a positive purpose to erase poverty from around the world. Organisation
headquartered in John Smith Drive, Oxford, England. They believe that poverty is not
unalterable and offer their services in order to remove poverty, injustice, gender inequality and
other economic crises. Oxfam provide their humanitarian services in order to raise standard of
peoples and make them independent.
Legal Structure:
Trust: In this voluntary structure, donor of property or donor of money donate their
essentials to a trust which is a combination of individual who takes authority and responsibilities
to manage their money or property (Janita and Miranda, 2013). They are termed as a trustee and
beneficiaries. In this the trust ensure confidentiality and future continuity.
Company limited by Guarantee: It is a corporate legal independent authority which is
mainly constituted by Memorandum and Article of Association. Organisation is these sector
have limited liability. It does not have a share capital or shareholder but it consists of members
who act as guarantors.
Associations: It is combination of small group of individuals who enter in a structure to
fulfil a specified agreed objective which is mainly not for a profit motive.
P2 Size and Scope of different types of organisation
Public Organisation: Organisations working under public organisation perform their services in
order to satisfy needs and demands of public rather than a motive to generate profit. Companies
in these sector are owned by public authorities at the extent of 50 %. Crown prosecution services
is an independent non-ministerial government department who provide criminal cases services to
police and other investigative departments.
Product & Services: Crown prosecution services provide their legal advices to
investigation agencies and police department of crime that are related to, domestic abuse, drug
offence, hate crime, cyber/online crime, fraud and economic offence and many more.
3

Size & Scope: Crown prosecution Services mainly operate their services in England and
Wales and have 14 regional team with more than 600 staff members and approximately 2,900
solicitors. CPS is planning to expand their area of service by offering their advices to other
geographical location investigative agencies and police departments other than England and
Wales.
Vision: CPS engage in the services to provide legal advices which is related to criminal
cases to police and investigation agencies in England and Wales with a vision to make their
decisions in independent way and bring right offender to justice.
Mission: Core mission of Crown Prosecution Service is to take their criminal decisions in
independent manner and offer perform their services in professional way. They thrives to work
in a manner with the help of which they can earn trust of people, colleagues and communities.
Business objective: Crown prosecution service perform their business activities with a
objective to provide their legal advices without any discrimination and in a fair manner.
Stakeholders:Public sector stakeholders include, governmental financial institutions,
government employees and other governmental authorities.
Legal structure: Crown Prosecution services perform their services as an independent
judicial agency and do their activities as an public prosecutor. They conduct their work with a
close collaboration with UK police, court and other agencies.
Private Organisation: Companies working under private sector perform their business functions
in order to earn and maximise their profit and fulfil need of consumers in best way.
Business Structure: There are mainly three types of private organisation:
Sole proprietorship: This types of business organisations are owned and controlled by a sole
individual.
Size & Scope: This form of private sector organisation generally have flexible and small
structure which is managed by a single individual (Weiss, 2014). In this there is a less initiative
of capital required to set this form of organisation and owner perform their functions to gain high
stake and profit in market.
Partnership: In this form of private structure, there are more than 2 individual who enter into an
agreement to run their business functions in collective manner.
Size & Scope: Partnership is regulated by partnership deep or an agreement in which
individuals combine their capital and resources to run their business functions in order to earn
4

and maximise profit by satisfying needs of consumers in simultaneous way. Partners are liable
for loss and profit as per according to partnership agreement.
Company: In this types of organisation companies perform their functions in order to maximise
their profit and are mainly governed by companies law. TESCO is a world leading British
multinational retailer company founded in the year 1919 and are headquartered in London,
England, UK. Company provide their services in groceries retailing sector.
Business structure: TESCO business structure include 11 members in their executive
committee which is led by Group Chief Executive. Company follow highly hierarchical structure
which reflects the large size of business. In their store level there are mainly a four layer of
management.
Product & Services: TESCO offer their services in general merchandise and groceries
sector. They perform their activities in supermarket, Convenience shop, superstore and hyper
store.
Size & Scope: It is multinational retailer company mainly provide their services in seven
countries across Europe and Asia. TESCO have more than 6,553 shops with 476,000 more than
employees.
Vision: TESCO perform their services with a core vision to” We make what matters
better, together”.
Mission: TESCO perform their activities to serve consumers at their best by proving
them great quality of products and services. They have new core mission which is to serve their
customers by heart treat them they way they want to be treated.
Business objectives: TESCO offer their products with great quality in order to serve their
consumers at their best and support every role of their colleagues in order to grow business.
Organisational Structure:TESCO is a leading groceries retailer organisation serving in
seven countries and are headquartered in London, England, UK. Company have approximately
more than 6,553 number of stores and estimated number of 476, 000 + employees.
Stakeholders: Stakeholders in this types of business structure are, employees, Directors of
company, creditors, owners, unions, local community, Financers and pressure groups.
Voluntary Organisation: Voluntary organisations are owned and controlled by sole individuals
(Werbach and Hunter, 2012). Oxfam is an association of 20 charitable organisations who are
5

performing their humanitarian services to eradicate poverty. Company was established in the
year 1942 with a motive to provide welfare services to people.
Product & Services: Oxfam offer their welfare services worldwide and provide help to
individuals who are facing problems in drought, famine and poverty prone areas. They provide
clothes, toys, handicrafts, food and other offerings to peoples around the world.
Size and Scope: There are 20 charitable organisation working in a combined manner with
Oxfam in order to eradicate poverty and raise standards of peoples in all over the world.
Vision: Oxfam is providing their humanitarian services around the globe with a vision to
remove poverty from the world and make people independent by raising their living standards.
Mission: Organisation is having a mission to remove any kind of inequalities in the world
and secure rights of individuals.
Business objectives: Core objective of Oxfam is to erase poverty and raise self
interdependency among people by empowering their rights.
Organisational structure: Organisation is having approximate number of 1200 more than
shops in all over the world. In Oxfam there are numerous number of volunteers offering their
welfare services from various geographical locations.
Stakeholders: In voluntary organisational structure, their stakeholders include volunteers,
customer whom they serve, donor, board of directors and foundations.
Legal Structure: Oxfam is a trust and an unincorporated form of structure.
LO 2
P3 Relationship Between Organisational functions
In order to perform business operations in more effective and proper way, it is essential
for TESCO to formulate certain strategies and policies. Company is looking forward to increase
their profit on continuous basis by 10 %. It is a basic objective of company which require proper
management of organisation internal structure. For this TESCO is required to maintain positive
relationship among their organisational functions which is mentioned below:
Marketing and Finance Department:
As TESCO is looking forward to maximize their profit on regular basis by 10 %, in this
situation it is required for company to promote their organisation on different level of platform.
In this marketing manager is required to formulate promotional strategies which require effective
6

amount of fund that is to be approved by finance manager. Correct and effective fund can only
be taken if they both are having healthy relationship (Ballard, 2012).
Sales and R&D Department:
It is important for sales department of an organisation to maintain proper link with all
departmental units. As TESCO is planning to increase their profit by 10 % on regular basis. In
this situation, organisation research and development unit will benefit sales manager to make
correct decisions which will help company to achieve their objectives in effective way.
An organisation is consist of various departmental structure who have different activities
to follow but have same target that is to fulfil overall objective of organisation. By performing
their functions in interrelated manner company can achieve their predetermined goals in proper
time frame and maximise their probability simultaneously. Inter relation in the organisational
structure of TESCO will benefit them maintain healthy communication in their culture and
promote positive growth. Major advantage of this interrelation is sharing of knowledge and
thoughts which will benefit team members to learn something new on everyday basis. In addition
to this, interrelation relations with departmental units benefits TESCO to reduce their work
related mistakes. While on the other hand, this interrelationship can cause disadvantage to
company by creating a unhealthy sense of competition and lot of conflict issues in organisational
structure. For this it is essential for TESCO leaders and managers to formulate effective polices
and strategies to frame proper and efficient measure as to overcome these situations.
LO 3
P4 Positive and Negative Impact of macro environment on business operations
TESCO is a world leading British multinational company provide various services related
to groceries to consumers. There are numerous Macro factors that affect functioning of
organisation. Mentioned below there is a PEST analysis of TESCO is done:
Political: Political factors represent government regulations and policies that they have framed
for companies. TESCO is required to consider political factors such as free-trade zone, subsidies,
industrial revolution and UK corporate Governance code in order to avoid any kind of law
intervention in their organisational activities.
7

Positive: Laws and regulations framed by government help TESCO to perform their
activities in ethical way. They can conduct their functions without facing governmental
regulations.
Negative: Brexit bring serious changes in law of UK currency control, Import quotas and
export. This will hamper the operational performance of TESCO. Company will face so many
obstacles to borrow capital amount form national and international bank.
Economic Factor: In this factor, availability of borrowing and lending rate, taxation policies and
other prices of overseas buyer has been included (Schaltegger and Hansen, 2012). These factors
affect functioning activities of TESCO in many different ways.
Positive Impact: Government relaxations in tax and other lending rates will benefit
TESCO to sell their goods in other seven Asian countries.
Negative Impact: Economic stability of UK has been disturbed after the situation of
Brexit that will create obstacles like decrease in the market share of company.
Social Factor: Social factor include social believes and values in a region. It is necessary for
TESCO to evaluate preferences of consumers and society and then offer their products and
services in a particular locations.
Positive Impact: By taking care of community values and believes TESCO can
simultaneously increase their sales and maximise their overall productivity. In addition to this by
following CSR activities, company can create positive image in marketplace.
Negative Impact: TESCO is required to abide CSR activities in ethical way as if they did
not follow them then it may decrease their goodwill which result in reduction of their goods and
services.
Technological Factor: As technology is changing with their fast speed, consumer perceptions,
style, trend and fashion is continuously evolving. In order to cope up with this situation, TESCO
is required to train their workers and make them adaptive to adopt these changes.
Positive Impact: By taking advantage of various technological measures TESCO can
produce effective products and services and bring sense of innovation in their organisational
structure.
Negative Impact: In order to bring technological innovations there is a requirement of
large amount of monetary funds and recruit effectively trained and skilled employees. For this it
is required for TESCO to maximise their cost of input and lot of time.
8

LO 4
P5 Internal and external and external analysis of organisation and their strength and weaknesses
TESCO is a world leading British multinational company provide their services in seven
Asian countries. Company is currently having more than 6,553 stores with a approximate
revenue of 55.9 billion. Mentioned below SWOT of company has been done with the help of
which TESCO is effectively able to analyse their strengths and weaknesses.
STRENGTH WEAKNESSES
 TESCO is having organized business
structure and offer great quality of
products in the market and have close
relationship with customers.
 Company is having local brand
recognition and have adopted
innovative unique selling point.
 TESCO is having trustworthy
reputation among United Kingdom as
they abide all legal rules and
regulations framed by UK government
in ethical manner.
 TESCO organisational functions are
mainly relayed upon United Kingdom
market which is currently disturbed as
they are facing issue of Brexit.
 Company is expending less on their
promotional expenditure and have
adopted limited customization in their
manufacturing structure (Berg and
Kilambi, 2014).
 TESCO is having weak online support.
Company is usually suffer with the
situation of much political influence in
their organisational culture.
OPPORTUNITIES THREATS
 TESCO is having a great opportunity to
invest in technical efficiency and
penetrate market with more
effectiveness as they accept payment
from various online modes.
 By investing in Health and beauty retail
sector company can further maximise
 Political situations like Brexit bring
serious fluctuations in the economic
stability of United Kingdom.
 Company is facing large competition
on global level which affect their
strategies and policies internally.
 TESCO is having other multinational
9

their international growth opportunities.
 In this digital world, TESCO by taking
advantage of E-Commerce and social
media websites can increase their
probability.
competitors like, Sainsbury's, ASDA,
Morrison's and Waitrose in global
market.
TESCO ASDA
TESCO offers quality products to the
customers with innovative technology.
It deals at multinational level and provides
services and products in different countries.
It believes in providing good service, new
technology and innovation is not given much
attention.
It is a British supermarket chain.
P6 Interrelation of strength and weaknesses with external macro factors
In order to conduct business functions in formative way, it is important for a company to
evaluate their strength and weaknesses as to conduct their operations in effective way
(Bharadwaj, 2013). TESCO is a British multinational cooperation engage in the service of
providing groceries products to their customers. Therefore, in order to perform their functions in
formative way on regular basis it is necessary to analyse strength and weaknesses of company
and their inter relation with each other which is mentioned below in descriptive manner:
Political Factor: This factor include regulatory shift of new rules and regulations and other
political issues.
Strength:TESCO abides all governmental rules and regulations that has been framed by
UK government under UK law for companies and have trustworthy reputation in country. This
will benefit them to perform their functions within UK in easy manner without facing any kind
of restrictions.
Weaknesses: With Brexit, governmental rules and regulations has been transformed in a
way that may create many hindrances in the growth path of TESCO. For this they are require to
modify and create new strategies and policies which need huge capital and time investments.
10

Economic Factor: This factor include, rules and regulations that are related to borrowing and
lending rates, taxation rates, availability of raw material and other interest measures. TESCO
have adopted many strategies related to pricing in their organisational structure and follow
estimated number of legal laws.
Strength: UK government have decrease their rate of borrowing which will benefit them
to do their functions of import and export in best possible manner as they provide their services
in seven Asian countries.
Weaknesses: With the situation of Brexit, various fluctuations in relation to interest rates
of UK creates numerous obstacles in the growth path of TESCO.
Social Factor: This factor is mainly related to community and society cultural values and
beliefs. TESCO is close to people as they provide great qualitative products.
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 6,553 stores in different geographical locations. This will
create obstacles for company to collect raw material and other production resources (Hilton and
Platt, 2013).
Technicalogical Factor: In this factor, numerous advancements of technologies is required.
TESCO accepts payment by taking advantage of different online modes.
Strength: By taking the use of online payment method TESCO offer their product their
services without facing any issue related to payment and accept payment from consumers in any
mode which will also provide satisfaction to their customers to get more discounted rate
products.
Weaknesses: Company is facing 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.
Legal Factor: It is an external factor that include rules and regulations of government. TESCO
is abiding all legal rules of United Kingdom government which they have enforced for retailing
sector. Such as licensing, minimum wage act, disputes act and many more.
11

Strength: TESCO is following all rules and regulations that has been framed by
government of United Kingdom. This will help company to perform their functions in any part of
UK without facing any legal restrictions.
Weaknesses: TECSO is performing their organisational functions in seven Asian
countries. For this it is required for them to modify their working structure in both internal and
external level accordingly to laws and regulations of other regions and locations. It require large
amount of capital investment and major change in their organisational policies and strategies.
CONCLUSION
As per the above concluded report, it has been analysed that business environment is an
overall combination of internal and external environment that affect activities of business. It is
important for all organisations to evaluate these factors and formulate strategies and policies
accordingly to strengthen their position in global market. In this report, organisational culture of
public, private and voluntary organisation has been mentioned which states their size, scope and
their vision. Furthermore, interrelation of different units in company and PEST and SWOT of
organisation has been included which states their negative and positive impact. It is essential for
organisation to analyse these factors in order to sustain their long term growth.
12

REFERENCES
Books and Journal
Hilton, R.W. and Platt, D.E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Bharadwaj, A. and et. al., 2013. Digital business strategy: toward a next generation of insights.
Berg, E. and Kilambi, K., Siebel Systems Inc, 2014. Method and apparatus to facilitate
development of a customer-specific business process model. U.S. Patent 8,639,542.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E.G., 2012. Business cases for sustainability: the
role of business model innovation for corporate sustainability. International Journal of
Innovation and Sustainable Development. 6(2). Pp,95-119.
Ballard, C. and et.al., 2012. Dimensional Modeling: In a Business Intelligence Environment.
IBM Redbooks.
Werbach, K. and Hunter, D., 2012. For the win: How game thinking can revolutionize your
business. Wharton Digital Press.
Vitale, R.P., 2011. Business to business marketing. Pearson Education India.
Janita, M.S. and Miranda, F.J., 2013. The antecedents of client loyalty in business-to-business
(B2B) electronic marketplaces. Industrial Marketing Management. 42(5). Pp,814-823.
Wheelen, T.L. and et. al., 2017. Strategic management and business policy. pearson.
Modeling business goal for business/it alignment using requirements engineering. Journal of
Computer Information Systems. 51(3). Pp,21-28.
Prins, J.R. and Cybercrime, B.U., 2011. Diginotar certificate authority breach’operation black
tulip’. Fox-IT, November.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
Avramenko, A., 2012. Enhancing students' employability through business
simulation. Education+ Training. 54(5). Pp,355-367.
Online
Business environment. 2018. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>.
13