Impact of Economic and Non-Economic Environment on Organisational Behaviour

This report discusses the impact of economic and non-economic environment on organisational behaviour, focusing on TESCO. It covers the economic system, conditions, policies, as well as non-economic factors like natural environment, demographics, and culture. The report also includes a SWOT analysis of TESCO and a PESTLE analysis.

Contemporary
Business Environment

Table of Contents
ABSTRACT.........................................................................................................................................2
INTRODUCTION................................................................................................................................4
Background...........................................................................................................................................4
Literature Review.................................................................................................................................4
Examining the Impact of economic environment on organisational behaviour..............................4
Economic System............................................................................................................................5
Economic Conditions.......................................................................................................................5
Economic policies............................................................................................................................6
Impact of non-economic environment on OB (organisational Behaviour).....................................6
Natural Environment........................................................................................................................6
Demographics..................................................................................................................................6
Culture.............................................................................................................................................6
Discussion and analysis........................................................................................................................7
SWOT ANALYSIS of TESCO and impact on organisational behaviour........................................7
PESTLE Analysis of TESCO..........................................................................................................8
Recommendation..................................................................................................................................9
CONCLUSION..................................................................................................................................10
REFERENCES...................................................................................................................................11
Books and Journals........................................................................................................................11

ABSTRACT
In this report, the concept of business environment is given which imposes direct impact on the
operations and activities of the organisation. It is important to determine the elements which
enforces direct influence on the productivity as well as profitability of the company. In addition to
this, it is important to aware about the changes and trends which occur within market in an
appropriate manner. There are different kinds of environment which includes economic, non-
economic as well as social and many more. The economic factor involves wages, policies as well as
government policies. In non-economic factor involves love, demographics and religion which
impact on growth and performance of the company at broad level. Apart from this, the strength,
opportunity, weakness and threat is also determined in order to grab opportunities as well as prevent
from threat at workplace. And also the company adopt the PESTLE Analyses for analysing the
external environment of the organisation. In context of TESCO, it is the largest chain of
supermarket which is located in UK provide superior quality products and services to its customer.
Therefore, the marketing manager of this company focuses on changing marketing trends and
lifestyle of customer. Beside from this, the manager emphasised on offering unique and innovative
products and services to its user in order to satisfy them. It helps them in increasing the brand image
and goodwill of the company in front of the customer. They operate their business at both national
and global level.

INTRODUCTION
The business environment and its culture imposes direct influence on the organisational
behaviour. Business environment includes both micro as well as macro environment which affect
the productivity as well as profitability of the organisation in favourable and adverse manner. In
relation of TESCO, it is the biggest chain of supermarket situated in UK which offer superior
quality products and services to its user in order to satisfy them. It helps in boosting sales as well as
profitability of the company. It includes different elements like supply and demand of goods, laws,
legislation as well as technology and so on. It is necessary to have a stable business environment in
order to increase the sales in future period of time. It helps the employees in order to accomplish
goal as well as objective in an effective manner ( Amankwah-Amoah and Wang, 2019).
Background
This report is carried upon TESCO, it is the largest multinational chain of supermarket of UK
which deal in wide variety of products and services in order to satisfy them. There are different
competitor of TESCO such as ASDA, Sainsbury’s and many more. The internal and external
environment imposes direct impact on the productivity as well as profitability of the business
organisation. Apart from this, the organisational behaviour is the study and application of behaviour
of an individual person within organisation for accomplishing goal and objective in short span of
time. The manager of organisation perform the various activities and functions in an effective
manner in order to achieve the vision in targeted period of time. Therefore, it is important to have
positive work environment within workplace in order to completed the task& work in better way.
TESCO expand their business at wider level in order to distribute the quality products and services
to its customer. Apart from this, Due to Brexit, it imposes negative impact on the profitability as
well as productivity of the organisation. The cost of the products and services has been increased.
Therefore, the company import as well as export goods and services in different countries. They
have adequate infrastructure for operating their business activities and functions in UK.
Literature Review
Examining the Impact of economic environment on organisational behaviour.
Organisational behaviour is considered as a process in which the study of behaviour of
individual person in order to accomplish goal and objective in short span of time. Through OB, it is
easy for the business firm to boost the productivity as well as profitability of the business
organisation at broad level (Hamilton and Webster, 2018). In addition to this, the economic

environment imposes direct impact on the behaviour of consumer as well as performance of the
organisation. Therefore, it has been analysed that economic environment influence the
organisational behaviour at broad level.
Economic System
It is necessary for the organisation to adopt the economic system in order to operate business
activities and function in an effective manner. There are various kind of economies which are
prevail in the country like free, mixed as well as market economy which is going to be mentioned
below:
Free Market economy: In this economy, the government imposes less rules & regulations in
order to carry out activities and functions of business organisation in an effective manner.
Therefore, it is easy for the company to transport the good from one place to another. In UK, it is
considered as a developed country as well as it is necessary to follow the government rules and
regulations in order to carry out business activities and functions in an appropriate manner.
Therefore, they does not follow this kind of economy (Aksenov, 2017).
Market economy: In market economy, it is vital to maintain the balance between demand as
well as supply because the decision are taken on the basis of distribution and investment process. In
UK, this kind of economy is only followed by some organisation of the country.
Mixed economy: This signifies the combination of both socialism as well as capitalism
economy that helps in operate its business activities and functions in an appropriate manner. In
addition to this, it makes optimum utilisation of resources at marketplace. In relation of UK, the
country use the mixed economy that helps them in developing the country. Apart from this, TESCO
adopt the mixed economy in order to gain competitive advantage over rival firm (Nikitina and
Lapiņa, 2019).
Economic Conditions
The situation of UK economy is dynamic and flexible as well as adopt the different policies
in order to monitor and control the operations of business organisation in an effective manner. It
imposes direct impact on the several elements which includes foreign students, universities as well
as tourism sector (Erl, Khattak and Buhler, 2016). Therefore, it is very important to have adequate
knowledge regarding economic factor as well as their effect so that defensive measure is adopted
for the future perception. Monetary policy is essential for the growth as well as development of the
country. In context of UK country, it is adopted in an effective manner in order to boost the rate of
employment as well as reduce the unemployment rate. Therefore, the monetary policy imposes

negative impact on the TESCO due to high interest ate which results in generating the issues and
problems for the business organisation. Apart from this, price elasticity imposes direct impact on
behaviour and attitude of consumer as the change in price alter the behaviour of buyer towards
products and services at workplace.
Economic policies
Organisation use different kind of economic policies which includes rules, law, regulations as
well as legislation and many more. In relation of TESCO, the marketing team of this company
focuses on maintaining effective policy as well as procedure in order to reduce the risk which occur
in future time period. The European Union policies are rigid as well as tackle by government in an
effective manner. There are different companies enter in the market for merger as well as joint
venture to become authorised firm but due to European Union policy they do not affect the business
and its environment in order to accomplish goal and objective in short span of time. In addition to
this, it imposes direct impact on organisational behaviour because they focuses on employees’ rights
as well as provide equal rights to them (Popescu, 2018).
Impact of non-economic environment on OB (organisational Behaviour)
Business environment includes internal and external factor which imposes direct impact on
the growth and development of organisation. In addition to this, there are numerous factor which
includes in Non- economic environment such as demographic, cultural as well as technological
factor. In relation of TESCO, they adopt both Non-economic as well as economic environment in
order to bring stability within workplace (Bogdan and Beata, 2018). Therefore, there are different
kind of factor which imposes direct impact on the growth and development of organisation in future
period of time. There are different non-economic factor which is going to be mentioned below:
Natural Environment
It is necessary to have enough resources in operate the business activities and functions in an
appropriate manner. In addition to this, it is important for the company to make optimum utilisation
of resources in order to accomplish goal and objective in given period of time. Due to scare natural
resources as well excess use of it by some companies, the government imposes rules as well as
regulation for optimum utilisation of resources within organisation. There are different factor which
directly affect the natural environment such as climatic change, rain and wind at broad level. Apart
from this, organisational behaviour is directly influenced by the natural environment because the
person, structure as well as technology are important for the business firm in order to boost sales
and profit in future period of time (Mcdonnell and Sikander, 2017).

Demographics
Demographics includes various elements like gender, income, age, occupation and so on.
All these factors affect the productivity as well as performance of business organisation. It includes
population of the country which have death and birth rate. Thus, it is vital to manager the equality
among both factor like birth and death rate. Apart from this, the main aim of company is to hire
talented and capable employees based on their knowledge. It is also essential to analyse the income
of individual person to identify the buying power of consumer in order to satisfy their need and
want in an effective manner (Silva, 2019).
Culture
Organisation culture is considered as process which includes belief, value, morale and so on
that imposes positive and negative impact on the performance of the business organisation. In
assistance of this, the manager of TESCO emphasised on providing healthy environment to the
employees that helps them in motivating them towards goal and objective of the business
organisation in short span of time (Kalitanyi, 2019). Apart from this, the manager give opportunities
to its subordinates to take part in the decision making which will be advantageous for the company.
It increase the performance and profitability level in future period of time in an effective manner.
Discussion and analysis
SWOT ANALYSIS of TESCO and impact on organisational behaviour
SWOT Analysis is the tool and technique which is adopted to assess the strength, opportunities,
threat as well weaknesses which affect the productivity as well as profitability of the business
organisation. The manager of TESCO emphasised on grab the opportunities as well as eliminate the
threat in order to increase the performance level of the business organisation. In assistance of this,
SWOT is used for identifying the different elements which influence the behaviour of employees
working in the company.
Strength
In relation of TESCO, the manager focuses on offering innovative and specific products as
well as services to its customer at reasonable price. Beside form this, the manager build appropriate
strategy in order to provide goods and services to its user in less time. And also the organisation
structure of the business firm is suitable that assists in increasing the sales as well as profit in future
time period is determined as a beneficial for the business organisation.
Weaknesses
In addition to the numerous strength, there are some weaknesses that the manager tries to

reduce for operating business activities and functions in an effective manner. Beside form this, if
appropriate training is not offered to its staff member that results in reducing the performance level
of individual person at workplace ( Hejduk, 2016). Apart from this, it is necessary to adopt the
suitable leadership style in order to bring innovation at workplace otherwise it is not possible to
achieve goal and objective of the organisation in stipulated period of time. It can be determined as a
threat for the company which imposes negative impact on the productivity as well as profitability
level.
Opportunities
In context of TESCO, the first and foremost advantage of this company is to execute the
advanced technology for offering the specific goods and services to its customer for increasing their
satisfaction level. It helps in increasing the loyalty and trust of customer towards products &
services of the company. Due to latest technology, the company offer the unique and innovative
products and services to its user in order to satisfy them can be determined as opportunity for the
company.
Threats
The manager of the TESCO tries to eliminate the threat prevailing at workplace. It is necessary to
communicate and coordinate the different task in an effective manner (Hejduk, 2016). If there is a
lack of communication in operating its business activities and functions thus it results in difficulty
occur in performing the task in better way can be considered as major threat for the business
organisation. Apart from this, the cost of executing the latest technology is too high which affect the
future sales and profitability level in negative manner.
PESTLE Analysis of TESCO
PESTLE Analyses is a framework which is adopted to assess the different factor which
imposes direct impact on the productivity of the business organisation (Bianchi, 2017). In context of
TESCO, it is the biggest international chain of supermarket which offer unique and innovative
products and services to its customer in order to gain competitive advantage over rival firm. There
are different factor in relation to TESCO which is going to be mentioned below:
Political factors
There are different political factor such as rules, regulations, laws as well as legislations
which affect the performance of business organisation in both favourable and adverse manner. Due
to Brexit, the exchange rate is increased and it imposes negative impact on the profitability of
organisation. The change in government rules and regulation results in alteration of the company

policies can affect the productivity of company in negative manner.
Economic factors
Economic factor involves interest rate, inflation as well as deflation rate and many more
which imposes direct impact on the performance of business organisation. Beside from this,
Economic factor can be considered as a sign of positivity for TESCO which is advantageous for
future sales and growth of the company.
Social factors
Social factor includes value, belief, lifestyle as well as trend which affect the productivity as
well as profitability of the business organisation. In context of TESCO, the manager focuses on
offering superior quality products and services to its customer in order to increase their living
standard. Also, they provide the products according to the changing need of customer in order to
satisfy them. It helps the company in achieving leading position at marketplace (Tabachnikova and
Vinokurova, 2019).
Technological factors
Technology plays an essential role for the success and growth of the business organisation. It
is necessary to implement the latest technology in order to provide the superior quality products and
services to its user. In addition to this, the company adopt Artificial Intelligence in order to analyse
the need and preference of customer as well as boost their sales through marketing campaign
(Cumming, 2018).
Environment factors
Environmental factor includes weather, climatic condition and many more that imposes
direct impact on the productivity and profitability of the business organisation in wider term. In
relation of TESCO, the manager offer eco-friendly products and services to its user for increasing
their living standard. In addition to this, they take important measure to perform the task in such a
manner which does not harm the environment which affect the people living in the society.
Legal factor
Legal factor includes rules, laws, regulation as well as procedures and so on. The company
follow all rules and regulations which is imposes by government in order to build an ideal work
frame within business organisation (Luu, 2017). In addition to this, the company does not use the
plastics for the betterment of company in future period of time.
Recommendation
The ideal recommendation for TESCO can be determined that it has a good opportunities as

well as possibility within market to boost its venture at wider level. In relation of TESCO, this
company deal in wide variety of products and services in order to satisfy the customer. Therefore,
the manager can build an effective strategy, policy and procedure for identifying the changing need,
preferences and lifestyle of customer and provide the products and services according to their need.
It helps them in increasing sales and growth of company in future period of time. Apart from this,
the company can use the latest technology for boosting productivity as well as profitability level in
short span of time.
CONCLUSION
From the above mentioned topics, it can be analysed that business environment imposes direct
impact on the productivity and performance of the company in both positive and negative manner.
There are different economic factor which includes taxation, laws as well as regulations while in
non-economic factor involves climate, weather as well as environment and so on. In addition to this,
PESTLE & SWOT is adopted by the company in order to analyse the micro and macro environment
factor which affect the profitability of the company. Apart from this, the manager of TESCO make
effective strategy in order to identify the need and wants of consumer and providing them high
quality products and services for increasing their satisfaction level.

REFERENCES
Books and Journals
Aksenov, S. L., 2017. Contemporary Business Environment in Russia. International Journal of
Economic Perspectives, 11(2).
Amankwah-Amoah, J. and Wang, X., 2019. Opening editorial: Contemporary business risks: An
overview and new research agenda.
Bianchi, M. T., 2017. Discovering the role of innovation in contemporary business systems: an
assessment technique from the literature analysis. International Journal of Digital Culture and
Electronic Tourism. 2(1).pp.1-15.
Bogdan, G. and Beata, G. F., 2018. Chances and Challenges for Contemporary Business–from
Human-Centred Design Philosophy to Omnichannel Environment. Handel Wewnetrzny, (376), p.73.
Cumming, J., 2018. An investigation into the strategic response of artists in the contemporary
music industry (Doctoral dissertation). An Empirical Overview of Contemporary Revenue
Management Practices in Hotel Industry; Evidence from Star Graded Hotels in Colombo District.
Erl, T., Khattak, W. and Buhler, P., 2016. Big data fundamentals: concepts, drivers & techniques.
Prentice Hall Press.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hejduk, I., 2016. Sustainable Enterprise as a Concept of Contemporary Management. Przeds.
Zarz, 10, pp.9-20.
Kalitanyi, V., 2019. Global Business Environment. In Contemporary Multicultural Orientations and
Practices for Global Leadership (pp. 1-24). IGI Global.
Luu, T. T., 2017. CSR and organizational citizenship behavior for the environment in hotel
industry. International Journal of Contemporary Hospitality Management.
Mcdonnell, L. and Sikander, A., 2017. Skills and competencies for the contemporary human
resource practitioner: a synthesis of the academic, industry and employers' perspectives. The
Journal of Developing Areas. 51(1). pp.83-101.
Nikitina, T. and Lapiņa, I., 2019. Creating and managing knowledge towards managerial
competence development in contemporary business environment. Knowledge Management
Research & Practice. 17(1). pp.96-107.
Popescu, D., 2018. Contemporary approaches and challenges of tourism sustainability. Amfiteatru
Economic. 20(SI 12). pp.830-832.
Silva, D.A.C.S., 2019. An Empirical Overview of Contemporary Revenue Management Practices in
Hotel Industry; Evidence from Star Graded Hotels in Colombo District.
Tabachnikova, O. and Vinokurova, N., 2019. Youth and Women Entrepreneurship in Contemporary
Russia: Tendencies, Challenges and Prospects. In Conference Proceedings Chapters (pp. 60-79).
Bulgarian Association for Management Development and Entrepreneurship.