contemporary business environment

Contemporary business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
How the business, cultural, and natural environment shape the behaviour of a selected
organisation..................................................................................................................................3
Pestle analysis of Tesco..............................................................................................................8
Swot analysis .............................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................12

INTRODUCTION
Businesses environment is the collection of the all the external and internal factors such as
customer needs ,supply demands, management, owners, suppliers as well as focuses on the
threats and opportunities regarding any business . To successfully sustain a business the business
required resources such as finance, social norms acceptance for that business has to rely on the
market. The sales of goods and services that has to depends on the consumers ,the labour that
rely on society. Raw materials and natural resources for that depends on Nature. In addition to
this depends on the legal support of the government that can rely on the government. It seems
that there are various dimensions and factors that affects the environment of Business. There are
two types of the business environment such as External Micro and External Macro. Micro
focuses on crucial environment at micro level, suppliers and offers to give the materials at lower
prices than the market. While Macro focuses on the large forces of the external environment such
as it determines the opportunities of an organization to focuses on threats as well as restrictions
regarding the expansion activities firm. Tesco is well-known firm within the United Kingdom as
it is a Multinational food retailer firm as it has its stores in 12 Nations all over the World. It
headquarter is in Hertfordshire ,England . It is known as retailer firm after Walt mart as it is the
second largest retailer in terms of profit as well as holds the title for the second largest retailer.
Basically Tesco is known for the selling non food and food products in addition to this Tesco
also provides the mobile, finance ,hardware services, insurance and many more. Present Report
focuses on the detailed analysis of the external environment analysis and internal environment of
Tesco . As it will evaluate the environment within that firm operates. Both the Swot and Pestle
are the tools used as decision makers while analysing the pros and cons of the Initiative of the
Project regarding firm. Swot focuses on the internal weakness and strength of firm and Pestle
focusses on the external environment of a project. Furthermore, report focuses on business,
cultural, and natural environment shape the behaviour of Tesco as values and beliefs of
organisation treatment as well as employees shape behaviour allowing flexible working
conditions result in satisfied customers (Amankwah-Amoah and Wang, 2019).
MAIN BODY
How the business, cultural, and natural environment shape the behaviour of a selected
organisation
Impact of Business Culture on its Behaviour

This is made of values and beliefs of organisation and its people. Values of business are
passed from its promoters and leaders and which shape its culture and behaviour of its people
(Karaibrahimoglu and Cangarli, 2016). There are various factors of this culture interaction of
employees in organisational setting, system of the organisation, importance given to various
aspects of business. This includes how significant organisation considers its employees and
treatment that employees receive in the organisation. These are important factor which shape
behaviour of organisation. Rather than affecting the behaviour of organisation culture impact the
behaviour of employees of the organisation. A culture which allows flexible working and
timings, free working environment, less rules and regulations allow employees to excel in their
performance as they are able to work according to their comfort level and their focus remains on
their performance rather than on following rules and regulation of the organisation. Free flow of
communication rather then flow of communication in hierarchical manner ensures effectiveness
and timeliness on communication and this way people whose performance and completion of
task is based on communication can excel in their performance. Preference which is given to
training and learning of the employees is also important while determining behaviour of
organisation and its people (Matinaro and Liu, 2017). Tesco provides effective training to its
employees and this is why all the employees of Tesco are very efficient and which result in
satisfied and happy customers.

Happy employees have positive attitude towards Tesco and in such situation they will do their
best to bring effective results. On the other a culture which is more restricted than employees
will have negative attitude towards organisation/Tesco, and they will only complete their task
and effectiveness will not be in the organisation which is a result of positive behaviour of the
people of Tesco
Impact of Business Environment on its Behaviour
There are various factors which affect behaviour of business (Alzubi, 2018). Behaviour
of organisation refers to behaviour of people of the organisation and the people shape the
behaviour of organisation, this is known as organisation behaviour. Environment of business
have great impact on this and this business environment has two types one is economic and other
is non-economic.
Business being an economic organisation and organisation operating for financial
motives definitely get affected by economic environment. This environment consist of economic
system, economic policies and economic condition. Tesco gets affected from all these factors. In
this economic system is system through which society and government distribute resources,
services and goods across a geographical region. This affect Tesco whether it is getting all the
Illustration 1: Impact of Culture on organisational Behavior.
Available Through: Culture: Your Environment for People at Work,
2019.

required resources or not. If the resources are limited and rarer than it will affect all the decisions
of Tesco from its production to distribution and price decision.
Figure 1Illustration 2: Impact of Environment on Organizational Behavior.
Economic policies are actions and guidelines through which behaviour of economy is
influenced (Bernstein, 2020). This includes various policies like taxation policy, distribution and
redistribution of income and supply of money, interest rate etc. these affect the behaviour of
organisation and to an extant these policies affect the profit of the organisation as well. High
taxation rate will increase the cost and this will affect the profit of organisation and also the tax
on profit will also get affected by the rate of tax.
Economic condition refers to financial condition of people of a country, their income and
their expenditure trend. GDP and employment rate are also part of this condition. This have a
great impact on Tesco and Tesco is a multinational company which is why economic condition
of the countries and their people affect its behaviour and decisions are based on that.
These were the economic factors of the business environment which affect the behaviour
of Tesco but these are not the only affecting factors non-economic factors are equally important
for organisational behaviour (Zhou and Verburg, 2020). Non economic environment consist of
various sub parts which are natural, demographic, technological, legal political and social. These
are significant factors of external business environment of Tesco and its internal environment
enables it to cope up with the changes in this environment.

Natural Environment is geographical and ecological environment of business. This is a part of
natural environment which society use for life and production activity. Locations are also based
on this and this location differentiate culture and living of people of different areas. This living
and culture have great impact on the behaviour of Tesco. Tesco is known to present British
culture the reason is that people who founded and made Tesco and those who are working and
operating Tesco are from Britain. There values and norms are like British and which is why
Tesco have British touch in its activities and its products as well. This values and norms keep
changing on the basis of geographical location. Ecological environment is that which provide all
the natural resources to Tesco for its operations and production of goods (Keszey, 2019). This
environment plays an important role in success and effective functioning of the Tesco. Natural
resources are very important so that organisations are able to produce goods and distribute these
to customers. Behaviour of organisation and their production decisions are mainly based on the
natural resources available to them. This also depends on the geographical location that what
type of resources are available to them. Tesco will be able to produce all the products only if it
has all the required resources. This shapes the behaviour of Tesco.
Other factors and environment affecting behaviour of business are
Demographic Environment, this environment includes factors such as age, births, deaths,
marital status, gender, education level and religious affiliation. All these factors related to those
who are operating Tesco and those who are customers of Tesco affects its behaviour (Alsop and
et.al., 2016). For example most of the people in Tesco are of young age then the behaviour of
organisation will be according to them most of the decision of Tesco would be such which are
right as per those young people of Tesco. From its management to all other functioning of Tesco
will be as per modern norms on the other hand if Tesco employs people who are of middle age
than they will operate Tesco in their traditional right way. Education level also affect this
behaviour as perceptions and thought process of the people will be different of educated and less
educated people.
Technological Environment, this consists of technology level and role of technology which is
used in Tesco affects its behaviour. In this if most of the operations of Tesco are completed
through the use of technology then it will be less active and its only concern remains completion
of task. On the other hand if Tesco employs more people and less technology is used in such case
it will be more active and along with completion of task people will also seek to find the ways in

which they can improve the processes (Keszey, 2019). This develops a ever improving and
enhancing culture of organisation and behaviour of the organisation will also be affected by
these.
Legal Environment, more restrictions on a business and less effective it is. This affect the
behaviour of organisation and people become more conscious about their all the decisions. This
limits opportunities for growth and development. Legal environment in what guides business in
what manner they are required to operate and tell them their do's and dont's. Tesco if is too
restricted from its legal environment in such case its employees will only focus on following
rules and regulations in order to avoid it from any type of legal issue. But if Tesco is not
restricted by laws in such case its employees can find different ways to improve its activities and
will look for innovation in operations as they are free to do what they want to do.
Political Environment, this environment consist of factors which are related with political
situation and political values and norms of a country (Bernstein, 2020). For example as per
Brexit Agreement UK is no more a part of European Union. This impact its various decision and
it will also limit the flow of goods and services from European Union countries. This affects all
the decision of the Tesco and this may have to take all decisions on the basis of these changes in
political scenario (Amankwah-Amoah and Wang, 2019).
Social Environment, this environment consist of consumer buying behaviour and what
preference Tesco gives to its customers and their preferences. This is a significant factor
affecting behaviour of Tesco the reason behind this is that all the business now have become
customer centric all their decision are based on their customer centric approach (Matinaro and
Liu, 2017). This affect behaviour of Tesco as they will operate and function as per their
customers.
Pestle analysis of Tesco
Political factors
Since the firms like Tesco operates all over the world as political factors impact the
performance of the firm. It includes acts of legislation, tax rates as well as the stability of the
nation at which the firm operates. Also due to the financial instability within the world ,various
government boosts retailers to create jobs so that the local people get the employment. As Tesco
plays a significant role in creating the job opportunities (Weitzner, 2017) .
Economic factors

Tesco should aware the changes within the policies as economic factors focuses on the
profit, prices, demand and leverage cost. Labor cost is consider as the crucial economic factor
that ca impacts the markets of United kingdom. There are also several factors that impact the
Tesco such as prices, cost and profits.
Social factors
Shopping trend changes over the time as nowadays people needs fast ,home delivery and
also the flexible return policy of the products. They choose online shopping. Tesco within UK
must understands the demands of the Costumers and provide them proper solution. Obesity is
also known as another issues within UK as Tesco must understands that People are more aware
regarding their health so firm need to focuses to provide the organic food (Domanović, V. and
Janjić, 2018).
Technological factors
To enhance the customer experience Tesco introduced RFID technology and increases
the store experience for the customers. Because of the RFID technology it automatically counts
the stock as well as removes it after the sales. The information is aids for the supplier regarding
the store and also replenish when needed (Kalitanyi, 2019 ).
Example – Internet , Automated process
Environmental
Drivers of the Tesco uses the routes which are fuel saving and also collected the
unwanted plastic bags from the consumers and recycle them. Tesco also committed to utilises the
renewable sources and by 2030 generate the 100 % electricity. Firm also decreases the carbon
footprint up to 50% within this year.
Legal factors
Tesco faces legal actions for misleading and accounting fraud and pay around 12 million to settle
legal action. It also faces legal action on the basis of discrimination (Boone, Kurtz, and Canzer,
2019).
Swot analysis
Strength
 Tesco's suppliers plays a vital role within the operations of any business. Tesco reduces
the cost as well as having the proper management of waste system (Weitzner, 2017) .

 It also becomes the leading supermarket as well as grocery retailer within the United
Kingdom. Tesco dominates the market of the united kingdom as by holding the
maximum amount of share around 27.8%.
 It is diversified 14 nations across Asia and Europe .
Weakness
 It faces the fraud scandal where Tesco founds guilty by showing less profit within its
accounting so that taxes can be avoided.
 It offers the customer the product at low cost and services within low prices falls under
the low cost strategy but it costing the firm in terms of low profit (Belyaeva, 2018 ).
Opportunities
 Tesco has its own shopping app for the online shoppers as it must upgrade its
features regarding the home delivery as it can easily attracts the customers.
 Firm has also been partnership with various other brands within the growth. The aim is to
provide the better products to increase the customers experience.
Threats
 Brexit referendum from Europe also have serious influenced on the Tesco’s business.
 National factors of Economics such as government rules, taxation as well as regulations
are serious threats that hinder the performance and growth within some parts of the
nation (Akhtar, Khan and Rao‐Nicholson, 2018).
 In 2017 Firm launched an ad regarding Christmas it was funny and offended many people
as according to them it was direct attack as well as disrespect the culture of Christians
CONCLUSION
From the above report it had been concluded that Tesco is a huge multinational brand but at the
same time its rivalries are growing day by day. Thus firm should take the advantages regarding
many opportunities. Firms also clear its brand name and resolve the legal issues from all the
proceeding as well as also came forward within a clean reputation. So that the people can Trust
the Firm once again. Swot analysis focused on the Tesco's Strength such reduce cost as well as
becomes the leading supermarket. While Weakness is offers product at low cost and services
also focused on the Opportunities such as own shopping app for the online shoppers and Brexit
referendums and government rules and taxation falls under the Threat. Political factors of
Tesco such financial instability as firm created jobs for thelocal people. Economic factors such

as Labour cost as well as focussed on profit,prices, demand and many more. It also focused on
Social factors such as customers needs home delivery and return policy of the products and
also Obesity is also one of the major social factor of the population of the United Kingdom as
Tesco understands the needs of the People provided them Organic food. To Enhanced the
customer experience Firms introduced the RFID technology that automatically counts the stock
as well as removes after the sales had done. It is beneficial for the employees of Tesco also
Tesco. Firms also generate the 100 % electricity at the end of the year 2030. It decreases carbon
footprint upto 50% within the year 2020. It also faced legal action on the basis of
discrimination with their employees and settled the issues pay millions for this. Furthermore,
Report focused on Economic policies income and supply affect the profit of the organisational
also get affected by the rate of tax Non economic environment demographic, legal political
significant factors cope up with the changes in this environment. Natural Environment location
and differentiate culture and living of people of different areas Ecological environment its
operations and production of good are also focused within the report. Furthermore f Business
Environment consist of economic system, economic policies and economic condition. Tesco
gets affected from all these factors. Demographic Environment, people in Tesco are of young age
then the behaviour of organisation will be according to them most of the decision of Tesco would
be such which are right as per those young people of Tesco. Education level also affect this
behaviour as perceptions and thought process of the people will be different of educated and less
educated people. Legal environment such case its employees will only focus on ways to improve
its activities also Political Environment, Brexit Agreement UK affects all the decision of the
Tesco and this may have to take all decisions on the basis of these changes in political scenario.
Social Environment, that all the business now have become customer centric all their decision
are based on their customer centric approach. This affect behaviour of Tesco as they will operate
and function as per their customers.

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