Contemporary Business Environment: Impact on Tesco's Organizational Behavior

This assignment focuses on the impact of contemporary business environment on Tesco's organizational behavior. It discusses the business culture and environment, macro environmental factors affecting Tesco, and analyzes the strengths, weaknesses, opportunities, and threats of the company through SWOT analysis.

Contemporary Business Environment
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................4
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12
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INTRODUCTION
Overview
Business environment can be defined as sum of internal and external factors such as:
customer’s needs, employees, supply and demand, clients, management, government activities,
owners, technology, innovation and many more. These are the factors that affect overall
functioning of an organization (Rudawska and Zhanna Belyaeva, 2018). Today many companies
focus on contemporary business environment. Contemporary business environment is a kind of
business environment that has a vast competitive market that changes continuously and quickly.
Such organization’s owner’s must be capable enough to understand development and
requirements that are required to be focused on. This kind of business environment is quite
competitive and in order to cope up with this pressure it is extremely important for organizations
to focus on beyond development of a good product (Tarabasz, Selaković and Abraham, 2018).
They also need to focus on pricing the product correctly and focus on easy and accessible
marketing of the product. This assignment will lay emphasis on Business culture and
environment impact on organizational behaviour of Tesco, macro environmental factors that can
affect Tesco both positively and negatively. This will be explained with the help of PESTLE
analysis. Other than this, this assignment will also lay emphasis on strengths, weaknesses,
opportunities and threats of Tesco with the help of SWOT analysis.
Introduction to organization
Tesco is a well known British general merchandise retailer and multinational grocer that
was founded in 1919 whose headquarters is in England, United Kingdom. In terms of revenue,
Tesco is third largest retailers present in the world and in terms of revenue it is ninth largest
retailers present in the world (Heese, Srinivasan and Kelley, 2019). They have more than 100
shops all across Asia and Europe. They are market leader of groceries in UK, Thailand, Ireland
and Hungary. If their overall global presence is talked about then Tesco has more than 6800
Stores in more than 14 countries apart from Europe and North America. Other than UK they
have a large market share in Asia. They have more than 450,000 employees working for them in
more than 11 countries. They mainly have supermarkets, superstores, hypermarkets and
convenience shop. They focus on offering one of the finest and best quality products in lower
cost that further helps them to attract a greater number of customers. It is UK’s one of the
favourite and biggest supermarket. Today retail market of UK is mainly dominated by Tesco and
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its competitors such as: Aldi, Argos, Sainsbury, Morrisons, Lidl and many more. Overall revenue
of Tesco in 2019 was £63,911 million (Wood, Coe and Wrigley, 2016). Their net income in 2019
was recorded as £63,911 million. Other than being a grocers and retailers they have various other
subsidiaries as well such as: Tesco Stores Ltd., Tesco Bank, Tesco Mobile, Tesco Ireland, Tesco
Family Dining Ltd., Dunnhumby, Spenhill, Booker Group, Jack's, Petrol Stations and many
more.
MAIN BODY
Business culture and environment impact on organizational behaviour.
Culture or environment is based on the arrangement of different attribute that will be
express towards business function. It is to be considered as collective thinking of mind which
create difference between group of members. It is mainly defined set of behaviour, value to
change overall business performance and efficiency in global marketplace. Sometimes, it also
defined the way of employee how they can complete their task and interact with each other in
organization. The culture may comprise various rituals, symbols, values and belief that govern
operating style of people within Tesco (Oyemomi and et.al., 2019). The business culture binds
the workforce together which provide the better direction of company to increase profitability
and productivity in global world. Organizational culture may vary impact on the staff members
performance and their motivational level. it often the employee work harder to achieve the
significant goal and objective. In this way, it should require for consider themselves to be part of
corporate environment which are operating one business and impact on the employee
performance.
On the other hand, Macro environment are those factors which directly effects on the
business operations and their working condition. Sometimes, it is uncontrollable and powerless
which are not capable for controlling over them (Raman, Garg and Thapliyal, 2019). Business
culture or environment can be divided into two groups: economic and non-economic
environment.
The economic environment of business may include economic system, parameters, stage
of business cycle, financial system, policies. It mainly referred to the characteristics of economic
system. the existing economic environment is highly complex which is not easy to handle in
proper manner. This is reason for organizations operating same economic environment which
help for decision making (Roscoe, Subramanian and Chong, 2019).
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The economic environment have the major level of impacts ion the business Tesco
which is being affecting different patterns of demand and supply. All level of existence in
working of business which have inclusion of various factor such as the interest rates, demand and
supply along with recession and inflation. Hence, all the business have the clear aims wants to
have proper maximization of profit (Panayotou, 2016). The level of economic profit can be
clearly achieved through the analysis of demand of consumer which have the provisioner of
appropriate supplies to customer along with stage-manage the appropriation level of high quality
of respective goods and services.
The development of economic systems have the clear indication in terms of which
societies per the governments have the proper level of organising with distributable of
availability of different resources. This have clear level of incalculable of the all available goods
and services as the development across the geographic regions or the country (Raman, Garg and
Thapliyal, 2019). This is helpful in regulation refactor of different post-production which
catering appropriate level of capital and labour.
The economic system has the proper clairaudience the type of different ecosystem system which
are such as traditionalist ecosystem, market ecosystem, command ecosystem and the mixed
embryonic developmental of business.
Tesco is considered to be the one which is havering the competitive advantages in the
markets' area with composition in recreation to other respective retailers which is prevailing bun
the market by offering the qualifies level of product at cost efficient rates (Villanueva and et.al,
2016). This is helpful for customers to have censurable towards proper protections along with
ensuring entrepreneur to have the cam mile level of chances in the markets to have respective
growth of financial systems win is important in eyes of consumer law.
Tesco has been benefit for the international supply chain by having proper expansionist
and dealing in relation to different countries across the globe to have efficient development.
These trades are helping them to have providence customer with varsity of goods and quality of
services for the various countries to respective level of different customers.
On the other hand from the local supply chain, the company is able to have the
providence of quality of fundamentals foods which are such as the milk meat and bread firm the
local farms e. The company is using the supply chains in order to provide the quality of local
foods that the customer is having prior level of experimentation form it.
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The next factor is developmental of economics policies are considered to be the action
through which the authoritativeness have proper level of creation of the best level of economics
environment for the respective growth for business and individuals. This is helpful in
accomplishing the different level of business objectivists what the governments to have the
achievements as power the different level of aims and objection and respective demands.
The development of economic policies are having the incalculable of varsity of decision
which is regards the speculation and respective taxation. As the Tesco is the avoiding passing
with level of full impact of the rise in prices towards the consumer along with super market aid
(Baboshkina, Savina and Morozov, 2018.). The company have stated that tin the time period of
difficulty and tough market conditions, the company wants to stay tunes to the respective level of
commitments in order to help the customers. The company so added that working closely with
suppliers partner is teeing the favourableness towards the exhaustions to keep the prices as low
as wants and promise sewer made to customers.
Hence, as per the development of efficient economic policies, Tesco is thanked for
paying accurate level of focus on lowering their respective prices along with providing the better
level of customer prices. It has increased the ongoing financial instability in global world and
many governments encourage Tesco to create job opportunities for employee (Raman, Garg and
Thapliyal, 2019). TESCO plays important role for creating employee opportunities which
directly turn into demand of product and services.
Economics conditions have the proper refereeing to the statement of the macroeconomic
variables along with trends in country point of items. This is considerations may have clear
inclusion of GDP growth level of potentiality, employments rate, inflation along with fiscal ans
monetary policy Orientalist (Kordos. and Vojtovic, 2016).
Tesco has been recorded as the designators level of growth in last 7 years in addition to
have appropriates acquisition of booker cash ans carry group. With addition to that the company
have TESCO have been provided various award on the basis of excellence customer service and
entire shopping experience. The organization always significant reserve cash in context of wide
range and develop strong position in global marketplace
The natural environment is influencing the organisation behaviour which have the proper
identification form external and internal sources. The company is considered to be highly
engages which heigh regulation in business which may be considered as strict ans structure
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culture. This is proper need to conform to have development of certain laws along with
regulation which is part of external environment of company.
On the other hand the interaxial environment along have the impact on organisational
behaviour. The strangleholds of accompany depending of organisational behaviour which s
considered to be more successful for growing and prosecutable of business.
The social changes are the clear reflection over all stakeholder perceptiveness s which is
indicated with neds and way of working (Aastveit, Ravazzolo. and Van Dijk, 2018 ). These are
the changes which take place if the several forces with level of reductase urbanization, feeling of
autonomy, and international impact due to new information sources. These social changes affect
the behaviour of people in the organization. There, it is required to make adjustments in its
working so that it matches people.
The non-economic environment is strongly influenced on the overall business. It is
considered as key factors for different business activities. It consists of social roles, class
structure, mobility and development social institution. It basically depends on occupation of
employee. In this way, it can be defined the income levels. Social norms are important standards
that would maintain attitude, behaviour and values.
Pestle analysis
Tesco is multinational food retailing company in UK and has stored in different countries
across the world. It is second largest retailer in terms of profits and expand their business in
global marketplace. It is based on framework or tool used by marketers to monitor and analysis
the macro environment factors.
Political Factor
Tesco operates the world wide and global political factors which influence overall
performance of business. it may include tax rates, legislation and stability of nation. it has
increased the ongoing financial instability in global world and many governments encourage
Tesco to create job opportunities for employee (Thiersa, 2019). TESCO plays important role for
creating employee opportunities which directly turn into demand of product and services.
Economic Factor
It is important factor that concern about Tesco which are likely to leverage cost, profit,
demand and price. Therefore, Tesco should be aware about the business policies and procedures
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such as taxation changes and other factor which directly effects on the financial accessibility. In
this way, the organization is still quite their dependability in UK market.
Social Factor
The factor indicates the trend of customer in UK where how they have moved towards
business operations and functions. Tesco has increased their non-food product for sales. in this
way, it will increase the demand of product and service in global marketplace. many potential
customers influenced by attitude, beliefs and they also aware about the health issues so that it
constantly changing (Roscoe, Subramanian and Chong, 2019). Tesco is also adopting to changes
in their product and services, using organic items.
Technological Factor
The advancement of new technology has increased new opportunities for TESCO. It may
include development and online shopping facilities for customer. The organization provide
option for Self-service check out as convivence and ease for client. In this way, it directly turns
have reduce labour price. TESCO has invested large amount of energy efficient project to
achieve business goals and objectives.
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Environmental Factor
The factor has increased the pressure on TESCO and address environmental issues. It is
adopting the business operation which can easily provide benefits for society. In some situation.
TESCO is committed to minimize the production of carbon dioxide during item manufacture
(Woodward and Veal, 2019). It always tries to use sustainable raw materials for controlling
pollution rate in global world. Furthermore, TESCO has reduced waste product in physical store
and also increasing social conscience.
Legal Factor
Government-based legislation and policies are directly impact on the entire performance
of Tesco. The organization should be adopted code of practices such as price changing without
any demand. Tesco provide the customer price reduction on the item they can purchase.it also
spending large amount of money in grocery stores.
SWOT analysis
Strength
 TESCO has provided the various award on the basis of excellence customer service and
entire shopping experience.
 The organization always significant reserve cash in context of wide range and develop
strong position in global marketplace (Reuer, 2019)
 It offers the best deals and personalised service experience by using online medium.
 TESCO has improved use of modern technology in terms business operations. In order to
create cost effectiveness and enhance better customer experience services.
Weakness
 The competitive pressure always increased the price wards and reduce profit margin in
marketplace.
 Many clients are buying so many products because of limited disposable income. In his
way, it directly affects on the business productivity.
 It is highly dependent on other countries such as UK and Europe in term of sales.
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Opportunities
 TESCO has increased the opportunity to grow online shopping experience. It also
provides home delivery services in client location.
 It is emerging the market while holding several opportunities for certain retail business
expansion.
 They have recently introduced Jacks which is a new discount store which has shown
significant growth within their business. Focusing on expanding this business can help
them to gain competitive advantage.
Threats
 Economic crises affected Tesco and their operational efficiency, performance in many
ways. The economic recession will continue to effects on market share and profitability.
 Competitive threat is coming from Tesco who that may able to offer item in low price.
Labor threat is another issue which has increased wages.
 Tesco was also accused of misleading customers with fake farm brand name and
marketing their products under the mane of Woodside Farms.
CONCLUSION
From the above assignment it has been summarized that today’s business environment
has become extremely competitive because of which organizations need to focus on various
factors other than better quality products such as pricing, marketing and many more. Other than
this, it has been analyzed that organizational culture plays a vital role in affecting overall
performance and productivity of employees as well as organization. If organizational culture of
an organization is not good then it can degrade overall motivational level and performance of the
employees of the company in many different manners. Positive organizational culture directly/
indirectly helps employees to work hard for the organization in order to achieve desired and
significant results. It has also been analyzed that there are various kinds of macro environmental
factors that have direct/ indirect effect on overall working conditions of the organization as well
as on its business operations. Working on and development of organizational environment and
culture can help a company to focus on enhancement of their as well as of their employee’s
overall performance and productivity.
From the above discussion it has also been analyzed that Tesco operates in an extremely
competitive environment. In order to main their position in the market and gain competitive
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advantage they need to work on their products, its prices and quality in a better manner i.e. they
should focus on providing products and services to their customers in a much better and
enhanced manner as compared to their competitors. It will not only help them to attract more
customers but will also help them to enhance their financial stability. Other factors that can affect
retail sector organizations economic policies development. These factors help an organization to
create a best economic environment level. These factors can also help an organization in
accomplishing their main business objectives with respect to the market demand. It has been
analyzed that other than this, majorly economic conditions of a nation affect operability of an
organization within that nation. In fact, organization plays a vital role in enhancing overall
economy of a country, increase employability and can also help in increasing/ decreasing overall
inflation rate of a country.
From the above assignment it can be concluded that major macroeconomic factors that
can affect an organization, their productivity in many ways. Some of the most common factors
are political, economic, social, environmental, technological and legal. These factors have both
positive and negative impact on an organization. Each organization has their own internal and
external capabilities that can affect their overall operations. Working on these capabilities can
enhance their strengths, reduce weaknesses, increase opportunities and reduce threats that can
affect their business. Analysis of these factors and working on them can help and organization to
gain competitive advantage.
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