How Businesses Operate

This presentation provides an overview of the different types of organizations in the UK and how they operate. It covers sole proprietorship, partnership, franchisee, private sector, and public sector. The presentation also discusses the impact of the business environment on Tesco and the importance of customer service and customer profiling for business success.

How Businesses Operate
Task 1 & Task 5

AC 1.1 Types of
organisations in UK
Business organisation refers to
an individual or a group of
persons working together to
achieve the same commercial
interest.
Organisation
Types
Sole
Proprietorshi
p
Partnership
FranchiseePrivate Sector
Public Sector

Cont.
 Sole Proprietorship : Sole proprietorship refers to that business owned by only one
person.
 Partnership : Business owned by two or more persons is known as partnership. Partners
contributes resources, capital, skills and workloads.
 Franchisee : Licensing arrangements where an individual or group buy the right to sell
or produce under a well known brand.
 Private sector : It is an business enterprise which is run by the private individuals or
groups.
 Public sector : An organisation owned and operated by the government.

Basis Sole
Proprietorship
Partnership Franchisee Private
Company
Public
company
Owner One owner 2 or more
partners
franchisee Shareholders Shareholders
and
government
Size small medium Small part of
large
organisation
Medium and
large
large
Liability Unlimited Mostly
unlimited
Limited Limited Limited
Profit
sharing
Owner Partners Franchisee and
Franchisor
Shareholders Shareholders

AC 1.2 Different structures
within businesses in UK.
Organisational
structure
Types
Functional
Line and
Staff
DivisionalMatrix
Project
Organisational structure is a system
used to define a hierarchy within an
organisation. It defines the jobs, its
function and where to report within
the organisation.

Cont.
 Functional Organisational Structure : In this structure organisation is been divided into
smaller groups with specific tasks or roles. Such as marketing, finance, production, etc.
 Line and Staff Organisation Structure : Most businesses in UK adopts Line and Staff
structure as it is flexible. Relationship is between different levels are direct and vertical.
Staff is mainly advisory in nature and doesn't possess any command authority.
 Divisional Organisational Structure : In this structure departments are formed in
organisation on different basis, such as function, product, project, etc. Each department
has its own manager who directs and manage employees under him or her.. Provides
flexibility to larger companies with many divisions.

Cont.
 Matrix organisational structure : It is an organisation designed to achieve
specific results by using teams of specialists from different functional areas in the
organisation.
 Project Organisation : This organisational structure is formed temporarily for
particular projects for specific time period.

AC 1.3 Impact of business environment on
Tesco
Tesco is one of the largest retail giants
across the globe, it has more than 6000
stores. Despite its successful operations
its faces number of economical
challenges whether at local, national or
at global level

Cont.
 High Unemployment rates : Unemployment rates is one of the factors which affects
the economy of Tesco as it affects the profitability, cost of its products and services,
etc. as unemployment reduces demand for its products and services.
 Substitutions : Availability of substitutes for Tesco's products and services force to
review the prices due to substitutes, as it affects the demand of products and services.
 Competition : Tesco has to face a tight competition from its rivalries, as a result it has
to face low profit margins.
 Innovations : Tesco's market shares have reduced due to innovations and new
technologies. major losses.

AC 5.1 Impact of customer service on business
success
Customer service should be one of the main priorities. Keeping them happy is key to
run a successful and profitable business. With good customer service in Tesco more
customers are likely to do business again, which increases customer retention and
increases the profits. Enhanced customer loyalty results in increased sales, returns
and profitability. It enhances the reputation of business in the market.

AC 5.2 Benefits of customer profiling to a
business.
 Better communication : It makes communication easier as business knows more
about their customers.
 Greater opportunities : Easier to devolop opportunities as they provide feedbacks
and suggestions.
 Reduce competition : Through strong relationship with customers it reduces
competitions.
 Bring in more customers : When organisation knows about current customers it is
easier to attract more.

References
 Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
 Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how
to do it right. John Wiley & Sons.
 Macaulay, S., 2018. Non-contractual relations in business: A preliminary study. In The Law
and Society Canon (pp. 155-167). Routledge.
 Perren, R. and Kozinets, R.V., 2018. Lateral Exchange Markets: How Social Platforms
Operate in a Networked Economy. Journal of Marketing, 82(1), pp.20-36.
 Boyd, B., Henning, N., Reyna, E., Wang, D., Welch, M. and Hoffman, A.J., 2017. Hybrid
organizations: New business models for environmental leadership. Routledge.

Thank You