Introduction to Business Management

This document provides an introduction to business management and its importance in an organization. It covers different management roles, the concept of critical thinking, and the impact of external factors on the business environment. It also explains how to analyze these factors using PESTEL analysis and Porter's 5 forces.

Introduction to Business
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PART A...........................................................................................................................................1
PART B............................................................................................................................................3
PART C...........................................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business Management refers to the administration of the different types of functions in a
business organization in a highly effective manner (Brajer-Marczak, 2016). The managers are
required to apply its different types of techniques so that they are able to optimize the overall
processes and maintain the smooth functioning within the company. It is very crucial so that the
managers of the firm are able to ensure that the specific goals and objectives which are set for the
future time period are effectively achieved by the application of the right methods of
management. If the managers are able to make use of its practices then they will make sure that
they achieve the desired level of success in the future time period without facing problems and
issues. In this report, focus will be made on management and business environment.
Additionally, specific analysis on Corporate Responsibility & National Culture will be covered
as a part of this assignment.
MAIN BODY
PART A
Management-
Management means the administration of the different types of functions and processes in
the organization so that an organization can work and function effectively. In Tesco, the
managers ensure proper management by effectively monitoring and controlling the different
types of activities which are carried out in the company on a day-to-day basis.
Mintzberg's theory-
Mintzberg's theory determines the different types of roles which a manager is required to
play while ensuring proper management within an organization (Castillo and et.al., 2017).A
manager has a requirement to assume any of them so that adjustment can be done according to
the needs and requirements. According to Mintzberg, following are the roles which a manager
can play within an organization-
Figurehead- A manager acts as a figurehead and figures out the different aspects related
to the organization. In this way the manager is able to ensure that the management is done in a
correct manner. The managers of Tesco act as a figurehead and thus in this way are able to figure
out different aspects in a company.
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Leader- A manager needs to act as a leader and therefore ensure that the organization is
able to achieve the vision which is set by it in an effective manner (Cullen, 2017). In Tesco, the
managers act as leaders and guide their different subordinates working under them properly so
that they achieve the distinct goals and objectives which are set for the future time period.
Liaison- Managers are required to make certain contacts which can be external as well as
internal in nature (Davis and Comeau, 2020). In the context of Tesco, managers should be able to
create liaisons with the subordinates so that no problems and issues are there in the
communication part.
Monitor- Managers should make sure that they properly take care of the monitoring
aspect within the organization. In Tesco, the managers must be able to monitor the day-to-day
activities in a proper manner and must guide the subordinates.
Disseminator- Managers must act as disseminators of the information and should be able
to communicate the information effectively. In the context of Tesco, the managers must provide
the necessary information to the subordinates which can allow them to carry on their work
effectively.
Spokesperson- Managers are the spokesperson within the company and therefore are
able to represent it. Thus their views can be seen as the views of the organization. For the
managers of Tesco, assuming this role is important because it allows them to be able to represent
the company in an effective manner.
Entrepreneur- Managers are required to control change within the organizations.
Tesco's managers need to act as entrepreneurs because in this way they are able to solve
problems, generate the ideas and implement them.
Disturbance Handler- In an organization, there are certain disturbances which can
happen. The managers of Tesco is required to handle these disturbances by displaying effective
skills.
Resource Allocator- In the companies, the managers are required to become resource
allocator (Doern, Williams and Vorley, 2019). In Tesco, the managers should make sure that
they are able to allocate the resources carefully so that optimization of the processes can take
place.
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Negotiator- In the firms, the managers are required to act as the negotiators (Janiesch
and et.al., 2017). Tesco's managers act as negotiators and in this way they make sure that proper
negotiation can be carried out in the company.
Thus by assuming the different roles as mentioned above the managers of the
organizations are able to make sure that they can identify the tasks which they can perform.
The role of critical thinking-
Critical thinking is crucial from the point of view of the managers in the organization
(Lin, Tsai and Mahatma, 2017).With its use the managers can judge what is going on in a
particular organization. Its usage is crucial from the point of view of the management to be able
to interpret the circumstances in a better way and take the desired action as required by the
nature of the situations. Thus in this way they can make sure that they analyse and interpret the
given situation and accordingly take the action which is desired.
Taking into account the diverse interest of stakeholders-
There are various stakeholders of an organization (Linton and Solomon, 2017). These
stakeholders have interest in the working of the organization. They can be internal as well as
external in nature. In the context of Tesco, there is a requirement on the part of the managers that
they are able to consider the diverse interests of these stakeholders and fulfil their needs and
expectations. In this way they will be able to make them highly satisfied which will ensure that
the organization is able to set a good image in front of the stakeholders. Diverse interest of the
stakeholders can be taken into account by identifying what are their requirements and fulfilling
them by trying their utmost best to fulfil them.
PART B
Business Environment-
Business Environment refers to a combination of internal and external factors which can
create an influence on the operating situation of an organization (What Is Business
Environment?, 2020). It can include factors like clients and suppliers, competition and owners,
improvements in technology, laws and government activities and market, social and economic
trends. It is dynamic in nature and is expected to change anytime and thus the managers of an
organization must be able to deal with these changes in an effective manner by preparing a
strategy to be able to deal with them.
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The following models can be used by the management of an organization to analyse the
business environment-
PESTEL Analysis-
PESTEL Analysis is a management framework which is used by the organizations so that
they are able to analyse the various types of external factors which affect their operations
(Lombardi, 2019). The analysis of these factors in the context of Tesco is as follows-
Political factors- For an organization, the political situations are quite crucial because a
change in them can affect their working pattern. Thus factors like government policy, political
stability, corruption and tax Policy can create an influence on the working pattern of Tesco.
Currently, in U.K. The political conditions are totally dynamic and can change anytime. Thus if
the political conditions are unstable in nature then this can create an impact on the profits of
Tesco. Profits of the organization can decrease in such a scenario. However if the political
conditions are in the favour of Tesco then it can enhance the profits.
Economic factors- For the firms, the consideration of different types of economic factors
is highly essential. Thus factors like economic growth, exchange rates, interest rate and inflation
rates can affect the functioning of Tesco. U.K.'s economic growth has witnessed a slowdown in
the recent years due to the implementation of Brexit and thus this has the potential to affect the
profitability level of Tesco in the future time period by decreasing it. However if the economic
conditions are good then it can also enhance the level of profits.
Social factors- In the organizations, there is a requirement of considering the various
types of social factors which are associated with the business. Factors like population growth
rate, age distribution, career attitudes and safety emphasis can lead towards an impact on the
business of Tesco. In some areas of U.K. The social factors create an influence on the
profitability of the organization. They can either increase or decrease the profitability level of
Tesco. If social factors are not in the organization's favour profits can be decreased and if they
are in the company's favour then they can enhance the profits.
Technological factors- In the business environment, there are fast changes which can
happen in the aspect of technology. For a company like Tesco, it is important that it is able to
consider the improvements which it needs to make in technology. Factors like technology
incentives, level of innovation, automation, R&D activity have to be considered by the
organization because they can create a direct influence on the overall level of earnings as well as
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the profits of the company in the future time period. Thus they are highly important. If it is not
able to adjust to technological factors then profits can be reduced and if it adjusts to these factors
profits can be enhanced. In U.K. Technological developments have been taking part rapidly and
thus it is crucial for Tesco to consider them.
Environmental factors- There has been a rising consciousness among the customers
towards the environment (Parris and et.al., 2016). Thus the customers want that the companies
must be eco-conscious in their approach and must care about the environment. Thus the factors
like weather, climate, environmental policies, climate change are required to be considered by
the managers of Tesco so that they are able to be environment-friendly. In U.K. The
environmental laws are quite strict and thus the companies should be able to follow them.
Tesco's profits can be reduced if does not follows them and if it follows them its profitability can
be enhanced.
Legal factors- For the companies, that they are able to follow the legal rules and
regulations which are set by the government of the country. Therefore factors like discrimination
laws, antitrust laws, employment laws and consumer protection laws must be considered by the
managers of Tesco. In U.K. The legal rules and regulations are quite strict and thus if Tesco does
not adheres to them its profitability can be affected and if it adheres to them its profits can be
enhanced.
Implication of external forces- The economic factors have a high influence on the
business operations of Tesco. This is so because the economic situations change very fast and
therefore can create an influence on the profits which are earned by the organization. In the
current situation in U.K., Tesco is influenced by these forces because the conditions are changing
dynamically and thus these forces are putting an influence on the profitability of the
organization.
Organization's policy for these forces- Tesco is a big company having different types
of departments. Therefore for the company it is quite crucial that it frames a detailed policy so
that the right strategy can be framed for dealing with the influence which is created by these
factors. Thus Tesco's managers are required to create a policy for dealing with the influence
which is put by each of the factors. For economic forces, Tesco's managers will be required to
make sure that they are able to adopt a policy in which they can negate the effect put by this
force by effectively making adjustment to this force.
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Decision-making by the managers- For the managers it is important not to be selective
and therefore they must consider all the factors in the PESTEL analysis because all of them have
a particular importance for the organization. In the context of Tesco, there is a requirement that
the managers are able to decide using the right approach how they will deal with each of the
following factors effectively and efficiently. The managers will need to be selective and consider
Political, Economic, Technological and Legal factors because these will affect Tesco the most
and the organization will be required to amend its operations according to the influence which is
put by these factors.
Porter's 5 forces-
It is a model which is used by the organizations to identify and analyse the different
competitive forces which determine the strengths and weaknesses of the industry (Raczkowski,
Sułkowski and Fijałkowska, 2016). In the context of Tesco, there is a requirement of using this
model in the correct manner so that the managers are able to assess the situation in the market
and frame a strategy for dealing with that situation accordingly.
The 5 forces are-
Competition in the industry- It means the level of competition which is present in the
market. Tesco operates in the retail industry and therefore there is a high-level of competition
present there. Thus this force has a high power for the company. For surviving this force, Tesco
should prepare its strategy for the enhanced level of competition so that it can deal effectively
with it.
Potential of new entrants- It refers to the potential which the new entrants have in the
market to impact the business of existing players. In the retail industry, it is not easy for the new
entrants to enter into the market due to the involvement of higher costs and thus this force has a
low power for Tesco. For surviving the potential new entrants Tesco has to make sure that it is
able to identify the strategies of new entrants and thus prepare itself for dealing with it by
making itself even more better.
Power of suppliers- It means the power which the suppliers have in the market to control
the prices of various types of inputs. In the retail industry, the suppliers have the power to
influence the prices of the inputs. They can change the prices according to their will and can
make sure that they can control the prices of these inputs. Therefore this force has a high power
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for Tesco. Thus Tesco must make sure that it is able to negate this force by maintaining a large
force of suppliers.
Power of customers- It refers to the ability of the customers to influence the decision-
making in the organizations. In the retail industry, the customers have a lot of importance and
therefore the companies are required to make sure that they are given considerable attention.
Thus this force has a high power for Tesco. Tesco should be able to negate this force by offering
the customers substantial return on their products and services.
Threat of substitutes- It means the threat which the substitute products pose for the
various types of customers. In the retail industry, some customers can prefer substitute products
over the branded products. Therefore this is a force which has a high power for Tesco. For Tesco
it becomes crucial that customers are not attracted towards substitutes if it offers branded quality
products to them.
Justification- 4 out of 5 forces have a high power and the remaining 1 force has a low
power. Therefore Tesco's managers need to make a specific strategy through which they can
counter the influence of these forces in a highly effective manner.
PART C
Corporate Governance refers to a system of rules, policies and practices which dictate the
way a company can be governed and managed in an effective manner (Revilla, Perez-Luno and
Nieto, 2016). It includes the principles of transparency, accountability and security. Tesco's
managers make sure that they can use it correctly so that they are able to make sure that they
include the right system for the purpose of governing the organization.
Corporate Responsibility refers to the responsibility which an organization have as a part
of its corporate commitment. It is very important from the point of view of the organizations.
Thus the management of Tesco is required to ensure that corporate responsibility is fulfilled by
taking the appropriate steps.
Practices Tesco adopts to maintain corporate responsibility-
Supporting local communities- Tesco supports the local communities in the country
through charity and other initiatives. This leaves a good impression on the society and helps the
firm in maintaining corporate responsibility.
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Educating and empowering workers- Tesco takes the initiative to educate and
empower its various workers who are working with it. Therefore this initiative allows the
company to be able to fulfil its corporate responsibility in a highly effective manner.
Labour and human rights- Tesco has taken initiative to ensure that the labour and
human rights are maintained. Taking this initiative allows the organization to be take care of the
rights of its employees in a proper manner. This also enables the fulfilment of its corporate
responsibility.
Employee health and safety- Tesco has ensured that it puts a certain part of its budget
apart for the purpose of employee health and safety. By taking this initiative the company makes
sure that it is able to fulfil its corporate responsibility in an appropriate manner.
Corporate Malpractice- Corporate Malpractice refers to the wrong use of corporate
power and cheating with the customers and clients (Vom Brocke and Mendling, 2018). This can
badly damage the reputation and goodwill of the company and therefore can create an impact on
its brand image. Thus the managers of the organizations are required to take certain steps and
measures to avoid it as far as possible.
The examples of Corporate Malpractice are as follows-
Public Sector-
 In the healthcare sector of U.K. There are different types of malpractices which are
carried out. This badly hurts the reputation of the public sector hospitals as there is a view
which becomes prevalent that there is lack of attention given to the patients in these
hospitals.
 In some companies of U.K. there is a practice which is prevalent and in it these
companies show their expenses on the higher side so as to lower their profits artificially
in the books of accounts. This is done primarily in order to evade tax liability. Therefore
this is an example of corporate malpractice.
Philanthropic Behaviour-
 Some of the NGOs have malpractices prevalent in them. These NGOs are involved in the
philanthropic activities and thus in this way there are certain malpractices in the handling
of these activities. This leads to a bad reputation for them and can hurt their goodwill.
 There are certain companies who keep a certain part of their profits reserved for the
purpose of philanthropic activities. There is malpractice in these activities as in some of
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these companies people who are in charge for these activities are involved in financial
malpractices.
Hofstede's Cultural Dimensions-
Hofstede's Cultural Dimensions refers to a model which is used in order to identify the
type of culture which is prevalent within an organization (vom Brocke, Zelt and Schmiedel,
2016). The categories which are used in it are as follows-
Power Distance Index- It refers to the way power is used within an organization
(Vukšić, Vugec and Lovrić, 2017). If it is high it can create inequality and it its low it leads to
decentralization. Tesco's managers are required to keep this index at low which allows for
decentralization and therefore ensures that the decisions can be taken in a highly effective
manner without problems and issues. For example- In Tesco the power is shared between the
different levels of management and thus this leaves the power distance index at low.
Individualism vs Collectivism- When there is individualism in an organization it leads
to priority to individual goals. In the case of collectivism the priority is given to the achievement
of the goals of the group. Thus in Tesco there should be a priority to ensure collectivism so that
the goals and objectives can be achieved. For example- In Tesco the focus is put on collectivism
and its employees are united in order to achieve their objectives.
Uncertainty Avoidance Index- This refers to the extent up to which uncertainty and
ambiguity can be tolerated. If it is high it means high-level of uncertainty is prevalent in the
organization. If it is low than it means that low-level of uncertainty is prevalent within the
company. Tesco's managers are required to keep this index at low so that there is low level of
uncertainty in the organization. For example- In Tesco, the managers put their focus on avoiding
of uncertainty in every manner so that the work can be carried on properly.
Masculinity vs. Femininity- Masculinity refers to the use of distinct gender roles,
assertiveness. Femininity means the use of fluid gender roles, being modest, nurturing and
concerned with quality of life. In Tesco there should be a balance between the two to maintain
the proper working pattern. For example- In, Tesco the management puts focus on creating a
balance between the two so that the teams are able to work in a proper manner.
Long-term Orientation vs. Short-term Orientation- Long-term orientation means
putting focus on long-term future. Short-term orientation means putting the focus on short-term
future. In the context of Tesco there is a requirement that a balance is striked between them. For
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example- In Tesco both the types of orientations are there because the company aims to focus on
achieving the results in both of them.
Indulgence vs. Restraint- Indulgence means that in the organization free interaction is
allowed. Restraint means that there is a lack of interaction within the organization. In Tesco
indulgence must be promoted. For example- In Tesco there is a focus on indulgence so that the
interaction is done in the correct manner within the company.
Justification- Tesco's managers have created such an organization culture in which there
is focus on achieving of results. Thus the use of this model is done in an effective manner in the
organization by the managers.
CONCLUSION
From the above report, it can be concluded that business management is a process
through which the organization can be managed in an effective manner. Mintzberg's theory has
several roles which can be played by a manager. It helps in better allocation of tasks. Thinking
critically can ensure that the mangers can perform their job effectively. Managers can take
account of diverse interest of stakeholders by caring about them and satisfying them. The use of
PESTEL analysis can be made for the purpose of analysis of macro factors, Porter's 5 forces can
be used so that the situation in the market can be analysed. Companies have to develop an
approach through which corporate responsibility can be fulfilled. Hofstede's Cultural Dimensions
is useful for the purpose of analysis of organizational culture.
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REFERENCES
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<https://www.marketingtutor.net/business-environment/>
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