Business Environment: Structure, Governance, and PESTEL Analysis of TESCO

Business Environment
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INTRODUCTION
Business atmosphere is defines the external and internal factors which impact how firm
functions including staff clients, administration, regulations and others. It is important for
organisation to consider the environment of its business at priority basis as it brings opportunities
which assists them to improve their business performance (Botha, Kourie and Snyman, 2014)
. Moreover, this helps management in future planning as well as decision taking. In respective
assignment the undertaken firm TESCO, it is known to be the leading British multinational
retailer. In Welwyn Garden City, UK is their main headquarters. This report covers some topics
that are how firm’s structured and governed as well as importance of performing PESTEL
analysis. Moreover, application of PESTLE framework and its impact on organisation is
explained into this assignment.
TASK 1
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TESCO PLC is considered a leading British general merchandise as well as grocery which
perform globally and having headquarters is in Welwyn Garden City, UK. It was established in
year 1919 by Jack Cohen. Not only TESCO is valuable brand in UK but it is also known to be
the 7th most valuable brand across the world. It have about 400, 000 staff that serves millions of
consumers every week into our offline as well as online stores. Moreover, in England, Scotland
and Wales, it operates about 588 super markets out of which 257 are super stores which sells
food items along with various other products such as clothing’s, alcoholic beverages, gasoline
and many more. At present, it runs their business in around 13 countries such as Malaysia,
Hungary, Thailand and others. Respective organisation brand value in all over the world is 9.2
billion USD and only in UK is 11.3 billion USD by the year 2019. It is also listed on the London
stock exchange (TESCO PLC , 2020).
Its history
TESCO PLC was founded by Jack Cohen in year 1919. The respective brand at first
appeared in year 1924 when founder bought a tea shipment from Thomas Edward Stockwell. He
developed his new label, the initial three letters was supplier’s name (TES) and another 2 letter is
his surname (CO) which formed a word named as TESCO. The first stores were open in year
1929 in Burnt Oak, Edgware. Between 1950s and 1960s, it grew organically. It buys 70 stores,
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200 Harrow stores outlets and others. Moreover, in year 1987, it takeover Hillards chain of 40
super markets into North of England for £220 million. During year 2001, it involved into online
grocery retailing within USA and year 2002 it purchased about 13 hypermarkets in Poland.
Along with this, in year 2011, TESCO introduced a range of Tesco venture brands. By the year
of 2012, it reintroduced Tesco Every day value with new recipes and packaging (Tesco
Plc history, profile and history video, 2020).
Organisational structure
A structure of firm is considered as a classification which demonstrate how certain practices
are directed for attaining the objectives of firm. These practices involve roles, accountabilities,
and rules. Moreover, it also determines that how information get flows among the levels into
organisation (Hillary, 2017). TESCO PLC comply hierarchical structure in which the function
are specifically categorised into a long chain of command. This kind of structure assists in
developing defined roles for all there by forming no chaos and confusion. So, its hierarchy is
divided in three levels that are top, middle and base. All 3 levels are discussed below:
 Top level: In the higher stage, power is in the hand of board of management whose head
is CEO of TESCO who is known to be the head of whole management employees as
well as makes all important decisions. Another person is Chairman, (CFO), CEO as well
as non managerial directors..
 Middle level: this level is carrying out among employees and board of director. It
comprise of several vice presidents and another assistant and managers.
 Base level: Within this, the topmost managerial post is held through local executive and
under him there are store manager. Every store manager is subsequently categorised into
three departments such as personal section, food trading and non food trading (Tesco
Management Hierarchy, 2018).
So, TESCO is structure in hierarchical way which helps them to perform their business in
smoother manner.
How it is governed
TESCO is having a diverse Board with various conceptions, viewpoints and thoughts that
benefits stakeholder for effective business. Its board comprises the Chairman named as John
Murray Allan who born in year 1948. Group of Chief executives, CFO, higher independent
management as well as various independent non managerial members. Moreover, in their Board
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