Business Environment of limited liability company - Report

The Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Type of business, purpose and ownership of two contrasting businesses.........................3
P2 Stakeholders influence on purpose of business:................................................................4
P3 The way business are organised:.......................................................................................4
P4 Style of organisation helps them to fulfil their purposes:.................................................5
P5 Influence of contrasting economic environments on business activities:........................6
P6 Impact of political, legal and social factors on business activities of organisations and
stakeholders:...........................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10
.........................................................................................................................................................1

INTRODUCTION
Business Environment consists of all those factors that have business such as the
strengths, weaknesses, internal power relationships and orientations of the organisation,
government policies and regulations, nature of the economy and economic conditions, socio-
cultural factors, demographic trends, natural factors, and global trends and cross-border
developments (Pingali and Roger 2012). TESCO and PRIMARK are leading organisation in
retail industry and they are operating in more than one country. Stakeholders have influence on
business decisions and they can made a huge impact on companies’ policies. Business activities
of companies are effect by their size and structure.
TASK 1
P1 Type of business, purpose and ownership of two contrasting businesses
Many entrepreneurs begin operating their business as sole proprietorships. The
entrepreneur who conducts business using this structure is under no requirement to register with
the company’s home state. The owner simply opens the doors and starts earning revenue. The
sole proprietorship and its owner are one legal entity, so a company’s earnings and losses are
reported on the individual’s personal tax return. Another type is Partnership in which two or
more people can own a partnership. Like a sole proprietorship, there’s no requirement to file
paperwork with the state to begin operating a business with your partner. A limited liability
company or LLC, is similar is some ways to a corporation and a sole proprietorship or
partnership. The owners of an LLC have limited personal liability for a company’s debts or court
judgements against the company (Moutinho, 2011). But as with a partnership, the LLC owners
report their shares of business income or loss on their personal tax returns. Other kind of
business is company, which can be of two type first is private which do not raise any capital
from public and other is public limited company which can raise funds from public. PRIMARK
is subsidy of Associated British Foods (ABF) which is a public company and TESCO is also a
public company registered in UK.
Main purpose of Primark is to provide good quality products for the public at a
reasonable price with wide variety. They also want to provide their service to more people so
they are targeting new economies and also opening more store in domestic countries. TESCO's
business purpose is built with a simple mission that is to be the champion for customers, helping

them to enjoy a better quality of life and an easier way of living. They want to be strong in
everything they sell as in food and they also want to grow retail services in all their markets.
P2 Stakeholders influence on purpose of business:
Those people or institutions who are affected by operations of a business are known as
stakeholders of that company. Customers, shareholders, employees and suppliers are main
stakeholders of a company. Business of both companies that is TESCO and PRIMARK is
influenced by customers as they are main focus of organisation's whole strategy, there can be an
increase or decrease in demand of a product which can make a huge impact on revenue of firm.
They play significant role in deciding what new product can be launched and also influence price
of product (Klapper, and Parker, 2011). They are centre of all then policies so they have power to
influence any decision made by company. Shareholders are another significant stakeholders
because they own share in company and they have right to involve in decision making process.
In any case if top level management want to split company's stock or spin off a separate business,
shareholders have right to on this important move. In annual meeting they can voice their
concern and feedback. Other stakeholder is employee and they can made impact on business of
these companies through productivity and efficiency in job, duties and task they do every day.
They can also resort to industrial action if they disagree with working conditions, pay or
company policies. They could take the form of work rule, bans on overtime, sit-ins or in extreme
cases withdrawal of labour (a strike). Treating employees as their most valued assets, promoting
a non-discriminatory work environment and actively involving employees in important decisions
are among the ways TESCO and PRIMARK have been influenced by emphasis on employees as
a stakeholder influence. Suppliers are another stakeholders as they supply a particular service or
commodity. They can decide whether to raise prices for orders which can obviously affect
organisation profits. Also their reliability could affect production. If orders do not arrive on time
finished goods may not be ready to put out to customers.
P3 The way business are organised:
TESCO has mainly five committee in board, 1. Audit committee, 2. Corporate
responsibility committee, 3. Nomination committee, 4. Remuneration committee 5. Disclosure
committee. TESCO organizational structure is highly hierarchical reflecting the large size of the