Unit 1

Unit 1
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1 Explain different types and purposes of organisations..........................................................3
P2 Explain the size and scope of a range of different types of organisations.............................5
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.......................................................................................6
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples. ..............................................................................7
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses..........................................................................................................10
P6 Interrelation between macro factors and internal factors.....................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Business environment can be describe as the surrounding of organisation in which it have
to perform activities. This will includes various components such as customers, technology,
government, market trends and many other factors (Ballard and et. al., 2012). It is crucial for
organisation to consider these factors while decision making. This report is based on Tesco
company. This organisation is a multinational groceries store that is offering its products and
services in different part of the world. Tesco company is dealing in retail sector and its major
products are Supermarket, hypermarket, superstore and many more. This company was
developed by Jack Cohen and its head office is located in England. This report will include types
or purpose of organisation along with its size and scope. In this relationship between different
functions of organisation is determine. This report will includes micro and macro factors of
business that will have impact on decision making. Apart from this interrelation of strength and
weakness with external factors are determined.
MAIN BODY
P1 Explain different types and purposes of organisations
Organisation refer as the group of people that are combine together in order to attain the
goal and objective of business. There are different types of organisation that is performing
business activities with different purpose (Bansal and Hoffman, 2012). Major types of
organisation is classified into public private and voluntary. Organisation types and purpose is
mention below -
Private sector – This type of organisation is privately owned and conducting business
activities. Private sector company is controlled and managed by owner who is responsible for
taking major importance decisions. For example Tesco company, Airdri etc.
Purpose – The purpose of private organisation is to earn more profits and enhance
organisational activities. Private business aim to offer its products and services to large number
of customer in order to earn more revenues.
Legal structures – Private sector companies are classified into several parts which
support owner to carry out business activities.
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 Sole trader – In this kind of private organisation only one person is responsible for
performing business activities and taking major decisions. Sole trader is also consider as
self employed person who runs and own business individually.
 Partnership – This type of organisation have two or more person who combines together
in order to carry out different business activities. In this profits or loss is distributed
among owners as per their percentage in business.
Public sector – This type of companies includes all those organisation that is managed
and controlled by government. In this organisation goods and services are developed in order to
provide support to nation or its citizens (Crane and et. al., 2019). In this power to take decision
and develop strategy is hold by government. Example of public sector company is BBC
organisation.
Purpose – The purpose of public sector company is to do welfare of society and develop
economic activities in nation. Public sector organisation purpose is to enhance social economic
activities in country and provide benefits its citizens.
Legal structures – Different legal structure of public sector company is mention below -
 Central public company – This type of companies are controlled and handle by central
government. Decision and strategies that is developed by central government will be
followed and performed all over the nation.
 State public company - Public companies which is managed by state government are
consider as state public companies. In this type of organisation all rules and regulation
which is developed by state government needs to be followed by organisation.
Voluntary sector – This sector includes all those companies which are developed and
created in order to provide benefits to society and meet with the needs of citizens (Geigenmüller,
Ata and Toker, 2012). Voluntary company are providing different products and services which
will lead to satisfy the requirement of citizens. For example NHS organisation.
Purpose – The purpose of developing voluntary organisation is to do welfare of society
and meet with the needs of citizens. Voluntary company are not providing services earn profits
but enhancing society and citizens are the main motive.
Legal structures – Voluntary sector legal structure is mention below -
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 Trustee – This type of organisation are able to perform business activities as well as
provide products to needed person with the support of trustees. They are providing
financial support or other resources to company for performing organisational task.
 Charity – This type of companies are based on charity for carry out organisation. In
voluntary organisation any one can charity for money or other essential items in order to
support people who need help.
P2 Explain the size and scope of a range of different types of organisations.
Size and scope of organisation can be describe as the market area which is capture by
company for offering its products and services (Groebner and et. al., 2013). Different
organisation vary in size and scope of business. This lead to have significant impact on
performance and profitability of organisation.
Types of organisation based on sizes
There are different types of organisation which are mention below in detail
 Micro and small business – This refer as the company which is providing products and
services to small market area. The motive of owner form offering its products is to earn
basic amount for their family living. For example Airdri business.
 Medium business – This type of business have larger size as compare to small
companies and it has more market area than micro business to offer its products. Medium
company have more than 50 employees who are performing business activities to earn
profits.
 Large organisation – Large company size includes more 100 employees and it is
providing its products and services to different part of the world. This type of company
is performing business activities in order to earn more profits and enhance market share.
Scope of the organisation
This will includes the market share, profits sharing, sustainability or growth rate of
company in market area (Hair, 2015). Scope of public, private and voluntary organisation is
mention below.
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 Public – The scope of public organisation is to provide products and services which is
significant for society and helps in enhancing economy of nation. The scope of public
company such as BBC is limited to UK market area.
 Private – The scope of private organisation vary as per the size of organisation (Johnson,
Clark and Barczak, 2012). Private companies such as Tesco have more scope to growth
and develop business by providing its products and services to global market area.
 Voluntary – The scope of voluntary organisation is to support society and perform
different activities that will lead to provide benefits to citizen of society. This type of
company such as NHS have less scope of growth as compare to other sector.
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
There are different functions in organisation and these function are linked together in
order to successfully perform organisational activities and earn more profits. Different functions
of Tesco and its relations with other companies are mention below -
 Production function – This function of organisation is responsible for developing and
producing products. Production function activities are interrelate to marketing and sales
functions. Marketing function will determine market need and communicate demand of
products to production department. Sales function is responsible for selling developed
products to earn profit.
 Marketing or sales function – Marketing or sales function Tesco company is
interrelated to financial function. This function of Tesco company will conduct several
promotional and marketing activities in order to attract customers. For this, organisation
will require financial resources in to carry out advertising activities.
 Accounts and finance function – This function of Tesco is related to managing financial
resources and accounts in correct and accurate manner (Koh, Fichman and Kraut,2012).
It is important for respective company to use new and different approaches for
performing organisational practices in more innovative manner.
 Research and development function – Tesco R&D function is responsible for
researching market trends and determining customers requirements in order to perform
business activities in more significant manner. Collected information will be
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communicated to human resource department, finance department and marketing
department to successful attain goals of business.
 Human resource function – This function of respective company is responsible for
recruiting employees, training them as well as motiving to perform task n effective
manner. Tesco company human resource function is providing training to sales team and
finance team. So that they can perform task in effective and efficient manner.
Organisational structure
Organisational structures can be describe as the procedure or system of organisation that
is significant for conducting different activities (Skersys and et. al., 2012). Tesco company is
based on functional organisational structure. Functional organisational structure refer as the
procedure in which employees are grouped to perform functional task. It includes functions such
as sales department, customer services department, human resource department, finance
department and so on. In this company employees are divided into different functional team
and employees who have similar knowledge and skills are grouped into one functional team.
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
PESTEL analysis is framework which utilise for identifying key drivers of modification
within strategic environment (Bah and Fang, 2015). Here, PESTEL stands for Political,
Economic, Social, Technological, legal and environmental factors. In relation of TESCO,
PESTEL analysis along with negative and positive impact of every factor are mention below :-
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Illustration 1: TESCO PLC
Source: TESCO PLC, 2020

Political – TESCO's home market is United Kingdom where political factors are stable but
Brexit result in creating lots of uncertainty (PESTEL analysis of TESCO, 2017). Same as home
market all other overseas market of TESCO are stable politically. Thus, respective organisation
is conducting their operation in environment which is conducive for business firm.
 Positive – UK political factors are stable which have positive impact on working of
TESCO.
 Negative – Brexit result in creating several uncertainties and negative impact on
respective company.
Economical – At global level several organisation get affected by Covid-19 and several people
earning also gone down as well as many lose jobs. Thus, spending level of customers get less
and they switch to cheaper brands. This overall situation affect TESCO operations and
profitability severely. Along with this, Labour cost is high in UK and Ireland which result in
millions of pounds every year.
 Positive – Economical stability of United Kingdom have positive impact on TESCO.
 Negative – High labour cost in some nation such as UK and Ireland have negative impact
on TESCO as extra cost occur i.e., millions of pound every year.
Social – By TESCO numerous initiative has been taken within recent year in relation of changes
and demands (Boons and Lüdeke-Freund, 2013). For instance, high demands result in selling
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Illustration 2: PESTEL analysis, 2020

halal meat to Muslim customer and have independent meat counters within some UK stores.
They sells both branded and own label halal meat in Thailand and Malaysia.
 Positive -
 Negative -
Technological – TESCO get benefits from advancement in technology over some years. For
example, it introduce “Clubcard” in 1995 as it is loyalty card which played important role behind
success of TESCO. Million people use it in both UK and several other nation in which TESCO is
operating.
 Positive – Advancement in Technology provide assistance in making customer satisfy as
well as also help in attracting several more.
 Negative – It also have negative impact on company because it is not possible for them to
always implement latest latest technology because it may be expensive sometimes.
Environmental – Business firms have pressure from legal bodies to address environmental
issues (Crane and Matten, 2016). It is not from government but also from people who are aware
about environment. For addressing this TESCO has taken several initiatives as they removed
most of their plastic packaging.
 Positive – Taking initiatives in relation of environment have positive impact on TESCO
as they build brand image and able to attract several more people.
 Negative – Several initiatives in relation of environment have negative impact as it result
in extra cost because plastic packaging removed by them.
Legal – Legislation and policies of Government have direct impact on TESCO such as UK and
EU law of competition prohibit anti-competition activities.
 Positive – Implementation of each and every law help TESCO in conducting their
operations in legal manner. Along with this, chances of illegal activities get minimized.
 Negative – Legal factor relation to prohibition of competitive activities result in negative
impact as they will not able to conduct any competitive activities.
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
SWOT analysis is a strategic technique utilise for helping a person as well as business
firm in identifying strength, weakness, opportunities and threat in relation of business
competition and project planning.
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SWOT analysis of TESCO – TESCO is British multinational grocery as well as retail
organisation which was established in 1919. In term of gross revenue TESCO is one of leading
company at global level and also in Britain. SWOT analysis of respective company are as
follows :-
(SWOT analysis of TESCO, 2020)
Strength – TESCO is leading grocery company and also no.1 supermarket in UK. In
comparison of other supermarket they have high sale and revenue. In addition to this, respective
company is geographically diversified as they have presence in more than 6800 stores within 14
nations apart from North America and Europe.
Weakness – Along with strength TESCO have some weakness also such as low cost
strategy as they are price leader in market of UK but their low cost strategy result in reducing
profit margin (Gilboy, 2016). Along with this, financial error is also weakness due to high debits
and credit card liabilities financial profit of TESCO profoundly affected.
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Illustration 3: SWOT analysis of TESCO

Opportunity – TESCO have several opportunities within business environment such as
Online shopping and home delivery services. Along with this, Joint venture is also opportunity
for TESCO within the region where performance of respective company is not good.
Threat – Major threat through which TESCO will go is competition within supermarket
as performance of WalMart is rising and they have several other competitors also such as Aldi,
Carrefour and so on.
SWOT analysis of BBC – British Broadcasting Corporation is British public service
broadcaster. It was founded in 1992 and headquartered in London. It is oldest international
broadcasting organisation which is consider as largest broadcasting station at global level with
numerous employees. SWOT analysis of respective company are as follows :-
Strength – BBC's one of the major strength is old reputation as they started their journey
from 1922 and people have great faith in their news items (SWOT analysis of BBC, 2019). Along
with this, they are oldest broadcaster as they are providing services at global level level with
approx. 23000 employees.
Weakness – Major weakness of BBC is that they have high operating cost as well as
their competitors are conducting business at lower cost as BBC is lacking behind in this race.
Opportunity – There are several opportunities for BBC out of which one of the biggest
is trying to be unbiased removing tag of biased will result in strong image in market (Hamilton
and Webster, 2018). In addition to this, Joint partnership is also good strategy for BBC.
Threats – TESCO have several threats such as strong competition because several news
channels are growing such as CNN which result in disturbing work of BBC.
P6 Interrelation between macro factors and internal factors
Relation within macro environment with strengths and weakness shows both positive as
well as negative impact on business firm. Thus, it will help in understanding how external factors
impact internal environment. TESCO pestle analysis and their impact on strength and weakness
are as follows :-
 Political – With political stability of nation it will be possible for TESCO to formulate
long term policies (Kolk, 2016). It will be strength of company as product and services
of company will result in providing constance price for long term.
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 Economical – As issue as increasing such as high labour cost in UK and Ireland which
will result in weakness for TESCO. Along with this, COVID-19 situation also result in
negative impact on respective company because purchase power of customer get reduced.
 Social – TESCO is serving high quality products to their customers which result in
creating good brand image. For instance, high demands result in selling halal meat to
Muslim customer and have independent meat counters within some UK stores. They sells
both branded and own label halal meat in Thailand and Malaysia. This work as major
strength of TESCO.
 Technological – Advancement in technology have positive impact on brand image as
they will able to serve their customer in effective manner with innovative ideas which
result in making them satisfy (Ren and et. al., 2017). Thus, technological factor work as
strength for TESCO.
 Environmental – TESCO is taking major steps in relation of Environment as they stop
using plastic packagings which result in building brand image and attracting large
number of customer. This overall work as strength for TESCO in attracting more
customers.
 Legal - Legislation and policies of Government have direct impact on TESCO such as
UK and EU law of competition prohibit anti-competition activities (Schaltegger, Hansen
and Lüdeke-Freund, 2016). Thus, it work as weakness for TESCO as they will not able
to conduct an activity which help them in gaining competitive advantages.
CONCLUSION
After going through above discussion it has been analysed that, business environment is
include mainly three type of organisations i.e., public, private and voluntary. Along with this, in
an business firm each and every division is interrelated with each other which help bin
conducting operations in more effective manner. In addition to this, it is essential for an
organisation to conduct SWOT and PESTEL on timely basis because several changes take place
which required to be analysed in better manner and on timely basis.
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REFERENCES
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swot-analysis-2019swot-analysis-of-tesco/>
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analysis-bbc/>
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PESTEL analysis of TESCO, 2017.[Online].Available
through<https://www.howandwhat.net/pestel-analysis-tesco/>
TESCO PLC. 2020. [Online]. Available through<https://www.tescoplc.com/about/>.
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