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Business and Business Environment

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Added on  2023/01/05

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This report provides an overview of different types of organizations in the business environment, including public, private, and voluntary sectors. It explains the relationship between organizational functions and objectives, and analyzes the advantages and disadvantages of interrelationships between functions. The report also discusses the impact of the macro environment on business operations.

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Business and business
environment

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INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
P1 Explain different types and purposes of organizations; public, private and voluntary sectors and
legal structures.........................................................................................................................................3
P2 Explain the size and scope of a range of different types of organizations...........................................4
M1 Analyze how the structure, size and scope of different organizations link to the business objectives
and product and services offered by the organization..............................................................................5
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure....................................................................................................6
M2 Analyze the advantages and disadvantages of interrelationships between organizational functions
and the impact that can have upon organizational structure.....................................................................8
D1 Provide a critical analysis of the complexities of different types of business structures and the
interrelationships of the different organizational functions......................................................................9
P4 Identify the positive and negative impacts the macro environment has upon business operations,
supported by specific examples.............................................................................................................10
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro environment
within an organization...........................................................................................................................11
P5 Conduct internal and external analysis of specific organizations in order to identify strengths and
weaknesses............................................................................................................................................11
P6 Explain how strengths and weaknesses interrelate with external macro factors...............................11
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision making.......12
D2 Critically evaluates the impacts that both macro and micro factors have upon business objectives
and decision-making..............................................................................................................................13
CONCLUSION.........................................................................................................................................14
REFERNCES............................................................................................................................................15
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INTRODUCTION
Business is a place where different individuals come together to take on a common
business process. These activities are directed towards achieving certain motives. These motives
can relate to profit generation or for charitable purposes (Aithal, 2016). This report is prepared
with the main motive of developing an overall understanding of business and its operations.
Furthermore, a business is operating in certain surroundings and factors of these surroundings are
impacting the environment in an intense manner. These factors may be internal or external as
well. In a market setup, there are different types of organizations, based on size, scope or type of
organizational structure. This report also focuses on furnishing knowledge about relationship of
business and its management with that of all other stakeholders for the organization. This report
also discusses about the interrelationship between external and internal environment factors and
how they can be used together so as to achieve organizational objectives (Shenkar, Luo and Chi,
2014). In this report, all above mentioned concepts are understood through taking real life
example of Tesco supermarket, which is a private company and well established in UK market.
In addition to this, to understand the concept of different organizational structure, examples of
department of transport as public company and transparent hands are taken as example of
nonprofit organization. Through these examples, attempt has been made to understand the impact
of external factors on business operations. These impacts can be categorized in both categories,
positive and negative impact as well. This assignment also explained the internal strengths and
weaknesses of the business and their interrelationship with the external macro factors in the
environment.
MAIN BODY
P1 Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures.
In a market setup, there are different kinds of business and individuals, before starting any
organization or business, there are various types of motives behind that idea (Ambler, Witzel and
Xi, 2016). This idea further leads to formation of different types of business structures and
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organizational setup. There are basically three types of business forms which are differentiated
based on their legal structure and organizational motive. These three are explained below:
Public sector organization: The main feature of these organizations is that these
organizations are being operated by state government (Apăvăloaie, 2014). The basic
motive of these organizations is to make possible the optimum utilization of resources on
mass basis and to provide essential public services to community at large level. In this
report, example taken for public sector organization is ESPO that is operating in UK. The
main vision of this organization is to provide high quality necessary goods and services to
community at large scale. The main element of this organization is that it believes in
providing one stop solution to people. Another supporting element in mission of this
organization is that any surplus or profits made by it goes back to public sector fund.
Private sector organization: It is just opposite to public sector organization as it is
owned and operated by private individuals or a group of private individuals. The main
goal of these institutions is to earn maximum profit and that goes in pocket of owners and
not for any charitable purpose. Government has no or very less say in these organization,
they are just an eye that keeps a check on operations, so that organization do not get
involved in any illegal activity. Due to this less interaction of government, this sector is
also termed as citizen sector. JCB is basically a British multinational corporation which is
headquartered in London. The main business line of this company is manufacturing
equipment for various sectors like construction, agriculture, demolition and water
handling.
Voluntary sector organization: These organizations are formed with the purpose of
ensuring enrichment of society. The primary objective of these institutions is to make a
social impact and not generate revenues or profits. It is an independent, flexible and
nonprofit institutions formed by people and for the people. They are working very
selflessly for the society and trying to get maximum welfare for them. Example of this
type of sector is Macmillan cancer support charity which is located in London. It is the
largest cancer society based in the place which attempts to provide financial support and
also healthcare to those who are suffering from this disease (Bah and Fang, 2015).

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P2 Explain the size and scope of a range of different types of organizations.
In an business environment, there are different types of organization (also explained in
above question). Goals and objectives of every form differentiate from each other, so as their
size and scope. Following table is focusing on explaining the above point.
Organization
name
Type of
organization Size by its employees Size by its revenue
ESPO
Public sector
organization
It is established in 1981
and it has around 201 to
500 employees
ESPO estimated
revenue is £12.93
million annually
(ESPO, 2019).
JCB Company
Limited
private sector
organization
JCB established in 1954
and the number of
employee in it are
approximately 11000
JCB estimated revenue
of 2017 was £3.35
billion. It was a strong
year for JCB.
Macmillan
cancer support
Voluntary sector
organization
Macmillan established in
1911 and staff is around
2910
Macmillan revenue
£356.98 million in
year 2017
M1 Analyze how the structure, size and scope of different organizations link to the business
objectives and product and services offered by the organization.
There is a very strong connection between type of products and services offered by the company
with its structure, size and scope. Organizational structure can be explained as those activities or
tasks that are performed so as to achieve growth in organization (Belás and et.al., 2014). In
simple words, it can be explained as identification of flow of information in a path between
different levels of that company. Following is a description about connection between size,
structure and scope of different organization with their objectives:
ESPO: It is a professional setup that is buying products and services from manufactures and
making them available to community members. It is offering around 25000 catalogs over 1200
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frameworks. Their main motive is to provide support with their procurement service. Their other
offerings include safety to pet animal form fire hazards, maintenance of ground, supply of
electronic items to offices, and also they are indulged in providing catering services. They are
following functional organizational structure (Bocken and et.al., 2013).
JCB: The major business line is to manufacture and deliver products which are useful in sector
of house building or specifically related with construction sector. The vision and mission relates
to gaining the top most position in this industry with a view of supplying services of best
possible quality. To illustrate, products and services of this company are industrial forklifts,
hydraulic excavators, diesel generator, compaction equipment, etc. These products are highly
significant in terms of their revenues.
Macmillan cancer support: Size, scope, and role of voluntary sector organization Macmillan
cancer support give the whole overview of the organization. Macmillan is a UK’s leading cancer
care charity that provides integrated products and service portfolio. They provide physical,
financial and emotional support. This organization comprises team based, functional as well as
division organizational structures (Savrul, Incekara and Sener, 2014).
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P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.
The structure of an organisation is a visual diagram that explains what workers do, to whom
they report, and how business-wide decisions are taken. Thus, each and every organisation
follows different organisational structures which assist in attaining target objectives and goals of
firm. Functions, sectors, goods, geographies, or procedures should be used by corporate systems
as a reference to appeal to organizations with specific sizes and industries. An effective
organizational structure describes how tasks are oriented towards the accomplishment of
business objectives such as mission, allocation, planning and oversight. It also drives
organizational behaviour as well as provides the context on which regular processes or routines
of operation are based (Boons and Lüdeke-Freund, 2013). The structure of organisation is
classified in different terms as:
Hierarchical structure: This is the most common structure that follow as a line
organisation. In this structure, command power flows from the board of directors to CEO,
CEO to rest of the company by following the structure from top to bottom. In this
structure, supervisors take command of all the department and they reports to heads or
CEO. Major advantages of this structure are to develop a reporting relationship, division
of authority and so on.
Functional structure: This is a centralized structure that overlaps substantially with the
structure of the hierarchy. In functional structure, the position of an employee director
falls to each department manager as each department has its own employee director who
reports to the CEO (Chang, 2016). This kind of structure is manageable for each size of a
company.
Divisional structure: This structure provides divisional flexibility to operate separately.
Major advantage of this structure is that it helps in managing a room for different
department to represent their ideas openly and implement innovation according to
business requirements and need (Rose, Orrenius and Neumann, 2013).
Matrix structure: The classic hierarchical structure is known as matrix structure in
which horizontal lines in this matrix suggest, this unified organization structure enables

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workers to switch from one department to another as required. One major advantage of
this structure is that it provides opportunities to employee to learn as well as foster skills
outside from their primary job role.
As JCB is a well-known construction company that provide quality services in wheel loaders,
tractors, JCB dieselmax and so on. IN order to manage international business activities in
effective manner, JCB follows a huge structured hierarchy of management structure. In order to
manage all the activities of firm, business classify its function in different departments by
developing a positive interrelationship between each of them such as:
Accounting/Finance and marketing: In order to manage organisation activities, Finance
department provides its contribution with the help or by providing help to marketing department.
JCB always constructs quality products by analysing requirement of their customers. In this
process marketing department play an essential role who evaluate relevant data from marketing
activities, In order to conduct such, finance division provides its support by providing desired
fund to marketing department. These kinds of practices help in successfully conducting business
operations (Charter, 2017).
Marketing and production: Marketing department play an essential role in JCB, in
order to gather relevant information according to customer’s need and requirement. By gathering
such, they provides information to production department who construct huge manufacturing
activities in order to develop desired products as per customer’s demand. These kind of
combination of different department in JCB aid in satisfying need of customers (Enofe and et.al.,
2013).
Human resource and Production: Main objectives of production department in JCB are
to produce quality products and services which are based on customer’s requirement as well as
need. Thus, in this procedure human resource department provides own contribution by hiring
capable candidates who have appropriate knowledge of business activities. They are not only
hiring candidates for production but also for finance, marketing, sales and so on (Popescu, 2013).
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M2 Analyze the advantages and disadvantages of interrelationships between organizational
functions and the impact that can have upon organizational structure.
In JCB, different departments provide their contribution in delivering desired services to
customers. Hereby, several functional and operational department such as finance, production,
marketing, sales and so on contribute equally by building appositive relationship with each other.
The advantages and disadvantages of interrelationships between organizational functions are:
Advantages:
Working with others will allow employees to sharing the knowledge and learn new
things.
Team working activities may help to retain employees for a longer duration in firm.
The staff is run by highly trained, seasoned people so that they can evaluate the whole
job.
Disadvantages:
Interrelationship between different departments may create conflicts due to mismatch of
perceptions and opinions (Erasmus, Strydom and Rudansky-Kloppers, 2016).
Such claims can refer to discrepancies between priorities and budgetary rivalry.
The general relation that illustrates a single key organizational objective is undoubtedly
poorer than in an industry where different types of workers work together routinely.
D1 Provide a critical analysis of the complexities of different types of business structures and the
interrelationships of the different organizational functions.
Business is not an easy task nowadays because it is required for an organisation to serve
effectively to customers by analysing their requirements and needs (Groebner and et.al., 2013).
Major complexities which are faced by different organisations are:
Complexity of public sector organisation: Public sector companies tend to face more
difficulty in contrast to any kind of business. One of the greatest complexities in this is to please

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the stakeholder. These kind of issues are arise due to changing in the demand of customers on the
basis of new trends.
Complexity of private sector organisation: One major challenge which are faced by
private sector organisation to remain competitor with the help of new marketing strategies. On
the other hand, the largest complexity in such organisation is related to the administration of
finance. Furthermore, the government has implemented too many private sector laws and
regulations that are impossible to obey.
Complexity of Voluntary sector organisation: These kinds of organisations are
basically established for social purpose thus in such major complexity is belongs to internal
control. On the other hand, this organisation requires managing all the risk on timely basis by
managing all the documentation appropriately. Furthermore, the success of this organisation is
based on trustee who needs to be good to manage all the administrative activities (Gupta, 2013).
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
The macro environment has impact on the business operations and functions which helps the
Tesco in identifying and evaluating positive and negative impact on activities.
In context of the macro environment the first and the for most this is to consider the
demographic factors which are important for the business are effect the business
operations to great extent. The developed countries have good conditions in terms of
financial situation which selling goods and services become easy as people there have
high income and high living standards. The company get good market conditions and
able to earn high profits in comparisonto developing countries. The economic conditions
helps in the business in identifying the various environmental factors which effect the
business activities and operations. Majorly two factors effect the business in context of
economic conditions that are demand and supply in the market place. The high demand in
the market place helps the company in making huge profits where as situation of
depression in the market lead to low demand and hence company would not be able to
make high profits.
The environmental or natural forces have the great impact on the business either in
positive or negative way. In context of the Tesco they are dealing in supermarket so they
are effected by the changes in the nature as they provide the products which are made
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from natural resources such as oil, minerals , etc. Hence these changes may effect their
productivity and lead to decrease in its profits.
Technological factors play important role in business and effect the operations and
activities of the business. In this fast moving world the need for new products are
increasing hence the demand in the market is increasing. Hence it is important for the
business to increase its production which is possible by using latest technology in its
business operations. The use of latest technology will help in increasing the production
capacity of the business and they will be able to meet the current demand taking place in
the market. Moreover the level of competition is increasing with the increase in the
increasing population due to which everyone is trying to cover the large area of market
and increase the number of customers. This is possible by using innovative and creative
ways which are based on latest technology in order to serve the needs and desires of
customers (Kolk, 2016).
Political and legal has the major impact on the business operations and activities as the
rules and regulations formulated by the government are not fixed. That is it keep on
changing according to situation of economy and market and business unities need to be
prepared in advance to deal with the changes in the government polices rules and
regulations.
The social and cultural forces also has impact on the operations and activities of the
business that is if business able to produce the quality products which are capable of
satisfying the needs and desires of the customers will able to survive in market and
company would be able to make profit.
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organization
PESTEL is consider as one of the most effective tool which is significant for successfully
or effectively determining different factors which have impact on overall performance of
business. It is essential for TESCO company to consider PESTEL model in order to analyses or
evaluate macro environment along with its impact on business practices. This will assist
organization to take correct decision which is beneficial for growth and development of business.
PESTEL model in context of TESCO company is mention below in detail –
Political factor - This comprise of various arrangement of decides that is created by
government group and this will prompt have direct effect on execution of respective
organization(Trkman, 2013). Political factor incorporates exchange arrangements, tax
assessment, limitation on import and fare of merchandise, political dependability and
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insecurity. Changes in rules or policies regarding import or export of products in UK
market area lead to have direct influence on overall practices of TESCO company.
Economical factor – This outer factor remembers efficient state of countries for request
to perform business activity is fitting way. Prudent factor comprise of financing cost,
conversion standard, swelling, monetary condition, GDP, etc. Economical factors is one
of the crucial factor that will lead to have direct affect over capabilities of business.
Increase in unemployment in UK market area affects the purchasing capabilities of
customers. This lead to decrease in sales or productivity of TESCO company.
Social factor – This factor will prompt significant effect on business and it incorporates
mentality, populace size, conduct of client and numerous different elements. It is basic
for individual organization to comprehend necessities of clients. It is essential for TESCO
company to consider the elements of social factor while conducting business practices
and task.
Technological factor – This factor is critical to upgrade business measure by utilizing
new and advance innovation in authoritative exercises. Innovative factor incorporates
more development and refreshed innovation to perform business task. UK market area
has one of the most innovative technology in market and it will lead to increase
opportunity for TESCO company to gain competitive advantage. It is essential for
organization to consider new and advance technology in market area which will lead to
have significant influence over performance of productivity of business.
Environmental factor – This variables incorporates atmosphere condition, climate,
contamination and other ecological factor. This will have positive and negative effect on
TESCO business execution (Veit and et.al., 2014). Respective company is conducting
business activities while considering environmental factor as well as performing different
CSR practices. This assist in developing positive impact of company and improve brand
image.
Legal factor There are a few laws and enactment create for improvement of
representatives and this will have influence of execution and productivity of TESCO
organization. Changes in laws or legislation related to employment and wages have
significant affect on day to day practices of respective company. Increase in employees
salary will have negative impact on TESCO profitability.

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P5 Conduct internal and external analysis of specific organizations in order to identify strengths
and weaknesses.
Internal and external analysis is to be done together so as to ensure that strengths and
weaknesses are aligned with opportunities and threats of external environment so as to formulate
effective strategies to achieve organizational goals and objectives (Hair Jr and et.al., 2015).
Company can take benefit from cut throat competition in the market. Management can
formulate efficient strategies so as to gain competitive advantage over other firms in the
market.
Tesco is taking huge benefit from the quality that it is providing to its customers. This
will help them to gain competitive advantage as it will ensure a loyal customer base for
the company. This strong point will help the company to sustain in market for longer
period of time.
Tesco understands that time is important in business, therefore, they procure goods on
time and make sure that delivery is also done on time. They are stocking items in the
store at time which ensures customers that they will get products of their requirement at
time.
The product of this company is the good quality products so the customer suggests
purchasing from Tesco specifically so this also becomes the strength of the organization.
P6 Explain how strengths and weaknesses interrelate with external macro factors
Every company is working in surroundings which are affecting the operations of
business. This surrounding can be divided in two categories, one is related to internal factors and
other is external facto. Both categories are interrelated with each other. External environmental
factors are also called as uncontrollable as they cannot be indentified so easily. Even after
identification, they are beyond the management power of company. Strengths and weaknesses
are just opposite to each other and their effective analysis can prove to be a useful tool for the
company and its management. SWOT analysis is the best way to determine the strong points of
the company and also the areas which needs improvement (Harrison, 2013). Opportunities and
threats for the business can be the best possible tool for providing assistance in strategy
formulation for future course of action. Many other factors like political issues affect the
organization and increase the threat. social factor affects the business in both ways positive and
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negative .positive is that without society business cannot be possible and negative is that
responsibility which the organization have a bear for a society that is corporate social
responsibility. Economic, social, technological many problems are there but these are
opportunities also (Hillary, 2017). PESTEL analysis is the tool that will help a business to
analyze and monitor external environmental factor so that possible impact can be studied and
strategies can be formulated in efficient manner. This whole process will lead to identification of
possible opportunities and threats from external environmental factors so that management is
ensured that organization id not effected in intense manner in future.
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision making.
SWOT analysis is a process of evaluating and monitoring impact of internal factors on business
operations. Through this process, management will come to know about different strong and
weak elements of organization and also use it as a tool for formulating effective strategies for
future course of action.
Strengths
The most strong point of Tesco is that it is
attempting to provide high quality product and
services to targeted customers. Furthermore,
management ensures transparency in
operations so that every stakeholder is
satisfied.
Company is also enjoying loyal customer base
which will help the company to survive in long
term.
Weakness
Tesco supermarket has very tough competitors
such As ASDA, Morison’s and Sainsbury’s.
Due to high rules and regulations such as code
of business conduct, the cost implied by the
organization on the products is high so it
becomes the reason for the weakness of the
business.
Opportunities
This company has a large group of consumers
so it can increase the business and do more
efforts on effective management so the
business can work more efficiently and
effectively.
Threats
Due to the huge number of competitors the
businesses have to face high competition in the
market. This is considered as a threat to the
organization. Miss management is also there in
the organization.
Competitive threats are also rising from other
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worldwide retailers (Hilton and Platt, 2013).
D2 Critically evaluates the impacts that both macro and micro factors have upon business
objectives and decision-making.
The business organisation can be affected by the both macro and micro environmental
factors in positive and negative way. The factors of micro environment includes customers,
suppliers, investor, and competitors etc. These factors has a direct impact over business decision
making. The impact of such factors are controllable thus firm can implement some strategies to
manage their negative impact. On the other hand, macro environmental factors include political
factors, legal practices, environmental factor, technological factors and so on. The impact of such
factors are beyond the control. Thus it is required for a firm to strategically manage all the
business operations in order to overcome their negative impact easily. For a firm it is required to
take help of different frameworks as SWOT, PESTEL and Porter’s in order to evaluate positive
and negative impact of macro and micro factors. Micro and macro ecosystems have a huge effect
on the performance of marketing campaigns, and these external variables must also be addressed
in detail during the strategic marketing strategy planning process (Kim, Suresh and
Kocabasoglu-Hillmer, 2013). Taking these variables into account would boost the effectiveness
of the marketing strategy of the company and the brand's image in the long run.Any decision
which are madeby business owner and management needs to take into account these two
worlds.If they really expect to be lucrative and hold a respectable market presence, then
marketing strategy must also be focused on them.Major consideration in such can be planning,
reviewing, controlling and initiating that can assist in managing business operations in more
smoother manner.
CONCLUSION
Performing a business activity is not so difficult task but also not a very easy task to take
on these days. Today’s environment is very dynamic and thus, it becomes very important to
consider every factor that relates with putting effect on operations of business. There is a very

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dynamic technological environment, which is continuously increasing the adoption of social
media and internet platform to communicate with targeted audience. Governmental policies are
also affected due to changes in external environment and they further impact the operations of
business. From this report, it can be elucidated that if company wants to survive and wants to
remain sustainable in long run, than most important step is to fulfill social responsibility on
regular basis. This will induce improvement in brand image of company in market. Not only
external factors, but analyzing internal factors is also important. If external environmental factors
poses some opportunities to company, than management can align them with strengths of
internal environment of the company. This will give a boost to company and its performance.
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REFERNCES
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business environment. McGraw-Hill Education.
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Rose, L.M., Orrenius, U.E. and Neumann, W.P., 2013. Work environment and the bottom line:
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