Unit 1 Business and The Business Environment

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1 Purpose and types of organisation.........................................................................................4
P2 Scope and size of different organisation................................................................................6
TASK 2............................................................................................................................................9
P3. Interrelationship between different Organisational Functions and Their Linkage with
Organisational Objectives and Structure.....................................................................................9
TASK 3 .........................................................................................................................................10
P4. Positive and Negative Impact of PESTLE Analysis on Macro Environment of Public and
Private Sector Organisation.......................................................................................................10
TASK 3..........................................................................................................................................11
P4 Negative and positive impact of PESTLE analysis on environment of public and private
organisation...............................................................................................................................11
TASK 4..........................................................................................................................................13
P5 SOWT analysis for private and public sector......................................................................13
P6 Interrelationship of External factors with weakness and strength.......................................15
CONCLUSION..............................................................................................................................16
REFERENCES................................................................................................................................1
.........................................................................................................................................................1

INTRODUCTION
Business environment aggregate individuals or people, economic, market and many other
forces that may lie outside the control power of management. It is consist of various aspects such
as change in technology, legalisations etc. which directly impacts on the operations and functions
that are performed by a firm. Private, voluntary and public all type of organisations monitors
external and internal changes for performing operations according to current environment
conditions. TESCO is selected as a private organisation which perform business in service
industry specifically in entertainment services. The section highlights in this report are purpose,
scope and size of legal structure and also the link of organisation functions with all objectives of
business (AGBOLADE, 2014). Size and scope of different types of organisation will also
included in this report. Relationship between different organisational functions and it's link with
company objective and structure is focused in the upcoming report. In the last, positive and
negative impact of macro environment on business operations will also be included in this report.
TASK 1
P1 Purpose and types of organisation
All departments and workforce of an organisation perform their operations and functions
with the aim of accomplish company goals and objectives. Some different type of business are
mention as follow:
Public sector organisation- It includes those firms which are financed and controlled by
government of a country. The main focus of public business is to provide best or effective
services at low prices to people, in order to improve society conditions. BBC is an example of
public organisation which is established in UK (Alsaad, Mohamad and Ismail, 2017).
Purpose- The main purpose of public organisation or business is to offer best services
with minimum use of resources.
Legal structure Central government- Funds are collected in the form of income tax directly from public. Local government- Community charges and council tax is collected by local
government.
 State government- Governance holds specific power that is applicable on different
department of organisation.

In context of BBC it is a central government public sector organisation.
Voluntary organisation- It involves the group of individuals who put their efforts for the
improvement of society. Individuals and voluntary organisation formulates an agreement that
leads to improve society standards. Oxfam is one of the voluntary organisation who work with
motive of reducing poverty from nation.
Purpose- Social welfare is the main aim of business who are working as a voluntary
organisation.
Legal structure
 Trust- It is usually establish for managing property and money to achieve a clear
defined purpose and it is used to establish formal relationship between all parties. This
includes donors of money, property and trustee.
 Limited companies- A limited company structure is a better choice for voluntary
organisation. This is also appropriate because this it helps in managing staff, contracts
and large amount of funds.
Oxfam legal structure is based on trust.
Private sector organisation- The term private sector includes those organisations that
controlled and establish business with engagement of individuals (Armeanu, Istudor and Lache,
2015). All decisions are based on the basis of private ownership that undertakes person to work
with group of individuals.
Purpose- Private sector organisation work with motive of earning profits and the other
motive of business is to improve productivity of organisation for enhancing the market size of
business.
Legal structure Sole proprietorship- In this aspect, an individual runs whole business and responsible to
take entire decision of company. Local authority provide license to individuals for
offering legal authority with motive of managing business according to sole
proprietorship.
 Partnership- The term partnership is defined as an association which is run by two or
more partners For this purpose, agreement is signed among partners that bound them to
pay their debts and share profits with an agreed proportion.
The selected organisation is Tesco plc which is governed by organisation laws.

Growth in Global business environment
With the constant production of company products such as increase in domestic market
leads organisation to reach at saturation stage. This aids business to grow at international level
and in recent years trade barrier are implemented by government which is used to perform
operations at global level. In the last, diversify aspect also leads to increase business at global
level.
P2 Scope and size of different organisation
BBC- It is recognised as a public owned organisation that perform work in service
industry and it is also recognise as one of the largest broadcaster among world. Background- BBC is a government managed organisation and it was established in the
year 1922. Moreover, BBC get funds with the help of UK households who get television
services among their home (Chang, Wang and Arnett, 2018). Radio broadcasting and
nine different TV channels services are also controlled and performed by BBC. Services offered by BBC- BBC news, BBC iPlayer, BBC one and other nine channels are
some effective services that are offered by BBC. Size- This firm has a large workforce with over 20,000 employees who are enrolled as
permanent staff and thousands are worked on part-time, fixed contract and flexible basis Scope- In the context of BBC scope creative and distinctive service offer a broader scope
for organisation to improve market area of BBC. Vision- Vision of BBC is to provide impartial news and information to individuals for
providing them world news. Mission- To provide and support aspects which improve learning aspects for all age of
individuals. Business objective- The objective of BBC is to provide content related education across
the border of UK (Chung and et. al., 2016). It help individuals for analysing impartial
news and information by engaging individuals of all world.
 Stakeholder- Programmes editors, presenters and governance are major stakeholders of
BBC.
TESCO PLC- TESCO is known as a private organisation and it is performing business
among market from more than one century. The main purpose of TESCO is to improve their

market share by managing business into developing countries. Along with this TESCO perform
business by operating their retail stores among various geographical areas. Background- The business of TESCO was started in the year 1919 as in this year Jack
Cohen start to sale groceries from the stall. It is situated at East End of London. And
with understand of business market Jack established TESCO in the year 1924. Product offered by Tesco- It is a British multinational organisation that provide a large
range of food items, clothing section and electronics products etc. Size- TESCO operate their business in all European market through expanding its market
by engaging more than 4,00,000 workforce so the size of business is wide and broad
(Evans and et. al., 2017). Scope- The scope exits in terms of offering frozen food and offering customers good
quality of products to their customers. Vision- To improve customer's loyalty is the main vision of organisation. Mission- TESCO perform work with the aim of increase in profitability by satisfying
customer's need in an organised manner. Business objective- The aim of TESCO is to generate and manage large range of
products which attracts more number of customers by offering discount.
 Stakeholders- Supplier, Employees and transporter etc. are some of the major
stakeholder of TESCO who aids management to perform business in an appropriate
manner.
OXFAM- The term Oxfam believe that with the power of individuals and performing
work with a together approach helps in reducing poverty. It also helps in formulating positive
future aspects that leads individual to enjoy similar and equal rights. Background- Oxfam is recognised as a voluntary organisation that is aimed to work with
non-profit group. Along with this it is also used for removing the alleviation and disaster
management. It was founded in the year 1942 by the group of Quakers, social activist and
Oxford committee to relief society from poverty. Services offered by organisation- Oxfam work to manage work with fair-trade and to
improve situation such as to improve health, reduce impact of poverty and natural
disaster, by providing support and relief to vulnerable communities of developing
countries via protect and rebuild their lives during crisis

 Size- Oxfam manage services in more than 94 countries with managing thousands of
local organisations who work for supporting people living in vulnerable
conditions(Georgescu and Popescul, 2015). It also include more than 50,000 volunteers
to manage service at global level. Scope- The scope of Oxfam is wide as specific services of TESCO relates with global
movement of individuals Vision- Vision of Oxfam is to generate sustainable world that is developed without
inequalities and leads individuals to free from poverty. Mission- Mission of Oxfam is to manage poverty with unjustifiable and preventable
method to remove injustice and support individuals to live a better life. Business objective- The main objective of Oxfam is to hold person for taking control of
individual life in order to escape them from poverty. Stakeholder- Trustee, volunteers, supplier and local community are the major
stakeholders of Oxfam.
TASK 2
P3. Interrelationship between different Organisational Functions and Their Linkage with
Organisational Objectives and Structure
An organisation is a bundle of activities which are performed to complete a business project.
These activities are not performed individually, without cooperation of various departments of a
firm like HRM, operations, marketing and more. Along with this, functions of departments are
also interrelated with each other, as one cannot function without the support of others. Tesco
PLC is a large company whose motive is to generate profit. This can be achieved with the help of
following departments which are inter dependent on each other. The relationship between
different departments are-
 Marketing and Human Resource Department- Human Resource department of Tesco
performs the key role of recruiting the best skilled employees to each department for the
efficient working of the organisation. The marketing department is a very creative and
innovative unit which requires skilled employees for making marketing strategies
(Holliman and Rowley, 2014). Tesco manages to have a good coordination between these

departments which leads to attractive promotional activities thereby generating large
revenues every time which leads to fulfilling organisational goals.
 Purchasing and Research & Development Department- Market research is an
important part which involves studying the customer feedback and monitoring the
competitors. The R&D department of TESCO study the market and report it to
purchasing department regarding the quantity of purchasing the inventory so that there
are less chances of dead stock. Tesco focuses on expanding the market in different
countries so R&D department helps the purchasing department regarding the quantity of
inventory to be stored for expanding the market.
 IT Department and Finance Department- The IT sector requires huge fund for
installation and development of new technologies. The finance department makes sure
that it has allocated sufficient budget for IT department which can help in updating the
software used by the company. Tesco PLC also uses online mode for selling its products
and Regular update of software and updated technology requires IT department to have
coordination with finance department so that objective of capturing the online market of
Tesco PLC is achieved.
Organisational Structure of public and private organisations
 Hierarchical Organisational Structure- This structure is mainly followed by large
companies where, different levels of authority with a chain of command,helps in
connecting different management levels within the organisation (Khan and Quaddus,
2015). The decision making process flows from top to bottom. BBC follows hierarchical
organisational structure where the hierarchy starts from BBC Trust, then Executive Board
which has number of directors for different section and then Executive Team which have
several other directors and then comes the Management Board.
Tesco also follows the hierarchical organisational structure where at the top is Tesco PLC Board
which comprises of committees who report to the board. Then in large stores, there are layers of
different managers like at the top is Regional Manager, then store manager following it, there are
many mangers divided according to the sections of store.
 Matrix Organisational Structure- It is a combination of functional organisation and
project organisation where there is dual commanding system due to diversified operations

(Likoko and Kini, 2017). It is used to secure the high degree of coordination between
different department for a large project.
TASK 3
P4. Positive and Negative Impact of PESTLE Analysis on Macro Environment of Public and
Private Sector Organisation
British Broadcasting Corporation
Political Factor- Government is the law maker of the country and laws may have a severe
impact on the functioning of business. BBC is controlled by the Board of Governance and
operates according to public interest. Positive impact- BBC is founded on Royal charter and it is reviewed after every 10 years
by the government. The government has allowed public funding for BBC which its entry
into competitive market.
 Negative impact- the government control over the amount of license fees makes the
pressure on BBC because the license is not issued for lifetime. It has to regularly pay
license fees and renew its license after every few years.
Economic factor- This include interest rate, income and inflation rate to analyse direct
impact of economy on performance of BBC operations. Positive- With increase in GDP of UK license fee is improved that also improve funds for
BBC.
 Negative- Increase in the cost of getting rights related with premier league is increased
that also involve BBC to reduce its operating profits (Madhavaram and Hunt, 2017).
Social factor- Culture and demographic related aspects are engaged in social factor it
includes occupation, income level and communication language used in external environment of
business. Positive- Due to high knowledge of UK individuals organisation undertake advantage to
enhance its number of channel in science and technical related areas.
 Negative- Different number of religion, culture and value followed by individuals of UK
so it is complex to broadcast service with all languages.
Technological factor- Technical factor include innovation level, development and
research methodology for generating awareness among organisation.

 Positive- With easy access of Internet among UK it is possible to expand the number of
services by including social and digital platforms. It aids for approaching different
individuals through providing access on Laptop and mobile phone.
 Negative- The cost for technology aspect is too high so the number of profits is reduced
for organisation. It works as a negative aspect for business.
Legal factor- Employee's safety law, anti-discrimination law and intellectual property
right are included in legal aspect that ensure secure property rights for organisation. Positive- This is complex for rival organisation to formulate similar products by
managing intellectual property rights.
 Negative- The license fee for the formal setup is implemented by board of governance so
BBC is totally depend on government rules.
Environment factor- BBC perform and manage their work according to safe
environment conditions because it is recognised as a public sector organisation. Positive- BBC adopt rainwater harvesting system with as centralised recycling point to
utilise them in future (Niemann-Struweg, 2014).
 Negative- Due to change in the climate it is complex for reporters to perform work with
environmental conditions.
TESCO plc
Political factor- TESCO express their work with political influence as it impact on
operations of organisation such as legalisation, tax rate etc. Positive impact- Stable political conditions leads UK to manage work with existing
policies. This also helps to understand work in an appropriate manner.
 Negative- The charges such as high import duty generate challenges for TESCO to
perform work appropriately.
Economical factor- TESCO emphasis more on economic factor as it directly impact on
the profits of organisation. Positive- Purchasing power of UK individuals is high so it is easy for Tesco to perform
work in an appropriate manner.
 Negative- Brexit generate challenge for organisation because overall economic of
company is impacted.

Social factor- With change in consumer behaviour and market requirements profits for
TESCO is impacted. Positive- Customer's perform their work with one more step that is to save time
perspective. So with application and website it is convenient for TESCO to increase the
number of consumers for purchase products.
 Negative- Due to the change in behaviour of customer the sales for TESCO products is
also decreased.
Technology factor- With the implement of advance technology techniques it is easy to
satisfy customer satisfaction level. Supply chain management is improved with the help of
implementing right technology. Positive- TESCO increase their number of sales by providing online sales facility and
home deliver option to individuals.
 Negative- TESCO compete with large retail organisation so technology is adopted by
all. Therefore, it is complex to manage and cutting cost of technology (Wu, Zhang and
Lu, 2014).
Legal factor- The business of TESCO is influenced by company specific laws such as
consumer protection act, health and safety law to minimise negative aspect for business. Positive- TESCO follow all laws related with government of UK it increases trust for
consumers which improves number of customer footfalls.
 Negative- Organisation perform work as food retail commission so without announcing
this is complex for management to change in the price of products.
Environmental factor- TESCO analyse as well as understand the relevant aspect which
relates with environment conditions and natural resources. Positive- Social awareness among stakeholders is a positive aspect for ensuring the safety
of environment.
 Negative- The competition for TESCO is increased that make influence for complexing
the environment policy and regulations.
TASK 4
P5 SOWT analysis for private and public sector
SWOT analysis for TESCO

Strength
 It is a leading organisation that cover
overall retail market of UK. So, having
a large market area reflects major
strength of Tesco in given industry
 TESCO deal with broad range of
products among all over the world. Operations of TESCO are operated in
different geographical areas such as
UK, US etc.
Weakness
 Most of the sales come from Europe
market which work as a weak point for
business.
 TESCO focus on economic range for
products related with mass volume. So
price cost impact on business sales.
Opportunities
 The opportunity for TESCO is to enter
among developing country for more
business expansion with the help of
merger. To improve profits by TESCO
implement online shopping aspect. It
increase in market share for the
organisation.
Threats
 Due to change in the currency
organisation face the challenges related
with loss of profits.
 The price war with the competitors
such as? impacts on operations of
company due to change in profits.
SWOT analysis of BBC

Strength
 BBC is the largest broadcaster which
provide its services at global level.
 The brand image of BBC is too strong
that enhance company goodwill at all
places. Fast and unbiased news is provided by
television.
Weakness
 Government related and controversial
news is biased that might increase
controversies among people and affect
its brand image at marketplace
 Journalists life is threatened by
broadcasting the news of crimes related
to them
 Operating cost of BBC is high so
competitor start price war which work
as a weak point for business.
Opportunities
 Becoming trendy and getting more
involvement lead BBC to improve its
growth in both national and
international market Providing unbiased and controversial
free news will be the biggest
opportunity for BBC to gain
sustainability in business
Threats
 The organisation faces strong
competition like CNN that possess
threat in retaining its business position
 Emergence of domestic channel also
decrease the viewership of BBC.
P6 Interrelationship of External factors with weakness and strength
BBC (British Broadcasting corporation)
Political- The political stability in rules and regulations of US and UK leads BBC to
improve brand image among future by performing operations with constant policy. Strength- Stable policy and government support for public organisation improve the
opportunities to obtain first mover advantage.
 Weakness- By the change in government conditions and regulations, there is a decrease
in the number of operations and also probably new government not support organisation
to perform business appropriately.

Economical- Funds for the organisation are increased that leads BBC to operate their
functions with more profitability. In the context of BBC economical aspects increase in the
number of profits by performing operations at low cost. Strength- The increase in number of operations with managing right cost leads
individuals to perform their work in an appropriate manner.
 Weakness- With change in economic policy or decision-making such as Brexit directly
impacts on company operations as it improve cost for business.
Social- BBC is recognised as a successful organisation that deals according to the
behaviour of customers and this is also used for contributing better services through
understanding individual need. Strength- With performing company operations according to the individual requirements
it is easy for management to manage all business as per society requirements.
 Weakness- Consumer behaviour and requirements changes in a short time period and
along with this market conditions for business is too dynamic. So it work as a difficult
point for business.
Technological- The high cost of equipment helps for spreading news at a broad level but
it is also reduce profits for business. Strength- Spread for news is complete with fast manner by use of high technical
equipments.
 Weakness- Cost to purchase technology and also provide training cost is high that
increase operational cost for business.
CONCLUSION
By the analysis of above report it is concluded that organisation follow all legalisation
and legal aspects for business that prevails in operating country. With the proper coordination
between various departments, it becomes easy for an organisation to accomplish long term
objectives of organisation. External and internal aspects of business perform an important role
for organisation for completing organisational task as per company objectives. Along with this,
organisation structure perform an important role for business so with adopting right structure it is
easy to work and manage operations in a smooth manner.

REFERENCES
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