Unit 1: Business & the Business Environment

Business environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
Explain different size, type and scope of organisation?.........................................................3
P.2. Explain the size and scope of a range of a range of different type of organisations?.....5
M.1. Analyse how the structure , size, and scope of different organisations link to the business
objectives and product and services offered by the organisation. .........................................7
D.1. Provide a critical analysis of the complexities of different type of business structure and
the interrelationships of the different organisational functions? ...........................................7
P.3. Explain the relationship between different organisational functions and how they link to
organisational objective and structure ...................................................................................8
M2. Analyse the advantage and disadvantage of interrelationship between organisational
function and the impact that can have upon organisational structure?...................................9
P.4. & M3. Identify the positive and negative impact the micro environment has upon
business operation supported by specific example? ..............................................................9
P.5. Conduct internal and external analysis of specific organisations in order to identify
strength and weakness? .......................................................................................................11
P.6. Explain how strength and weakness interrelate with external macro factor. ...............12
M4. Apply appropriate SWOT / TOWS analysis and justify how they influence decision
making? ...............................................................................................................................14
D2. Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision making? .........................................................................................14
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment is a collection of both external and internal factors that affects
firms ability to build and develop successful customer relationship (Bejtkovský, 2018). The
organisation that was selected in this report is Tesco. It is most famous retailer in UK. It deals in
clothing, groceries etc. Various topics are discuss in this project like size, scope, legal structure
of different type of organisation, SWOT and PESTLE, relationship between different functions
and so on.
TASK
Explain different size, type and scope of organisation?
Public Sector Organisation: these are the organisations which are in the control of
Government. The government finance the company with the intention to provide facility to
general public. Their main objective is to serve the service for social welfare as they not run the
business for profit maximisation purpose (Bejtkovský, 2018).
Purpose: Achieve the targets through optimum utilisation of resources is the main
objective of company.
Legal structure:
State – In such type of companies state government has full control over the affairs of the
company. State government is the authority who formulate laws related to compensation, salary ,
perquisites, wages. All the schedule employment attract state laws and legally bind the
employer . In this laws are attracted which are applicable to their state because each state has
different laws.
Local- In this municipality corporation, electricity board, organisation which provide
water facilitates are involved under it(Cepel and et. al., 2019)
Central government - In such type of companies all the powers and control are in the
hand of central government. All benefits and salaries are fixed according to provisions and laws
of CG. Same laws are followed to every employer or employee whether they belong to any state.
In this same laws are followed in organisation in the whole country.

Private sector organisation - These sector includes those organisations which are
established and controlled by the private individuals. The owner of private organisations can be
either a single individual or a group of individuals.
Purpose: the objective of it is to gain maximum profit as well as to gain competitive
advantage so that they can easily survive in the business environment.
Legal structure:
LLP: Limited liability partnership is registered under the LLP Act. In involve partners
and designated partners in their business. LLP is a combination of both partner and company so
it covers the features of both. There are two type of liability exist in business such as liability
limited by guarantee and limited by shares(Kotaskova, and Rozsa, 2018). In this document is
prepare which is called as memorandum of understanding.
Partnerships A partnership is an association of more than one individual. The legal
obligations in partnership are similar to sole trader. Also, the partners are bound to sign a
partnership agreement which legally bounds them in paying debts or sharing of profits in agreed
proportion.
Sole proprietorship: In this type of company only one member are present who has full
control over the management of the organisation
Voluntary Organisation: Voluntary organisations involves a group of individuals who
willingly enter into an agreement to form a organisation in order to accomplish a objective.
Example of such type of organisation is Oxfam as it is global charitable organisational structure
whose main objective is to remove poverty from nation.
Purpose: : The aim of Voluntary organisation is to work for the betterment of social
welfare. Social welfare not only includes development of individual but also growth of society as
a whole
Legal structure:
Trust -The trust is not a legal entity which means they cannot enter into any agreements
it their own name. This leaves the trustees to open a path of personal liability.
NGO- These are those organisations whose main objective is not to earn profit but to
serve the services to public so that standard of society are tends to improve. For the purpose of
marriage, education, for disable person, old age people these are open in different locations of
country. As it provide support to the weaker section of the society. The Source of fund of such

type of organisation are donation, subscription fees. With the amount that are collected are used
for the benefit of people
Unincorporated Association- These association is not a legal entity. Hence there is no
limitation of liability as they entered into the agreement on the behalf of charity and are
personally liable.
P.2. Explain the size and scope of a range of a range of different type of organisations?
Basis BBC Tesco Oxfam
Background It is public based
company established in
the year 1922 as the
channel generate large
amount of money from
Households of United
Kingdom who have
TV in their Home.
It is multinational
groceries retailer. It
was established in the
year 1919. The
founder of the
company is jack
Cohen
The structure of this
company is Voluntary.
It is incorporated as
NGO. The members
perform the business
operation in terms to
disaster relief, poverty
alleviation.
size There are large number
of workforce around
22000 are engaged in
company.
In the year 2021
approx 405,506
employees are
working in company.
It has 6800 stores in
different locations of
UK.
In 94 countries Oxfam
works across the world
. It has thousand of
local partner
organisation. With
more than 50000
thousand volunteers
all over the World they
work for social
welfare.
scope To expand the business
in various counties like
South Africa, Idia,
Japan , China
It has scope to
immerge in the market
through dealing in
frozen food.
As population are
tends to increase due
to which chances of
poverty are also raise
so Oxfam has wide

scope to uplift the
standard of people so
that society conditions
are tends to improve.
Service / product
offered
BBC iplayer, BBC
news, BBC two, BBC
one are the channels
provided by BBC in
different nine nations.
`It deals in groceries,
electronics, footwear,
clothing , cosmetics
etc. As it provide to
their customers
facilities of both
online and offline
service.
This organisation
works for education
and development, fair
trade, livelihood,
health, natural disaster
etc.
vision To become creative
company in the World
in the same sector is
the vision set by
organisation BBC.
Top become the most
highly valued business
by the clients and to
gain trust from their
target customer.
Oxfam vision to see
the World with
poverty . It want the
world where humans
are equally treated and
tends to be valued ,
and people enjoy all
the rights which are
created for them.
Mission The mission of the
company is to create
awareness, entertain as
well as educate the
persons who are
connected to their
programmes or
services
To be the champions
for audience and try to
support them in
enjoying better life by
providing great
products to their
customers and also to
gain lifetime loyalty.
To create lasting
solution to the
injustice of poverty.
Oxfam work for
eliminating poverty at
global as well as local
level.
Stake holder There are various Their stakeholders are The stakeholders of

internal as well as
external share holders
are present like
program editor, local
community, BBC Trust
, Presenter, etc.
their supplier,
employers, employees
, audience who
purchase services and
product
Oxfam are their
trustee, supplier,
volunteers as well as
operating communities
etc.
Business goal BBC main objectives
is to provide their
audience specialised
content of education
through impartial news
which help audience to
get connect to all over
world .
Their objective is to
better understand their
customer. To become
most energetic &
innovative to take risk
so that life of
customers are making
better and also to earn
respect for staff for the
values.
To give solution for
injustice of poverty
and also to empower
equal rights to women.
M.1. Analyse how the structure , size, and scope of different organisations link to the business
objectives and product and services offered by the organisation.
As different organisation has different size , structure and scope. These can help the
business to achieve the targets. For example to run small business few employees are need to
perform the activity. Number of products are also limited in it and flat structure are adopted
under it. On the other hand if medium size organisation is there than it deals in sufficient
products which is not so less and not so high. In such type of organisation functional structure
are follow. But in case of large or big companies there are large number of employees are
involved so hierarchial and divisional structure are adopted. Therefore it is concluded that all the
three factors are interconnected or interlinked with each other.

D.1. Provide a critical analysis of the complexities of different type of business structure and the
interrelationships of the different organisational functions?
As many problems are come in the formations of organisation whether it is related to
public, private, voluntary. Like problems related to choose place of working , regarding the
location of registered office , registrations , formation of various documents such as
memorandum, agreement, regarding arrangement of human resource, regarding funds etc. are
face by organisation at the incorporation of any type of business.
TASK 2
P.3. Explain the relationship between different organisational functions and how they link to
organisational objective and structure
Relationship between different functional areas.
No organisation can do business in isolation . In small firms people are come in contact
to each other in informal way so by asking question and through immediate reply they can can
easily solve the query of clients But in large organisation separate departments are present .
Each unit is expert and specialized in specific field I(štvanić, 2017). In it important information
are transfer from one unit to another so according to that they can work and smoothly run the
business. Regular communication among all the unit leads to achieve the target. For effective
results it is important to maintain corporation and coordination between different departments in
the company.
Sales & marketing: In all the organisation both marketing and sales plays an important
role for business expansion and survival . Also both of these are interconnected to each other.
Through advertising in newspaper, radio, television, magazines , marketers can easily create
awareness regarding their product which leads to attract large part of audience and increase their
customer base by selling the product to them. Sales are totally depends on marketing activity.
Effective marketing leads towards effective sale and if appropriate tools are not use to promote
than it tends to decline the sales.
Finance & HR : Their strong relationship is the key to success for business. As finance
team are responsible to make record of all the transactions which are connected to money. On the
basis of these accounting is done so that employees can prepare financial statement which
reflects true and fair position of business so to perform all the activities related to audit,
accounting there is need of smart accountants and CA. Therefore finance department come in

contact to HR to appoint suitable candidate for their unit. Also salaries are set by HR but TDS
are deducted by finance member and taxation or return work are done by Member of finance
unit. HR team arrange funds from finance department to perform the administrative work
affectively.
Sales & production: Both the activities are linked to each other as if any one can not
perform well than it make negative impact on other. Production unit is responsible to produce
goods so that to meet the needs of customerHrechyshkina and Samakhavets, 2019). It is the
responsibility of product unit to concerned about the issues in their department to sales units and
also it is the duty of sales executive to keep update regarding production schedule and also get
update regarding order's delivery date and it become possible if proper communication is their
between both the departments so that salesman not to fix the day of supply which is difficult to
satisfy. And also it's the duty of sales man to inform the production department regarding the
number of items need to produce to satisfy the requirements of customers on time. In this way
work of both department are inter connected.
M2. Analyse the advantage and disadvantage of interrelationship between organisational
function and the impact that can have upon organisational structure?
In the organisation various functions are perform and all the functions are connected to
each other as such interrelationship has various advantage and disadvantage like Interrelationship
develops coordination and cooperation. It tends to make positive impact on business as give
effective results which leads to smooth running of business. But it has some disadvantage also
because as these are interconnected to each other than deficiency or error in one functions affects
the performance of other also which make negative impact on business as it leads to increase
wastage of time and tends to reduce productivity as well as profitability.
TASK 3
P.4. & M3. Identify the positive and negative impact the micro environment has upon business
operation supported by specific example?
PESTLE of Tesco
Political: This factors are based on various topics such as labour law, corruption, government
policy, tax policy, trade restrictions, political; stability etc.
Positive Impact Negative Impact

 Due to political stability, cost of
making changes in the policies,
provisions, rules are tends to be low as
it involves less amount to do alteration
so it does not affect the probability of
Tesco.
 With the reason of increment in the tax
rate large part of profit are go to
government as taxation. It make
negative impact on revenues because it
tends to decline.
Environmental: In include various factors which are related to interest rate, exchange rate,
disposable income, inflation rate, unemployment rate, economic growth and so on.
Positive Impact Negative Impact
 By creating social awareness among
audience, Tesco is reducing the waste
produced in their store
 Due to strict environmental regulations
and policies , competitive position of
Tesco is getting influenced.
Social: Age distribution, Health consciousness, cultural barrier, lifestyle attitudes, population
growth rate all are included under it.
Positive Impact Negative Impact
 Now people are more conscious to
health so it make positive affect on
Tesco business because now they can
expand their business in the health
related product(Hamilton and Webster,
2018).
 Due to rapidly change in the behaviour
of customer towards the healthy item
than it leads to effect negatively the
sales of existing product which results
to decline profit margin.
Technological: This factor are concerned to innovation level, R&D activity, technology
incentive, automation, technological awareness etc.
Positive Impact Negative Impact
 Automation and advance technology  Lack of technological awareness or due

are adopted by Tesco in their stores
which leads to eliminate wastage of
time. Also online facility helps to gain
competitive advantage by increasing
sales.
to rapid change in technology create
problem to staff members of Tesco
because it take time to get adapt new
advance technology therefore due to
delay it make negative impact on sales
also.
Legal: In this various laws related to discrimination, copyright, patent, trademark, health &
safety, employment law, consumer protection, arbitral are involve under this factor.
Positive Impact Negative Impact
 Due to applicability of consumer
protection Act Tesco can safeguard the
interest of customer which provide
satisfaction to consumer due to that
audience purchase more which tends to
increase sales level and profitability.
 If employment law are not followed by
Tesco than it leads to attracts
punishment, fines etc. which reduce
profitability of Tesco and also it decline
the goodwill of the organisation.
TASK 4
P.5. Conduct internal and external analysis of specific organisations in order to identify strength
and weakness?
SWOT Analysis of Tesco
Strengths
 Have large number of retail stores
which tends to make shopping most
convenient for audience and to gain
competitive advantage due to their
large customer base.
 Have excellent and wide distribution
network.
Weaknesses
 To take participation in many retail
sectors leads to raise problem of
management as it results as
inefficiency.
 Tesco business operations had failed in
US and Japan which tends to increases
unnecessary expenses and reduce profit

 Have flexible mode of payment which
provide facility to customer to moving
towards cashless.
and sales.
 Non availability of sufficient funds are
great weakness face by organisation
Tesco.
Opportunities
 Tesco had an opportunity to improve
sales by using online mode in health
products also because now people are
focus more on their health.
 Through upgrading online shopping as
well as giving home delivery services
Tesco can expand their business. In this
way Tesco increase profitability.
 Tesco had good chance to increase their
sales by introducing non households
products.
Threats
 Fluctuation in the currency rate are the
threat face by Tesco because it provide
serves to various countries all over the
World.
 Price war among competitors and
chances of existence of monopolistic
condition by their competitor are threat
mostly face by tesco.
 Threat of heavy taxation rate are face
by company because due to the reason
large amount are paid as tax which
tends to decline their revenues.
P.6. Explain how strength and weakness interrelate with external macro factor.
Political factor: It includes those factors which are related to government intervention
such as income tax, GST, FEMA, corruption, tax policy, trade restrictions. AS all these factors
need to take into account at the time of assessing potential market attractiveness(Fernandes,
2017).
 Strength -High formalities or restriction on foreign trade are strength to Tesco as it is not
easy for competitor to take licence or start business in other foreign countries as it
restricted the entry to new arrivals which tends to reduce competition to Tesco.
 Weakness: High taxation rate make negative impact on revenues so tit is great weakness
to business.

Environmental factor: It is determinants of performance of economy. It include factors
like interest rate, inflation rate , disposable income, unemployment rate, exchange rate etc. as
these have long term impact on organisation. These factors also make impact on audience
purchasing power and spending habits. Pricing strategies are also get impacted due the reason of
these factors.
 Strength- high exchange rate is strength to Tesco as it tends to improve values of
currency.
 Weakness- Tesco do not have sufficient skilled workforce. As the employees are already
committed with their competitors.
Social: It represent demographic customs, norms, values, characteristic of audience
where company operate their business. Population trend are involve in this factor like
distribution of income, health and safety measures, population rate, career attitudes, etc.
marketers make concentrate on these factors so that they can easily capture the large customer
base.
 weakness- High income tax rates in domestic country are major weakness BBC face
because it make negative impact on profit and revenues
Technology: These are pertain towards innovation in the field of technology which make
impact on business operations of industry. It includes various factors such as research and
development , technology incentive, automation etc. These factors may tends to influence
decisions regarding whether to take entry or not in particular industry. Though operate business
technology wise we can prevent our organisation from unnecessary expenses(Fabus, 2018).
 Strength- R&D and fully automation advance technology are strength to Tesco.
 Weakness- Involvement of heavy cost in adoption of latest innovative technology.
Legal: These factors are overlap the factors that cover in political aspect. As is concerned
to provisions, laws related to consumer protection act, discrimination law, Trademark,
employment law, health & safety acts. It become so tricky if company trade ion different
countries because every country has different regulations, laws and provision.
 Strength- Strong attention to consumer protection are strength to business of Tesco.
 Weakness- Strict Laws and provisions are great weakness for tesco.

Economic factor- Tesco understands the relevance of social responsibilities and focuses
on reducing the environmental wastage by optimally utilising the natural resources.
 Strength - The bottleneck in the shipment of news are strength of Tesco.
 Weakness- If Tesco not follow act or provisions that are set under this factor it attracts
high penalties.
M4. Apply appropriate SWOT / TOWS analysis and justify how they influence decision
making?
For business it is necessary to do internal and external analysis because these can help
the organisation in decision making. By performing SWOT/ TOWS analysis strength and
opportunities can easily be identify and with support of these company can easily overcome with
threat and weakness. It also help to grasp various new opportunities also that exist as these can
help to gain competitive advantage to business.
D2. Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision making?
For business it is necessary to analyse external and internal environment so that they can
can easily frame policies and strategies to survive in the competitive situation. For that PESTLE
analysis is perform by smart marketers so that macro environment can be easily observe. With
the help of SWOT and PESTLE analysis it is observe that which factor make negative impact
and what affects positively and on the basis of these effective decision making is done.
CONCLUSION
To run the business or to start any new business it is necessary to analyse internal and
external factors that are present in the business environment . After deep study it is also conclude
that company should operate their business by following all the legal provisions so that their
customers are tends to satisfy because laws are made to safeguard the interest of customers. This
will provide satisfaction and motivate employees which leads to smooth running of business.

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