Business Environment and Organizational Functions: Unit 1 Report

This report provides a comprehensive analysis of the business environment, covering various organizational types, including private, public, and voluntary sectors. It examines the legal structures, purposes, and scopes of these organizations, with Tesco as a key example. The report delves into the relationships between different organizational functions, such as purchase, production, marketing, finance, research, and human resources, and their links to organizational objectives and structure, including divisional and hierarchical structures. Furthermore, it explores the positive and negative impacts of the macro environment on business operations and conducts an internal analysis of an organization, highlighting the interrelation of macro factors with organizational strengths and weaknesses. The report aims to offer a clear understanding of how these factors influence business performance and sustainability.

Unit 1

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Different types and purposes of organisation and its legal structure .........................................1
Size and scope of different types of organisation ......................................................................3
TASK 2............................................................................................................................................5
Relationship between different organisational functions and link with objectives and structure
.....................................................................................................................................................5
TASK 3............................................................................................................................................7
Positive and negative impact of macro environment on business operations ............................7
TASK 4............................................................................................................................................9
Internal analysis of an organisation ............................................................................................9
Interrelation of macro factor with strength and weaknesses of organisation ...........................10
CONCLUSION .............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
Business environment is a sum of all the factors that includes internal and external terms
such as customers, suppliers, management, demand and supply, rules and regulations of the
organisation etc. the major objectives of the business environment is to accomplish the
requirement of the customers by fulfilling all their needs and expectation. It includes various
types of organisation and purposes including their legal structure so that task can be achieved
according to their structure. It also involves size and scope of various enterprises that helps in
enhancing the knowledge related to businesses. Further, it explains the organisation function and
structure that is used in Tesco. At last it shows the positive and negative of macro environment
and analysis of internal environment so that company may achieves their overall objectives and
goals for sustaining in the market by earning more profits(Belás and et. al., 2015).
TASK 1
Different types and purposes of organisation and its legal structure
Private sector: It defines those business venture which is regulated by a person or a group of
person without any interference of the government. This type of organisation mainly working for
earning high profits. For example- Tesco that is one the largest company in UK that is operating
for earning more profits. It deals in variety of products such as food, clothing, financial services
etc(Papilaya, Soisa and Akib, 2015).
 Purpose- The main aim of Tesco is to provide the better quality products everyday so
that they can enjoy larger sustainability and profits. They promote goods and services at
global market by satisfying the needs of customers and enhance their living standard.
legal structure
 Sole trader: This term defines a person who runs and operate a whole enterprise on their
own without any legal restriction for earning more profits to feed their individual family
and friends. They are easily operate in the country like UK.
 Company: It is of two types i.e. public and private ownership. It includes group of
people who are working for achieving common goal in specific time so that they can
protect the organisations assets and financial resources and earns more new monetary
value. It is work under the company act where person and business both are seprate
entity.
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Tesco is working under the limited corporation with the name of Public company in UK. That is
working for satisfying the customer demand and earns a high amount of profits.
 Partnership: This term suggest when two or more than two persons are sharing profits
and losses for achieving the common objectives than it is called partnership firm. In this
each and every partners mutually deicide their percentage of interest. Some examples of
partnership firm is businesses, schools, interest based enterprises etc.
Public sector: It refers to that type of sector in which there is more interference of the
government can be taken place that are working for satisfying the needs of society and for their
well being. This term involves education sector, health related sector etc. The best example of
Public sector organisation is National health services that is operated in UK that support the
society people by providing the health related services. This organisation is accountable to the
UK government and raises their fund from tax benefits, fund collected from government etc.
 Purpose: It's main purpose is to provide products and services for the well being of the
society people so that they feel safe and raises the financial resources from the
government funds and benefits of tax(Prajogo, 2016).
Legal structure
 Local: This type of structure in public sector is accountable to both for central and state
government. They are working for a limited area or a particular region with the
permission of state and national community.
 State: It refers to that in which they are accountable to the central government only but
have a power to control the local authority. They generally working for a whole city and
take decisions for the welfare of the people who are living the particular state.
 Central: It is the topmost government authority that can regulate the state and local
authority and take decisions for the benefits of whole country. National health services
are working under this government. That can take all the decisions so that company may
achieves their goal to provide services to the people of country.
Voluntary sector: This type of sector is working for the welfare of the people within the country
without focusing on earning profits. In this owner and investors does not get any benefits
because they are working as a voluntary for well being of society people. Example- Keep
Britain Tidy is the charitable organisation that is established in UK which are working for
improving the local area, utilising the natures resources in nan efficient way and reduce litter.
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 Purpose: The major aim of this type of organisation is working for welfare of living
Being in the country without thinking of earning profits and any financial growth(Deasy
and et. al., 2016).
Legal structure
 Trust: It refers to that in which organisation is working for welfare of society and
accountable to the trustee who invest their amount in the business entity. In this a person
who do a charity have a right to use their capital as per their own wish. In this Keep
Britain Tidy is work under this structure.
 Unincorporated association: It refers to that structure in which group of person are
working for the welfare of the society without focusing on earning profits. They are
regulated under the government.
Difference between public, private and voluntary sector organisation
Basis Private Public Voluntary
Objectives This type of
organisation is
working for earning
profits and revenues.
In this enterprise is
working for the
welfare of organisation
with the government
support.
Voluntary firm are
operated for not to
earn profits and
revenues but providing
the benefits to the
people of country.
Supply of good and
services
This enterprise are
mainly deals in
financial sector, food
sector, IT, medical,
support services etc.
Public sectors
organisation are
working with the
sanitation, health,
education and for
those firm who are
facing the failure.
It is working with the
limited types of
products such as
health and education
type.
Size and scope of different types of organisation
Private sector
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 Size and Scope: In Tesco, 450000 employees are working within business enterprise
with a total revenue of £ 63.911 billion. The company deals in large number of products
and services such as food sector, clothing, financial services, home wares etc. and sell
their products globally that will shows the large scope of the business enterprise.
Public sector
 Size and Scope: National health services provided 1.5 million people employment in all
over the UK that is bifurcate in different sections. In this they can provide the society
people varieties of services that involves mental health, social care, hospital services,
ambulance etc. with around £ 134 billion budget. There scope is very high as they
offering their services in most of the countries(Bitkowska, 2015).
Voluntary sector
 Size and Scope: Keep Britain tidy is providing the environmental services with the
employment range is 51 to 200 who are connected and working for them. They are
working for non-for-profit. It includes 560000 volunteers are involved that run a
environmental campaign.
Difference between micro enterprise, small enterprise, medium enterprise, large enterprise
Basis Micro enterprise Small enterprise Medium
enterprise
Large enterprise
Concepts It refers to that
business that is
working with less
than 10
employees and
operated their
venture in the
local area.
It is little more
wide to micro
business that
work with less
than 250
employees for
earning only
small amount of
profits.
It defines that in
which
organisation is
working on a
state level and
also deals in
nearby country
for gaining more
profits with the
employees of
250.
This business
venture are
working for
earning high
profits and
generaly deals
globally with the
employees more
than 250 and
beyond.
Market share Micro enterprise Market share of Market share of Large company
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market share is
placing to nil
because they
earns only regular
income.
small business
enterprise is small
according to their
served Area.
medium sized
venture is lower
than that the large
company.
market share is
also large because
they capture the
huge market with
their existence
and products.
Sustainability This type of
business venture
are working for
longer
sustainability in
the local area.
Small
organisation
focuses on their
sustainability by
selling their
limited goods and
services in their
regional area.
Medium sized
organisation are
working for
sustainability by
satisfying the
needs of
customers(Aydine
r and et. al.,
2019).
This type of
business
organisation is
not merely focus
on sustainability
they focus on
their brand image,
loyal base of
customers that
indirectly set the
path of longer
sustainability.
focusing in
profit and
growth
Micro enterprise
focus on earning
low amount of
profits.
Small enterprise
also focus on
small amount of
revenues but
more than micro
businesses.
Medium
enterprises focus
on high growth
and maximization
of profits but less
than large
ventures.
Large enterprises
are working for
high profits due
to which they can
face major growth
and market share.
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TASK 2
Relationship between different organisational functions and link with objectives and structure
Organisational function: This term refers to the activities that was done under the
functions of business which includes operations, finance, marketing, purchase, Human resource
etc. in case of Tesco this term can be elaborated below(Bah and Fang, 2015).
 Purchase and production department: Purchase department is working for obtaining
the goods that was needed in routine operating activities within organisation. They
majorly interlinked with production department because they provide the raw material to
the production department so that they can produce the goods and services and offers to
the customers. In Tesco the interrelation between this two department helps in efficient
manufacturing of offering that will earns more profits and attracts large base of
customers.
 Marketing and finance department: In Tesco, marketing department are working for
promoting and selling the products to their potential customers. In this finance
department set the budget for that so that no overspending can be faced by the company.
It shows the effective interrelation that helps in improving the financial condition of
company(Stott, Stone and Fae, 2016).
 Research and human resource department: In Tesco the interrelation between this two
department is very effective because research and development department can examine
the market and find the skilled and experienced person for the vacant job so that HR
department can easily hire the person who work effectively and done their task on time.
Organisational structure
 Divisional structure: It refers to that structure of the organisation in which manager can
make the small divisions in each department that contains all necessary resources and
functions. In this divisions can be classified as a product and services that helps in
earning the objectives and profits within the time period. In this employees are working
as per the assigned responsibility so that no misunderstanding can be taken
place(Georgescu and Popescul, 2015).
 Hierarchical structure: It refers to that structure in which one superior can control all
the activities and all other workforce are subordinate under the one person. IN context of
Tesco. Manger can adopting this type of organisation structure to fulfils all the objectives
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and earns a high amount of profits. In this functions can be divided into three to four
layers where one top authority pass the information to their subordinates and they are
working according to that. This structure is very effective for achieving the targets on
time without any conflicts so that firm may earns a high amount of profits.
TASK 3
Positive and negative impact of macro environment on business operations
Macro environment: It refers to an essential term for every business organisation
because it exits the whole economy of the country rather than a particular sector. It includes
varieties of terms such as employment, inflation rate, political condition, GDP growth, spending,
monetary policy and trends and fiscal rate etc. to evaluate all this term manager of Tesco adopts
the PESTLE analysis with their positive and negative impact that can be shown below(Foster and
et. al., 2015).
 Political factor: This factor shows political stability, tax policy, fiscal policy etc. in case
of Tesco, it can be impacted on two ways that is shown below.
◦ Positive: Due to political stability and low amount of tax place a good impact on the
Tesco, because of this they can attracts the large base of customers and earns more
profits.
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Illustration 1: source- (Tesco Organizational Structure, 2020)
Text 1: Hierarchical structure

◦ Negative: This factor creates a major drawback for Tesco because of Brexit in UK it
will affect the dealing with other countries and due to this buying of raw material is
also high.
 Economical factor: It shows the purchasing power of people, inflation rate etc. In case
of Tesco it will affected in negative and positive way that given below.
◦ Positive: This factor positively affect the Tesco, because of high purchasing power
of UK people. This will helps in earning more profits and revenues.
◦ Negative: Due to high inflation rate charged by the government, Tesco can increase
their price of products due to which their profit margin may be reduced.
 Social factor: It involves behaviour, values and beliefs of the people in the society. For
Tesco this will positively and negatively show their results which can be shown
below(Makarova and Polyanin, 2015).
◦ Positive: People of UK attracted towards the schemes and offers that was given by
the Tesco to their customers this helps in enhancing their profit margin.
◦ Negative: In today's environment people of UK are move towards the organic that
helps in safeguarding their health, this will negatively affect the Tesco sales in other
high fat drinks and foods.
 Technological factor: It shows the use of advanced technology to satisfy the needs of
customers. This term make some benefits and drawbacks to the Tesco that are as follows.
◦ Positive: Use of social media for promoting and selling helps in earning more profits
by Tesco and attracting large base of customers.
◦ Negative: Lacking of privacy and leaking information in the use of technology may
affect their brand image and reduces their overall profits.
 Legal factor: This shows the legal laws and regulation that affected the Tesco business
in two ways which is shown underneath.
◦ Positive: Use of proper laws relating to employees helps in getting more productive
work with less wastage of resources(Bah and Fang, 2015).
◦ Negative: If Tesco does not follow the rules and guidelines properly than it will
negatively affected their operations of business.
 Environmental factor: It shows the laws related to safeguarding the environment that is
taken by Tesco which impacted in two ways.
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◦ Positive: In this Tesco avoid the use of plastic bags that does not harm the
environment and attracting large base of customers. For this they can adopts the RFID
technique.
◦ Negative: Focusing on safety of environment Tesco overall expenses may be high
and due to this there profit may be affected(Frösén and et. al., 2016).
TASK 4
Internal analysis of an organisation
SWOT Analysis of Tesco
STRENGTH WEAKNESSES
 It is one of the leading company that
captured the huge British market with a
revenues of 63,911 million pounds.
 It also have a large supply network that
helps in reducing overall cost.
 The major weakness of Tesco is sudden
switching in the club-card facility
without informing their buyers this will
majorly impacted the brand image of
company.
 Tesco offers the goods and services
with credit facility due to this they face
financial issues and debts(Ayatse,
Kwahar and Iyortsuun, 2017).
OPPORTUNITY THREATS
 For Tesco major opportunity is
expanding the business units in all over
the world with the use of advanced
technology.
 Another opportunity for Tesco is
Alliance with the other brands that will
helps in growing.
 The main threats of the Tesco is the
major national economic deduction that
will impacted the growth and
performance of Tesco.
 More competitors are the major threats
such as Walmart, Aldi etc.
SWOT Analysis of Morrison's
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STRENGTH WEAKNESSES
 Large product portfolio and
customisation in goods and services is
the greatest strength of Morrison's
 Lack of research in the market is the
major weaknesses of Morrison's.
 Due to limited area presence Morrison's
profits may be affected.
OPPORTUNITY THREAT
 Their varieties of deals and using
advanced technology helps in making
new opportunity for earning more
profits.
 Major threats for the Morrison's is
growing competition due to this their
sales will be affected(Bah and Fang,
2015).
Interrelation of macro factor with strength and weaknesses of organisation
Political factor
 Strength: Because of good political stability and low tax regimes Tesco can expand
their market and become a largest retailer in the British market.
 Weaknesses: Because of Brexit occur in the country of UK, Tesco can frequently
changes their club card schemes for outside country people this will majorly impact the
profit of company.
Economical factor
 Strength: Due to high spending power of people in UK Tesco can enjoy more benefits in
their revenues that will place as a great strength of this sector(Monroe, Rikala and
Somervuori, 2015).
 Weaknesses: Increasing in inflation rate their production of goods and services may be
high cost and this affected the overall operating expenses of company.
Social factor
 Strength: Tesco can offers a varieties of schemes and offers the goods and services as
per customers demand this will majorly benefited their profits and sales.
 Weaknesses: People dynamic perception related to goods and services may affected the
overall profit margin and image of the Tesco.
Technological factor
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