Business Environment: Exploring Organizations and Macro Environment

This report provides a comprehensive analysis of the business and business environment, focusing on different types of organizations, including public, private, and voluntary sectors, and their legal structures. It examines the size and scope of various organizations, using TESCO as a case study, and explores the interrelationship of organizational functions such as finance, human resources, and marketing. The report also delves into the positive and negative impacts of the macro environment on business operations, applying the PESTLE model to TESCO. Furthermore, it conducts internal and external analysis using SWOT/TOWS to identify strengths and weaknesses and their interrelation with external macro factors, ultimately evaluating the impacts of both macro and micro factors on business objectives and decision-making.

Business and Business Environment

Contents
LO1: Explain the different types of organizations, including their size and scope.........................4
P1 Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures......................................................................................................................4
P2 Explain the size and scope of a range of different types of organizations.............................6
M1 Analyze how the structure, size and scope of different organizations link to the business
objectives and product and services offered by the organization................................................8
LO2 Demonstrate the interrelationship of the various functions within an organization and how
they link to organizational structure................................................................................................9
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.......................................................................................9
M2 Analyze the advantages and disadvantages of interrelationship between organizational
functions and the impact that can have upon organizational structure......................................12
D1 Provide a critical analysis of the complexities of different types of business structures and
the interrelationships of the different organizational functions.................................................13
LO3 Use contemporary examples to demonstrate both the positive and negative influence/impact
the macro environment has on business operations.......................................................................14
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples..............................................................................14
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organization..........................................................................................17
LO4 determine the internal strengths and weaknesses of specific businesses and explain their
interrelationship with external macro factors................................................................................18

P5 Conduct internal and external analysis of specific organizations in order to identify
strengths and weaknesses..........................................................................................................18
P6 Explain how strengths and weaknesses interrelate with external macro factors..................20
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision-
making.......................................................................................................................................21
D2 Critically evaluates the impacts that both macro and micro factors have upon business
objectives and decision-making.................................................................................................22
Conclusion.................................................................................................................................23
References......................................................................................................................................24

Introduction
In this assignment of Business and Business Environment the different kinds of organizations are
described in terms of the public, private, voluntary, micro, small, medium and large
organizations. TESCO is the largest British company which deals in grocery and merchandise
products in United Kingdom. The different functions of organizations are described like finance,
human resource, marketing and how they are interrelated with each other. The internal and
external analysis of the TESCO is described in positive and negative by considering the strengths
and weaknesses of company. The detailed explanation of PESTLE and SWOT model are
provided of the TESCO.

LO1: Explain the different types of organizations, including their size and scope
P1 Explain different types and purposes of organizations; Public, Private and Voluntary
sectors and legal structures
Introduction
In this task description is provided about the purpose and types of public, private and voluntary
organizations of the United Kingdom. The size, scope and legal structure of the organizations are
described in detail. The difference between profit, not profit, and non-Government organizations
apart from those details are given related to the public sector, private sector, and voluntary
sector.
For Profit Organization Non-profit Organization Non-government
Organization
The aim of this organization is
to maximize the profits and
give these profits to the
shareholders and owners of
company.
The primary objective of
create more profits by
providing effective services
and products.
The aim of this organization to
fulfill the needs of society, the
organizations have not any
owners.
The business pays no income
tax on the charities and
donations.
This is framed by legal
persons who are not related to
government.
Funds are collected from
government but they maintain
a non-government position.
The different types of organizations are as follows:
Public sector: The sector covers a large portion in economy of the country and provides various
governmental services. It includes infrastructure, Police, Public roads, bridges, tunnels,
telecommunications etc. it provides benefit to not a single person but to whole society. Vodafone
is Public limited company in telecommunication industry located in London.

Private sector: The organization under this sector is run and managed by a single person or a
number of people to earn more profits and not controlled by any state or government. It is also
called a citizen sector and makes contribution in the economy. John Lewis partnership is
private retail Sector Company of UK.
Voluntary sector: This is a community sector that provides services to whole society and
functions are controlled by non-government and non for profit organization. The activities are
undertaken for the benefit of society. Oxfam is a charitable organization with objective to
remove poverty
Different types of organization on the basis of legal structure are as given:
Sole trader Partnership Company
When a single person manages
and operates the business their
own.
The business is not a separate
legal entity.
Advantages;
 Easy to set up
 Run business as per
own choice
Disadvantages;
 Unlimited liability
 Difficult to raise
money and expand
(Pandey, 2013)
This is an association of two
or more number of people
who carry the business and
share profit and loss.
Advantages
 More capital
 More skills and
knowledge
Disadvantages
 Sharing profits
 Conflicts mar arise
This is an incorporated entity
with separate identity of it
owners. business run by
shareholders
Advantages
 limited liability
 Specialized
management
Disadvantages
 Difficult to run
 Little stake of hired
managers
Conclusion
The above description concludes that objectives and aims of the organizations are same to earn
more profits with the satisfaction of society. The businesses are run and managed by single
person and group of person.

P2 Explain the size and scope of a range of different types of organizations
Introduction
In this part Micro, small, medium and large origination is explained on the basis of size,
objectives, scope etc. The relationship of demand and supply is described in respect with the
industry.
Micro organization: The enterprises are present everywhere like ice parlor, café etc. these are
established in minimum capital and less number of employees. They add value in the economy
by making micro business, increase the income and decrease the cost of organization.
Small organization: The business has small number of employees and sales volume is also low.
It is owned independently and size of the company is limited in terms of the revenue also. For
example, bakery stores that employs 10 or more people and manufacture ng unit includes 50
employees. Some other firms like restaurants, drycleaners, law firms etc (Osita, et. al., 2014).
Medium organizations: The enterprises are formed with less than 250 people in the
organization. The enterprises emerge by steady and loss growth of successful businesses. This
creates a bridge between big corporations and small business.
Large organization: The enterprise that fulfills any of condition that, at least 5000 employees
and turnover of more than 1.5 billion Euros and total of balance sheet is 2 billion euros. For
example, Walmart, Apple, Google, General motors, Goldman Sachs etc. are the largest
organizations of the world (Kuipers, et. al., 2014).
Micro organization small organization medium
organization
large organization
 The company
has short term
planning
 The company
has limited
personnel
 The
organizations
has also short
term planning
 The company
ha limited
 The
organizations
doe some long
term planning.
 Personnel
development
 The extensive
long term
planning by
dedicated
teams.
 Multiple

development
opportunities
 Decision
making by
owner
resources
 Decisions of
the company
are taken by
owner itself
limited to key
employees
 Decision can
be taken by
ceo/ owner.
(Kuipers, et.
al., 2014).
career develop
net path and
programs
 Distributed
decision
making by
organization
hierarchy
Transnational Corporation: It is commercial enterprise that functioned several facilities, does
business in many countries of the world and no any specific country its national home. They look
out for maximum profits and competitive advantage by searching the cheapest and effective
production location in world.
Demand and supply: Demand means quantity of particular products and services required by
customers and supply means quantity if particular products and services that are provided to
market by suppliers (Miller And Barbour, 2014).

M1 Analyze how the structure, size and scope of different organizations link to the business
objectives and product and services offered by the organization.
All organizations which are described above like Vodafone, John Lewis Partnership and Oxfam
are different in every aspect whether nature, structure, size and scope on the basis of objectives
of the company. The objective of Oxfam is to reduce the poverty from country at large extent,
Vodafone has objective to earn maximum profits and provide best services to customers which
gives more productivity. The objectives are kept in mind in every step of working, to survive
long term in market and to achieve high profits. The satisfaction of customers is the primary
objective of companies to groom more in marketplace. The size, structure and scope are may be
different but objectives of the organizations are same in many respects (Miller And Barbour,
2014).

LO2 Demonstrate the interrelationship of the various functions within an organization and
how they link to organizational structure.
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.
Introduction
In this part explanation is given about the relationship of different department of the TESCO and
common business objectives of the company. The types of organizational structure are described
in respect to the organization.
Figure: Interrelationship of functions
Role of departments:
Marketing: It is also the essential function of the TESCO that promotes the products of
company at wider level to attract large number of customers. It covers sales promotion, public
Interrealtionship
marketing
finanace
human
resource
production

relations, advertising, hoardings etc. to promote the merchandise products. Marketing manager
controls the functions of packaging, branding, distribution, publicity, pricing policies, procedures
etc.
Finance: The department is responsible to control and monitor the financial activities of the
TESCO. The finance manager takes investment decision which helps in the financial planning
and capital budgeting of the company. Financial decisions are concerned with capital structure of
long and short period. The effective decisions increase the growth and sales of company. The
marketing increases the profit and stability for long term (Worthington And Britton, 2014)
Human resource management: It is the duty and responsibility of HR department to hire best
qualified and experienced employees to increases the efficiency of organization by increasing the
productivity. It also includes motivating employees, gives training and development, boost
morale and confidence.
Operations: The operations department of the Tesco manages the production and related
activities of the merchandise and grocery. The activities are depends on the employs and workers
of the organization. The functions are held by operational manger that control delivery system,
quantity and quality of products, balance between demand and supply of the products.
Interrelationship: All departments of TESCO are doing different activities as per their
specification and objectives if the company but they are interrelated with each other to achieve a
common objective such as earn more profits, increase sales, large number of customers, long
term stability. Marketing activities such as advertising, sales promotion are done for the
increment of sales which is directly related to the sales department. HR department of the
company hires best employees as per the role of sales, finance, and marketing department
(Andrejovská & Bánociová, 2014).
Kinds of Organizational structure:
Product Organization structure: The structure of organization is defined as per the
specification of products. For example, TESCO organized the products by labeling on, sauces,
dressings, other merchandise etc (Tran. 2013).