Business and Business Environment: A Comprehensive Analysis

Desklib provides solved assignments and past papers to help students succeed.

BUSINESS AND BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION......................................................................................................................2
LO1............................................................................................................................................3
EXPLAINING DIFFERENT TYPES AND PURPOSE OF ORGANIZATIONS; PUBLIC,
PRIVATE AND VOLUNTARY SECTOR AND LEGAL STRUCTURES.........................3
EXPLAINING THE SIZE AND SCOPE OF A RANGE OF DIFFERENT TYPES OF
ORGANIZATION.................................................................................................................8
LO2..........................................................................................................................................10
EXPLAINING THE RELATION BETWEEN DIFFERENT ORGANIZATIONAL
FUNCTIONS AND HOW THEY LINK TO ORGANIZATIONAL OBJECTIVES AND
STRUCTURE......................................................................................................................10
LO3..........................................................................................................................................13
PESTLE ANALYSIS FOR TESCO AND BRITISH AIRWAYS......................................13
LO4..........................................................................................................................................17
SWOT ANALYSIS OF TESCO AND BRITISH AIRWAYS............................................17
RELATIONSHIP OF STRENGTHS AND WEAKNESSES WITH MACRO FACTORS
AND IMPACT ON DECISION MAKING.........................................................................17
CONCLUSION........................................................................................................................19
REFERENCES.........................................................................................................................20
1

INTRODUCTION
The business environment is a collection of entities and factors which affect the business and
maybe or maybe not under the control of companies. Business environment affects the
performance, profit and survival of the organization. The business environment is dynamic
and changes continuously due to the wide variety of entities and factors existing in the
environment. The business environment is internal and external that affects business growth.
The assignment will help the learner in knowing the background and understanding of
business and business environment, functions of the organization, different types of
organization, scope and size. The learner also gains knowledge about the impacts of external
and internal factors on the business operations and performance, and the relationships of
organizations with different stakeholders.
2

LO1
EXPLAINING DIFFERENT TYPES AND PURPOSE OF ORGANIZATIONS;
PUBLIC, PRIVATE AND VOLUNTARY SECTOR AND LEGAL
STRUCTURES
BUSINESS
Business is an economic system where goods and services are exchanged for revenue. The
environment in which the business operates is called the business environment. The factors of
the business environment change dynamically with the changing demand of customers and
the environment of the business market. The businesses are of different types based on
ownership and aims (Bloom et al., 2018).
BUSINESS ENVIRONMENT
The business environment is the collection of institutes, individuals and other factors that are
not under the control of an enterprise but depends on these factors for business sustainability
and performance. The different factors help the enterprise in identifying different threats and
opportunities in the business (Hillary, 2017).
TYPES OF ORGANIZATION
Private organization
Private organizations are profit organization that works for earning revenue from the
business. The government bodies of the countries have no connection with the private
organization and the earnings are not shared with any government system. Example of private
organization in the UK is British Airways which is the second largest airline in the UK. The
company provides air transportation services at different locations. The company is a private
sector organization and run for earning money in value to services. The company is
established in 1974 and serves in more than 180 destinations. The company works on their
own by following the rules and regulation of the country but has no profit share with the
government (British, 2019).
3

Figure 1: British Airways
Source: British, 2019
Purpose- British Airline is the Second largest airline company in the UK and aims to expand
the business globally. The aim of the company is divided into three parts that are general
goal, strategic goal and business plan. The company aims to become the world's global
premium airlines, for that the company focus on improved customers service. The
globalization includes appeal to all passengers, highest quality services to the passenger, and
maintenance of services, equipment’s and products. The strategic goals of the British airlines
are the choice of airline, top quality services, global city growth, expansion of position, and
meeting customer’s need. The business plan prepared with the aim to achieve a general and
strategic goal. The business plan includes colleagues, customers, performance, excellence and
partnerships. The company is providing daily flights services in more than 400 cities across
the world with a different class of flights based on the travelling purpose of customers
(British, 2019).
Public organization
Public sectors are connected and controlled by the government of the country. The
government bodies included in the public sector is local government, central government and
state government. The sector includes public enterprises and entities, public companies, and
services. The earnings from the public sector are distributed for the development of the
country and for the improvement of social services such as defence, social schemes, police
services and education. The example of public sector organization in the UK is Tesco which
operates in approximately 11 countries of the world. Tesco is the world's 3rd largest retailing
company established in 1919 and operates supermarket, hypermarket, shops and superstore.
The company is public limited and has a business in every sector such as food, grocery,
clothing, books and banking. The profit earned is shared with the government of the country
in order to countries and business growth (Tesco, 2019).
4

Figure 2: Tesco
Source: Tesco, 2019
Purpose- Tesco is a public sector organization with the aim to be the champion of customers
and providing them quality life and easy way of living. Serving the customers a little better
every day is the core aim of the company. The company wants to enhance the customer
experience by providing better products and services. Understanding the customers need,
acting responsible for the communities and being first to meet the customers need help the
sector in increasing revenue. Another purpose of the company is the satisfaction of customers
that brings profit to the company. The profit is consumed by the government in business
expansion and social welfare. The company works with the aim to reduce food wastage,
makes the life of people healthier and easy, providing quality goods, and making a
contribution to the community and government of the country (Tesco, 2019).
Voluntary organization
The voluntary sector is a nonprofit sector that works for providing better and easier lifestyle
to the people. The company is not directly connected with the government body but works for
the wellbeing of community and country. The source of earning of the sector is donations,
charity and government shares. The sector uses the resources for improving the lives of
people and for countries’ progress. The best example of voluntary organization in the UK is
the Wellcome Trust which is a biomedical research charity situated in London. The company
was established in 1936 and works for the improvement of human and animals health. The
aim of the company is to achieve improvement in health with the help of research and
development. The company focuses on biomedical research and is approved as world’s third
wealthier charitable foundation. It is a non-governmental foundation and works with the help
of funds and donations. The company the funds and charity by the other organizations and
5

government companies are used for the research and development of the biomedical that
helps the human and animals in living a healthier life (Wellcome, 2019).
Figure 3: Wellcome Trust
Source: Wellcome, 2019
Purpose- The aim of the foundation is providing a healthier life to animals and human. The
motive of the foundation is to invest £5 million to improve health in the next five years. The
company focuses on launching a new strategy, implementing the ideas and opportunities that
contribute to improving the health of human and animals. Wellcome Trust is the world's
second-biggest foundation that spent the highest money in charity for the wellbeing of human
and animal. The main purpose of the trust is advancing the idea, seizing opportunities and
driving reform that works for the goodwill of humans and wants to make the world disease
free. The healthier environment makes all the factors favourable and contributes to the
world's progress. Contributing to the health will lead as change for better which is the motive
of the foundation (Wellcome, 2019).
LEGAL STRUCTURE
The legal structure of the organization changes with change in the country. Selection of
appropriate legal structure plays an important role in business success as the legal structure
impacts the daily decisions and impacts the operations of the company. The legal structure
impacts the internal and external factors of the organization such as taxation, economy and
environment. Generally, there are three main legal structures adopted by the organizations of
the UK. The legal structure will provide the way in which the company can set up and run the
business. The types of legal structure are as follows (Eisenberg, 2017).
6

Figure 4: Legal Structure
Source: Eisenberg, 2017
Sole proprietorship
The sole proprietorship is the structure in which only a single person invests for the business
operations and the profit is consumed by the individual (Eisenberg, 2017).
Partnership
The partnership is the activity of the business in which more than one people finance for the
business or to run the business (Eisenberg, 2017).
Corporation
The corporation is the type of structure in which few members or up to thousands of members
shares the ownership for earning profit and for business development (Eisenberg, 2017).
7

EXPLAINING THE SIZE AND SCOPE OF A RANGE OF DIFFERENT
TYPES OF ORGANIZATION
The size and scope of an organization depend on the purpose of business and on the profit of
the company. The size of the company is based on the legal structure of the business. The
Scope of the organization depends on the working and aim of the company and contributes to
the progress of the company by following the proper operation of business expansion. The
scope provides opportunities to the company for business expansion and progress. The
different sectors have different size and scope such as (Roche, 2016).
PRIVATE ORGANIZATION
The private organization operates without government contribution and operates with the aim
to achieve profit. British Airlines is a private sector organization works for providing airline
services to passengers worldwide. The company runs with the aim to serve fabulous services
to the customers for business progress and profit that is used for business expansion. British
Airlines is a large business organization as the business of the company is all around the
world and is considered as UK’s second largest airline company. The companies serve in
around 180 destinations and have huge opportunities for business growth (Murphy, 2015).
Scope- the scope of the company depends on the functioning and area of opportunities and
how the company is using opportunities. One of the biggest scopes for the British Airline
company is the expansion of the business on a global level. Expansion of business helps the
organization in understanding the needs of the customer as well as in understanding the need
of business for growth. Another scope that contributes to business progress is improved
quality services and products that can be adopted and achieved by analyses and evaluation of
quality service (Murphy, 2015).
PUBLIC ORGANIZATION
The public organization operates with the help of government bodies and work with the aim
to benefit the country. Tesco is a public sector retailing company works with the aim to
contribute to the country. The company is considered as the third largest retailing company in
the world that serves the customers with the best services and products. The company has
many subsidiaries as Tesco Stores Ltd, Tesco banks, Tesco Mobile, and Booker group. The
company has approximately 6,800 shops across the world that contributing to the economy
8

and development of the country with the products in supermarket, superstore, and
hypermarket and convenience shop. The business expansion of the company is all around the
world that makes the company a large organization (Eze, 2018).
Scope- The business of Tesco is across the world and in every area of business such as food,
grocery, banks, mobile, books and accessories. The expansion of business in every sector
increases the scope and opportunities for the company. One of the biggest scopes for the
company is to expand business in the field that is not implanted yet that will increase the
ways of earning money and pays to the country progress. Another beneficiary scope for the
company is to enhance the service quality and innovation of new services for gaining the
customer’s attraction (Eze, 2018).
VOLUNTARY ORGANIZATION
The voluntary organization works with or without the contribution of the government bodies
and aims to provide a better lifestyle to humans. Wellcome Trust is a voluntary sector
foundation that works for the health of human and animals. The company is considered as the
world's third largest charity foundation working on health. The company focuses on
biomedical research that helps the human and animal in overcoming from dangerous
diseases. The company is an anon governmental large organization that provides funds for
scientific research in the medical sector. The aim of the foundation is to make the world
disease free for world growth (Schwabenland, 2016).
Scope-The Company works with the purpose of providing health and a better life to the
animals and human of the world. The company donates in scientific research for innovation
of new medicines and operations that help in overcoming the dangerous diseases. Enhancing
the donation and charity for the development in research program will help the company in
maintaining a reputation in the charity sector and emerges as one of the biggest scopes for the
foundation. The company can also interact with more and more organizations for the
collection of funds that contributes to scientific research (Schwabenland, 2016).
9

LO2
EXPLAINING THE RELATION BETWEEN DIFFERENT
ORGANIZATIONAL FUNCTIONS AND HOW THEY LINK TO
ORGANIZATIONAL OBJECTIVES AND STRUCTURE
TYPES OF ORGANIZATION
Micro organization
The micro organization is the business organization that has less than 10 employees and the
annual turnover of the company is around £632,000. 76 % of the business in the UK is
developed and run by individual and are mom profit organizations that run for fulfilling the
needs (Jansen, 2017).
Small organization
Small organizations are considered as profit organization on the local level. The organization
includes the employee less than 100 and the yearly turnover of these organizations is around
£ 900,000 (Jansen, 2017).
Medium organization
The medium organization operated with the number of employees around 1000 and with the
aim to achieve profit from the national market. The yearly turnover of the medium
organization is around £ 25 million (Jansen, 2017).
Large organization
Large organizations are considered as the biggest earning organizations in the business world
as a market of these organizations are expanded globally. The average number of employees
work in the organization is more than 1000 and the yearly income of the company is around £
500 million (Jansen, 2017).
ORGANIZATIONAL FUNCTIONS
The organizational function can be defined as the set of activities or a core process carried out
by different departments of the company. These core activities lead the business upstairs and
contribute to business earnings. The core function includes marketing, operations, human
10

resources, customer services, finance, information technology and warehousing. An
organization such as Tesco and British Airline needs to adopt the organizational function for
the business progress. The relation of organizational functions with the objectives and
structure is as follows (Bustinza et al., 2017).
Figure 5: Organisational function
Source: Bustinza et al., 2017
Production function
Production function contributes to generating products and services in the organization. The
organization such as Tesco and British Airlines needs to combine the labour, energy, capital,
information and material for increasing the productivity and services (Bustinza et al., 2017).
Finance function
The finance department of the organization keeps the record of money paid and received by
the organization in the business. The records then used to maintain financial statements,
employee expenses and salaries (Bustinza et al., 2017).
Human resource function
The human resource function in the organization works for recruitment, training, selection
and employee development. The objective of the department is to enhance the staff and
increasing the potential of the employee for improved company performance (Bustinza et al.,
2017).
Sales and marketing function
11