Business Environment Analysis and Organizational Impact Report

This report provides a comprehensive analysis of the business environment and its impact on various organizational types, including public, private, and voluntary sectors. It begins with an introduction that highlights the dynamic and competitive nature of the business environment and its influence on organizational operations. The report then delves into the different types and purposes of organizations, such as Tesco (public), Asda (private), and Oxfam (voluntary), exploring their legal structures and objectives. It also examines the size and scope of these organizations, comparing their market share, objectives, and growth strategies. The report further analyzes the interrelationship between different organizational functions, such as HR, finance, marketing, and operations, and how they contribute to achieving business goals. Additionally, it identifies the positive and negative impacts of the macro environment on business operations, supported by specific examples, and conducts internal and external analyses of Asda to identify its strengths and weaknesses. Finally, the report explains how these strengths and weaknesses interact with external macro factors, providing a holistic view of the business environment's influence on organizational performance.

Business & Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Explain different types and purposes of organizations;public, private and voluntary sectors
and legal structures......................................................................................................................1
P2 Explain the size and scope of a range of different types of organisations.............................4
Task 2...............................................................................................................................................6
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.......................................................................................6
Task 3...............................................................................................................................................8
P4: Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples................................................................................8
Task 4...............................................................................................................................................9
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses............................................................................................................9
P6 Explain how strengths and weaknesses interrelate with external macro factors.................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
In the shadow of contemporary business environment, any organisation either private or
public sector face lots of environmental threats that disrupt the organisational operations. This is
because business environment is dynamic, uncertain and completive. Therefore, for developing
competitive organisational structure of an organisation, they need to access the business
environment to get more insight about the up & down in the market (Cortez, Gilliland, and
Johnston, 2020). Following report focused on the aspect of business environment and its impact
on the private, public and non-profitable organisation. Asda is being taken for private, Tesco for
public and Oxfam as a voluntary organisation to support report finding on the business
environmental view. Following report also highlights the various functions of the Asda in
reference with interrelationship with other department of the firm. Business environment is
reactive in nature, so report also throw light on positive and negative implication of the
contemporary business environment in context to macro environmental factors.
Task 1
P1 Explain different types and purposes of organizations;public, private and voluntary sectors
and legal structures.
The primary aim of every company whether small or large and private and public is to
serve their target consumer by satisfying their need to achieve business goals. Organisations are
segmented into 3 categories mainly i.e. public, private or a voluntary sectors.
Public organisation
A public company is one whose major share ( about 51%) are owned by the government
of the UK. Public company are meant for the welfare to society and they are also accountable to
settle its shareholder funds on a time. Moreover, public limited companies delivers low level of
liabilities to its shareholders. Although a company that has prefix public limited has high status,
creditability in the UK market. Tesco is a Public company and it is renowned name in the UK
retail industry and world's fourth largest retail company. Tesco deals in territory business
segment because it doesn't product goods, but provide service to its consumer.
Purpose of public sector in reference to Tesco
 The main purpose of a public sector in reference to the Tesco is to earn more profits
which can be invested in business expansion and societal welfare campaign.
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 The ultimate aim of a public sector to provide products and service to the user in utmost
cheap price. In this direction, Tesco looks for putting maximum use of the scare resource
and help people to save money by lowering their price in compare to other supermarket
stores (Rimita, Hoon and Levasseur, 2020).
Legal Structure of a public sector- Central or federal structure : Many public sector are governed and owned by the central
government of UK. Public sector which are governed within central government control
are meant for development of country economy. Tesco is form of federal organisational
strucutre because it gets its funding from the central Government of UK. State :- Although a particular state also governed and hold public company in many
regions of the state in order to uplift business of MSME organisations and can commence
business with full owned rights. The ultimate aim of state owned company is to ensure
development of the state and fulfil needs of the society.
 Local company :- Company within governance of local & municipal are establish for the
welfare of a particular community, ultimate aim of this type of company is to develop
infrastructure of a local region to ensure public would get educations, health service and
employment opportunities.
Private organisation
Company which are not governed or control by the government are called private
companies. A private company can be started by obtaining certificate of incorporation from the
registrar house. Private company owner have unlimited liabilities, these are company which are
owned by the shareholder or company by the guarantee. Lidl GB store is a private type leading
retail supermarket chain company in the UK territory . Mainly private company are profit
centred company but introduction of CSR and sustainability development has disrupted their
operations in many ways.
Purpose of a private company in referenced to Asda
The primary and foremost objectives of a private company is to earn profit while
expanding their existing business to provide products and services to the customer. Asda mainly
focus innovation practice for more customer conversion while putting maximum use of available
resource (Borojo, and Yushi, , 2020). With rising of market competition, primary focus of
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private company is to create sustainability performance while delivering excellent customer
service.
Legal Structure- Sole trader- Sole trader form of private organisation are more simple and easy to form,
these type of organisation are owned and controlled by an individual. Moreover, sole
trader are obliged to share both profit and liabilities, therefore in sole-proprietorship
owner has unlimited liability of the business. Partnerships:- Partnerships is a form of business entity where agreement is made
between two or more than two parties, who share a common interest, business liabilities
and profit as per the partnership deed. Many sole trader like Asda opted for partnership
for business expansion and diversification.
 Private limited company- Private limited company is form of corporate business entity
formed by a group of people who share common business objectives. Private limited
company are of two types company by share or company be limited guaranteed.
Asda is perfect example of partnership type of company because to scattered and expands
its operation in the UK, Asda share some of its share with Walmart.
Voluntary organisation
Voluntary company are those non profit organisation which are existed in country for the
betterment of the society rather of earning profits. Oxfam UK is leading charitable company in
the UK that is fighting against the social issue i.e. “poverty” with the help of million of
volunteers lead by Oxfam international.
Purpose of Voluntary sectors
The foremost objective of a voluntary organisation to address and uplift societal issue and
work towards them for betterment of the society. Oxfam charitable company has business motive
to end global poverty issue (Gogokhia, and Berulava, 2020)
Legal structure of voluntary organisation Trusts :- Charitable trusts are constituted for the purpose of charitable activities and
social well being. Oxfam is form of charitable trustee that are working on the social issue
of global poverty. In trustee holds the decision-making rights in charitable trusts
 Charitable Unincorporated association :- an unincorporated charitable trust can be
formed by mutual agreement among group of people and volunteers who share common
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interest and objective. It is easy to form by having mutual interest among the group of
people to work for a societal cause.
P2 Explain the size and scope of a range of different types of organisations.
Basis Tesco Asda Oxfam
Size Tesco is a large operating
business having its
operations in about 13
countries, other then this it
is only supermarket chain
based British company
which has multinational
operations. Tesco has more
than 7000 stores worldwide
whereas approx 4100 stores
are within UK territory.
Tesco employed more than
420,000 employees which
are core strong resource
capability of the firm to
perform customer service
operations. Tesco have
different outlet like Tesco
Superstore, Tesco Direct,
and Tesco F&F (Wanke,
and et. al., 2020).
Asda is not far behind
Tesco, the private company
employed about 146,000
employees which are
providing customer service
operations in more than
1200 stores within the UK
territory only. Asda operate
various supermarket outlet
like Asda living, Asda
supermarket, superstore and
Asda petrol.
Oxfam, a charitable trust
company has more than
10000 volunteers who are
working in more than 90
countries and help to
provide injustices of poverty
to more than 20 millions
people among which 52%
are women vicitim.
Scope The scope of Tesco relates
to the extends of its market
share to achieve this task
they are following cost
leadership theory in its
Asada scope relates to the
its slogan i.e. being British
lowest price supermarket.
Scope of business also tied
with its product quality so
To work on other social
issue like human rights, debt
and aid to safeguard women
victim.
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business operations. Being
a public limited company,
Tesco foremost focus to
provide product and service
as cheap as possible to add
value to its customer
service and societal
welfare.
Asda now focus on total
quality approach.
Basis Small Medium Large
Meaning Small organisations are
small in size and has
annual turnover less than
10 million and has
maximum 50 employees.
Medium-sized
organisation contribute
much into country GDP .
Annual turnover is more
than 10 million but less
than 50 million and has
capability to employee
less than 500.
These are the large
organisation cover large
market share and serve
large population of country
annual turnover more than
1 billion with unlimited
workforce.
Objectives
&goals
The foremost objective of
small business is to
survive in market and
earn profit. .
Primary aim of a medium
size company is to
expand business and grow
its market share.
Objective and goals of a
large size company is to
maintain its market position
and diverse its operations
in more nations, so goals of
large size company is
relates to External growth.
Market
share
Small has small market
share and they provide
day to day and other
necessary products and
Medium-sized
organisation follow
market perennated
strategy to expands its
Like small and medium
organization large
organisation operate in
foreign soil market along
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service (Sivarajah and et.
al, 2020).
business they have large
market share in compare
to small size business.
with a domestic market.
Growth
and
sustainabili
ty
Small business focus on
market survival rather
than a growth and
sustainability
Medium sized enterprise
concern at expanding
business operations,
therefore they adopted
sustainability
development
Large business focus on
establishing its brand at a
larger scale,thus contribute
in growth and
sustainability.
Profit
margin
Small enterprise make a
huge profit of its capital
investment, because they
has low liabilities and
market risk
The margin of profit is
comparatively low in
compare to its capital
investment because to
expands its operations
they follow cost
positioning strategies.
Large business has
relatively last profit share
because they has huge
market share so they follow
skimmed the cream
strategy which give them
more profit margin
(Trigkas, and et. al, 2020).
Task 2
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
In context of Asda, there is core interrelationship of different department of organisation
links with its organisational structures and business objectives this is because this different
functional operations would support Asda to accomplish its business goals and objectives.
Interrelation between different functional unit are as follow- HR department and its interrelationship with finance, marketing and operation-
HRM department main role concern is to provide adequate workforce in the organisation.
Asda has the wide diversify workforce so another function of HR department is to manage the
diversity culture to maintain workplace harmony and positivity. HR department functions with
other department of Asda to ensure organisational objectives acquisition. For instance HR
manager consider the cost of employees hiring and training that would help finance department
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to formulate budget of workforce planning. Marketing department work with HR department for
hiring and training of new marketing personnel and operational department can contact with HR
department for the administrative issue regarding payroll and incentive of a employees.
Finance department and its interrelationship with HR, marketing and operations departments
Finance is the lifeblood cell of every organisation to achieve organisational goals and
mission, finance department prepare budget plan for the business strategies that illustrates
various operations that need to achieve in giving timeline. Various department like HR work
with finance personnel to acquire the budgeted funds to perform recruitment process. Marketing
department can knock the doors of finance department for the approval of funds that they would
need in promotional functions.
Marketing department and its interrelationship with HR finance and operations
Marketing department support Asda to conduct product promotional activities and form
business strategies. Marketing department can assist HR personnel to improve communication
flow and help in ascertaining job profile and requirements analysis (Ohiomah, Benyoucef and
Andreev, 2020).
Organisation structure-
Organisation structure act as the blueprint of organisational operations and delegation of
task and authority. Organisation structure can help organisation to know the actual manner of
doing particular task to achieve business goals. Following are some type of organisational
structure in context of organisational mission and objectives- Functional- In functional organisational structures, Asda divide its department based on
functional unit and specialisation like marketing, finance, HR and sales department.
Under functional structure Asda delegate responsibility authority and task based on
employees specialisation and role, it support Asda to drive more productivity in
operations.
 strategic business units- SBU act as the functional unit that has their own set vision and
mission. In context of Asda this structure can be more fruitful because they are offering
wide product range under one roof. SBU unit strucutre operate individually they have
their support like HR and finance and they directly report to the headquarter. Asda
through SBU structure can operate independently while focusing on its target market
group.
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Task 3
P4: Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
PESTEL analysis of Asda
Political- The emerging BRICs market creates economic importance for the Asda to
expands its business operations in the BRICS countries which are mainly Inida, Brazil, Russia
and china, but entry into BRICs nations depends on the political relationship with these
countries. UK has sound and healthy relationship with these countries except China. Asda
enjoys the political stability of the UK but with the enforcement of Brexit, it create many
uncertainty of the business operations because it disrupt supply chain (Newman and et. al,
2020).
Economic- The global shift in the economy create many opportunities for many
organisation but Asda not utilising this opportunity due to its pricing strategy which restrict its
entry into global market. The global pandemic COVID-19 disrupt business of many because of
that many lost jobs thus, income level of the public fall down which disrupt demand and supply
of its product.
Social- Social power of the UK public is high this is because lifestyle of the people is
changing at the fast span which affects the operations of the Asda. The ageing poplulation in UK
is more and due to rise of many diseases people are more health conscious, therfore it rise the
demands of veg foods. Ethics can be other segment that affect the society because Asda operate
within the society so it must conduct its business in prescribe ethical norms.
Technology- The impact of digital revolution is not hidden from any marketer, Asda
using social technology to reach and connect its customer that help them to generate more
revenue. Moreover all big supermarket are using innovative technology which create tough
competition in the market for Asda.
Legal- Asda is facing many legal suits after the horse meat scandal, company also facing
legal suits for under wage and unfair wage system. Moreover, fiscal policy change affects the
business revenue of the Asda. But one of the benefits of the legal aspect that all business
operations are legitimate (Betti and Sarens, 2020).
Environmental- Sustainability is major concern of every organisation in order to
contribute to the societal responsibilities. Asda is socially responsible as it conduct various CSR
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activities to enhance its brand image. Moreover, Asda reduces the carbon print by 55% for
environmental cause.
Task 4
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
Strength
One of the strength of Asda is wide range of
product categories under one roof which are far
more cheaper than other supermarket.
Moreover, Asda is socially responsible as it
conduct various CSR activities. Moreover,
Asda enjoy large economy of scale because of
its cost leadership pricing strategies. Asda has
strong brand portfolio which help them to cater
into new product segment easily. Asda has
good connect with its customer as they are
24*7 available for its customer. Moreover,
Asda has earn many rewards in the retail
business segments (Sleep and et. al, 2020).
Weakness
Foremost weakness of Asda is low global
presence, they have their operations only
within UK market only. Moreover, there are
some critics of quality of Asda, it would
damage company market reputation.
Moreover, company has high attrition rate
because of unfair wage system at Asda.
Opportunities
Free trade government agreement creates
opportunity for Asda to expands its business by
entering into new emerging market. UK
government Green drive approach opendoors
of opportunity for Asda as federal and state
government contractor can procure its product.
Expanding its business online may be another
Threat
Asda is facing many critics for its quality as
they are not matched with other supermarket
product like Lidl and Waitrose. Asda has only
physical presence in this era of digitalisation
and internet penetration where its competitors
like Lidl and Waitrose are already active on
online business.
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opportunity for Asda for more customer
conversion.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
External macro factor Strength Weakness
Political Stable political presence of the
government in the UK.
Due to Brexit, government policies
regarding trade and taxation policies
are keep changing.
Economic Income status and employment
rate of UK is high.
Company has only presnece in the
UK market only.
Social Asda is performing many
activities in CSR for obtaining
sustainability in its business
operations.
Due to change of trends and lifestyle
of the people it has became complex
for Asda to ascertain customer need,
behaviour and value & belives
(Contractor, and et. al, 2020).
Technological Rapid technology advancements
creates opportunity for Asda to
expand its business operations
and make its business operations
smoother. Moreover the impact
of social technology help Asda
to connect its potential
customer.
There are certain restriction
regarding privacy management
moreover, to respond the technology
change, Asda need to capitalise on
technology aspect which would
lower down their investment on
another projects.
Legal Company has adopted all forms
of UK trading laws.
After horse meat scandale there are
certain legal suits enforeced against
Asda that damge its brand image and
brand crediability. Unequal wage
system is being a concern of Asda.
Environmental Asda has clear the Government policy regarding
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environmental friendly approach
that help them to drive
sustainability approach in the
firm which would harness
company reputation (Kristinae
and et. al, 2020).
consumption of alchol restricted its
brewery business.
CONCLUSION
From the above carried out study, it has been summarised that an organisation cannot
eliminate business environmental issue but can reduce the threats through addressing businesses
environment in formulating business strategies. Moreover, it has been found that for building
organisational competitive structure, a business need to address its strength and weakness in
reference of external business environmental factors. Moreover, it has been analysed that
business environment is more important to a firm for effectively managing various organisational
activities. It has been concluded that inference of the the business environment can leverage both
positive & negative impact on a business operations.
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