Business Environment Analysis: UK Organizations and Functions

This report provides a comprehensive analysis of the UK business environment, examining various organizational types, including private, public, and voluntary sectors, with a focus on Tesco, NHS, and Oxfam. It delves into the purposes and legal structures of these organizations, highlighting their key characteristics and objectives. The report explores the relationship between different organizational functions such as marketing, operations, HR, finance, production, and sales, and how these functions link to overall organizational objectives and structure. It also assesses the positive and negative impacts of the macro environment on business operations, supported by specific examples, and conducts internal and external analyses, including SWOT analysis, to identify strengths, weaknesses, opportunities, and threats. The interrelation of strengths and weaknesses with external macro factors is also examined. The report concludes with a synthesis of the findings and offers valuable insights into the dynamics of the UK business landscape.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................................3
LO1- Different types and purposes of organisations:.............................................................................3
Size and scope of different range of organisations:................................................................................5
LO2 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.................................................................................................7
Positive and negative impacts the macro environment has upon business operations supported by
specific examples....................................................................................................................................9
Internal and external analysis of specific organisations for finding strengths and weaknesses: ........12
SWOT analysis of NHS:..........................................................................................................................14
Interrelation of strengths and weaknesses with external macro factors:............................................14
CONCLUSION.............................................................................................................................................15
REFERENCES..............................................................................................................................................17

INTRODUCTION
Business environment is a summation of all internal and external influential factors
which affects a business. These factors shapes the way a business is being conducted. With in
depth research being conducted in this report, it is being tried to understand about various
types of organisations that function in an economy, comparison between companies bearing
two different identities, defining characteristics of businesses, factors determining their
performances. Besides that, the report also seeks to address the determinants of macro &
micro business environment, relationship between various functions of the business
(Docherty and Nyhan, 2012). This report includes a brief analysis of an organisation's
business environment using analysis models offered by management theories and practices.
For better understating of business environment, a company named TESCO is chosen that
engaged in providing groceries items and it is UK based multinational firm. In public sector
the chosen organisation is NHS and in voluntary it is Oxfam that are studied in depth to
evaluate major factors of both the organisations.

LO1- Different types and purposes of organisations:
Organisation: An organisation is a social group of people where all the members of
the group strive to achieve common goals. An organisation is defined by the structural unit,
its purpose of formation, the respective roles assigned to each individual within the premise.
It is a legal entity formed as per the provisions enshrined in existing law of the land. They
work as an open systems under which they are prone to internal and external changes.
Types of organisation: There are varied types of organisations in UK which are
formed as per the business purpose, they have different characteristics, nature, liability and
legality. Based on the legal status provided to various organisations in UK as per the
framework of Companies act, 2006 are as follows:
PRIVATE COMPANY:
A privately held company is that whose scope is limited as it can't issue shares or
raise capital by way of share allocation from general public. A private company doesn't need
to have a minimum capital requirement and are limited to a threshold of maximum 50
shareholders. It is the most common kind of organisation formed due to its feasibility (Corral,
Sillitti and Succi, 2013). for example the Tesco is considered as the profit making company.
Purpose of Tesco:
The main purpose of Tesco is to create value for their potential consumers for the
lifetime to build them loyal consumers ( Clarke, Tamaschke and Liesch, 2013.). By offering
wide range of products and services enlarge the business opportunities in positive manner.
Legal structure of private organisation:
The legal structure of private organisation are as follows:
Sole trader:
sole trader operates one person business and needs small amount of finance to set up
their business. They only employ the waged employees and alone provide all kinds of finance
by bear all kinds of risk. Legal structure is not defied as it depend form each and other
depend on the owner. The benefit is that there is no other boss having maximum level of
privacy. On the other hand the business have maximum level of audibility without any level
of legal instruction.
Private limited company have is an kind of joint stock company that have separate
legal identity from their owners. They are small in nature and often run by family run

businesses owned and operated by shareholders. Tesco which is a private limited company
and owned and operated by shareholders.
Partnership:
Partnership firm should be build to overcome from problems of the sole traded. In
partnership which is an association of the individuals and have 2 to 20 partners in their
organisation. The company have the benefit of getting easy establish. But on other hand the
partner have audibility of debts in the business is considered to be unlimited.
PUBLIC LIMITED COMPANY
A public limited company can raise share capital by way of issuing shares to general
public, has a minimum capital requirement of £50,000 and minimum two directors (Becker,
Kugeler and Rosemann, 2013. ). The company act 2006, provides special rights to a
company formed irrespective of its nature like legal person status, can sue and be sued,
common seal, ownership of property in its name etc. for example organisation the Public
limited company is NHS which is a publicly funded national healthcare system in UK.
Purpose of the NHS:
The main purpose of NHS that provide comprehensive range of services as per the
consumers needs and preferences regarding patients, respective families and their carers.
There main motive is to give one of best services to the patients to cure well.
Legal structure of Public limited company:
Community interest company: This kind of company as the name suggests are
formed for the purpose for community development, social welfare and all the profits and
capital will only be used for the benefit of the community. They are not for profit
organisations.
Limited liability partnership: A LLP is a new kind of business organisation which
has dual set of characteristics of a company and a partnership firm. Under this setting, its
members have liabilities limited to their shares means scope of their liabilities are determined
by their respective share holding limit. Other feature is that the members can directly manage
the business as it happens in a partnership firm.
Sole proprietorship: A sole proprietorship is a single person entity where the sole
owner is one person who registers it. He has to nominate a nominee on his behalf to manage
the business in case he dies or becomes incapacitate to perform his duties (Saebi, Lien and
Foss, 2017).
VOLUNTARY ORGANISATION

Voluntary organisation which is not established for the profit making but give their
services for the social welfare. In that report for the voluntary organisation is Oxfam.
Purpose:
The main purpose or objective of Oxfam to provide assistance to people to get rid
them from poverty and kinds of social issues.
Legal Structure of voluntary organization:
Trustees: These are the individuals that contributes funds for the welfare common people.
Charity: These contributes or serves for the welfare of suffer and needy people.
An unincorporated association:
This is one of most important kind of structure of the voluntary organisation that are
best for the small groups with a membership builds the short term goals, low income and
many more. The benefit of company is about the no level of secrecy along with democratic
level of management. On other hand there is lack of secrecy and mutual interest in company.
International companies are mainly having the exporter along with importers as there is no
requirement of investment from outside there respective home country. On the other hand
the multinational companies have the level of investment in the other countries but there are
not allowed to have the coordination's in offering the products in each and every country.
With the extent to hat the global companies ha the investment present in many of other
countries which leading to have several levels of development.
Classification by size and scope
Micro- they are small business that employ few employees that is less than 10. There scope is
to serve local people.
SME- they are small and medium size independent firm that employ more than 50 and less
than 250 and total asset is less than €50 million. There scope is to serve entire nation
Large – it refers to those who are having more than 5000 employees working. The scope is to
expand and operate in home nation and at global level.
Local or national – an organisation or entity that is having a collective goal and operate at
local level in UK
Transnational- they are those organisations that operate in across state boundaries but are not
controlled by foreign policy.
Multinational – it is those organisation that is having headquarter is one country but its
production facilities are in other countries. For example- tesco
Global – they are those organisation that operate in many countries and have different
headquarters in other countries as well.

Size and scope of different range of organisations:
Every organisation have some sort of aims and objectives for that management
divides roles and responsibilities to each and every individual so that they can perform in
better manner (Corral, Sillitti and Succi, 2013). Various kinds of organisation establish in
market with their size and scope that are as follows;
Difference between private and public sector
Private Public
The organisations are owned and managed by
individual or group
It is owned by government or form in
parliament.
Aim is to earn profit by selling products and
services
Aim is to provide products and services to
people to fulfil their needs.
For example – Apple and Reed For example BBC and NHS
Profit Non profit
The purpose is to earn profit. It can be either sole
proprietorship, partnership or company.
Its aim is to serve society. It can be NGO,
Source of revenue is sale of goods Source of revenue is donation,
Public sector
organisation
Private sector
organisation
Voluntary
organisation
definition Public sector
organisation that
owned and operated
by the government by
the society and their
important attributes
(De Oliveira,
McCormack and
Trkman, 2012) They
work for both the
These kinds of
organisation owned
and operated by the
individuals who runs
their business with
the motive of earn
profit. They build
product and services
as per the consumers
needs and wants.
Voluntary
organisation that give
their services for the
benefit of society and
these are the non
profit organisations.

societal benefits and
for earning profit and
the chosen
organisation is NHS.
Mission The major mission of
NHS is to aware
about the health
issues and give best
quality of services.
The vision Tesco it to
become one of highly
valuable business by
serving in best
manner of their
customers,
community
The mission to
provide the assistance
to needy and suffer
people by providing
social welfare
programs.
Vision The vision is to give
one of best treatment
and spread awareness
to by best medical
practices to lessen
down the health
related concerns.
mission of in which
they are operated and
become loyal and
committed towards
the colleagues and
shareholders (Dela
Rama, 2012. ).
To provide their
services to large no.
of consumers.
Size In NHS there are
around 1,50,000
doctors totally and
3,20,000 nurses and
midwives so it is one
of large public sector
unit.
it has net operating
income that is 2206
million dollar and no.
of employees are
450000 in 2019.
Oxfam have alliances
with the 20 charitable
trust that contributes
towards attaining
their goals and
objectives in proper
manner.
Stakeholders There major
stakeholders are
employees, patients,
doctors and nurses
that deliver the best
efforts to achieve
organizational goals
There major
stakeholders are
employees,
consumers and
investors with charity
organisation that
helps to deliver value
The major
stakeholders of
Oxfam are their
charitable firms,
seekers, volunteers
and other people.

and objectives. to organisation.
LO2 Explain the relationship between different organisational functions and how they
link to organisational objectives and structure
Functions are :-
Marketing – Its key activities are promotion and advertising of products. They also do
market research to obtain data. Other activities are generating awareness, branding, etc.
Operations – Its main activities are performing business operations, utilising resources, etc.
HR- the activities are recruitment, training and development, performance appraisal, etc.
Finance – Its key activities are forming budgets, recording transactions, allocating funds, etc.
Production – its key activity includes transforming raw materials into finished goods. For
this they use machines and other equipment’s
Sales – The activities of sales are selling products, doing sales promotion, distribution of
products, etc.
R&D- the key activity include doing research and innovation, developing new products, etc.
In an organisation, there are various departments that depends on each other to share
the roles and responsibilities in better manner. The function of an organisation depends on the
functions of the human resource that are very much important. There are various departments
that are human resource, sales and marketing and production departments that depends on
each other to share knowledge and information to achieve organisational goals and objectives
in proper manner (Becker, Kugeler and Rosemann, 2013).
The organisation have the flats structure which make the organisation various department in
order to have proper development with growth opportunist in odder to reach the goal and
organisation.
Marketing department is very much important for organisational growth and
enhancement that share their tasks and responsibilities with the human resource department
The role of marketing is to increase the level of sales and revenue in order to have major
contribution to development of company. Marketing department have role in sharing to share
knowledge and information that accumulate by them after conducting the research and

development. Marketing information proved beneficial for finance, sales and production that
helps in taking crucial decision to build one of best products and services as per the market
demand and supply accordingly. With the help of information that accumulated by marketing
department finance department can occupy one of best financial tool and services. Human
resource department select one of most competent staff members for other departments also
so that their overall organisation can retain best manpower to attain desirable goals and
objectives.
Relationship between Finance & marketing department
Finance and marketing department is one of most important and crucial for an
organisation. The role of finance department is to provide the level of budget for
development of various level of investment decision. The company departmnent has the role
to reach at their goals and objectives by sharing their mission and vision for common goal. In
context of marketing department with finance department by giving relevant knowledge and
information for choosing one of best financial tool that organisation can easily afford and use
for their organisational development (Docherty and Nyhan, 2012. ). In order to finance
department give relevant knowledge to marketing department about the financial condition so
that they can easily choose one of best promotional strategy for their organisation and comply
with major changes by gaining competitive advantages. On other hand marketing department
share knowledge and information to finance department about the emerging trends in finance
sector so that they can choose one of best option for their organisational development. So it
can said that both the departments interlinked to each other (Kopnina and Blewitt, 2018).
Relationship between marketing & production department
There is a close relationship in both sales and production department by sharing
common goals and objectives to achieve organisational objectives in proper manner. Sales
department give information about the trends in market and accordingly build products so
that consumers become loyal towards organisation. The role of marketing is to increase the
level of sales and revenue in order to have major contribution to development of company.
On the other hand the production department has role in order to properly develop the
innovation product in the organisation On other hand, production department have the role
to builds products as per the consumers needs and wants and balance the ratio of demand and
supply so that necessary changes should be made to get important benefits. Sales and
production department are very much important and by sharing important knowledge with
each other they production department can build one of best products and services that
simultaneously enhance the sales of organisation (Reeves and Deimler, 2012).

Pre bureaucratic structure - the pre bureaucratic are mostly followed in small organisation
as on other hand the bureaucratic is considered as the level of standard use in larger one.
Usually it is followed by sole trader or manager.
Bureaucratic structure – it is a type of structure in which hierarchy is based on legal
authority. The levels are clearly categorised into lower and higher level. here, rules and
regulations are clearly defined with distribution of power.
Post-bureaucratic structure- the organizations are fully developed and have various
standards and procedures, with a central command consisting of several board members
where a democratic procedure does the decision-making. Employees' suggestions are
considered when deciding on a post-bureaucratic structure.
Functional – it is most common used structure where employees are grouped on basis of
similar task or activities. For example- Starbucks.
Divisional – In this each organisational functional is divided into division. For example, IT,
fiancé, etc. For Example – McDonald’s
Matrix – Here, structure is divided on basis of relationship.
SBU- The structure consists of operating units that serve as autonomous business.
LO3
Positive and negative impacts the macro environment has upon business operations
supported by specific examples
Business environment is considered as important parts or development of business
along to nays important aspect business. The forces which have the constitutes with business
environment along with have the suppliers, competitors along weight media, government,
customer in having existence over economic conservationist along with other insinuation
which is working environment.
By applying PESTEL model, TESCO is capable to gain knowledge about its macro external
factors, PESTLE analysis related to such company is as below:

 Political factors: As tesco operate worldwide, it may be affected by the global
political factors such as tax rates, stability of country and import duties to get
important kinds of outputs etc.
Positive aspect: The positive aspect of political factor that by follow the rules and
regulations tesco can be able to sustain for the long time in market and enlarge business
opportunities in positive manner.
Negative aspect: on other hand the import duties on goods and services affect due to the take
some kind of inventory form the market of UK in which china and east Asia included. This
makes tesco to have negative impact in having proper level of sales in Europop countries for
further development.
 Economical factors: These factors include demands, interest rate, employment rate
and so on. tesco shall require to consider these factors before taking any decision
because any kind of changes affect on the business decisions making in adverse
manner to gain desirable outcomes.
Positive aspect: The positive aspect of the economic factors that it enhance the borrowing
cost in the UK to tesco opportunities in positive manner.
Negative aspect: the negative aspect that concerned with the economic activity refers to the
changes in the interest rates, inflation are not easily controllable activities and directly and
adversely affect business procedures (Edgington, 2018.).
 Social factors: It includes taste, preference of the general public and other social belief
that my affect the company. As tesco is operating in more than one countries, it shall
require to consider all such factors and provides the products according to specific
geographical location. It includes lifestyle, educational background etc. It is essential
for business to consider the social requirement of population so that company can
offer them goods and services accordingly, this helps in improving Tesco
performance in market significantly.
Positive: With the help of social factors tesco can easily build products as per the consumers
needs and wants properly that enhance their competitiveness. Tesco ensures to offers
affordable goods to consumers, that attract wide range of consumers and they like to spend
money in the firm. By this way tesco becomes able to generate more revenues and gain
competitive advantage as well.
Negative: the negative aspect of that tesco can not give their best while changes occurs in
their organisation in very rapid manner so they sometimes fail to build positive image in front
of them.