Business Environment Report: Types, Scope, and Interrelationships

This report provides a comprehensive analysis of the business environment, focusing on the internal and external factors that impact organizational functions. It begins by defining the business environment and then explores different types of organizations, including public, private, and voluntary sectors, using Tesco as a case study. The report examines the size and scope of various organizational types (micro, small, medium, and large), their legal structures, objectives, mission, vision, and product/service offerings. A critical evaluation of the interrelationship of various organizational functions within an organization is presented, highlighting the impact of these relationships on organizational structure. The report analyzes stakeholders and legal structures within the context of Tesco and other examples like Bestway and Oxfam, ultimately providing a holistic understanding of the business environment's complexities and its influence on organizational success. The report includes a detailed discussion of the interrelationships between various organizational functions and their impact on organizational structure, emphasizing the importance of these relationships for achieving organizational goals.

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAINBODY...................................................................................................................................3
Different types, scope and purpose of the organizations.............................................................3
Size and Scope of various type of organizations.........................................................................8
Critically evaluate interrelationship of various organizational function within organization.....9
Interrelationship impact on organization structure....................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment can be defined as the collection of internal and external factors that
affects organization functions. Internal factors are financial resources, equipment’s, employees,
organization structure, suppliers etc. directly impacts on decision-making of organization. while
external factors include political, economic, socio-cultural, innovation in technology, legal
factors, market trends and others etc. impacts business performance, productivity and operations.
To understand business environment has an example of Tesco company. It is a British
multinational groceries company which is famous as general merchandise retailer. The brief
study provides understanding about types of business environment through three different types
of organization in term of size, classification, scope and legal structure and interlinks them with
their goals, products and services which provides by companies.
MAINBODY
Different types, scope and purpose of the organizations
Attributes Public sector Private sector Voluntary sector
Definition It is a profitable type sector
that is operated by
government and offers
services to the customer
across the world. The
organization gives high
contribution and country’s
economy by paying tax and
recruiting employment
opportunity (Sony and Naik,
2019). There has an
example of Tesco company
which is public limited type
company. It is
headquartered in UK and
It is operated by owner for
financial gain. It is non-
governmental type
organization which offers
good quality products to the
customer and in return
generate high revenue.
Government has no control
while operating business in
other countries. The public
sector also plays essential role
in the country’s economy it
also pays tax and provides job
opportunity to the people.
There is also an example of
While it is non-profit type
sector which is run by
group of people. It is
properly independent
from local and national
government interference
so it is known as non-
governmental (NGO)
sector as well. Such type
sector does not have to
pay tax but gives high
contribution because it
provides supports to those
who are unable to live
their life independently or

famous as general
merchandise retailer.
Organization captures 27%
market share that is higher
as compared previous years.
Organization offers
worldwide services to the
customer. It is retailing
industry which has number
of locations around 68,000
shop around the world.
Organization has large
number of subsidiaries i.e.
Booker group, Tesco Bank,
Tesco Mobile, Tesco Stores
Ltd, Tesco Family Dining
Ltd. Tesco Ireland and
others which offers different
type of product or services
to the customer across the
world. Tesco is funded
through potential investors
and banks loans.
BESTWAY company. It is a
British multinational
conglomerate company which
is headquartered in London,
UK. Organization is a market
leader which has covered
market share around 18.6%.
While organization has 64
warehouses nationwide and
provide worldwide services. It
is wholesale, cement, banking
and pharmacy industry. It runs
UK’s third largest pharmacy
and has largest shareholder in
the united bank. Organization
operates inti three sectors
cement, pharmacy and
wholesaler but it has only one
subsidiary i.e. Bestway
Cement which is located in the
Pakistan. Organization is
funded through investors and
bank loan. Organization
famous as UK’s second largest
wholesaler company.
suffers from any
discrimination. For
example: Oxfam is
charitable organization
which is located in
Nairobi, Kenya. It offers
worldwide services and
mainly located in the UK.
It is founded in 1942 and
operates by Oxfam
International. It gives 7%
market share in the global
market. Subsidiaries of
organization are Oxfam
Bookshops, Oxfam
Germany and Oxfam
Australia which is located
in different region but
offers different type of
service as per customer
demand. Organization is
funded from private and
public sectors. In
addition, it organizes
some cultural shows that
supports to earn funds.
Organization is
considered as
confederation of 19
independent charitable
organization (Hasmath,

Hildebrandt and Hsu,
2019).
Objectives
The main purpose of the
organization is to develop
value for the customer and
in return earns lifetime
loyalty. Another objective
of the organization is to
generate high revenue
within organization and gain
competitive advantage in the
competition market.
The main objective of the
organization to generate high
revenue and influences good
brand image in the market.
Another objective of the
organization is to expand it’s
business across the world so it
can easy to improve sales
revenue and GDP rate of
company.
The main objective of the
organization is to support
create lasting solution
against injustice of
poverty. Another
objective of the
organization is to
empower people to
develop a future which is
secure and free from
social evils i.e.
discrimination, poverty
and injustice.
Mission The mission statement of
the Tesco is to “we make
what matters better” (The
Vision And Mission Of
Tesco Essay, 2020). In other
word, organization has
mission to create value for
the people by offering high
quality products and
services so they give value
of their money and gains
lifelong trust on brand
(Rosalina and Malik, 2019).
It is very important for the
organization because gives a
goal to the company to give
The mission statement of the
organization is to “develop a
sustainable green energy
technology which resolves
power crisis, stable and cost
effective” (Mission & Vision,
2019).
The mission statement of
the organization is to
“empowers people by
protecting human rights
and eradicates poverty
properly from the world”
(Vision, mission and
beliefs, 2019).

high efforts to achieve it.
The mission statement
ensures that customer gets
best available service from
the organization’s staff.
Vision
The vision statement of the
Tesco is to “develop and
maintain a market leading in
the global market.
Organization contains five
elements in its vision
statement such as wanted
and needed across the
world, expand business by
using full opportunities,
become more innovative
along with full of ideas,
encouraging, earning trust
and loyalty of the customer
effectively. These are vision
elements which supports to
develop sets of objectives so
that easy to meet objectives.
The vision statement of the
company is to “implement
alternative power so0lution by
using natural resources and
develops green living country.
Organization develops green
power and energy technology
that supports to create new
energy and resolve the
problems of current power
issues as well as gas pollution.
It is the main vision of the
organization.
The vision statement of
Oxfam is to “just world
without poverty” in other
word, organization wants
such kind world where
people are values and
treated equally and enjoys
their rights as citizen.
Company focuses on the
alleviation of global
poverty (Jing and Avery,
2016).
Products
and services
Tesco has wide product line
i.e. food product, non-food
items (i.e. clothing, electric,
music and books), online
retailing services, petrol
retailing services and
financial services as well.
Bestway company has three
business i.e. pharmacy,
cement and wholesale whereas
offers different type of
products in limited countries.
Organization products are
surgical products,
pharmaceutical products,
Oxfam is charitable
organization which offers
wide variety services i.e.
food, climate change,
health and education,
women’s right, water and
conflicts and disasters to
the people around the

cement and others. world.
Stakeholders
External stakeholder of the
organization are customers,
suppliers, creditors,
competitors, local
communities and the
government. while internal
stakeholders are employees,
management and
organizational structure.
Tesco focuses only two type
stakeholders such as
employees and customer
because they help
organization to meet it’s
objectives.
There are two type of
stakeholders i.e. internal
stakeholder and external
stakeholders. Internal
stakeholders are management,
employees and organizational
structure while external
stakeholders are investors,
government, customers and
others.
The main stakeholder of
the organization are the
donors, and supporters,
coalitions and alliance,
suppliers, private sectors,
academic institutions,
governments and
volunteer etc. these are
external stakeholder while
internal stakeholders are
Oxfam itself and it’s
group of people who
offers non paid services to
the public.
Legal
structure
Tesco is a British
multination groceries
company which operates
across the world through it’s
subsidiaries. So, it has lots
of legal structures which
ensures that business is
operated properly. There is
one of the most famous
legal structure of the
organization is the corporate
governance, whereas people
in the public sector deals
with shareholder. This
structure makes sure that
Bestway is Pakistan-based
company which operates in
limited countries but has
warehouses across the world.
Organization runs three type
business i.e. pharmacy,
cement and wholesaler so it
has to follows three type legal
structure such as large
corporation and multinationals
which is main legal structure
of the organization (Kettunen,
2016). while Bestway cement
follows partnership legal
structure to operate in Pakistan
It is charitable
organization which
follows trust, a
corporation or limited
liability company. This
structure helps
organization to align
number of objectives i.e.
to meet public needs and
requirements. This legal
structure helps
organization to align it’s
services which they offer
tom public and
eradication of poverty,

organization has
responsibility to reduce
carbon footprints or does
not produce large amount of
carbo di oxide. The structure
allows organization for
advertising the sale of
shares and sells them
general public by stock
exchanges (Pucihar and
et.al., 2019). The legal
structure supports company
to align its product and
services.
successfully. Bestway
operates it’s business under
the governmental laws. Private
sector gets more opportunity
of the legal structure because
they can expand its business in
various sector without any
restriction and can generate
high revenue within company.
This legal structure supports
company to meet it’s
objectives and products as
well.
injustice and
discrimination around the
world (Oladimeji, Eze and
Akanni, 2018).
Size and Scope of various type of organizations
There is three type of organizations micro, small- medium and large organization which
keeps difference to each other in term of revenue, size, employees and scope as well.
Large size organization
An organization that occupies more than 500-1000 employees and offers their services
tyo the customers. It operates in large scale as compared small and medium-sized business so it’s
annual revenue is about $1 billion (Vaara, Sonenshein and Boje, 2016). These type business gets
funds from banks, investors and other financial sources. The main goal of the business to expand
its business across the world by offering wide variety products to the customers. Large scale
business has wide scope in the global market because it keeps wide product line and perform
wide business activities i.e. product development, services, sales revenue, marketing and
contracts (Aditya, 2018).
Small size organization
Small business is those business whereas more than 1 to 99 employees offers their
services in the organization. it is small size business which is operated by owner independently.

The revenue of small business is around $44000 per year along with no employees. While
average revenue of the small business is about $4.9million. it gets funds through family, friends
and banks to start up business. Even government also supports small type business because it
gives contribution in country’s GDP by paying tax (Srinivasan, Bajaj and Bhanot, 2016). Small
business has wide scope such as it supports to influence employment and provides opportunities
to the entrepreneur and develops meaning ful jobs. It expands growth of country by increasing
urban and rural growth.
Medium-sized enterprises
It is small-medium size business whereas more than 100 to 499 employees are self
employed and provides services to the customer. The annual income of the SME business is
about $5-$10 million. SME business gets funds through friends, family and bank loan service
etc. Government supports these organization by offering bank loan at low cost. The reason
behind is that SME business recruits’ number of employees for the job purpose as result decreses
unemployment rate and gives contribution in country’s economy as well. These type businesses
are innovative nature which offers different type of products so that improves quality of
customer’s life after consuming. SME plays central role in the country’s economy because they
are major source of entrepreneurial skills, innovation as well as employment (Adrian, 2019).
Critically evaluate interrelationship of various organizational function within organization
Tesco is a British multinational company which has wide product portfolio and offers it’s
services across the world. So, there are various organizational functions i.e. marketing, human
resource management, finance, R&D department and others which plays effective role in
organization and supports to meet its objectives over the time. the main goal of the Tesco is to
give value it’s customers and earns lifetime loyalty from them. All organizational functions are
handled by board of director. Interrelationship of organization functions is described as follows:
HR with marketing department
Human resource department is the main department of the Tesco who oversees all the
department and supports company to meet its objectives. HR department and marketing
department keeps close relationship to each other because both marketing and HR department
has common goal to leads high productivity in the organization (Wijaya, Nurhadi and Kuncoro,

2017). HR department develops strategy to improve market share of the products while
marketing department implements that strategy in their practices and promote it’s products in the
business market by applying promotional tools. HR recruits’ employees on the basis of
organization needs. While marketing department supports manager to express about individual
performance at the workplace. Then HR department provides training class to employee for
improving their productivity in the working. In addition, human resource develops creativity in
the employee’s mind which helps marketer to promote product’s market share effectively. Thus,
both departments HR and marketing supports each other and manage organization’s obligation in
their working.
This interrelationship has some drawbacks also such as when human resource is not
capable to develop effective strategy or recruits talented employee at the workplace that
automatically decrease working productivity of marketing department as result unable to receive
value-based outcomes in the organization. As same hypothesis is implemented for marketing
department such as when marketer does not have analytical skill then they cannot give actual
feedback of employee performance to the HR. As result manager unable to recruit appropriate
employee for the marketing.
R&D with marketing department
Research and development department plays effective role within organization such as
they help company to take competitive advantage and upgrades brand image in the business
market. While marketing department perform numerous responsibilities such as deep research of
the market by collecting information about customer’s needs, preferences and requirements
about product and services (Brandsen and Honingh, 2016). Then marketer analyses overall
information and understand customer psychology for the product and service. In addition,
marketer identify market opportunities that can uplift organization position in the business
market. Marketer supports R&D department by providing information about customer demands
and expectation for the products. While R&D department innovates new products from the
existing products so that marketer easy to meet customer objective and influences sales
infrastructure of the company. In other case, when R&D department introduces new products or
services then it is marketer duty to influence product awareness in the customer and increase

demand of the product in public. It shows marketing and R&D department works closely and
supports company to take sustainable profit from the business market.
The negative drawback of the interrelationship is that when marketer gives insufficient
information to the R&D department about the products, in that situation R&D department unable
to understand customers’ attitude like what feature they want in products and others as result
organization unable to give value to them through the products. As same case applies for R&D
department for example when marketer demands for value-based products to the R&D
department and they unable to give such kind product that can meet user’s objective as yield
reduces purchasing behaviour of the customers. So, it is important for the organization to recruit
those employees who can take action effectively by supporting each other and helps to meet
organization’s objective.
Marketing with finance department
Marketing and finances departments are the profitable source of the company because it
helps company to improve economical scale of the company. Both finance department and
marketing department keeps different nature to each other but has common goal to improve sales
revenue of the company. Finance department has goal to save extra expenditure money while
marketing department has aim to expenditure more funds in promotions and advertisement so
that easy to improve sales revenue of the company in few periods of time. Finances department
is crucial for the marketing department because they prepare budget for the marketer as per
requirement which helps to fulfil needs for the research, promotion and distribution of the
products. On the other hand, marketer department gives information to the finance department
about annual sales incomes. This information helps finances department to keep control on the
budget and expenses so that improve economical scale of the company. Thus, both finance and
marketing department works together and fulfil organization’s objective.
The major drawback of the interrelationship is this most of the time dispute takes place
between finance and marketing department when marketer requires more funds or flexibility in
the budget for the product promotion. Whereas finance department denies to marketer for
offering extra funds as result conflict crisis takes place between them.

Thus, these organizational functions keep interrelationship together and supports it to meet it’s
objective over the time.
Interrelationship impact on organization structure
Tesco is multinational company that follows hierarchical organization structure within
company so that easy to oversees all organizational functions at a time. Hierarchical structure is
use by organization because it has different levels of authority and vertical link or chain of
command between manager and employees’ level of the company. This Hierarchical structure
motivates employee to improve their skills as specialist so they enable to upgrade their job
position from exiting one (Dekoulou and Trivellas, 2017). It gives positive impact on
organization functions because here board of director is the main owner of the company who
have authority to implement decision. On the other hand, second level is CEO (chief executive
officer) after BOD who has authority to handle all the department effectively. While third level
displays various organization functions i.e. marketing manager, HR manager, sales manager,
finances manager and others has authority to oversee individual employee performance at the
workplace. it denotes each organizational function keeps close interrelationship to each other and
helps company to meet it’s objectives by offering good quality product and services to the
customers.