Business and Business Environment 22: Tesco, Shell, BP Analysis Report

This comprehensive report provides a detailed analysis of public, private, and voluntary organizations, exploring their structures, functions, and objectives. It delves into the relationship between organizational functions and their impact on business objectives, using Tesco as a case study. The report examines macro-environmental factors through PESTEL analysis and assesses micro-environmental factors via SWOT analysis, comparing Tesco and Shell Energy. It also includes a critical evaluation of how macro and micro-economic factors influence decision-making within organizations, providing recommendations and insights for strategic planning. The report concludes with a discussion on the influence of structural design and external factors on organizational size and objectives.

Running Head: BUSINESS AND BUSINESS EVIRONMENT 0
Business and Business Environment
Student details:

BUSINESS AND BUSINESS EVIRONMENT 1
Contents
Introduction......................................................................................................................................2
Organization....................................................................................................................................2
Types of organization...................................................................................................................2
Scope and size of organization.....................................................................................................7
Organizational Functioning.............................................................................................................9
Relationship between different organizational functions.............................................................9
Effect of the organizational functions over objectives and structure of Tesco............................9
Reform in Tesco.........................................................................................................................10
Advantages and disadvantages of interrelationship between organizational functions.............10
Complexities faced by different types of business structures....................................................11
Macro Environment.......................................................................................................................11
PESTEL.....................................................................................................................................12
PESTEL analysis on Tesco........................................................................................................13
Micro Environment........................................................................................................................16
SWOT analysis over Tesco (UK)..............................................................................................16
SWOT Analysis of Shell Energy (UK)......................................................................................17
Similarities and difference between the both SWOT analysis...................................................17
Recommendation for SWOT and PESTEL...............................................................................18
Application of SWOT analysis and justification to its influence over decision making...........18
SWOT analysis of British Petroleum.........................................................................................19
SWOT analysis of Engie (UK)..................................................................................................19
Similarities and difference between SWOT analysis of BP and Engie.....................................20
Relationship between Structural Design and the factors determining size of an organization..20
Influence of macro and micro factors over the objectives and decision making process in an
organization................................................................................................................................21
Conclusion.....................................................................................................................................22
Bibliography..................................................................................................................................23

BUSINESS AND BUSINESS EVIRONMENT 2
Introduction
The following report is a detailed analysis of public, private and voluntary organizations. It
includes scope and working of these organizations along with their organizational functions. The
report gives brief of relationship between the organizational functions of these organizations and
the effect of organizational functions make over the objectives and structure of an organization.
In this report detailed study is made over macro environment factors affecting business of an
organization. Herein a SWOT analysis is made over Tesco and Shell Energy. Later a comparison
is also made over the dissimilarities and similarities faced by both of them. Lastly a critical
evaluation of macro and micro economic factors how they influence the performance of business
organization.
Organization
An organization refers to an entity where different people work to achieve particular objective or
various objectives. The word organization is derived from Greek word organon which means
tools or an instrument. An organization can also be known as company, firm, corporation,
institution or group (Tolbert & Hall, 2015).
Types of organization
Public organization- Public organizations include those organizations and entities which are
controlled by government. These are the organizations which deliver public programs, goods &
services. For example: - British Armed Force, British council etc.
Features-

BUSINESS AND BUSINESS EVIRONMENT 3
 Ownership of State- These organizations are owned by a central, state or local
government.
 Accountable to public- As these organizations are funded by public money they are
answerable to people about their actions and its consequences.
 Autonomous- These organizations are autonomous in nature which means no other
organization can interfere in their functioning (Andersen, et al., 2016).
Objectives of Public organization-
 The main objective of public organization is maximization of social welfare.
 It helps in preventing the growth of public economies.
 Focuses over equal distribution of goods and services at affordable rates.
 These are some of the legal forms of public organizations- the Royal Air Force and The
British Army holds objective of public safety and security at cost of their own life.
(Steiss, 2019).
Private Organization- These are those organizations which are not owned by government rather
it is owned by an individual or by a group of individual and their main motive is profit
maximization. For example: - Unilever, Aviva and TESCO (Haufler, 2013).
Objective of Private Organizations
 The primary objective of private organization is improving its profits
 Constructing an organizational structure to restrict the liabilities
 Building an economic strategy which will help them in sustaining in the market
(Christenson & Reschly, 2012)

BUSINESS AND BUSINESS EVIRONMENT 4
Types of Private Sector Organizations
There are different types of public sector organizations some of them are mentioned below:-
Sole traders- It is type of business organization where a single individual is liable to all profits,
losses and other issues of an organization as he is the only owner of the company like dust &
dance and Adnil creations are the most popular sole trading organizations of UK. The legal
structure of sole is similar to that of the business. The owner is personally liable to every loss and
profit.
Partnership- According to this type of business structure, two or more individuals forms a legal
relationship in order to carry on a business. All the partners have a share in the business as all of
them have made investment in the business. For example whatsapp and mumsnet were founded
in partnership.
The partnership is further divided into 3 sub parts- general partnership, limited partnership and
limited liability partnership. The general partnership gives equal rights and opportunities to all
the owners. All of them are liable to each profit and loss faced by the company. As per the
‘Partnership Act 1890’ a partnership remains in between people who have a common view point
and the partners have unlimited liability in the firm (Legislation, 2019).The limited partnership
allows every partner to limit his/ her personal liability to the ratio made by them in business
investment. Lastly Limited Liability Partnership is slightly different from the general partnership
because of the legal structure states that every partner has a limited or reduced financial liability.
(Legislation, 2019).

BUSINESS AND BUSINESS EVIRONMENT 5
Company – A company is legal entity which can be owned by an individual or group of
individuals. A company can be defined as an artificial person who functions in accordance with
laws. (Legislation, 2019).
There are various types of companies which includes Private limited companies, Public limited
companies, Companies limited by guarantee, Unlimited Company, Limited Liability Partnership,
community interest company, industrial and provident society, Royal charter. All these
companies have different functioning and legal structure.
Franchising- The franchising refers to running a commercial operation using the brand name of
some other organization. The franchising was started by franchise agreement, as per this
agreement there is a contract between the owner of organization franchiser and the franchisee.
These partnerships are contractual over Law of Contract.
Licensing – It refers to the agreement between two firms where one company permits another
company to produce or manufacture its product for either a specific period of time or a specific
payment. For example various clothing brands use cartoon characters like Mickey Mouse on
their clothes. These companies have made an agreement with the company which owns the
patient over cartoon character.
Voluntary Organization
A voluntary organization refers to an organization where people from different background come
together to accomplish a common interest. These organizations are non-profit organizations
whose main objective is social welfare. It includes both Non-profit organization and Non-
governmental organization. For example charities like Red Cross society and YCWA, social

BUSINESS AND BUSINESS EVIRONMENT 6
welfare organizations like Human Rights Watch and Environmental Protection Agency (EPA)
(Legislation, 2019).
Objectives of Voluntary Organizations
 Provides services to the public- These organizations provide aid to the needy people.
 Increase in the standard of living- Helps people living who are below the basic standard
of living and provide them basic facilities.
 Helps in promoting legal, economic, cultural and social objectives
Types of Voluntary Organization
Non-profit organization (NPO) - An organization whose main objective is to provide help to
specific group of people who have an unambiguous necessity.
Non-governmental organization (NGO)- These organizations are owned by a group or
community of people who work for social welfare. These organizations functions on every
aspect including educational, religious, charitable and social works.
Distinction between NPO and NGO
Basis of distinction NGO NPO

BUSINESS AND BUSINESS EVIRONMENT 7
Registration It can be registered as a trust
under ‘Public Trust Act’ or as
a nonprofit company under the
‘Companies Act 1956’.
It is an organization which can
be registered under Section 8
of the Companies Act, 1956.
Area of functioning Large area of functioning Small area of functioning
Objective It works for the betterment
and development of society
and economy.
It promotes arts, science,
commerce or any other
purposeful things.
Scope and size of organization
The scope of an organization covers departments which are related to the specific company/
business. For example, small business like family owned store has lesser scope than a
multinational organization. A small business has limited scope of functioning in comparison to
large business organization.
Factors affecting size of an organization
 Size of capital- The size of capital reflects investment and expenditure made over an
organization. Large organization requires large capital requirement (vice-versa).
 Number of employees- Large amount of employees refers that a company requires more
human capital to complete the tasks whereas less amount depicts less work.
 Volume of sales- The aggregate volume of sales refers the total amount of revenue and
profit generated by an organization. An organization with higher sales defines its wide
area of functioning e.g. Unilever.

BUSINESS AND BUSINESS EVIRONMENT 8
 Level of technology- The level of technology of large organizations is better than small
organizations as these organizations are required to provide best quality of services to the
consumers.
 Raw materials- The quality and quantity of the raw material defines size of an
organization
 Legal form of ownership- The form of ownership defines the size of an organization;
there are different types of legal structures like single ownership, partnership, franchising
etc. For example: - Unilever is founded by Lever brothers, Samuel van den and Antonius
Johannes Jurgens. This is partnership form of legal structure.
Scope of different organizations
 Local company- A local company has limited area of functioning (city, town etc.), it has
limited amount of goods & services to offer.
 National company- Deals only within national boundaries (only in UK, USA, Australia).
Variety of goods and services to offer to the consumers.
 International company- Deals within the boarders as well as outside the nation. As the
area of functioning is broader the number of quality and quantity of goods offered is
wide.
 Multinational company- Deals within 2 or more nations.
 Global company- Deals worldwide around the globe (Hubka & Eder, 2012).
Effects of structure, size and scope on the objectives, products and services
The structure of a business organization influences the objectives, products and services of an
organization, for example Tesco UK follows hierarchical organizational structure. Herein the

BUSINESS AND BUSINESS EVIRONMENT 9
positions are divided in different parts which ensure the work to be done properly and
smoothly.
Thus the company ensures that the products offered by it should be of best quality. The brand
name defines the quality of services offered as Tesco has wide scope of functioning it
requires to keep the quality and quantity of the products maintained.
Organizational Functioning
It refers to the group of activities performed within various departments of an organization. Tesco
follows hierarchical organizational structure which constitutes of 5 main committees who report to Tesco
Plc. Board (Wagstaff, et al., 2012).
Relationship between different organizational functions
Tesco constitutes of various functions–HR which is responsible for hiring best quality of people
for the company. These people are later recruited to the segment of the company which suits
their skills. The quality of the people hired leaves an impact over the marketing and sales ratio of
a firm. If the firm will not perform well and it becomes unable to meet the targets, it will get
revert from R&D team of Tesco. The Research and development plays and important function in
analyzing the growth and stability of a Tesco. Hence it can be observed that all these functions
are somehow interrelated.
Effect of the organizational functions over objectives and structure of Tesco
The organizational function of Tesco includes HR, marketing and sales, research and
development, operations, finance, IT and accounting. All these functions are interlinked and help
in achieving the objectives and structure of Tesco. Tesco aims to establish good command over
the online shopping accompanied by good quality of goods and services. The Information
Technology Department of Tesco will develop website which is easy to access. This will help in

BUSINESS AND BUSINESS EVIRONMENT 10
increasing the total sales of the company and will provide reliance to consumer. Thus because of
the following the objective of increasing sales and providing best quality to consumer will be
achieved. The development of proper web portals also helps in maintaining and managing the
hierarchical structure of the company.
Reform in Tesco
The major reform required in Tesco is to work upon the Research and development function. As
Tesco is one of the leading supermarket chains in UK, it should make an effort to know the
demands of the consumers. The main objective of company is to provide the consumers best
quality of goods and services so that he can get maximum level of satisfaction. The R&D
department should conduct a survey which will analyze the problems faced by consumers while
or after purchasing products .Once the research is conducted steps should be taken to solve the
problem raised by consumers. This will help in increasing the total sales of Tesco (Evans, et al.,
2018).
Advantages and disadvantages of interrelationship between organizational
functions
Advantages
 Efficacy in work- The interrelationship between organizational functions of Tesco brings
efficiency and speed in work. The area of functioning is divided which makes functioning
easier.
 Clarity- Each of them HR, finance and accounts have specific task to perform. Thus the
chances of confusion in delivering the services are reduced. The probabilities of
duplication of work condense which saves time of Tesco (Heider, 2017).

BUSINESS AND BUSINESS EVIRONMENT 11
Disadvantages-
 Seclusion- The people working in different departments of Tesco do not get an
opportunity to come across and share their perspectives. This poses a threat over growth
of an organization.
 Lack of synchronization- It often happens that the managers of these departments are
unable to deal with the problem faced by other department. As all of them are interlinked
synchronization is essential otherwise Tesco and its customers have to face challenges
(Bullmore & Sporns, 2012).
Complexities faced by different types of business structures
There are basically 4 types of business organizations sole proprietorship, partnership and
corporation. The sole ownership companies do not hold large capital investments. Therefore they
do not have different departments like HR and IT to handle different task. Moving forward to
partnership firms it becomes necessary for them to maintain data of almost every activity as in
partnership business the chances of conflicts between the co-owners is greater. The accounts and
finance department keeps every activity documented. Lastly there are corporations, corporations
are large business organizations, they have more work pressure. Hence it order to remove
duplicity from work and increase the efficiency to perform task it becomes mandatory for
corporation to do division of functions (Clayman, et al., 2012).

BUSINESS AND BUSINESS EVIRONMENT 12
Macro Environment
The macro environment refers to- ‘The major external and uncontrollable factors that influence
an organization's decision making, and affect its performance and strategies. These factors
include the economic factors; demographics; legal, political, and social conditions; technological
changes; and natural forces’ (Gillespie, 2015).
PESTEL
PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal Factors
which act as a tool to analyze and monitor an organization’s performance. It helps in using cost
effective methods in business, understanding the in-depth understanding of business, alertness
towards threats which can be faced by an organization (Yüksel, 2012).
o Political factors – Political factors which could impact the working of an organization for
example: - FDI, bureaucracy and tax policy.
Positive impact- Keeps decorum in business and reduces the conflicts between the
organizations existing in market.
Negative impact- Fluctuations in government policies imposes restricts over firms.
o Economic factors- Economic policies or forces which could leave an impact over the
business for example: - interest rates, exchange rates, inflation and deflation.
Positive impact- In case of less interest rate the firms may produce more at low cost
incurred over production (Yüksel, 2012).
Negative impact- The hike in exchange rate leads to fluctuation in the exports and
imports of an organization.
o Social factors- Social factors include feedback and beliefs of consumer, common cultural
views prevailing in market for example: - age, health, growth of population etc.

BUSINESS AND BUSINESS EVIRONMENT 13
Positive impact- With the help of social factors the firm understands the needs of targeted
consumers.
Negative impact- Drastic change in the social factors can affect the production, it is also
observed that because of sudden change in taste and preference of people firms face loss.
o Technological factors- The usage of technology in producing and marketing product for
example: - automation, intellectual property regulations, technological advancement with
regards to communication and transportation.
Positive impact- Goods produced with the help of latest technology attracts consumers
and provides maximum level of satisfaction.
Negative impact- The technological advancement is a costly method.
o Environmental factors- Using sustainable and cost effective ways of production for
example: - scarcity of raw materials, global warming etc.
Positive impact- Ensures sustainable production and desirable usage of natural resources.
Negative impact- Lack of resources sometimes creates problems for firms while
production.
o Legal factors- Rules and regulations which affects the production and distribution of
business. For example:-equal opportunities, health and safety, consumer rights etc.
Positive impact- The legal factors helps the consumer in seeking redressal if they are not
happy with the goods and services offered.
Negative impact- The false claims by consumers sometimes leaves a bad impression over
brand image.

BUSINESS AND BUSINESS EVIRONMENT 14
PESTEL analysis on Tesco
In order to understand the ways in which macro environment affects the working of an
organization PESTEL analysis can be performed. The PESTEL analysis is basically an overall
analysis of an organization herein this analysis is conducted over Tesco. It includes both the
positive and negative impacts which the macro environment can pose on an organization. The
following research is conducted over Tesco. It is multinational retail organization which deals
with not only edible goods but also in mobile networking, broadband services etc.
Political Factors-Political factors affecting Tesco can be the tax rates implied in UK, the present
and impending legislation of UK, the political unreliability of nation and ratio of unemployed
people in the country. On the other hand the political or executive departments ensure whether
the proper rules and regulations are followed by the firm or not (Griffith & Harmgart, 2012).
Economic Factors- Secondly there are various economic factors which can influence the
working of Tesco includes the cost of manufacturing the product, cost at which the product is
sold and the margin of profit earned by Tesco. In order to keep the brand name on top Tesco
should reduce its profits by reducing the prices of the commodities. In UK the labor cost is
considered as an important economic factor that affects the UK supermarket. Apart from this
supermarkets like UK should also focus on increasing borrowing cost. The company Tesco
presently holds around 27.7% of total share of grocery market in UK.
Social Factors -The social factors which are one of the most prominent factors affecting the
sales of any organization. Tesco is a retail organization which provides consumer goods directly
to the consumer, in order to provide best services Tesco should understand the changing
consumer behavior. Sometimes the availability of similar product at almost same rates offered by
opponent firms can draw the attention of the consumer. Hence it is the duty of Tesco to keep a

BUSINESS AND BUSINESS EVIRONMENT 15
check on close opponents. It can be observed that the change in taste and preferences of the
consumer is also a social factor which influences the gross sales of company.
Technological Factors -There are various technological factors which have benefitted the firm
in terms of providing satisfaction to the customer; recently Tesco has launched RFID technology
in order to increase the in-store experience of consumer. It has also developed a new system
PayQwid; this system helps the consumers in making payments with the help of their mobile
phones. The technological advancement has reduced the number of working staff in the
organization as most of the work is now automated. Therefore unemployment is the negative
impact of technological advancement.
Environmental Factors-These days government of UK is paying attention towards the
environmental threats caused by the organizations. Thus the companies like Tesco are
responsible to address these issues as soon as possible. Tesco has taken big steps regarding the
issue, the company now promotes E-shopping. The company states that they will be providing
home delivery of the products as nominal rates, the van drivers will use the routes which will
save the fuel and the delivers will also collect the poly bags from customers and recycle them.
The only negative effect of the environmental factor will be that the customers sometimes may
not get the things what they actually wanted as products can be out of stock; the delivery of
product can be a matter of concern also the customer can face challenges in making choice
online.
Legal Factors-Lastly there are the legal factors which influence the overall functioning of
Tesco. In the year 2016 seventeen workers of Tesco took a legal action against the employer for
disrespecting the workers on the grounds of age and gender. After this incident the workers were

BUSINESS AND BUSINESS EVIRONMENT 16
extremely angry and took the case to judicial level. The workers of Tesco were paid less for the
night shift and were not granted the holidays as well. Along with this Tesco also received a legal
notice from the investors in the case of misleading them (Oraman, 2014).
Micro Environment
Micro environment refers to the internal and controllable factors which influence the decision
making of an organization for example: suppliers, competitors, intermediaries, firm itself and the
customers. The macro environment influences the performance, productivity and the returns
earned by company (Craig & Campbell, 2012). The micro economic factors which influence
success of a firm are as follows – impact of the consumers, availability of investors and
employees, level of competition and general public and media.
SWOT analysis over Tesco (UK)
Tesco is a supermarket operating in United Kingdom, Europe and it has also developed an online
portal which enables them to deliver services at home directly to the consumer. Tesco is
basically a food retailer organization, it supplies food manufactured under their own
manufacturing units this helps in ensuring that the products delivered to consumer are of best
quality. In the session of 2018-2019 total revenue generated by Tesco was around £63,911
million which made it second leading supermarket of UK (Felgate & Fearne, 2015).
In the following case study the SWOT analysis of the Tesco is conducted.
Strengths-Here are some of the strengths of Tesco, being a part of retail industry of edible goods
its prime focus is over the households this is the reason Tesco holds a systematic supply chain
and dispersion. It offers various products to its consumers like food, clothes, music, beverages
etc. The company has earned the title of leading supermarket chain in UK. One of the greatest

BUSINESS AND BUSINESS EVIRONMENT 17
strength of Tesco is its geographically diversified services which has doubled its income in past
few years.
Weakness-Coming up to the weakness of Tesco the first thing which can be noticed is the poor
performance at operational level in specific market. The legal issues related to company
influence the customer and also degrades its image in the marketplace.
Opportunities-A big well-known brand like Tesco can tie up with other brands, it can noticed
that properly strategized partnership can be fruitful in long run or it can also acquire small firms
in order to increase its overall productivity. The increasing demand of organic products can be
catered by the firm. Rising demand of private labels can be served by the firm.
Threats-Lastly, moving onto the threats to the company it can be noticed that Morrisons has good
number of competitors in the market like Asda, Morrisons, Walmart, boots and amazon who are
biggest threats to the its sales (Zhang, et al., 2015).
SWOT Analysis of Shell Energy (UK)
Shell Energy Retail Limited was formerly known as First Utility, is a supplier of gas and
electricity in the United Kingdom. The SWOT analysis of Shell energy is explained below.
 Strength- the company has a strong market position and works with advanced
technological techniques.
 Weakness- shell has faced increased debt of $58379 million in the FY 2015.
 Opportunity- the demand for cleaner energy resources is increasing, the energy
consumption will increase by 40% by the year 2040.
 Threat-the emission of carbon dioxide is major problem for Shell energy.

BUSINESS AND BUSINESS EVIRONMENT 18
Similarities and difference between the both SWOT analysis
The SWOT analysis of both the organizations shared various similarities for example both the
organizations have wide scope of growth in future. Both the organizations have good market
value. Apart from these there some differences among both the companies for example Tesco
can form ties with some other brand but Shell Energy can hardly find a company to tie up or
share the work load as an energy developing firm need higher capital investments.
Interrelation of Strength and Weakness analyzed with the help of SWOT and PESTEL
with external macro factors
The technological advancement can be beneficial for both the firms. If new machinery is
introduced in the production of goods will faster the production of goods as compared to the
process of producing goods with the help of human capital. The chances of defects also get
reduced along with this the packaging function will also get quicker. This will reduce the chance
of getting defeated by the competitor firms which is one of macro environmental factor
influencing the ratio of revenue earned.
Recommendation for SWOT and PESTEL
It should be recommended that both the organizations should work on the development of
organizational function (HR, Finance and accounting, IT, etc.). The following recommendation
is suggested as both the organizations are huge and holds great amount of work pressure. Thus it
becomes essential for them to divide the works among organizational functions to decrease the
work load of a solo department and to distribute it within different channels.

BUSINESS AND BUSINESS EVIRONMENT 19
Application of SWOT analysis and justification to its influence over decision
making
The SWOT analysis plays a crucial role in decision making in a business organization as the
SWOT analysis shows the clear image of position of a company in the market. Therefore all the
decisions are made as per the review generated after analyzing the present market situation. For
instance Tesco is facing a threat from the similar organizations providing services in the market;
It will construct plans for future in regard to beat these competitors. Tesco will take actions like
granting discounts on the purchase of certain amount which will attract more customers
(Bensoussan & Fleisher, 2012).
SWOT analysis of British Petroleum
British Petroleum is world’s largest energy companies which is known for its petrochemical
business around the globe. The organization has faced challenges in past few years. The SWOT
analysis of British Petroleum is given below-
 Strength-The Company has large number of subsidiaries and brands under retail.
 Weakness- Company faced various oil spills, which made environmental damage. The
employees of company are dishonest
 Opportunities- Other retail subsidiaries are opportunity for BP. It can focus on other
sectors than petroleum to generate revenue.
 Threat- The spillage of oil, explosion in refinery pose a threat to life of workers as well as
to the environment (Spencer & Fitzgerald, 2013).
SWOT analysis of Engie (UK)
Engie is the oldest and largest companies in energy business in France. The company operates in
various fields’ distribution and generation of energy, nuclear energy, renewable energy and
natural gas. The SWOT analysis of Engie is given below-

BUSINESS AND BUSINESS EVIRONMENT 20
 Strength- The stable and steady financial performance over years.
 Weakness- Company is facing large number of anti-trust and legal disputes.
 Opportunity –Provides cheap and clean source of energy to developed and developing
economies.
 Threat- The newly emerging competitive firms are biggest threat to Engie. For example:-
Centrica, Eni, Statkraft and Total (Engie, 2019).
Similarities and difference between SWOT analysis of BP and Engie
The SWOT analysis represents all the strengths, weakness, opportunities and threats faced by an
organization. Herein the similarities and difference between British Petroleum and Engie are
presented. As per the research conducted above, it can be stated that both the firms are having
good financial stability thus they can launch new technology for production. Both the
organizations are lacking coordination. The workers in organizations are not loyal towards work
ethics. The British Petroleum is facing threat from the environmental issues whereas Engie is
facing threat from its competitors. Another difference among the SWOT analysis of both the
companies is that BP holds various other subsidiaries to earn profits whereas Engie has the only
source of earning revenue by increasing the supply of energy to developing economies.
Relationship between Structural Design and the factors determining size of an
organization
Structural design is a method to use the hierarchy of organization to achieve its goals and
objectives in future. Each of these factors is influenced by the structural design of an
organization.

BUSINESS AND BUSINESS EVIRONMENT 21
 Size of capital- The size of capital refers to the total amount invested in the firm. It
depends upon the hierarchy followed by the company if there are more investors the size
of capital will be large.
 Volume of sales- The volume of sales refers to total sales made by an organization in an
year. Thus, there is a strong relationship between the volume of sales and the total
number of sales force working in an organization.
 Raw materials- Raw material are basic need of an organization. The distribution of raw
materials among the different sites of production relies under the command of the product
distribution manger. The supply chain of raw material and finished goods is in the hands
of distribution manager who is a part of structural design of the company.
 Number of employees- The number of employees holds a strong relationship with the
structural design of an organization. The Human Resource management team hires all the
employees in an organization, the team hires talented and skillful people who will help in
achieving the objectives of company.
 Level of technology- The level of technology used by a firm depends upon the total
capital of the company. Hence, the total number of stakeholders a company holds
influences the level of technology.
 Legal form of ownership- The form of ownership is also influenced by the structural
design of an organization. There are three forms of ownership sole proprietorship,
partnership and cooperation. If there is sole owner of the firm the legal ownership will be
sole proprietorship (Daft, 2015).

BUSINESS AND BUSINESS EVIRONMENT 22
Influence of macro and micro factors over the objectives and decision making
process in an organization
In the decision making process of an organization both macro and micro factors play a key role.
Macro factors like demographic conditions faced by an organization where a company takes
decision in accordance with the targeted group of people, their age, race and sex. For instance if
the company is producing goods for children, it main objective will be that the product is not
injurious for them (Kennedy & Parsons, 2012).
Micro factors also influence the decision making of an organization. For instance if an another
firm who is a competitor in the same industry is granting more wages along with better amenities
to its employees, it might be possible that the employees may switch to that organization. In the
following the case the company will regulate the employee policy under which it can provide
more facilities to the customer. The objective will turn from hiring talented employees to
keeping them for long term in the company (Fossati, 2016).
Conclusion
As per the study conducted above it can be concluded that the organizations are required to work
upon their organizational functioning. Especially in the case of Tesco, it can be suggested that
the firm should look for new ways to promote itself in order to remove the weaknesses which
came into notice in the SWOT analysis. Similarly, Shell Energy should also work on its
weakness and try to eradicate the threats faced because of the macro environmental factors. Last
but not the least some attention should be given to the recommendations proposed in the study.

BUSINESS AND BUSINESS EVIRONMENT 23
Bibliography
Andersen, L. B., Boesen, A. & Pedersen, L. H., 2016. Performance in public organizations:
Clarifying the conceptual space. Public Administration Review, 76(6), pp. 852-862.
Bensoussan, B. E. & Fleisher, C. S., 2012. Analysis without paralysis: 12 tools to make better
strategic decisions. New Jersey: FT Press.
Bullmore, E. & Sporns, O., 2012. The economy of brain network organization. Nature Reviews
Neuroscience, 13(5), p. 336.
Christenson, S. L. & Reschly, A. L., 2012. Handbook of research on student engagement. New
York: Springer.
Claessens, M., 2019. THE MACRO ENVIRONMENT – SIX FORCES IN THE ENVIRONMENT
OF A BUSINESS. [Online]
Available at: https://marketing-insider.eu/macro-environment/
[Accessed 28 July 2019].
Clayman, M. R., Fridson, M. S. & Troughton, G. H., 2012. Corporate finance: a practical
approach. 2nd ed. New Jersey: John Wiley & Sons.
Craig, T. & Campbell, D., 2012. Organisations and the business environment. 2nd ed. London:
Routledge.
Daft, R. L., 2015. Organization theory and design. 1st ed. London: Cengage learning.
Engie, 2019. Engie.UK. [Online]
Available at: https://www.engie.co.uk/
[Accessed 4 August 2019].
Evans, Barry & Mason, R., 2018. The lean supply chain: managing the challenge at Tesco. 2nd
ed. London : Kogan Page .
Felgate, M. & Fearne, A., 2015. Analyzing the impact of supermarket promotions: a case study
using Tesco Clubcard data in the UK. In The Sustainable Global Marketplace , pp. 471-475.
Fossati, S., 2016. Dating US business cycles with macro factors. Studies in Nonlinear Dynamics
& Econometrics, 20(5), pp. 529-547.
Gillespie, K., 2015. Global marketing. 4th ed. London: Routledge.
Griffith, R. & Harmgart, H., 2012. Supermarkets competition in England and planning
regulation. The International Review of Retail, Distribution and Consumer Research, 22(1), pp.
1-25..

BUSINESS AND BUSINESS EVIRONMENT 24
Haufler, V., 2013. A public role for the private sector: Industry self-regulation in a global
economy. Wahington D.C.: Carnegie Endowment.
Heider, K. G., 2017. The economic organization. London: Routledge.
Hubka, V. & Eder, W. E., 2012. Design science: introduction to the needs, scope and
organization of engineering design knowledge. London: Springer.
Kennedy, A. M. & Parsons, A., 2012. Macro-social marketing and social engineering: a systems
approach. Journal of Social Marketing, 2(1), pp. 37-51.
Legislation, 2019. Charities Act 2011. [Online]
Available at: http://www.legislation.gov.uk/ukpga/2011/25/part/1/chapter/1/crossheading/
charity/enacted
[Accessed 28 July 2019].
Legislation, 2019. Companies Act 2006. [Online]
Available at: http://www.legislation.gov.uk/ukpga/2006/46/pdfs/ukpga_20060046_en.pdf
[Accessed 28 July 2019].
Legislation, 2019. Limited Liability Partnerships Act 2000. [Online]
Available at: http://www.legislation.gov.uk/ukpga/2000/12/pdfs/ukpga_20000012_en.pdf
[Accessed 28 July 2019].
Legislation, 2019. Partnership Act, 1890.. [Online]
Available at: http://www.legislation.gov.uk/ukpga/1890/39/pdfs/ukpga_18900039_en.pdf
[Accessed 28 July 2019].
Oraman, Y., 2014. An Analytic Study of Organic Food Industry as Part of Healthy Eating Habit
in Turkey: Market Growth, Challenges and Prospects. Procedia-Social and Behavioral Sciences,
Volume 150, pp. 1030-1039.
Spencer, D. C. & Fitzgerald, A., 2013. Three ecologies, transversality and victimization: The
case of the British Petroleum oil spill.. Crime, Law and Social Change, 59(2), pp. 209-223.
Steiss, A. W., 2019. Strategic management for public and nonprofit organizations. London:
Routledge.
Tolbert, P. S. & Hall, R. H., 2015. Organizations: Structures, processes and outcomes. 10th ed.
London: Routledge.
Wagstaff, C., Fletcher, D. & Hanton, S., 2012. Positive organizational psychology in sport: An
ethnography of organizational functioning in a national sport organization. Journal of applied
sport psychology, 24(1), pp. 26-47.

BUSINESS AND BUSINESS EVIRONMENT 25
Yüksel, I., 2012. Developing a multi-criteria decision making model for PESTEL analysis.
International Journal of Business and Management, 7(24), p. 52.
Zhang, D., Shi, X. & Sheng, Y., 2015. Comprehensive measurement of energy market
integration in East Asia: an application of dynamic principal component analysis. Energy
Economics, Volume 52, pp. 299-305.