Business and Business Environment: A Comprehensive Report

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Business and Business Environment
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Contents
Introduction......................................................................................................................................3
Task 1 (Lo1)....................................................................................................................................4
Types, size and scope of organisations........................................................................................4
Task 2 (lo3) “The UK supermarket”.............................................................................................13
P4 macro-environmental impacts on business operations.........................................................13
Lo4.................................................................................................................................................16
P5 Swot analysis of the Tesco Plc. In the United Kingdom.....................................................16
P6 interrelation between external macro factors and strength and weaknesses of Tesco..........20
Conclusion.....................................................................................................................................21
References......................................................................................................................................22
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Introduction
The term business environment refers to the collection of all external and internal factors like
employees, management, client, owners, customers’ needs and expectations, technological
development, social trends etc. these factors of the company are responsible for affecting a
company business environment directly or indirectly. The business environment helps to identify
the opportunities, allocating the resources, planning, and improvement in performance and
growth of the business. Every organisation varies from others and has a different business
perspective and different environment. Due to this differentiation in the business environment of
every organisation, it is very dynamic and complex in nature and it is uncertain. The business
environment of the company changes very fast and it also has a complicated procedure for its
establishment.
The report consists of organisations on the basis of their sectors and like profit, the non-profit
sector and public sector. It consists of details about the company's size and scope, the difference
between the three sectors of the country.
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Task 1 (Lo1)
Types, size and scope of organisations
Types and purpose of the organisation
Profit organisation
Profit organisations are the organisations whose main aim is to earn profit and make money.
These types of organisations generate profit for the company and owners and use that money to
expand their business (Anderson and Dees, 2017). These types of business organizations use
different types of strategies and tactics to make a profit out of available resources. These
businesses use a different type of managerial skills and leadership approaches to increase worker
productivity (Anderson and Dees, 2017).
For example,
The example for profit organisation is Iceland ltd. It deals in the supermarket chain of food items
and emphasises n sale of frozen items.
The legal structure of Iceland ltd
Figure 1 legal structure of Iceland ltd.
(source: Karlsdottir, 2019)
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Non-profit organisations
Non-profit organisations are the organisations which are dedicated to the social work and social
cause and provide public benefits (Knutsen, 2016). These organisations are not driven by profits
and they do not work for profit optimisation. Non-profit organizations are used by trusts, charity
and cooperatives. The main aim of these organisations is to serve the public and not earn a profit
(Knutsen, 2016).
For example,
The example of a non-profit organisation is welcome trust. This is an internet based non-profit
organisation which works for the rights of the children in the United Kingdom.
The legal structure of Wellcome trust
Figure 2 legal structure of Wellcome trust
(Source: Gordon, 2017)
Public Organisations
Public sector organisations are the organisation which are owned and operated by government
bodies and they exist to serve and provide services to the people of the country (Van Dooren and
Van de Walle, 2016). The main aim of these organisations is to serve the public and citizen of
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the country and not to make a profit for the organisation. These organisations are mainly
established and owned by the government of the country.
For example,
The example of this type of organisation is Department for Environment, Food and Rural Affairs
(DEFRA) which is responsible for rule, regulations and policies for environment, food and rural
problems.
Legal structure of Department for Environment, Food and Rural Affairs (DEFRA)
Figure 3 legal structure of DEFRA
(Source: Berti, 2014)
Difference between profit, non-profit and public organisations
Non-Profit organisations profit organisation Public Organisation
This section of the economy is
owned by the charitable trusts
and controlled by an
organisation only (Nayır et al.,
2018).
This section of the economy is
owned and controlled by an
individual or group of
individuals and companies
which is known as the private
sector.
It is the section of a country’s
economy which works under the
control of local, state or central
government.
The goal of this organisation is
to serve society and not to earn
the profit.
The agenda of these
organisations is to make money
and earn profit from a different
The objective of these
organisations is to serve the
citizens of the country (Nayır et
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source. al., 2018).
These types of companies
generate revenues from
donations, subscriptions and
membership fees (Anderson and
Dees, 2017).
These types of companies
generate or raises its funds by
issuing debenture and share,
making investments and taking
loans from banking institutions
(Nayır et al., 2018).
These types of organisations
earn the revenue from the public
like taxes, penalties and duties
charged.
The key areas in which it
operates is social work like child
labour and rights, women
empowerment and free
education.
The areas in which it operates
are information technology,
education, transport,
telecommunication, construction
and banking (Knutsen, 2016).
The areas where its works are an
army, agriculture, health, mining
and manufacturing, transport etc
(Van Dooren and Van de Walle,
2016).
This type of organisation does
not provide anything to the
worker, who is working for the
organisation (Anderson and
Dees, 2017).
It provides good salary
packages, incentives and
competitive advantages.
It also provides benefits of job
security, allowances, retirement
benefits and perquisites.
Business purpose and supply of goods in this sectors
Profit sector
The business purpose of the profit sector is to earn profit and make more money from the profit.
These organisations only work for earning profits and use that profit to expand the business.
These organisations get their goods and services from vendors and suppliers who provide raw-
material or finished goods to them Nayır et al., 2018).
Non-profit sectors
The business purpose of these organisations is to serve the citizens of the country. Feeding the
homeless, environment safety camps etc. these organisations are run by specific people and
group of people who are dedicated to serving to the society. The supply of goods and services in
non-profit organisations is availed by generating charity funds and donations (Knutsen, 2016).
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Public sector
The main purpose of these organisations is to provide the public services to the public which
includes governmental services like health, military, police, education and transport and public
goods. These organisations do not work for profit-making or to generate profit from the public.
The goods and services for these organisations are provided by private sector companies because
the public sector would not be able to provide the goods and services (Van Dooren and Van de
Walle, 2016). This organisation also needs goods and services which they hire or purchase from
a private sector organisation.
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Size and scope of the organisation
Difference between micro, small, medium and large enterprises
Microenterprise Small enterprise Medium enterprise Large enterprise
The enterprises which
are operating with less
than 10 people and
has minimal capital
(Porkka, 2016).
Small enterprises are
which has a small
number of employees
and even does not
have much capital
This enterprise is the
enterprise which is
made up of less than
250 employees and
they are emerging
slowly and steadily
These are the
enterprise which has a
large number of
employees and capital
to operate.
This does not exceed
more than twenty-five
lack rupees.
This exceeds the
amount of twenty-five
lacks but not more
than five crores (Doz,
2016).
It invests more than
five crores and less
than ten crores.
It invests money than
ten crores with many
outlets and offices
(Porkka, 2016).
One of the micro
enterprises in the
united kingdom is
Manton’s cards (Doz,
2016).
Some of the small
enterprises in the
united kingdom are
café pod coffee
company, Davison
canners and forex.
The medium size
company in the UK is
Bright star financial
and Clarasys.
The large size
company in the UK is
AFI Topco, John
Lewis.
Iceland ltd:
Iceland ltd. Is a food retailing store in the United Kingdom, it offers fresh, frozen cupboards,
party and household products as well as drinks at their stores. It was started in the year 1970 by
Malcolm walker in England. This company has a chain of supermarkets in various cities of the
United Kingdom (Karlsdottir, 2019). It acquires 2.2 per cent of market share in the markets of
the United Kingdom. It also has 800 plus stores in the United Kingdom and other stores in
Ireland, Spain, jersey, Malta and Norway. The profit share of Iceland is 8 per cent. The sales of
the company have also increased by seven per cent. Iceland is a growing company with good
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sustainability. It provides the food with a labelled plastic bag and the scheme or return of the
bags in the company. This was first started by Iceland ltd. It provides environmental
sustainability (Karlsdottir, 2019).
Wellcome Trust
Wellcome Trust is a non-profit organisation of the United Kingdom. It was established in the
year 1937 by Henry Wellcome. The organisation works for the health benefits and improvements
of the people of the country and it runs biomedical charity trust in the country. This organisation
has developed the medicines and vaccines for Ebola virus (Gordon, 2017). This organisation has
been established to help people buy to improve health if the researchers generate tests,
investigations and ideas. The organisation has invested up to 25.9 billion euros. This
organisation believes in growth and sustainability in the sense of the development of new
research in medical science, by providing new medicines. This organisation believes in
environment cleanliness and sustainability development (Gordon, 2017).
Department for Environment, Food and Rural Affairs
Department for the environment, food and rural affairs is responsible for food production and
standards, environmental protection, fisheries, agriculture and rural communities of the United
Kingdom (Pechey, 2016). This organisation is a government organisation formed in the year
2001, under Margaret Beckett leadership at the time of the merger of the ministry of agriculture,
fisheries and food and department of environment, transport and the regions. This department
was created after the failure of MAFF. It has an annual budget of 2.2 billion euros. The
organisation is sustainable because it works for environment safety of the country and the
government held it responsible for damaging environment, insufficiency of food and steady
development of rural areas and affairs. These organisations do not work for profit-making or
generating profit (Pechey, 2016).
Kinds of structures of the organisation:
Every organisation has a different kind of organisational structure and it follows it on that basis
only. There are three types of organisational structure.
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Functional structure of the organisation
Functional structure of organisations refers to divisions of the company in various departments
like marketing, finance, production and HR department. This structure is suitable for small scale
enterprise (Porkka, 2016).
Divisional structure of an enterprise:
Divisional structure of the company is used for large organisations where the company operates
in various geographical areas and these organisations even have their smaller organisations in
within their umbrella to cover different types of products (Doz, 2016).
The matrix structure of an organisation:
It is the third main type of organisational structure, which is a combination of divisional and
functional organisation. It is used in a larger organisation to take benefit of functional and
divisional structure of the organisations and company can have a dual management system
(Agyei-Mensah, 2017).
Iceland ltd. A profit organisation in the United Kingdom has its business in a different
geographical area, and it operates the business with matrix structure of the organisation, with
different functional and divisional organisational structures.
Difficulties in a transnational, international and global organisation
Transnational organisation:
Transnational organisations are the multinational organisations which have control over
operations like production and services delivery in more than one country (Kern et al., 2019).
The transactional organisations face problem or difficulties in the way of capital formation and
removal of capital from the organization.
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International organisations:
International organisations are the organisation which has its business developed in more than
one or two countries and it is dealing with the operations or the company in every country. The
international organisation faces problems with organisational communication between two
subsidiaries of the company. If they don’t have proper communication in the organisation only
then, it will be difficult for them to operate (McArdle, 2017).
Global organisations:
Global organisations are the organisations which operate their business functioning on the basis
of global divisions and not on the basis of product. Their operations are based on the different
product line and geographical areas (Hazy, and Erogul, 2018). Global organisations also face
issues with communication with their organisation established in another country.
Iceland ltd. Company is an international company operating in different countries with its stores
within its umbrella. The company follows the structure of a matrix organisational structure. Its
mission and objective are to earn profit and make money and to serve the best quality products to
the people and these functions of the organisation are helping the company to achieve their goals
and objectives (Karlsdottir, 2019). These functions make the Iceland ltd. Company to stick to
their missions and fulfil that mission. The objectives and goals give a company a target to
complete and Iceland is following it efficiently.
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