Business and the Business Environment Report - Analysis & Evaluation

This report provides a comprehensive analysis of the business environment, exploring different types of organizations (public, private, voluntary) and their legal structures, size, and scope. It examines organizational functions and their interrelationships, focusing on how they contribute to achieving organizational objectives. The report delves into the impact of the macro environment on business operations, utilizing PESTLE, SWOT, and TOWS models to analyze internal and external factors. The second part of the report focuses on Tesco, applying these analytical tools to understand its business environment and strategic positioning. The report highlights the significance of understanding the interplay between organizational functions and external factors for effective business management and strategic decision-making. This report offers valuable insights into the dynamics of the business world, providing a solid understanding of the key elements that shape business success.

Business and the
Business Environment

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures......................................................................................................................3
P2, Explain the size and scope of a range of different types of organisations.............................6
TASK 2............................................................................................................................................8
P3. Explain the relationship between different organisational functions and how they link to
organisational objectives and structure. ......................................................................................8
TASK 3............................................................................................................................................9
P4. Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.................................................................................9
TASK 4..........................................................................................................................................13
P5. Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses...........................................................................................................13
P6, Explain how strengths and weaknesses interrelate with external macro factors.................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Business is a mixture of different settings and events including some commercial activities
which are performed and executed by companies or individuals as entrepreneurs for motive of
profits and attaining the strategic objectives by following all the legal structure and operational
guidelines (Alotaibi and Liu, 2017). The Report is divided into two separate parts in which the
first segment highlights different types of organisation that exist in the marketplace with their
purpose and legal structures and also elaborate on their size and scope. Several functions and
their interrelationship that are present in the organisation are also evaluated. The second part of
the report is developed on Tesco which is a supermarket store in United kingdoms developed in
1919 by Jack Cohen. The Macro environment of a company is evaluated their PESTLE, SWOT
and TOWS model is utilised for understanding the internal and external business environment
and knowing the interrelationship among them.
TASK 1
P1. Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures
Meaning of a Business Organisation:
Business organisation is a term that defines a structure and objective of a specific entity that is
developed according to be plans and overall external and internal business environment. Every
general business is the signed with the focus over two specific objectives that is of earning higher
profits and moving towards growth and success by spreading awareness and making that are
present in the society. There are numerous types and categories of businesses which are being
run in the environment. These business organisations are defined below:
Types of Business Organisation:
 Sole Traders are individuals single handily set up their business which is known as sole
proprietorship where the ownership and control of all the business related activities are in
hands of single person who is not a separate from the business. In other words an
individual who is running their own businesses are known as a sole traders who are
responsible and liable for all the liabilities and enjoy the benefits earned.
 Partnerships is a business setting that is developed by efforts of more than two parties
who are known as partners. The relationship between partners is governed and regulated

with the help of a partnership deed also known as an agreement which are signed by all
the parties involved in the partnership business which define their specific scope and
structure of the partnership along with representing all the responsibilities and role of
each partner and their capital investment ratio.
 Private Sector organisation are privately held businesses which are initially started with
the smaller level holding small size and scope but with growth and success changes into a
large organisation. A privately owned business is small on initial level and therefore there
are less than 50 shareholders involved in the business according to United Kingdom the
entity is not allowed to trade there shares publicly not even able to exercise any trading
activities on any stock exchange. Hilton Hotel is a good example of a private organisation
which is dealing at international level. Specifically, the size of a private sector business
organisation can be both small and huge based on the business which is performed by the
organisation or it also depends on the market in which it is performing like it is local,
national or International. Tesco PLC is considered to be a public organisation which also
run as a private one because its shares can be owned by public as well. Size specifically
based on the different levels like local, national or international, in which a public
organisation is performing. On the other hand, the scope of an organisation within private
sector is to earn maximum level of earnings through specifically delivering required
services to the customers and clients. Including this, the goal private organisation like
Hilton hotel is to to become the leader throughout meaning high profit margins within the
industry in which it is performing like hospitality sector.
 Public Sector Organisation are most commonly limited liability companies which has
the power to sell their shares in stock market and conduct appropriate sharing activities
with the help of available stock exchange. Private sector organisation unnecessarily have
to maintain a minimum capital of £50,000 in United Kingdom and are also responsible
for failing their financial returns and records every 12 months by following the respective
accounting principles. Over public sector organisations have to get their certificate after
reading from Companies House before conducting any share exchange activities
(Alotaibi, 2016). Crown prosecution is said to be a public sector organisation which
specifically helps different individuals with legal issues. Crown prosecution is
performing at national level therefore it has great number of employees that are dealing

with different legal issues. Goal of a public sector organisation is to embrace the living
standards of civilians of a country.
 Not for Profit Organisation (Voluntary) are the businesses which are set up in the
market with a very different objective from other business entities that is not related with
any financial gain and earning profits bringing change in public and in society by
providing services to those who are unable to have appropriate opportunities for
completing their daily requirements. In present context, Oxfam can be considered as a
good example of a not for profit organisation, which also so consider as a charity
organisation that helps people who are in need. Goal of a voluntary organisation is to
specifically help the people who are in need like vulnerable. Scope of this organisation is
to improve the living standards of a group, community or the society. Basically, the size
can be both small and large in numbers based on the the area in which a non-profit
organisation is dealing.
Difference in Types of Business Organisations:
BASIS PROFIT
ORGANISATION
PRIVATE
ORGANISATION
VOLUNTARY
PURPOSE The purpose of public
sector enterprises as
they are government
bodies that to seek to
deliver appropriate
goods and services to
to people including
military, police,
public, infrastructure
and other for benefit
of society.
The private
organisations are the
integral part of
country's economic
systems which are
privately owned by
individuals and group
of people and running
the operations for
profit making.
privately owned
organisations are an
important source of
growth and
development and
The sole purpose and
initiative of voluntary
organisation is to
provide benefits to
the society by
enriching it and
without any
expectations of
returns and profit. the
voluntary
organisation also
create social wealth
and works for benefit
and improvement of
the society.

generation of per
capita income of
country along with
widening the
countries GDP
(Batocchio, Ghezzi
and Rangone, 2016).
SET UP FOR Example of Virgin
mobile as a public
owned company and
one is the leading UK
Challenger banks.
The focus of virgin
mobiles is laid on the
approach which seat
to offer a good value
to the customers by
delivering a positive
contribution towards
the society.
Tesco is the best
example of a private
Organisation in
United Kingdom.
Tesco is the British
multinational retail
company which has
been sitting to lay
emphasis on
generating a huge
range of revenue and
income by opening a
competitive
advantage of its own.
Cancer research UK
is a voluntary
organisation and they
provide social
services by
conducting research
and campaigns for
preventing cancer
from the society and
spreading awareness
amongst people.
SIZE Virgin Mobile is a
large organisation it
self holding
operations in huge
size and its employee
base is vast and wide
spread in those areas
where the firm
operates.
It is a large
organisation
operating in number
of location worldwide
and in huge markets.
Cancer research is a
voluntary
organisation who
have small permanent
employee base other
enter and leave on
their own will. `

SCOPE The geographical
scope of Virgin
Mobile is wide
spread from UK to
many other
developed and
developing markets
in the world.
Same is the case of
Tesco, the firm is
established in UK
and now operating in
markets like Ireland,
India and others.
The scope of Cancer
research in
geographical term is
limited in UK.
P2, Explain the size and scope of a range of different types of organisations
Difference between Micro, Small, Medium and Large Organisation:
BASIS MICRO
ORGANISATION
SMALL
ORGANISATION
MEDIUM AND
LARGE
ORGANISATION
Size Micro Enterprises are
small business sectors
where employment level
is very low and with low
investment capital
(Belas and et. al., 2018).
Small business
Enterprises are owned
by independent bodies
and small number of
workers is involved in it
seeking to enhance their
business activities and
operations in order to
for long run and
increasing their sales
volume.
Medium and large
organisation includes
those employees
working as voluntary
membership and mostly
involves the
multinational bodies
holding the possibility
of increasing their
growth on a very fast
scale.
Scope The scope of micro
business organisation is
in developing countries
as they constitute of this
type of enterprises in
large number there all
The small size
businesses privately
owned businesses
mostly sole proprietors
working in partnerships
holding a chance of
Medium and large
organisation includes
multinational businesses
that work as a part of
government sector and
thereby earning huge

the necessities are
compelled by micro
businesses adding value
to the economy and buy
domain there in scope
for better income and
opportunities.
bearing in their sizes
and revenue structure by
capturing appropriate
opportunities.
profits. The capital is
kept aside for future
developmental purposes
for seeking to develop
internal aspects of
company.
Number of
employees
10 or less 50 or less 250 or less
Goals Goal of a micro level
organisation is too on
enough to fulfil daily
needs or to survive
within today's
competitive market.
Goal of a small
organisation can be the
same as micro level
companies but the major
difference is they
specifically earns more
than the micro ones.
Goals can be different of
both medium and large
level organisations
because, some may have
to become a leader
within the area in which
they are performing and
some of others might
not stop themselves by
their only but to earn
maximum profits
through expanding
business at International
or National level.
TASK 2
P3. Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
In previous sections it has been identified that there are different types of business organisations
that is Private, Public and Voluntary. This business organisations are of different sizes and scope
which are separating them from each other into Micro, Small, Medium and Large businesses and

also their business legal structure and objectives differentiate from one another. Every
organisation which exist in the marketplace have different functions which ones integrated and
complete their respective task contributes to the ultimate organisational goals and objectives with
the help of strategical means. Tesco is a privately owned entity and considered as one of the
largest retailer in United Kingdom holding several operations and departmental units as it is a
multinational organisation which is diversifying into different geographical locations serving to
customers with its numerous stores.
Organisational functions:
 HR department: Tesco PLC, already has an effective HR department which helps
company in recruiting the best employees based on their qualifications and skills who fits
the vacant seats within the company.
 Finance department: This is said to be the Primal department of Tesco PLC because
this department looks into financial books and keeps an eye on all the expenses and profit
margins that takes place every year.
 Research and development Department: Another crucial organizational function of
Tesco PLC, which helps in analysing the market and pulling out the information about
different trends that took place which helps in taking right decisions in order to grab the
competitive advantages within Retail industry.
Organisational structure: The organisational structure which has been followed by Tesco PLC
is hierarchical, which helps company in in rotating the information in a systematic way.
 Tesco Plc. Governance Structure
Illustration 1: Tesco Corporate Governance Structure, 2016
(Source: Tesco Corporate Governance Structure, 2016)
 Tesco Plc. Organizational Structure

Illustration 2: Tesco organizational structure at store level, 2016
(Source: Tesco organizational structure at store level, 2016)
Under this section the organisational functions of Tesco are elaborated along with their
interrelationship with one another (Chaouk, Pagliari and Moxon, 2020).
 Sales and Marketing department- Sales department of Tesco is considered as one of
the most important and essential operational unit because the nature of the business entity
is of retail running in a competitive environment. Therefore revenue generation is one of
the biggest objective of the company and which is fulfilled by sales department of Tesco.
Marketing department of Tesco is responsible for several tasks from conducting a market
research to building a good brand image of the company in market places to conducting
appropriate promotional actions for Tesco. both sales and marketing department of Tesco
and their tasks are interlinked because according to the market research conducted by
marketing unit and strategic and plans and promotional actions taken by them the sales
department and sales individuals develop there sales strategy. It is important that both the
departmental units are effectively communicating with one another and integrating the
task for bringing a alliance in between there external communication with customers.
 Human resource and Marketing department- The Human resource Department of
Tesco a vital role in the organisation with the most appropriate and talented workforce

also by fulfilling the manpower needs of company. Human resource Department
undertakes recruitment and selection activities on behalf of Tesco for bringing the best
experts and developing appropriate operational teams. Marketing and Human resource
Departments tasks are interlinked as the HRM unit will bring the most export marketing
individual for the company. therefore it is very important that both the department in
units are communicating with one another and fulfilling each others requirements so that
the best people can be attracted and employed by Tesco.
TASK 3
P4. Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
Micro environment refers to the external business environment of an organisation which
influences and impacts several activities and decisions of company. Therefore, PESTEL analysis
tool is utilised for Tesco to understand all the external factors that are influencing business and
operations. PESTEL analysis have six elements which are considered as the key drivers of
change leading to respective threats and opportunities available in front of the business existing
in the external business environment. Political- Tesco is a supermarket Store in Retail industry holding its headquarters in
United kingdoms but operates through more than 12 to 15 other countries leave it
exposed to many political elements that can affect the operations and objectives of Tesco.
The European union referendum is causing a huge risk for Tesco in relation with the
investors and that is imposing a negative impacts on the business. Also currently the UK's
political environment is unstable that also imposes a threat and negative impact causing
huge political issues which are rising constantly (Chattopadhyay and Bhawsar, 2017).
o Positive: Rather than focusing on United Kingdom’s market, Tesco PLC may
effectively take into consideration of different growing markets where it can
expand its business which would be really very helpful from going through the
impact of Brexit.
o Negative: The negative impact that came in front due to Brexit was that the
market become open which was considered to be the Primal chance for many

foreign business organisations to start performing within United Kingdom which
can be taken as a threat for Tesco PLC. Economic- Currently in United Kingdom there are two specific factors that are
negatively impacting the economy which is initialisation of BREXIT deal and outbreak
of covid-19 due to coronavirus. It implies that domestic businesses of United Kingdom
are severely affected because of the two significant reasons and therefore Tesco is also
being negatively impacted due to this economic issues. The economy of United Kingdom
is becoming unstable and unpredictable which is causing a threat on Tesco and its
operation specifically on profitability and revenue standards of the entity.
o Positive: Specifically, outbreak of novel coronavirus also brought ample number
of opportunities for Tesco where it can spread its business through online
platforms which will not only help company in getting attention of new customers
but it will also help existing customers to be loyal.
o Negative: Many of the supermarket in United Kingdom and different stores were
kept close due to outbreak of pandemic COVID-19, which impacted negatively on
productivity and profitability of Tesco PLC. Social- The social environment around the globe and more prominently in United
Kingdom is unstable and unpredictable because of the regular dynamic changes taking
place in customer trends and in overall business operations. Therefore it is not easy to
analyse the impact of social factors on Tesco. But the people of United Kingdom are
considered as loyal customers and which is a beneficial element of social external
environment which is causing a positive impact on Tesco in such conditions as well.
o Positive: Organic products are offered by Tesco PLC within its super market
which can be considered as a positive impact on brand image of the company in
front of the society and its potential customers.
o Negative: Due to greenwashing act, Tesco PLC might go through different range
of problems and can shift the interest of of loyal customers towards the other
business organisations that are offering the same sort of alternative products just
like Tesco PLC. Technological- The super store Tesco is an organisation that always keeps up with the
regular updates and changes taking place in the technological market. Tesco always