Business and Business Environment: Types, Functions, and Analysis

This report provides a comprehensive analysis of the business environment, exploring different types of organizations including private, public, and voluntary entities. It delves into the purpose, legal structures, size, and scope of these organizations, using examples such as Tesco plc, BBC, and Cancer Research. The report examines the relationship between various organizational functions and their link to objectives and structures. It also includes an analysis of internal factors using SWOT analysis, and assesses the positive and negative impacts of macro factors on businesses. The interrelation of strengths and weaknesses with macro factors is discussed, providing a well-rounded understanding of the complexities within the business and its environment. The report aims to provide a detailed overview of the business environment and its impact on various organizations.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1: Different types and purpose of the organisation with their legal structure...........................4
P2: Size ans scope of different types of organisation ................................................................6
M1: Analysis of size and scope linked to the objective offered by the company.......................8
TASK 2............................................................................................................................................8
P3: Relationship between different organisational functions and their link to objectives and
structures.....................................................................................................................................8
M2: Advantages and disadvantages of interrelationships of functions....................................10
D1: Critical analysis of complexities of different types of business structure..........................10
TASK 3..........................................................................................................................................11
P4: Positive and negative impacts of the macro factors............................................................11
TASK 4..........................................................................................................................................11
P5 : Analysis of internal factors with the help of SWOT.........................................................11
P6 : Interrelation of strengths and weaknesses with macro factors..........................................12
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1
.........................................................................................................................................................1

INTRODUCTION
`Business is an activity which is undertaken by the individual to make money by selling
goods and services. Business environment is a collection of various internal and external factors
which has influence on the business. Internal factors of the organisation can be controlled by the
organisation but their analysis is important as on the basis of this they can identify their
competencies. While the factors of external environment has various influences which cannot be
controlled by the organisation but their analysis is crucial for the organisation as it helps to
determine the opportunity and the threats. For this report the organisation that is taken into
consideration is North West London Chamber of commerce, which provide assistance to the
business in making their businesses successful. This report is prepared for the presentation for
which it includes different types of organisation on the basis of their motive, size, scope and
relationship between various functions preformed by them. Also the analysis of internal and
external environment is done which will help the businesses to understand the opportunities and
threats present in the business environment which can be availed by them on the basis of
strengths and weaknesses.
TASK 1
P1: Different types and purpose of the organisation with their legal structure
Organisation are the entities which are established by the individual or by the group of
people. Every business is established with some motive which can vary from organisation to
organisation. On the basis of which the organisation are classified into different types which are
given below:
Private organisation : Private organisation are those organisation which are owned,
controlled and managed by the individual or by the group of people. They are established with
the motive of profit making. They are regulated by various laws imposed by the legal system of
the economy in which they are operating. For e.g., Tesco plc is a private company (Tesco
organisational structure, 2019).
Purpose : The purpose of the company is to earn profit by providing the goods and services to
the customers as per their needs and wants.
Legal structure : The legal structure of private organisation is :

 Sole proprietor: It is the organisation in which the funds are invested by an individual and
they control and manage the entire organisation. For all the liability and the risk they are
sole responsible but they do not have to share their profits with others (Bull and et al.,
2016).
 Partnership: In this type of private organisation the businesses are established by two or
more partners on the agreed terms and condition. The liability of the partners are
unlimited and but they share their profits as per the agreed ratio. Partnerships are
regulated by the acts which are imposed by the judicial system.
 Limited Companies: Limited company are those in which the investment are made in the
business by procuring the funds from the public to whom the shares of the company are
provided. The liability of the members are limited to the extend of the share in the
organisation. They are highly regulated companies as they involves the money of the
general public (Çelik, Metin and Çelik, 2012)
Public organisation : Public organisations are owned, regulated and monitored by the
government. The motive of these organisation is welfare of the society and but also to earn
profits from the operations. The profits so earned are used in the welfare of the society and to
meet up the expenses. For e.g., BBC is a public organisation.
Purpose : The main motive of these organisation is the welfare of the society by developing the
infrastructure, uplifting the standard of living etc.
Legal structure : The legal structure of the public organisation is :
 Centre government : It is an apex body which regulate the entire economy by dividing it
into several territories. They allocate the responsibilities to different officials who
manages the departments. Centre allocates the funds to them so that they can effectively
manage their department.
 State government : State is the one who manages a particular territory on the basis of
powers provided to them by the centre. They work for the development for that particular
territory and manages the department which comes under state. The funds are allocate to
them by the centre.
 Local government : Local government is responsible for managing the local community
by developing the infrastructure in their area, resolving the basic issues etc. which helps
the people of the community to improve their standard of living.

Voluntary organisation : Voluntary organisation are formal associations which are
established with the aim of social welfare. The individuals joins the such organisation voluntarily
to work for the betterment of the society. They are established for specified purposes and are
regulated by various act as not-for-profit organisation. For e.g., Cancer research is a voluntary
organisation (Deasy,and et al., 2016).
Purpose : The main motive of these organisations are betterment of the society by undertaking
various developmental programs.
Legal Structure : The legal structure of voluntary organisation are :
 Trusts : Trusts are established to manage the land and property and to manage the funds
received for the specific purpose. They are managed by the trustees who are treated as the
nominal owners of the property of the trust.
 Unincorporated Association : They are established with the aim of help and provide
safety to the society for any specific concern which is temporary in nature. Such
associations are joined by individuals voluntarily to work on the common issue.
P2: Size ans scope of different types of organisation
The organisation performs various functions as per the nature of the their business. The
size, scope, objectives vary from organisation to organisation. For different type of organisation
their objectives, products and services, stakeholders are discussed below :
TESCO PLC : Tesco plc is British multinational retail company which deals in groceries
and general trading goods. It is a private organisation who has been operating across UK along
with that in various other countries. They offers a wide variety of products in their store which
are of low cost and designed in such a manner that it can easily attract the customers.
Vision : The vision of the company is to be a high valued company by the customers and
community in which they operate also making the colleagues committed towards the
organisation (Deshpande, 2018).
Mission : The mission of the company is to be master of customer by providing them better
quality of products and easier way of living.
Size and Scope : They have been operating in whole of UK and various other countries such as
India, Malaysia , Thailand etc. with a large work force of more than 450000 people in their
organisation. They operate their business from the stores which are easily accessible to the
customers.

Products and services : The products and services offered by them are books, clothing,
furniture, toys, electronics etc. They have their subsidiary companies which offers various
services related to bank, mobile etc.
Stakeholders of Tesco Plc : The stakeholders of the company are shareholders, employees, local
community, government, suppliers, financers etc. for which they operate the business and tries to
maximise the value that they offer.
BBC : British Broadcasting company is a public company which is financed by the
government out the license fee collected by them from the general public. It is registered under
royal charter of UK and it is regulated as per the charter's conditions. BBC is one of the oldest
broadcasting company which operates through out the globe (Evans and et al., 2017).
Vision : The vision of the company is to be the most creative company in the world by
providing the customers greater value.
Mission : The mission of the company is to act in the interest of the public by serving a
large audience with high quality and differentiated products, services.
Size and Scope : They have been operating in different counties through the world from
so many years which is why they have amazing experience in journalism and media. They have
more than 24.400 employees worldwide that helps them to improve the quality of the services
that they offers.
Products and services : As they have been operating from so many years so the products
that they provide are of television, radio, and online while the services provided by BBC are
related to broadcasting, web portals, radio. They broadcast information related to sports, weather,
news etc. through television, radio and their websites (Hamilton and Webster, 2018).
Stakeholders of the BBC: The stakeholders of BBC are both internal and external, to
which they provides their quality services. Some of their stakeholders are media partners,
journalists, employees, society etc.
Cancer Research : It is an organisation which is engaged in conducting the research to
determine the diagnoses for the cancer, various measures that can be taken to reduce the number
of patients of cancer. The aim of the organisation is to make the world free from cancer. They
gather the funds by way of donations, legacies and also they get it from the government as part
of financial assistance to them.

Vision : The vision of the company is to bring the day when all the cancer throughout the world
are cured.
Mission : The mission of the company is to identify the cure for different types of cancer so that
the world can be made free from cancer.
Size and Scope : It is an organisation which in working in UK to create awareness about Cancer.
They have their research centres in UK but it aims to cure the cancer throughout (Häuberer,
2014).
Products and services : They undertake various researches which helps them to determine
various diagnosis, preventions that can be taken and the treatments to be given the patients.
Stakeholders of the Cancer Research: Their stakeholders are their members who work with
them and the society whom they work for.
M1: Analysis of size and scope linked to the objective offered by the company
The different type of organisation has their own structure, size and scope which are based
upon the objectives of the organisation. Private organisation are established with the aim of the
profits for which they expand their business so that they can increase their profits while
voluntary organisation work for the welfare of the society so they operate for the particular
concern irrespective of the area they are serving. Public organisation work with motive of profits
and welfare both so they expand their business to earn profits so that they can increase their
profits which can be used for the betterment of the society.
TASK 2
P3: Relationship between different organisational functions and their link to objectives and
structures
Business performs various functions which helps them to achieve their objectives. But to
increase the efficiency of the functions integration of the functions is important as it helps them
to contribute to the overall objective. The interrelation between different functions of Tesco plc
are :
 Finance function and marketing function : Marketing function of Tesco conduct the
research on the basis of which they determine the changes that are to be done in the
existing product line as per the requirement of the customers taste and preference. Such

research report helps the finance team to forecast the requirements of funds which helps
the management in taking the decision appropriately and on time.
 Production function and marketing function : Marketing team in Tesco forecast the
demand and changes required in the wide variety of products and accordingly direct the
production team to produce the specific quantity. While production department of Tesco
develops the new features in the products that helps marketing team to promote their
products (Laudon and Traver, 2016).
 Human resource function and finance function : Human resource department of
Tesco provides the finance team an efficient staff which is capable in recording,
controlling of finances while the finance department provide them the funds for the
training of the employees of the organisation. And also helps them to provides the
benefits and incentives to the employees.
Organisational objectives can be achieved when all the departments in the organisation
work for the common goal by integrating all the functions. Due to integration the redundancy of
the activities are reduces as all functions work for each other (Magomya and et. al., 2014)
Organisational structure is a system which helps the organisation in determining the
levels through which they can delegate the authority and the responsibility. In Tesco it helps to
identify the roles and the channel of communication in which one is responsible to other. The
various type of organisational structure are :
 Hierarchical Organisational Structure : In this structure, there are various level which
defines the roles, responsibility and the authority of the employees. This structure helps
to determines the communication channel which is top to down and it implies that the
chain of command is large in this.
 Flat Organisational Structure : In this type of structure, the employees are given roles,
responsibilities and authorities but they does not exist any level among the employees.
Employees have easy access to the managers which makes decision making easy as the
chain of command is short (Nickel and Eikenberry, 2016).
Tesco follows the hierarchical channel which helps them to delegate the authority and
responsibility. Also it makes it easy for them to give command to the employees and to integrate
the efforts of different functions towards their common goal. The organisation structure chart of
Tesco Plc is given below which helps to determine the interrelation among different department.

(Source : Tesco organisational structure, 2019)
M2: Advantages and disadvantages of interrelationships of functions
The interrelations has various advantages and disadvantages for the companies. In Tesco
the functions are interrelated which helps them to reduce the cost which they have top face due
to redundancy of the activities. It also helps to utilise the efforts and time of the employees as all
the functions work with each other which helps them to take the guidance from the other. But on
the other hand it affects the business operations as it can leads to chaos due to ineffective
communication and it develops the competition among the department due to which their
performance is compromised.
D1: Critical analysis of complexities of different types of business structure
Every organisation follows some organisational structure which helps them to allocate
the roles and responsibilities and also it becomes easier for the organisation to interrelate their
functions. But if affects the performance when the structure of the complex as it can lead to
various complexities such ineffective communication which can affect the decision making of
the company.

TASK 3
P4: Positive and negative impacts of the macro factors
PESTLE is defined as the market analytical tool which helps business organisation to
determine the external factors which can affect the market position of company. In context of
TESCO Plc, they will be able to determine each and every factor which can impact them
positively and negatively. Below, there is the detail description about the PESTLE analysis on
business organisation (Prajogo, 2016).
Political Factors: TESCO is one of the company which is directly affected with the
political factors which impacts on operational activity. Some of the political factors which is
needed to be considered is Tax rates, legislations and political instability and many more. Positive Impact: As government is stable which doesn't impact on changing the plans
and policies as low cost is charged. Negative Impact: Number of products are purchased from other county where import
duty is high which decreases the profit.
Economic Factors: It is one of the factor where TESCO focuses more because it has the
connection with the behaviour of customers at the time of buying products. Positive Impact: As customers of UK have high purchasing power which allows
company to sell qualitative products at higher price (Tahernejad, Khalokakaie and Ataei,
2013).
 Negative Impact: As recently UK had faced the effect of Brexit which has increased the
inflation rate due to which price of product are increasing and due to economic instability
people are not spending high cost on the products which they buy.
Social Factors: It is the factor in which TESCO is required to focus on change in
customer behaviour and demographic changes because it can affect on revenue of a company. Positive Impact: In present situation people are trying to buy products from single place
so that they can save time and by looking at this several other branches have been
establish by the company which is helping them to enhance the profit Negative Impact: There are number of people who wants to purchase organic food
products which have significantly reduced the profitability of TESCO.
Technological Factors: It is the factor where TESCO is needed to introduce latest
technologies which help them to sustain within the market

 Positive Impact: They have been able to develop the concept of online shopping for
customers which made easy for customers Negative Impact: As company have introduced number of new technological which have
increased the cost of product and reduced the overall profit.
Legal Factors: Company like TESCO have been influenced by different laws such as
safety laws , consumer protection laws and many more. Positive Impact: Here, company like Tesco follows each of the laws which have
increased faith of customers towards the company. Negative Impact:As per the guidelines of Food Retailing Commission, TESCO is unable
to sell any of the product and high and low price (Teng, Thekdi and Lambert, 2012).
Environmental Factors: Company like TESCO have to understand about the social
responsibilities and must reduce the environmental wastage by utilising the natural resources. Positive Impact: TESCO is able to create social awareness among the customers as they
uses the minimum amount of waste material
 Negative Impact: With continuous changes in environmental policies company is facing
tough competition in the market.
TASK 4
P5 : Analysis of internal factors with the help of SWOT
It is important for organisation to conduct the analysis of internal factors as it helps them
to identify the competencies of the organisation which will help them to grab the opportunities
and to reduce the impact of the threats.
SWOT analysis of Tesco
Strength Weakness
 Tesco has won many awards for the
excellence in their customer service and
the experience of shopping which they
provide to their customers.
 Tesco has developed brand equity and
has got global recognition.
 In the history of UK this is a brand
 Tesco is very vulnerable to some of
external profits such as finance profit.
 The competitive pressure has lead to
price wars which has reduced the profit
margin of many retailers.
 Their markets are limited to UK and
Europe which means Tesco has not

which has developed assurance and
credibility for all their customers.
focussed on developing it markets in
other parts of world which has limited
their market reach.
Opportunity Threat
 Tesco has a very profitable opportunity
that they can form strategic alliance
with other companies and brands who
belong to similar industry.
 Tesco can develop by growing its
business to the online platforms. They
can also focus on increasing the home
delivery service to other new areas.
 There re many new opportunities for
Tesco in the private label market. Also,
in those countries where the
performance is low joint ventures is a
good option for Tesco.
 Economic recession will is a big threat
to there company as this can lead to
reduction in the market share and also
company's profitability will also be
affected.
 Other global giants are a big threat for
Tesco as they are also offering products
at lower prices and they are having
large variety.
 Labour threats posses a threat on the
cost structure of Tesco which can
increase the pressure on its pricing
structure.
SWOT of Analysis of BBC
Strength Weakness
 BBC has a strong brand value as it one
of the oldest company.
 It is the largest broadcasting company
worldwide.
 The operating cost of BBC is very high
due to which they faces issue of deficit
in cash low.
 BBC faces many controversies as they
are blamed to touch the sensitive issues.
Opportunity Threat
 The technology that is used by BBC is
quite updated as they uses web
 Due to strong communication their
programs get influenced.

designs , software designs etc.
 They can add on the programs related
to fashion and for kids which is trendy.
 Emerging domestic channels affects
their operations and give them stiff
competition .
P6 : Interrelation of strengths and weaknesses with macro factors
Political Factors:
There are different factors which makes huge impact on operations of Tesco Plc which includes
government rules and regulations, taxation policy etc.
 Strength: The GDP of UK grows rapidly which becomes the major strength of Tesco Plc
as it makes easy for them to attract large number of people due to having their high
buying power.
 Weakness: Changes in taxation system may affect the sales figure of Tesco Plc which
may also disturb the performance of employees.
 Economic Factors: These include several factors such as interest rates, disposable
income of consumer, export and import duties etc.
 Strength: Tesco Plc provides large number of portfolio of products which can easily
attract numerous customers of different buying behaviours.
 Weakness: The import and custom duties may be the major weakness for Tesco Plc as
fluctuation in such duties may affect the profit of an organisation which may be shifted to
the buyer’s disposable income.
Technological Factor: UK is technological advanced nation which draws large number of
companies towards the country (Hair Jr and et. al., 2015). It includes advanced technology which
can reduces wastage of resources and increase productivity of an organisation.
 Strength: Tesco Plc is multinational organisation having good financial position in
market thus adoption of advanced technology such as TV Advertisement, social media
marketing etc. makes easy for them to increase their existing customer base and revenue.
 Weaknesses: Using outdated machinery or technology such as providing cash option
only and ignoring digital payment option to the buyer at the time of billing restrict
customers to reach their various outlets.

Social factors: These factors consists of buying behaviour or pattern of customers which mainly
decided the sales of an organisation.
 Strength: Research and development department of Tesco Plc assist other departments
such as marketing, production etc. to identify and analyse the actual needs and
preferences of their targeted customers. This helps them in making corrective policies
which matches their buying behaviour.
 Weaknesses: Tesco Plc employed huge number of workers coming from different
cultures and backgrounds. This increases the chances of arising conflicts regarding
communication and adoption of policies. Along with this, different customers having
different buying behaviour bounds Tesco Plc to maintain their pricing policy.
CONCLUSION
It has been concluded from the above report that Business environment consists of
different factors such as internal and external which brings more complexities and challenges to
different types of organisation such as private, public and voluntary. To analyse these factors, the
management uses analytical tools such as Pestle to deal with external factor and SWOT for
internal factors. Apart from this, different department of an organisation performs different
functions with the help of taking support from each other under existing organisational structure
of company.

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Online
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