Detailed Analysis of Business Environment on Tesco: Unit 1 Report

This report provides a detailed analysis of the business environment, focusing on its impact on organizational structures and functions. The report begins with an introduction that highlights the significance of the business environment, followed by an examination of different types of organizations, including public, private, and voluntary sectors, along with their legal structures. The report explores the size and scope of various organizations, using Tesco as a case study. It analyzes the relationships between different organizational functions, such as marketing, HR, and finance, and how these functions link to organizational objectives and structure. The report also identifies the positive and negative impacts of the macro environment on business operations. Furthermore, it includes an internal and external analysis of organizations to identify strengths and weaknesses and explains how these interrelate with external macro factors. The conclusion summarizes the key findings and provides references for further reading.

Unit 1

Table of Contents
INTRODUCTION................................................................................................................................3
TASK 1 ................................................................................................................................................3
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures..........................................................................................................................3
P2 Explain size & scope of range of different type of organisations...............................................4
TASK 2.................................................................................................................................................6
P3 Analyse relationship between different organisational functions & how they link to objectives
/ structure.........................................................................................................................................6
TASK 3.................................................................................................................................................7
P4 Identify positive and negative impacts the macro environment has upon business operations. 7
TASK 4.................................................................................................................................................9
P5 Analyse internal and external analysis of organisation to identify strength & weakness...........9
P6 Explain how strengths and weaknesses interrelate with external macro factors......................11
CONCLUSION..................................................................................................................................12
REFERENCES...................................................................................................................................13
Books & Journal:...........................................................................................................................13

INTRODUCTION
In business sector, environment play important role in running of activities and operations
in smooth manner. Business environment is defined as process in which it comprises of external &
internal elements that affects the organisational as a whole (Kumar, 2016). Main aim of this report
is to understand the impact of business environment on enterprise functions. Tesco, a multinational
corporation headquartered in UK. Firm deals in retailing sector, hyper markets, super markets &
many other products such as cosmetics, apparels, etc. This report comprises of different types of &
purpose of organisations, size & scope of different firms, difference between organisational
functions & relation with organisation structure, positive & negative effect of macro environment,
internal & external analysis of enterprise and relation of strength & weakness with external macro
factors.
TASK 1
P1 Explain different types and purposes of organisations; public, private and voluntary sectors and
legal structures.
In enterprise, structure is defined as process which depicts how to allocate task, resources,
supervision, which are carried out to achieve organisation objectives. Structure have a deep
impact on entity overall functioning process. By forming a appropriate structure it is easier to
analyse how to make decisions related related to work.
Private organisation- These are those type of organisations which carried out their business
with motive of gaining profit & revenue. Such type of firms mostly use their own money for doing
such businesses. Legal structure is presented below-
Sole traders-
They are those who run business as individual with use of their own personal money. They
have savings of money which they use it for development of their business. They are solely
responsible for their own decision making. For example- saloons, restaurants, clubs, lounge etc.
Private limited-
These are type of firms who have privately owned business but with limited number of
shareholders. Such type of shares cannot be sold in market for personal use. In this, public are not
allowed to participate in decision making & also shares can be traded only between family or
friends. For example- Walmart is to be known as private limited company. (Prajogo, 2016). The

TESCO focuses on providing superior quality products and services to its user in order to satisfy
them. It aids assistance in attracting large number of user at marketplace.
Public limited companies-
In public limited companies, they are one which are shares can be traded for both sales as
well as purchase. Moreover, in this public is allowed to take participation in decision making. Main
aim of such type of enterprise is that they provide quality of goods & services to society or
community. For example- Mc Donald is being stated as public limited company.
Partnership-
It refers to private enterprise because profit, risks & others things are beard by partners
involved in partnership with equal ratio. Many firms use this partnership as aim of expanding
business at global scale. For example- BMW and Louis Vouitton are in being considered as partners
(Guerrero, 2019).
Public organisation- These enterprises are those in which they are managed and controlled
under government laws or regulations. Their main purpose is to deliver public services to
communities or society. For example- HSBC Holdings is viewed as public firm which provide
several services such as debit & credit cards, loans etc. Legal structure is explained below-
Central government department-
These are entity's that carry out their business activities by properly following legal laws,
governmental rules as well as regulations.
Voluntary Organisation- They are type of firms who get established with purpose to assist
society, community, and people to solve their problems & enhance their standard of living life.
Legal structure is discussed below-
Trust-
Trust is type of association which comprise of parties, shareholders, superior bodies etc.
They are people who take all decisions regrading firm (Metcalf, 2020).
So, stated matter depicts that there are various types organisations which are required to be
understood in appropriate way. Because choosing correct type of firm is essential for accomplishing
of goals & objectives. Furthermore, it helps in making correct decisions during process.
P2 Explain size & scope of range of different type of organisations
In enterprise, both size as well as scope is essential to be viewed. Scope refers to resources
or objectives which are required for completion of a project. By accessing it, decisions can be made
effectively.
Private organisations

These type of enterprises mostly run functions and operations with purpose to gain profit at
higher level. For example- Tesco is to be viewed as privately owned firm which is located
worldwide.
 Vision- In this, main their main vision is to be the trusted retailers around the world.
 Mission- Company's mission is to be first option of customers for delivering of high
products & services.
 Objectives- To extend business activities which leads to higher productivity?
 Size- Tesco size is wider as its employees size is 116403 across globe. Also, they have a
focused larger global supply chain all around world.
 Scope- The entity operates at at global level and is expanding business widely.
 Structure - Entity have straight forward structure in which they follow top down approach
at all aspects.
Public enterprise
This enterprise allows public to participate in decision making independently. Moreover,
shares can be also used as trading (Fabo, 2017).
 Vision- Their vision is to be largest banking group who are driven by commitment to help
people as well as community.
 Mission- HSBC mission is to deliver financial services throughout worldwide.
 Size- It has personnel across globe with approximately 2,32,958.
 Scope- HSBC also operating at international level and has wide range of business
operations.
 Structure- HSBC have top down approach in which decisions are made by top authorities,
Voluntary organisations-
Such kind of enterprise run business activity with purpose of helping nature & assisting to
people of community. Cancer Research UK is viewed as voluntary organisations.
 Mission- Cancer Research mission is to protect & maintain healthy environment in
community and amongst people.
 Vision- Securing the life of people by removing diseases related to cancer.
 Purpose- Top safeguard health of every individual suffering from Cancer.
 Size- The size of a company is limited & as it has subordinates and volunteers around 300.
 Scope- Cancer Research also operates at international level & has volunteers at worldwide.
 Structure- In this, it have a flexible structure as decision making process is carried out by
involving everyone in firm (Guo, 2020).

The given paragraph states that sized as well as cope of entity is needed to be examined so
that it is easy to access information for functions or operations. By analysing them, they assist in
carrying out other activities properly.
TASK 2
P3 Analyse relationship between different organisational functions & how they link to objectives /
structure
Organisational functional are necessary to be examined because they are base of every
entity through which they are able to carry out resources, capital, employees etc. in most efficient
manner. Every firm have different functions which they linked to their management structure. It is
crucial to analyse relationship between functions & structure. In relevance with Tesco, they also
have several types of functions which are described below-
Marketing and HR department- Marketing department are those which perform functions
like advertising, promotions, sales generation etc. This department is responsible for enhancing
overall productivity of business at larger scale. Whereas human resource department are one who
perform functions like hiring, recruiting, selection & are responsible for managing workforce at
workplace. In reference with Tesco, they have highly efficient HR who hire talented candidates and
maintain discipline and in marketing those personnel are assigned with roles, tasks according to
their level of skills (Chelladurai, 2017). The entity has divisional structure & these functions of
enterprise depend upon departments which directly have impact on organisational structure. In
addition to this, the HR manager of TESCO focuses on recruiting talented subordinates that is
helpful in providing effective facility related to marketing of products and services to its user for
satisfying them. It aids assistance in increasing sales and profit margin in future period of time.
Advantages
 Main benefit of this function is that it helps in achieving of organisational goals &
objectives at all level.
 Moreover, they assist in development of all strategies and appropriate decision making
process.
 Also, though use of these functions it is easy to implement effective strategies.
Disadvantages
 Cost involved in these is expensive because of their wider use in organisational context.
 To carry out them, high level of skilled employees is needed by entity to get the better
results.
Finance & market department- In finance section, they unpin marketing department in

their activities so that all stated objectives are achieved properly. Marketing section main role is to
examine & analyse company's campaigns, promote product of firm etc. Both these departments are
linked with each other which help Tesco to have correct form of structure within a management
(Chión, 2019). Herein, the finance manager focuses on providing finance to marketing department
that helps in promoting products and services in front of user at marketplace. It aids assistance in
increasing profit margin and sales of company in future period of time.
Advantages
 This function helps in accessing company's financial information & using it in proper way to
achieve objectives without facing any error or issues.
 Another benefit is that it also assists in generation of new ideas.
Disadvantages
 To use them, deep level of knowledge is needed by management so that it is easy to solve
disputes.
 Then, they are time consuming process & a slight change will cause a huge impact on
business operations.
 Moreover, new correct use of tools, software is necessary to implement them in effective
manner (Mahlangu, 2018).
Human resource and finance department- Further comes HR department linking to
finance section. Under finance department, they they are have responsibility of generating profit &
managing all financial transactions so that statements are prepared appropriately. Human resource
section is linked with this department because with use of organisational capital they perform their
roles in most efficient way by use of advanced tools and software. Both these affects undertaken
entity at deeper level because through them structure of management is formed/ presented further.
Advantages
 It is useful for firm because it assist in using of resources in most efficient manner. Through
this, company is able to identify appropriate resources.
 Another one is that this help business to make changes by in cost effective way so that
optimum use of capital is done (Parray, 2018).
Disadvantages-
 Both HR & Finance department require updated tools & expertise to get performed properly.
 Further drawback is that they initial cost of implementing them is high which disturbs the
overall structure.

Organisational chart & structure of TESCO
Therefore, the above explained paragraph specifies that all discussed departments reflects
organisational functions. Moreover, they are interlinked with each other according to which they
perform functions.
TASK 3
P4 Identify positive and negative impacts the macro environment has upon business operations.
In business environment there are two types which are micro and macro environment.
Micro environment are defined as factors which have a impact on business decision making process
as well as on performance. There are several components which come under this category like
competitors, customers, shareholders etc. In reference with chosen firm, they also get affected by
components.
Macro environment are those who which affects business or organisation structure as a
whole system as they operate in both socially & economically. In relevance with selected entity they
examine these elements by using PESTEL Analysis.

PESTEL - It is a framework which is used by entities to determine external or macro
environment elements which impact on organisations activities at wider scale (Nurmi, 2018).
Moreover, this concept is used as a tool by companies to track the environment they’re operating in
or are planning to launch a new project/product/service etc. In relevance of Tesco, they main aim of
using this framework it is easy for them to conduct market analysis easily which is beneficial for
making decisions. It has several elements which are discussed below-
Political factors-
In this, it comprises of several variables such as environmental law, political stability or
instability etc. These have impact on corporation at deeper level of scale. In context with chosen
firm, as it operates at wider level they have to consistently change their policies for example with
introduction of Brexit there has been a huge impact on entity's overall structure (Ervural, 2018).
Positive- Positive impact of this factor is that company is able to get reliable information
regarding their internal as well as internal structure.
Negative- Due to change regulations of Brexit, selected firm is unable to cope up with new
changes.
Economic factor-

These include variables such as inflation or deflation rate, tariff or non-tariff rates etc. They
also affects company because in view point of selected corporation they have have to remain active
in to be aware about changes in economy of different countries in which they are operating. Due to
current pandemic situation, many countries have been affected along with business sector. It has
disrupted the company's structure.
Positive- With rise of need of foreign exchange rates, it has positive impact on chosen entity
as they easily expand their activities globally.
Negative- Due to frequent changes in economic variable leads to negative effect as Tesco
find it difficult to establish or open their new stores in some of the countries.
Social -
Then arises social in which it includes variables like beliefs, values ethics, region, culture,
taste or income of individual etc. It is necessary to be aware about these social elements so that
functions are operated accordingly. In relation with undertaken corporation, they have been able to
meet up all demands of customers according to their culture, taste etc. (Kumar, 2016). This has
increased their goodwill in market.
Positive- By proper having knowledge about these social factors, Tesco goodwill increases
at higher level.
Negative- Due to using of excess use of resources, it is negatively affecting upon theior
operations and their values.
Technological-
With increase use of technology, it has become essential for business sector adapt with
changing trends. So, in relevance with chosen entity they regularly update their online website with
new/ updated features. As such focusing on digitalisation has increased customer ratio by 43 %.
Furthermore, it has also leads to accessing of new opportunities at higher scale (Prajogo, 2016).
Positive- Main positive effect of this factor is that due to using of social media tools and
digital tools in firm, Tesco has been able to access to large customers.
Negative- Negative impact of this factor is that using of technology over limit leads to cost
expensive which negatively affects the structure of firm.
Environmental-
It is another component in which it involves pollution, waste management, green agenda,
etc. These variables do have impact on entity as Tesco has reduce use of plastic at wider level. By
introduction of this phase, it leads to increase of sustainability period for longer period of time.

Positive- When these factors are adapted it positive impacts upon firm goodwill.
Negative- Due to reduction of plastic in their manufacturing might leads to bad quality that
leads to negative results.
Legal
Then at last one is legal in which it comprises of agreements, contracts etc. With change of
regular governmental policies, it have direct impact on operations of a company. For example- there
were many issues which were faced by Tesco because of bias/ gender at workplace. With arises of
many legal issues it has somehow affected goodwill of entity. PESTEL analysis is needed to be
conducted in correct way so that it is easy to achieve correct results with use of information’s or
market research.
Positive- It has positive impact as company follow all legal procedures and carry out
activities legally; Tesco is able to maintain good relations with government.
Negative- Following all legal rules and regulation is difficult and is time consuming which
negatively impact upon management functions.
TASK 4
P5 Analyse internal and external analysis of organisation to identify strength & weakness
SWOT Analysis
It is tool which is adopted by entity to determine their inner capabilities by accessing
strength, weakness, opportunities & threats. To use this tool, deep level of market research is
required so that appropriate information is use. Corporation has to be active so that they are able to
access correct credentials. This analysis is designed to facilitate a realistic, fact-based, data-driven
look at the strengths and weaknesses of an organization, its initiatives, or an industry. The
organization needs to keep the analysis accurate by avoiding pre-conceived beliefs or gray areas and
instead focusing on real-life contexts.

Strength
 Main strength of chosen firm is that it is
located globally which makes it easy for
them to access larger customers.
(Guerrero, 2019).
 Entity has large number of cash as a
reserve which they uses for expansion of
portfolio.
Weakness
 The undertaken corporation have many
branches or subsidiaries but some
branches are not performing properly.
 Due to high cost of inventory, it is
difficult for many customers to purchase
the high cost product.
Opportunity
 Because of being a top retailers in UK &
Europe they have been able to attract
many other businesses & it leads to
increase of strategic alliances with many
companies.
Threats
 Due to rise of competition, many rivals /
competitors have been able to
partnership with each other which with
aim of dominating market of Tesco.
(Metcalf, 2020).
HSBC- SWOT ANALYSIS- Public organisation
Strength
 Main strength of HSBC is that it has
goodwill in market and due to which it
has large customer base in market.
 Further, they operate at global level and
which reflects their financial strength.
Weakness
 Due to many debts taken people, it is
difficult for organisations to expand their
operations or services.
Opportunity
 HSBC has opportunity of gaining more
Threats
 Biggest threat of firm is that due to small

skilled employees due to this pandemic
situations.
banks, they might loose their customer
base and because of ongoing COVID-19
situations employees turnover rate is can
increased.
So, from discussed SWOT analysis it is seen that selected firm make changes according to
their strength and weakness. Thus, it is necessary to for them to examine them in appropriate way.
Both external as well as internal analysis is required to be carried out in such a way so that
capabilities are accessed at deep level.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
BASIS Strength Weakness
Political factors
Their main strength is that
company mostly operates in its
home country which is UK &
have stable politics because
changes are not consistent.
Occurrence of changes affects
entity's overall performance
level.
Economical
Due to current ongoing
situation of pandemic, demand
of products have increased as
people mind changes & switch
to quality focused. (Fabo,
2017).
Due to restrictions of in many
areas, many changes have been
made & still in process which is
affecting operations of business.
Social
The entity is able to meet up
with society & consumer
demands at all aspects because
of their wider portfolio.
With regular changes in income
& taste of particular individual
it creates a deep impact on
growth of corporation.
Technological
With use of advanced software
they have been able to access
larger number of customers.
(Guo, 2020).
It has increased the cost of
production of firm which leads
to use of more capital.
Environment Because of their focused on
reducing of wastage they have
To reduce wastage, they have to
use more resources which

been able to increase goodwill
in market.
negatively affects the
environment of business.
Legal The entity follows all types of
rules, regulations, laws which
help them to run all operations
smoothly.
They have to be careful at every
aspect because a slight change
or error in rules or regulations
will affect their code of ethics.
The discussed matter depicts that strength and weakness are related with macro external
factors. It is seen from above stated table which shows their relevancy. They both are needed to be
understood in correct way.
CONCLUSION
After a brief analysis of above report, it has been concluded that business environment have
deep effect on business functions as well as operations. Discussions have been made about entity's
functions with structure, types of organisations, comparison between different enterprises. Then,
PESTEL & SWOT analysis, their inter-relation with each other is also explained briefly. Thus,
environment affects organisational at deeper level.

REFERENCES
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