Analysis of Business Environment: Tesco's Organizational Structure

This report provides a comprehensive analysis of Tesco's business environment, examining its organizational structure as a private company, its size, and its scope within the retail industry. The report explores the different types of organizations including public, private, and voluntary sectors, highlighting their purposes and legal structures. It delves into the relationship between various organizational functions such as marketing, production, finance, information technology, and human resources, illustrating their interdependencies. Furthermore, the report conducts both PESTEL and SWOT analyses to evaluate the macro-environmental factors, strengths, and weaknesses affecting Tesco. Finally, it discusses how these strengths and weaknesses interrelate with the identified macro factors, offering insights into Tesco's strategic positioning and operational dynamics within the competitive landscape. The report concludes with a summary of key findings and recommendations.

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Different types and purposes of organisations.......................................................................1
P2 Size and scope of different types of an organisation.............................................................3
P3 Relationship between different organisational functions.......................................................5
P4 The positive and negative factors of macro environmental factors within Tesco.................6
P5 Internal and external analysis of specific organisations to identify strength and wakkness .8
P6 Discuss strength and weaknesses interrelate with macro factors.........................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment consist of sum of both internal and external factors that includes
various aspects such as level of competition, employment, demand and supply, suppliers, client,
management, market trends and so on(Quinlan and et. al., 2019). The business environment is
dynamic and the manager has to adopt the changes in policies, procedures, rules and regulation
of the company so as to gain a significant position within the market. Tesco is one of the leading
retailer in UK that deal with large variety of products such as groceries, toys, furniture and
variety of financial services across the globe. Tesco is a renowned brand and is the third largest
retailer in the world that meet the needs of individuals. This report is based on different types and
purposes of an organisations such as public, private and voluntary. This report also cover the
PESTEL AND SWOT analysis to assess the changes of internal and external analysis within the
organisation. The interrelation between various departments is also covered in a report in various
aspects like human resources, finance, marketing and so on as each department perform different
functions and responsibilities
P1 Different types and purposes of organisations
Organisation comprises of group of people who work together for accomplishment of a
common task. The manager perform various functions such as planning, organising, directing
and monitoring the activities to facilitate the smooth operation of a business enterprise. The
organisation help in dividing the work among the subordinates in according to their specialised
skills so that they work with greater efficiency and contribute to the success and prosperity in a
workforce. There are different types of organisation such as private, public and voluntary which
are describes as follows:
Public organisation: These are the organisation that are owned and operated by the
government and the tax that are collected from the large number of individuals are used for
important projects like public parks, water supply, roads, railways and other infrastructure for
the development of the country(Gaganis, Pasiouras, and Voulgari, 2019). Public limited
companies have huge financial resources and their liability is limited to the extent of capital
contributed by them. It focus on providing the service that benefit the entire society and also
play an effective role in the delivery of public services. BBC is one of the leading broadcasting
public limited company in UK.
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Purpose: The main purpose of Public limited company is to provide welfare to the
society rather than earning profit. It also focuses on economic development and provide vast
growth opportunities in the economy.
Legal structure: the legal structure of public organisation is described as below:
Local Government: These are owned locally by the government that have control over
their specific region. It elect officials and collect taxes on a small scale and do many other things.
Central Government: These are owned centrally by the government and control major
part of the country.
State Government: These are owned by the state as it has separate department for overall
functioning of the state that includes education, agriculture and so on.
Private Organisation: These organisations are managed and operated by the individuals
and their main motive is to earn profit(Contractor, and et. al., 2019). The private sector makes
the big portion of the economy and also one of the advantage is that it provide world class
infrastructure facilities and shares are easily transferable in case of public company. It is
regarded as expensive as compared to a public limited company. Tesco is one of the private
retailing company in UK.
Purpose: The main purpose of private limited company is to make money and provide
the long term growth of a company. Also, they take prompt decisions and have great sense of
personal touch with employees within a business enterprise.
Legal structure: It has separate legal entity and shareholders has limited liability in
respect of company's debt. A company is run by board of directors by following the legal
documents like Article of Association and Memorandum of Association.
Voluntary Organisation: These organisations refer to non profit organisation and it is
formed by association or group of people(Trigkas and et. al., 2020). The motive is to provide
welfare to the community members and their purpose is not to earn profit. Wellcome Trust is one
of the leading charitable organisation in UK.
Purpose: The main purpose of voluntary organisation is to fulfil their mission and work
towards the greater good rather than to make a profit. It create a social wealth rather than to
make a profit.
Legal structure: The three main legal structure used by voluntary groups are as follows:
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Trust: Trust are set up to manage money for a clear defined purpose and can be formed
quickly and cheaply.
Limited Companies: It is an incorporated organisation and has a separate legal entity
from its owners.
An Unincorporated Association: They have no separate legal existence and have
common purpose when a team work together. In this, no fees is charged.
P2 Size and scope of different types of an organisation
Various types of organisations operate as a part of the economy. These entities vary from
each other other on the basis of their size as well as scope. Thus, it is important to take into
account the 3 types of organisations in accordance with their size and scope to determine the
differences underlying between them.
BBC (Public limited Company):
Overview of company: BBC is the one of the oldest broadcasting company in UK and is
broadcasting in 28 languages and it is awarded as Queen's Award for Enterprise(Bill, Feurer,
and Klarmann, 2020)(Zhang, Daim, and Zhang, 2019). It provide fast and innovative
technology to provide an ease of convenience among the customers.
Products and services: It deals with wide range of products and services that includes
broadcasting, radio, web portals and its services are showcased in television, radio and online.
Size: The concerned firm employs 22,000 staff as it is the oldest and well established
country. The total number of assets that a company has 1.172 billion and currently its net income
is 69 million across the globe.
Scope: It is a oldest broadcasting company in UK which is operating in 200 countries and
possesses its resources where it is not currently working.
Vision: The vision is to be the most creative and innovative organisation in the world.
Mission: T he mission of BBC is to enrich people lives with their programmes and also
to inform, provide education and source of entertainment to the people around the world.
Objectives: The objectives of BBC are very clear among the employees that comprises of
trust, respect, quality and value, creativity and togetherness.
Tesco (Private Company)
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Overview of company: Tesco is a multinational retailing company in UK that deal with
wide variety of groceries such as books, clothing, electronics, toys and various financial and
telecom services(Saura, Palos-Sanchez and Correia, 2019). It is the third largest retailer in the
world in terms of gross revenue. Further, it is the top retail corporation functioning within the
territorial boundaries of Britain.
Products and services: The number of products in case of Tesco includes supermarket,
hypermarket,superstore and convenience group.
Size: The number of employees working in the Tesco are 4,50,000 as it is a giant
company with a well trained staff. Its total net income is 1,320 million and revenue is 63,911
across the country.
Scope: Tesco has expanded its operations rapidly and currently it has 6800 shops across
the country.
Vision: The vision of respective firm is to be the most highly valued business and to
serve the most loyal and committed customers within the confines of UK.
Mission: The mission of Tesco is described by the statement that is “ We makes what
matters better, together.”
Objectives: The main objective is to provide the best and efficient quality of products and
to deliver best services among the customers with full of modern and innovative ideas.
Wellcome Trust (Voluntary organisation)
Overview of company: Wellcome Trust is one of the charitable organisation in UK with
the objective of improving the mental and human health. It is one of the wealthiest charitable
institution after the American Bill.
Products and services: This charitable association provides funds in various areas like
biomedical science, humanities and its services includes grant management, education and
investments.
Size: The respective institution has 2,057 individuals are associated with it and its
financial endowment consist of 25.9 million which is the largest funding within the confine
sector of UK.
Scope: This trust covers large market segment and overseas of UK as it is well renowned
trust and it support public understanding of science.
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Vision: The vision of a respective association is to contribute to the society through
pursue of learning capabilities and education at an international level.
Mission: The mission of Wellcome Trust is to promote health in order to provide the
guidance to the students by using research and development.
Objectives: The objective is to improve the overall well being of large number of
individuals especially their mental and physical health.
P3 Relationship between different organisational functions
Organisation structure is a hierarchical system that identifies the duties, responsibilities
and roles performed by the manager to accomplish goal in a proper time(Sousa-Zomer and
Cauchick-Miguel, 2019). Most functional areas in Tesco deal with external people or
organisation as it is very important to have proper communication strategy that is interact with
other department. It is important for the manager of firm to assign the work among the
subordinates in according to their specialised skills in order to work beyond their potential. The
dependency of decisions on various considerations involving other business functions and it is
important to evaluate the outcomes of such interrelations. In the context of Tesco, the
interrelationship between departments that are presented as follows:
Marketing and Production: The link between marketing and production is considered
as interrelation between different departments. The production manager of Tesco design new and
innovative products, estimates the demand of new products, time and space distribution across
the globe. The management has to undertake various strategies such as change in production
capacity by changes in resources, improved inventory management and so on. Both department
influence the nature, timing of demand that relate to various marketing strategies such as sales
promotion, advertising, pricing strategy and so on that determine the efficient production cycle.
The link between these department with reference to Tesco provides the product portfolio
management, identification of production capabilities and sales revolution within the market
among the targetted customers.
Finance and Information Technology: The finance manager of Tesco perform various
operations such as maintaining cash flow, trading and profit and loss account and ascertaining
the balance sheet of the company so as to ascertain the financial position of the company(Nam,
Lee, and Lee, 2019). The IT manager of Tesco support the bases of customer relation
management and customer service is supported by IT. The customer service provision provide
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speedily and timely information about their needs. Like all departments, the finance department
prepare cash flow, covering cost and pay back investment with their allocated budget.
Marketing and Human Resource: The HR perform various functions such as
recruitment, selection, training and development of an employees which enable them to increase
their skills and knowledge base in order to improve the overall efficiency of an organisation. The
manager of Tesco hire the right kind of employees and provides effective training to them so that
they could work hard with greater potential. The marketing department combine with human
resources in developing job descriptions, designing training programs and incentive systems that
results in implementing the marketing plan and activities.
P4 The positive and negative factors of macro environmental factors within Tesco
The certain factors that exists within the external environment of the business has a
crucial role in the overall business management. These factors impact from the operations to the
marketing level in an organisation. Thus it is essential to analyse and evaluate the determined
macro environmental factors in relation to Tesco plc. Which is a well established retail company
in the United kingdom. The study of all these elements will be covered in the PESTLE analysis
which evaluates the position of company in the respective environment as well as it determines
the positive and negative aspects of each and every environmental factor on Tesco plc.
Political: This factor includes all such policies, regulations and rules which are directly
or indirectly determined by the respective governmental power(Lu, Wang, and Xu, 2019). The
factors can be changed or modified according to the existing ruling political parties within the
country. The current political power within the confines of United Kingdom are generally helpful
to the growth of its business enterprises, in addition to that it brings some negative impacts on
the respective organisation which are as follows:
Positive – The stability of ruling party within the United Kingdom act as the most
beneficial term to the business as the certain rules and policies of the respective party is remains
the same through every business period and management of Tesco can effectively use this to
prepare it long term plans regarding the sales and operation.
Negative – With such a wide scope of advantages Tesco faces a bit of disadvantages in
performing its functions within UK. The country gets an immense level of disturbance through
BREXIT policy. Thus with an effect from this policy the price rates of labour and resources has
been inflated and it is affecting the financial sources of business.
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Economical: All those environmental conditions which are responsible in terms of
financial and monetary aspects within the country that significantly affects the operatio9ns of
business. The economical factors in U K are considered as the most favourable condition to
work as a business. Due to the higher GDP, return on investments , increase in the interest rates
of foreign direct investment. It gives certain opportunity to retail sectors such as Tesco plc. to
increase its profitability.
Positive – The impact of the country's financial conditions on the foreign promoters is
quite influential. The high rate son interest attracts the Foreign Direct Investors to invest in the
development of company, that would help it to expand its performance and sales.
Negative – Tesco is considered to be most cost efficient business, the BREXIT criterion
in the respective nation has increased the cost of production and sales because of limited
availability of resources and raw material.
Social: These factors belongs directly to the society and culture of respective region. The
buying behaviour of consumer, satisfaction from products, change in taste and size, trends of the
current market and so on(Crudu, 2019). These all are considered as the social factor of the
organisation. Being a most developed nation U K has the highest rate of literacy in its residents
and it is considered as the hub of fashion and new innovation. Along with all these qualities
these factors influence the business of Tesco negatively as well as positively in the following
terms:
Positive – With such a wide culture of new and adaptive ideologies, businesses alike
Tesco plc. can significantly emphasise more on the innovation part in its operations. Thus this
activity of business will help it to grab the wide attraction of potential consumer base.
Negative – The anticipation of a social trend by rival firm before Tesco would serve as a
negative aspect for the organisation in the sense that the customers would shift to the alternate
brand.
Technological: United Kingdom is renowned as the IT hub and innovative advancements
in technologies. All the innovation of technologies helps the business to grow and evolve their
working process. Tesco gets the certain opportunity is a way to promote its sales and profitability
by adapting these technologies.
Positive – The emerging trend in new technology helps the organisation to simplify its
working process and compete with the rival firms.
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Negative – technological advancements can be adopted by the competition and that can
turn to an unfavourable condition for the organisation.
Legal: All such factors that are interrelated with the norms and culture of legal and
governing authorities in the respective nation(Chang, Wong, and Chiu, 2019). The legal factors
covers all the laws and legislations of the country which affects the business operations. The
environment of legal factors for Tesco helps it to set the guidelines and principles for the
effective working operations. There is a vast of advantages and disadvantage of the legal aspects
on to the operations of business.
Positive – The legal factors give a proper criteria for the work and provides certain legal
frameworks under which the organisation can perform its operations in the most ethical way thus
it does promote the moral of the employees within the organisation as they get the higher
opportunities and effective working environment.
Negative – The laws and regulations to operate the business are certainly rigid that forces
the organisation to work in the respective boundaries of respective rules and regulations. In
relation to Tesco the legal factors sometimes act as a barrier for growth and profitability.
Environmental: The environment of United Kingdom is none other different then any
European or western region. The nation faces critical issues to use the natural resources as well
as it impacts the overall climatic conditions that create the barriers for effective business
operations as well as for the usual life of individual. The positive and negative impact of the
environmental factors in relation to Tesco are here as follows:
Positive – the environmental condition of uk gives businesses like Tesco a effective
chance to work in way to overcome the crises. This helps to build an efficient brand image
within the market.
Negative – the current state of environment creates a scarcity of essential natural
resources that is ultimately increase the cost of overfall process.
P5 Internal and external analysis of specific organisations to identify strength and wakkness
Micro environment play a very important role in determining the internal analysis of an
environment and it help in decision making of a business enterprise(Brenstein, Electronic Credit
Systems Corp, 2019). The SWOT analysis is conducted to determine the strength, weakness by
grabbing the opportunities and removing threats within the organisation. In other words, it help
in ascertaining the level of competition and enhance the profitability within the marketplace
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across the globe. It is a planning model that provide strategic advantage and it also includes
various aspects like level of employment, organisation culture and so on that provide the internal
analysis of environment. The SWOT analysis are presented as follows:
SWOT of BBC
Strength:
Largest Broadcaster: BBC is the largest and oldest broadcasting in UK with almost
23,000 employees.
New and updated: This is the most vital strength that BBC is ahead of its competitors. It
is one of the largest player in the market that provide new things like Colour TV, HD channels
and so on.
Strong Brand image: The concerned firm has a strong brand image all over the world.
The major strength is that it provide same consistency of items and has large distribution of
network in UK.
Technological Advancement: This is one of the major strength of BBC that provides high
technical web design, software design and graphic design that hold the excellent position in the
market.
Weakness:
Biased opinions: One of the major weakness is that there is chance of biasness in the
opinion and views among the debaters.
High operating cost: The operating cost of BBC is high as compared to its competitors
within the market.
Opportunities:
Rise in Revenue: BBC is one of the popular broadcasting in UK that results in rise in the
revenue around the globe.
Great packaging: In this, the BBC is updating itself and viewers prefer to get traditional
information and packaged in a new style.
Threats:
Strong competition: There are large number of players such as CNN within the market
which possess a greater threat for a firm.
Introduction of domestic channels: There are various domestic channels that give rise to
the competition within the market.
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SWOT of Tesco:
Strength:
Large market share: Tesco is one of the leading retailer and supermarket in UK that has
expanded its operations and provide the overall shopping experience.
Brand Equity: Tesco has considerable brand equity in its name with global recognition
and in terms of quality, selection and service.
Improved Technology: Tesco provide new and innovative products among the customers
so that it provide fast and efficient services to their customers.
Weakness:
Price wars: There are lot of competitors in the market such as ASDA, ALDI, Amazon,
Walmart which leads to decrease in the prices of products.
Less expansion: This retailing company is highly dependent on the UK for its sales and
does not spent time and resources on developing the other market.
Opportunities:
Online shopping: Tesco could introduce the online shopping that provide an ease of
convenience among the customers.
Joint venture: There is opportunity for the respective company to allow joint venture with
local companies that improves the overall performance within the confines of UK.
Threats:
Rise in food prices: One of the major threat for a company is rise in the price of food
which affect the purchasing power of customers and thus reduces the wants of consumers.
Pressure of stakeholder: There is greater stakeholder pressure that have a major impact
on the social responsibility and thereby adversely affect Tesco.
P6 Discuss strength and weaknesses interrelate with macro factors
Strength and weakness are the external factors that have a direct impact on the
organisation' s decision making and it analyse the availability of resources in order to gain the
competitive position within the market(Schaltegger, Hörisch, and Freeman, 2019). There are
various factors that affect the boundaries of an organisation like political, economical, social and
technological and major role in determining the changes that has taken place in an entity. In the
context of Tesco, the interrelation with macro factors are presented as follows:
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Political factors: The manager of Tesco prepare an appropriate planning so that it could
capture the large market share across the globe. The vote for Brexit has affected the Tesco
adversely which leads to inflation and affect the financial sources of the company.
Economic Factors: Foreign Direct Investment provide the major source of destination
and it help in promoting the growth of a business within the confines of UK. Due to Brexit, it has
affect the cost of production and sale operation of a business with reference to Tesco. As a result,
it create a negative impact of the company and affect the productivity of a business.
Social factors: Tesco provide new and attractive products to gain large access of
customers. At the same time, there are changes in customer trends and preferences which affect
the operations of the company. There are large number of players which lead to price wars and
thus reducing the prices of products. Also, the pressure of stakeholders possess the threat on the
environmental issues and sustainable development.
Technological Factors: Tesco provide new and innovative products in order to gain
large access of customers. Technological advancement is adopted by its competitors which
possess a great threat for the company within the confines of UK.
CONCLUSION
From the above information, it can be summarised that the business environment in
which company carry out its operations is regarded as dynamic. The manager of company
perform various functions such as planning, organising, directing and monitoring the activities
for the accomplishment of a goal. Organisation provide the framework of duties and
responsibilities among the subordinates in a proper manner. There are different types of
organisations such as public, private and voluntary that define the size, scope, vision, mission
and legal structure. It has been analysed that PESTEL and SWOT is conducted to assess the
internal and external factors of a business in order to gain a competitive position within the
market. This help in optimum utilisation of resources and minimise the wastage by adopting the
environment protection measures such as reduce, reuse and recycling within the market and this
help the company to facilitate the smooth operation of a business.
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