Business and Business Environment: Organizational Analysis and PESTLE

This report provides a comprehensive analysis of the business environment, focusing on different types of organizations, including public, private, and voluntary sectors, and their legal structures. The report examines the size and scope of organizations like BBC, Tesco, and Oxfam. It delves into the relationship between organizational functions such as marketing, finance, HR, IT, production, and research & development, highlighting their interdependencies and links to organizational objectives and structure, particularly the hierarchical structure. Furthermore, the report identifies the positive and negative impacts of the macro environment on business operations, using PESTLE analysis to evaluate political, economic, social, technological, legal, and environmental factors. Finally, the report conducts internal and external analyses of Tesco to identify its strengths and weaknesses through SWOT analysis, and explains how these interrelate with external macro factors, providing a detailed understanding of the business environment.

Business and Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................4
Task 1 ..............................................................................................................................................4
P1 Explain different types and purpose of organizations;public, private and voluntary sectors
and legal structures. ....................................................................................................................4
P2 Explain the size and scope of a range of different types of organization. ...........................6
Task 2 .............................................................................................................................................8
P3 Explain the relationship between different organizational functions and how they link to
organizational 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.............................................................................................................................................12
P5 Conduct internal and external analysis of specific organisation order to identify strengths
and weaknesses.........................................................................................................................12
P6 Explain how strengths and weaknesses interrelate with external macro factors................13
CONCLUSION..............................................................................................................................15
REFERENCES .............................................................................................................................16

INTRODUCTION
Business Environment includes aggregate total of all individuals, organizations and other
factors which may or may not under control of the company but can give impact on company
performance, development, profit. Few factors such as governmental, financial, technological
and cultural factors which work as outside factors but consider as an part of environment.
Business environment is a dynamic environment which work on both factors internal and
external. Different types of organizations like public, private and voluntary are work directly and
indirectly of these factors. Internal and external factors includes employees, customers and their
needs , demand and supply of the products, clients, partners, governments all comes under
internal and external factors of the company and these factors give impact on company functions
directly and indirectly both. The organization chosen for this report is Tesco company. Tesco is a
UK based retailer company. This report deal with purpose, scope, size and legal structure of the
company and also understand the strength and weakness through SWOT analysis and also do
PESTLE analysis and understand the positive and negative factors of the company.
PART 1
Explain different types and purpose of organizations;public, private and voluntary sectors and
legal structures.
Organization consider as a collection of individuals and resources that engaged in
pursuing organizational objectives and goals. Organization distribute work among employees
and assign tasks to them which helps to accomplish the common aim and purpose of the
company. Different types of organizations are discuss below-
Public Sector organization- It is also known as public traded company and public held
company or public corporation. Public company shares openly and freely traded on a stock
market.
Example - BBC ( British Broadcasting Corporation).
Purpose- The main purpose of BBC is to provide quality news related business, political,
educational and entertainment with the help of television , radio and other broadcast channels to
the public. It also serve all the audience through provision of impartial, high-quality and
classified output services. The organisation have a view of innovation in the technology and
getting more audience (Beaton, MacIndoe and Wang, 2020).

Legal Structure- The legal structure of public company work in three level. Which are
discuss below -
Centralised Government System:
Private Sector Organization-
Private companies comes under those companies where government not involve. Private
company play a prominent role in country economy and run by individuals and partnership to
earn profit (Golensky, and Hager, 2020).
Example - Tesco PLC.
Purpose- The main purpose of Tesco is to earn lifelong honesty and loyalty to provide
good quality products and services in groceries, clothing and household sectors.
Legal Structure- it is also known as business ownership structure. Legal structure affect
company financial system, tax and national insurance and how company raise funds for the
business. Organization consider some legal structures which are given below-
 Sole Proprietorship- The other name of sole proprietorship is sole trader or
proprietorship. It is an unincorporated business only with one owner who is responsible
to pay income tax on the profit of the business.
 Partnership- Partnership is consider legal structure of business which operate between
two or more individuals in context of share and profit management.
 Limited Company – A company is a corporate legal entity which formed by the groups
of individuals to work together to accomplish common goal and objective (Khan, and
Siddiqui, 2020).
 Public Limited Company: This is the organisation which have limited liabilities and of
that company have to work within the certain or fixed liabilities and predetermined profit
sharing ratio.
Voluntary Sector Organization- Voluntary organization is different from the public and
private organization. It is a non profit organization which also known as civil society
organization or third sector organization. The main aim of this organization is provide services
with any profit. This organization is not profit oriented the main concern of this organization is
welfare of the society.
Example- Oxfam

Purpose – The purpose of voluntary organization is work for the benefit of the society
with out profit and intervention of government. This organization is “Not For Profit”.
Legal Structure- The legal structure of the voluntary organization discussed below-
 Trust- It is a legal firm that act as a agent on behalf of a business or person for the
motive of management ,administrate and transfer the assets and properties to a beneficial
business party. It manage business activities and act as a stock transfer, custodial
arrangement.
 Unincorporated Association- It means a unincorporated group of number of people who
join the organization for their mutual consent with a specific reason other than earn profit
(Powell, and Bromley, 2020).
 OXFAM is a incorporated company: It is a non-profit organisation, working with 20
independent charitable organisations. It is registered at Hague, Netherlands in 1996. the
main aim of this organisation is to provide medical care and paying school fees.
Growth of International Business Environment
The growth of international Business environment leads many factors such as
technological, political, economical, environmental , proportional educational, import and
export, foreign market. International environment growth and development depend upon these
factors so any company private, public and voluntary wants to expand their business globally
than company need to do so changes in these factors for the growth purpose (Le and et.
al.,2019).
Explain the size and scope of a range of different types of organization.
BBC ( British Broadcasting Corporation)-
BBC is a broadcaster work for the public service. It is a independent and company that
perform day to day operation and programs to inform, entertain and educate people all around
the world. BBC consider the UK's very popular and most watched channel.
 Size- it is the world biggest and oldest national broadcaster. The total number of
employees are working in BBC is 22000.

 Scope-the main scope of BBC is to telecast channel programs through televisionand radio
and also provide online services. To grow and develop company services online so that
people easily assess that.
 Vision- the vision of the BBC is become most innovative and creative organization all
over the world.
 Mission- Provide high quality of services and work for the public interest.
 Business objectives- the main objective of the BBC is to fulfil all the requirement related
to current and future prospective. Broadcast news most possibly in all languages for the
national and International audiences (Marques, La Falce, J.L.2019).
Tesco PLC -Tesco is a multinational company which provide goods and service in
merchandise retailer sector. Tesco expand business all over the globe. It is a largest company so
that its growth rate and market share always high. Tesco provide high quality of products so that
company have customer loyalty.
 Size- tesco is biggest food retailer company with 2318 stores . In current time over all
326000 employees are working.
 Scope- The scope of Tesco is very high in market. It is the most popular company in UK
when people of UK want to purchase general food and groceries products then tesco is
the first name which come first in mind.
 People easily access company products with good quality and do shopping online and
offline both.
 Vision- to become highly valuable company in the word in the area of food and
groceries.
 Mission- to become the preference of customers to provide high quality of products.
 Business Objectives- provide product according to customer need to gain customer
satisfaction.
Oxfam- Oxfam is a independent and well established charitable company in UK that
focus on alleviate poverty internationally. It is a non profit organization that serve for the
betterment of the people. Its work on justice , education, livelihoods, equality and health of the
people

 Size- Oxfam work globally and reach huge number of people. In this time at least 2202
million people involved with this organization.
 Scope- the scope of this organization is wider become it works for the welfare of the
people. With the help of this organization many people free from injustice of poverty.
This organization also help people to build better future
1. Vision- people treat equally and live their live with out poverty.
 Mission- the mission of this organization is to create many opportunities for those who
are not still capable to stand strongly in society.
 Business objectives – empower people to create a bright future that is secure without
injustice and poverty.
Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.
There are many functions which involve in organization development these functions are
marketing, finance, human resource, IT, production and research and development functionalistic
interrelationship discussed below- Marketing and Finance function- there are many activities which are performed by
marketing department such as product, price , place , promotion, process, delivery,
advertisement. With the help of good advertisement and strategies marketing department
perform their duty well. Tesco marketing department is doing their job very responsibly.
Tesco marketing and financial department are interrelated. Financial department is
responsible to prepare budget according to the marketing department need. Financial
department consider all the cost and profit margin and then provide a financial statement
as per the marketing department requirement Human Resource and IT function -HR function leads all the job role of the company.
and this function also able to create employment for the people. In HR , recruitment,
selection, training and development activities involved. Tesco HR functions are very
effective and company provide job so many person all over the world. IT department of
tesco is responsible for the effective growth of HR department. With the help of
advanced technologies and online services HR department functioning very fluently. HR
and IT both functions are interrelated without IT function, HR function experience
difficulty.

 Production and research & development function- production function is play a
important role in new products of the company. Tesco more focusing on their production
department and prepare new strategies for the development of the products. Tesco
company research and development department functioning very well. With the help of
research and development department company do market research so that company
clearly know the needs of customer and prepare a research report and then that report
circulate in production department so that company easily prepare and modify their
product according to customer need. So both functions are interrelated.
Organizational structure of Public and private organization
Hierarchical organizational structure- This structure refers to the chain of command from top
level to lower level of management employees. Highest level employees have more power and
responsibilities. This structure represents in a pyramid shape. Tesco and BBC both companies
follow hierarchical organizational structure (.Brandi, 2017).
PART 2
Identify the positive and negative impacts the macro environment has upon business operations,
supported by specific examples.
Pestle Analysis- It is the framework of analysis the external environment which includes
political, economical, social,technological, legal and environmental factors for the organisation.
Through this analysis firm can take the right action at right time to overcome in critical situations
PESTLE Analysis-
Political factor- These are the factor which includes tax policy, trade restrictions, tariffs and
bureaucracy, which will affect the organisation.
Economical factor- This factor include the various aspect of the economy which covers
economic growth, interest rate, exchange rate, inflation and unemployment rate.
Social factor- These are the factor which takes consideration of cultural and demographic trends
of the society, which includes cultural aspects and perceptions, populations growth rates and
age distribution.
Technological factor- These factor include the innovation in the industry, which includes
research and development activity, automation and technological incentives.

Legal factor- These are the factors which includes industry regulation, licenses&permits, labour
laws and intellectual property.
Environmental factor- this factor concern the ecological factor on organisation, which includes
weather conditions, temperature, climate change and pollution.
Positive and negative impact of macro environment factor of Tesco:
Political factor:
 Positive impact: Tesco is a home market of UK and the government of that country is
more stable so it easy for the organisation to sustain in the market with the formulation
of all rules and regulation (Engelbrecht, Lindeman, and Hoermann, 2019).
 Negative impact: Tesco is a global retailer and it very difficult to cope up with all the
rules and taxation policy of concern country in order to follow those rules and laws.
Economical factor
 Positive impact: There are 4.5 billion annual wages and increased by 4.4% for 25 years
and it will uplift the worldwide economy.
 Negative impact: There is rescission in the economy and effect the Tesco market badly.
Social factor
 Positive impact: Tesco is offering fast and flexible delivery to the consumers in orer to
meet the needs and demand of the buyers.
 Negative impact: Company is also selling junk food which effect the health of the
individuals.
Technological factor
 Positive impact:Tesco is adapting advance technology for providing products to
consumer's door.
 Negative impact: Company is getting the high production cost to use introduction of
advance technology.
Legal factor
 Positive impact: Organisation is ensuring the strict follow-up of FOOD RETAILING
COMMISSION(FRC).
 Negative impact: Tesco is undergoing through accounting frauds and misleading the
investors and have to pay penalty for that actions.
Environmental factor-

 Positive impact: Company is using short-cuts for delivering food and collecting plastic
bags and recycle them.
 Negative impact:Company is working on global bases and sometimes this is very
difficult to follow all the environmental law in order to implement such laws
(Drumwright, and Kamal,2016).
Positive and negative impact of macro environment on British Broadcasting
Company(BBC):
Political factor:
 Positive impact: It is a public organisation and controlled by the government hence this
the benefits for the company to run the organisation in own way.
 Negative impact: BBC is not taking a interest on advertisers or justifying their activities
to their shareholders and facing license restrictions for broadcasting.
Economical factor
 Positive impact: Government is getting good revenue with less investment in BBC.
 Negative impact: Organisation get investment only from license fee. It does not get any
investment from government.
Social factor
 Positive impact: BBC is giving cultural and social benefits to everyone and not
excluding anyone due to their financial crisis.
 Negative impact: Increasing cost of usage of internet effects the spending power of
individuals.
Technological factor
 Positive impact: Website of BBC is viewed by 25 million people on weekly basis due to
enhancement in their website by the company.
 Negative impact: Advancement of new technology, increases the boardcasting cost and
effects the overall investment (Ghisellini, Cialani and Ulgiati, 2016).
Legal factor
 Positive impact: This the public organisation and hence follow all the laws in favor of
company as well as for their consumers.

 Negative impact: BBC is controlled by government and license fee is fixed by the
government. There is no right on management decision-making
Environmental factor-
 Positive impact: With the effect of global awareness, BBC head office is supported by
rainwater harvesting system and water saving toilets. Disposable cups are not allowed in
office. Also using various features such as solar energy panels and use of fair trade
product.
 Negative impact: Huge cost on rainwater harvesting system and water saving toilets
leads to decrease in overall revenue of the organisation.
Conduct internal and external analysis of specific organisation order to identify strengths and
weaknesses.
SWOT ANALYSIS: It is the strategic planning techniques which used to evaluate the
strengths, weaknesses, opportunities and threats of a organisation. It will help the firm to
understand the upcoming threat and measures to solve it (Kromidha and Robson,2016).
SWOT Analysis of Tesco:
Strengths Weaknesses
1. Tesco is the largest grocery retailer in UK,
has no.1 supermarket in the country. Its annual
operating profit rise 28%.
2. Tesco has global presence with 6966
grocery retail stores worldwide.
1. Tesco is facing the frauds in trails and
accounting scandals and have to pay penalty of
it.
2. Tesco's performance is poor in specific
market due to insufficient market research
before entering in new market.
Opportunities Threats
1. Tesco has recently introduced Jacks, a new
discount store which is gaining good profit. It
is the opportunity to grow this business.
2. Tesco can avail the option of online
shopping by upgrading their services.
1. Increasing market share and growth of
WalMart, biggest competitors of Tesco can be
a threat for market position.
2. Government regulations, legal taxations can
effect the operational efficiency of Tesco.

SWOT Analysis of BBC
Strengths Weaknesses
1. It is the largest broadcasting company in the
world with highest no. of employees.
2. BBC has a strong brand image worldwide
and also earned viewer trust.
1. there is high operating cost in the BBC due
to high usage of advance technology.
2. BBC also face criticism for broadcasting on
serious matter related to religion and politics.
Opportunities Threats
1. Organisation can deal in international events
to build strong brand image.
2. BBC can expand their business in emerging
market like Chine & India.
1. Company is facing competition from other
news channels like CNN.
2. Changing consumer choices from online
channel could be a threat for physical
infrastructure of the company.
Explain how strengths and weaknesses interrelate with external macro factors.
 Political factor- These are the factors which includes government policy, political
stability, foreign trade policy, tax policy, labour law, environmental law and trade
restriction
Strength: Tesco has expanded their business globally and if the tax rate is low then company
can earn more profit with available resources.
Weaknesses: Working on global bases and following all the government polices is a heavy task
to follow and create hurdle in the business activity.
 Economical factor- These are the factor which influence the economy and includes
economic growth, interest rates, exchange rates, inflation and disposable income of
consumer
Strength: Company is focuses on economical factor that increases the productivity of the
operations in the company.
Weaknesses: Increase in the exchange rate of goods can cause the high carriage cost of the
goods and will effect the overall investment.