Business and Business Environment: Analysis of Organizations Report

This report delves into the intricacies of the business environment, examining various organizational types and their legal structures, including public, private, and voluntary sectors, with examples like NHS, Tesco, and OXFAM. The report explores the size and scope of these organizations, their pr...Read More

Business and business
environment
STUDENT NAME:

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Different types of organisations and their legal structure......................................................3
P2 Explain the size and scope of a range of different types of organisations.............................5
TASK 2............................................................................................................................................7
P3 Relationship between organisational functions and their linkage with objectives of
organisation.................................................................................................................................7
TASK 3............................................................................................................................................9
P4 Positive and negative impact of external environment on business operations.....................9
P5 Internal and external analysis of some specific organisations to identify strength and
weakness...................................................................................................................................10
TASK 4..........................................................................................................................................12
P6 How strength and weakness interrelate with external factors.............................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
Books and Journal..........................................................................................................................15

INTRODUCTION
Business environment is known as surroundings of business which includes both external
as well as internal factors that affects functioning of business. It is essential to do proper analysis
and evaluation of market before starting business in those markets. The company considered in
this report are Tesco as a private organisation, National health service (NHS) as public
organisation and OXFAM as voluntary organisation. The following report discusses about
business environment and various factors that affect functioning and operations of the
companies. There is PESTLE analysis of one of the companies and SWOT analysis of other two
companies. There is discussion on relationship between organisational functions. Also, there is
discussion on positive and negative impact of external environment on business activities.
SWOT analysis of two companies is mentioned. At last, there is discussion on strength and
weakness of external analysis(Banica and Hagiu, 2015).
TASK 1
P1 Different types of organisations and their legal structure.
Within a business environment, there exist different kind of organisations that have varied legal
structures and purpose. Information about various kinds of business firms is given below:
Public organisation: A public sector involves both public enterprise and services which
is managed & owned by governmental authorities. These firms have the aim to provide good
facilities to local and regional people without charging them high amount. Profits and shares
earned by this sector are used to offer standardised services to common people. For example,
NHS.(Clarke and Xu, 2016).
Purpose: Main purpose of public sector firms is to offer high quality service to public so that
they can feel secure and safe while living in a region. Public services offered by these firms
involve governmental services like police, military, news, healthcare, educational and other
services.
Goal: Major goals of this company is to reduce the overall infant mortality rate maternal
mortality. They want to provide services related to women's health and child health, nutrition,
providing universal immunization. Access to comprehensive health care and providing a
stabilization, demographic and gender balance. Which can help in improving the overall
condition of health of people.

Mission: they have a mission that they will be providing capacity building and support of
technical nature which will help in strengthening of the public health systems.
Vision: The vision of this company is to provide affordable, accessible and quality health care
services both curative and preventive to the needy people.
Legal structure:
 Local government: This tier of government is authorised to manage small town and
cities. Their powers are limited and they care accountable to state government for their
work.
 State government: This governmental structure formulates regulations and laws for a
state and manage all the public activities within that region.
 Central government: It is the highest tier in governmental bodies. This government has
jurisdiction within whole nation and formulate regulations for state and local government.
Private organisation: This business sector includes firms that are run and managed by
private businessmen either as individual or in partnership with another businesspersons. One
example in this context is Tesco which is a UK based retailer offering grocery and other
household products to their customer base.
Purpose: Purpose of these firms is to earn high revenues and sales so that maximum
profits can be earned. This benefits these firms in gaining wide advantage over rival firms.
Goal : They are having a goal that they want to bring continuous innovation in their company so
that the company is able to have a competitive edge in surviving in the market for along period
of time.
Mission: Tesco has a mission that they want a business which is growing and having presence
across many countries throughout the world.
Vision: “ To be most valued business from the customers they are serving, communities in they
operate and having committed and loyal colleagues.
Legal structure:
 Sole proprietorship: In this legal structure, an individual runs and own business on
individual basis. All the business activities are carried out by a single person in order to

attain maximised profits. If these businesses face any loss, it will be faced by sole
proprietor only(Deasy and et.al 2016).
 Partnership: This is stated as an association of two or more than two people. This legal
structure has legal obligations similar with sole proprietorship but here, a contract is
signed by the partners which allow them to acknowledge their shares and profits within
business. If one partner does not follow contract terms, other partners can file a law suit
against them.
 Limited company: It is an organisation that is set up by a person to run their business.
Here, owner of business is not completely responsible for the business activities and
finances of firm will be separate from personal finances of business owner. These
companies can either public or private in nature. For example, Tesco.
Voluntary organisation: These business firms are basically a group of people which are
interested in serving people without any fees. For example, OXFAM which is a global company
which fights against poverty(Fabuš, 2017). There can be two types of voluntary organisations as
discussed below:
Non governmental organisations: These are those organizations which are independent and are
not owned by government. These organisations are not working for profitability but they are
working for benefiting society and are active in social areas and humanitarian.
Non profit organizations: These are those organisations who are not owned by government and
are working for the benefit of society. They serve public and work for solving problems which
common people are facing. These are commonly known as NPOs ad they are granted tax
exemptions also as they are working for the benefit of society.
Purpose: Main aim of OXFAM is to provide social and welfare services to common people so
that they can live a comfortable and healthy life.
Goal: Major goal of Oxfam is to remove poverty and help those who are living below the
poverty line. They want to finish this problem of poverty in places whee they are having their
presence. They are not working for any kind of monetary profits.

vision: They have a mission “They want a world without poverty, a place where everyone is
treated equally and enjoy their rights as citizens. People can also have a influence on decisions
which are affecting their lives”.
Mission: Oxfam has a mission that they want to create solutions which are lasting for eradicating
poverty. They want to start a global movement which can bring change, creating a future which
is secure and a place which is free of poverty. They want to remove poverty globally and locally
which will help in making the world better place for the people.
Legal structure:
 Trust: These firms are set up for management of property and money for a defined
purpose. These firms create a relation among three parties which is money donor, trustees
and beneficiaries. Starting up a trust is a cheap and quick process. For instance, OXFAM.
 Association: These companies are not legal entities but management committees that are
called as councils. In these organisations, different people work together to attain a
common goal.
Business environment include several type of firms. These companies are very different
in performing their business activities and main aim of these firms is to either earn maximised
profits or serve people for free so that they can live a comfortable life. Operating in a specific
region can make market saturated due to which earning high sales became difficult. To overcome
this issue, business firm operates in global manner so that they can serve a greater number of
customers and earn high profits. Due to this, growth in international business is increasing day
by day. In context with TESCO, company is operating globally and earns high revenues and
profits against rivals(Grigore and Drăgan, 2015).
P2 Explain the size and scope of a range of different types of organisations
There exist three type of firms i.e. voluntary, private and public firms that have different
size, scope, mission and objective. These aspects for Public, private and voluntary firms i.e.
NHS, TESCO and OXFAM respectively are stated below:
Public organisations: NHS is a public firm in UK which provides healthcare facilities and
emergency treatment to needy people without charging them high money.

 Products and services: Main services which are offered by NHS are critical medical
services, emergency treatments, dental care, eye care, ear tests to people in UK in free.
 Size and scope: NHS is one of the biggest public company which is employing more
than 1.5 million workers. Staff of company involves health visitors, dentists, doctors,
ambulance, nurses etc. Firm has high scope in UK and other regions as they offer free
medical services to local people without compromising with quality of services.
Global: They are having huge scope at global level as they are working for a good cause of
society and they are willing to benefit the people.
National: National health services is having its presence in UK. They are able to have a great
scope in the country in which they are functioning.
Scope and function in future: It is identified that scope of the company is vast as they assist
large number of individuals in order to enhance the living standard of individuals. Along with
this, they start their business functions in various countries across the world which assist them in
order to enhance their image at the marketplace.
 Mission and vision: Mission of company is to increase their business operations in
global context so that every patient and needy people can get proper treatment
irrespective of their financial statement. Vision of company is to provide health benefits
and medical care to common people.
 Stakeholders: Main stakeholders of company are staff members of NHS, local bodies,
governmental officials and agencies.
 Private organisations: Tesco
 Products and services: It is a supermarket company hence they are dealing with all
grocery related products and various financial products also.
 Size and scope: There are approx 700 stores present all over world and they have 5 lacs
people employed in this company. company has a very wide scope as they belong to
supermarket industry which has a maximum growth potential.
Global: Tesco is having a strategy that they want to expand themselves globally so that they are
becoming a well known brand across major countries of the world.
National: Tesco started its operations from UK. Since then it has been able to spread it across
many countries which has made it possible for it to have a increased scope.

Scope and function in future: It has been analysed that scope of Tesco is wide as it will assist
in grabbing opportunities available at the market area. On the other hand, function of the
company is enhanced day by day as they work in different countries and expand their business at
international marketplace.
 Mission and vision: Tesco have a vision that they want to be largest supermarket chains
of the world. And their mission is to become a cost leader and provide quality products to
their customers.
Stakeholders: Stakeholders of Tesco are executive officials, investors, board of
directors, shareholders, customers, employees etc.
 Voluntary organisations: Oxfam
 Products and services: This company deals with lifestyle products.
 Size and scope: There are 20 independent companies which are operating under Oxfam.
This has led to wide scope for the company as they will be able to manage their future
course of actions.
Global: The scope of Oxfam is very high at global level as they want to remove the poverty
across various parts of the world. They have a belief that poverty is not bad and this has to be
dealt in a way so that people who are dealing with it can find positive solutions for them.
National: OXFAM is a voluntary organisation which is having a wide scope as they aim at
alleviation of poverty at global level. This is a non profit organisation but they aim at benefiting
the people across all parts of world.
Scope and function in future: In context of Oxfam, scope of the voluntary organisation is wide
as they will be able to perform their business function in an effective manner. There functionality
is enhanced in day by day as they have operate its business at international marketplace across
the whole wide world.
 Mission and vision: Oxfam have a vision that they are able to reach maximum people
and satisfy their basic requirement. Company also has a mission that they want to affect
lifestyle of people in a positive way.
Stakeholders: Stakeholders for OXFAM are volunteers, local people, government,
investors, charity organisations etc.

TASK 2
P3 Relationship between organisational functions and their linkage with objectives of
organisation
Structure of a company : This consists of different departments in the company which
help them in achieving of overall goals and missions. This plays a very important part in smooth
running of company as a whole. There are Three basic structures of company as discussed
below:
Functional structure: This type of structure is made in usch a way that employees
performing similar functions are grouped together. Each specialists operate independently and
the management acts as link of communication between these functional units. In tesco such
type of functional units are used for smoothness in overall functioning of the company.
Divisional structure: The divisional structure is also present in various organisations in
which each organizational function is grouped in a division and these divisions together
correspond to a geographic or products.
Matrix structure: It is that type of structure in which there is two basic perspectives
used for organizations for structuring their functions. These structures are versatile and complex
and these are appropriate for large organisations. In this structure the horizontally the product
lines are managed and vertical lines product lines are being managed.
Various functions in organisations are discussed below:
Marketing and Finance:
Tesco is a company which belongs to supermarket industry of UK. Major function of this
department is to increase overall sales and profits of company. Accounting department is
basically responsible for preparing financial statements and further analysing it. This helps in
monitoring of sales trends and provides information which is used for expansion of business and
reduction in costs(Huang-Horowitz, 2015). There is a need that there is strong interrelation
maintained between these two most important departments of company, this will help them in

managing costs of business and at same time functions of marketing department will take place
without any interruptions.
HR and marketing:
Every company wants that there are competent employees so that they can understand
functions and their job in a proper way. This also reduces cost on part of company which they
otherwise must incur in case employees require training on how to perform their job. Recruiting
of trained employees is function of HR department of every company. In context of Tesco it is
very important for their marketing department to effectively communicate with human resource
department related to their various requirements this will help them in doing their human
resource function according to that. This will help in saving lot of time and al functions will be
performed in an effective manner(Khan, and Quaddus, 2015).
Organisational structure
Tesco has implemented a Functional structure which means that they have made divisions
according to functions of company. Below this structure has been discussed with the help of a
flow chart which will help in understanding of this functional structure being followed in Tesco.

TASK 3
P4 Positive and negative impact of external environment on business operations
Types of Business Environment:
Micro environment: This environment consists of various factors which are concerned with the
micro environmental factors such as customers, suppliers, competitors and overall brand image
of company is also a part of micro environment of companies.
Macro environment: This environment consist of the various non economic and economic
variables which can provide different opportunities and also various threats to the companies.
Various factors related to the macro environment are political, social, legal, economical and
technological. All such have a very strong impact on the internal functioning of company.
Pestle analysis: PESTLE analysis is a tool which is used by Companies in tracking of various
external environmental factors . This is a analysis which helps the organisations in identification
of various external forces which could have an impact on market and this analysis can be helpful
in understanding what can be the positive and negative impact on their business of such factors.
Tesco uses PESTLE approach to analyse various factors which are part of the external
environment and they help in internal management of functions of company.
 Political factor: These factors are related to the extent to which government of a country
can have a influence on a industry or any particular company. There are some political
factors which affect every company directly or indirectly. Tesco is located in United

Kingdom, there are various legislations which are bought by government. One such
legislation recently introduced by UK government related to control on Fat tax, as they
want to control the problem of obesity which can adversely affect the health of people of
UK(Kolk, 2016). such regulations are a weakness for company as they have to
compulsorily adhere to it which increase more compliance to be done by them.
 Economic factor: These factors are the determinants of the performance of a economy,
which has a impact on the company and its performance. Economy of UK is recovering
from the financial crisis which occurred in the year 2008. now present situation is
different as there is developed economy now in UK. This has many positive benefits for
company as they can get benefits of a developed economy, such as there will be more
personal disposable income available with people which will help them in spending
more. This will lead to increase in overall sales of Tesco. If these factors are in against of
the company such as decrease in personal disposable income will lead to decrease in sales
of company.
 Technological factor: These factors are related to various innovations taking place in the
country. Technology is most critical factor which plays role in overall development of
company. When there are many competitors emerging then technology is a tool which
can help companies in getting a competitive advantage. Tesco also has adopted
successfully the growing advancements in technology company has recently improved
their distribution service with the help of such usage of updated technology. When
competitors will be adopting the technology faster than Tesco then it will lead to increase
in competition for his company.
 Social factor: These are the factors which are related to the cultural trends, population
analytics, demographics etc. There has been increase in the life expectancy of people
living in UK. Social factor deals with people living in society such as there has been shift
in preference of people they are more focussing on trends of online shopping which helps
them in shopping at any time in comfort of their home. This has shifted focus of company
towards their online presence(Moroni, Arruda and Araujo, 2015).

 Legal factor: Legal factors are those which are related to various legal laws made in a
country which can be related to advertising standards, laws related to consumers,
products labelling, products safety etc. There are legal requirements which have to be
compulsorily adhered by companies operating in that country. Tesco is having a
supermarket chain across different parts of world. They are also dealing in various
financial products such as loans, credit cards, mortgages and savings. There are various
financial cats which apply on Tesco and they have to adhere to them while making
policies related to their financial products.
 Environmental factor: External environment is where every company has its operations
and they are functioning. This factor is having a very crucial role in functioning of Tesco.
Tesco is a company having concern for environment and they have always made efforts
that they are able to take measures in protecting and saving environment. Sustainable
development is a tool which is focus of company as they want to minimize their
consumption of energy and at same time company always takes measures that they are
not emitting such gases which can harm the environment(Otache, and Mahmood, 2015).
This has a negative impact on companies as they have to always show concern for the
environment before using any new procedure. Implementation of environmental
protection measures help building up of trust of their customers.
P5 Internal and external analysis of some specific organisations to identify strength and
weakness
SWOT analysis of Tesco
Strength Weakness
 Tesco is a company which is having a
global presence. They are present in
approximately 14 countries.
 There are stores of Tesco which are
growing in number as according to a
 In year 20185 there has been decrease
in the operating profit of Tesco by a 9%
number. This was because of the Brexit
referendum and this was the year of
worst performance of company.

survey in 2008 there were 3,757 stores
and in present situation there are 6966
stores all over world.
 Tesco uses superior technology to
enhance the experience of their present
customers.
 Tesco has been successful in
maintaining a efficient network of
supply chain which has reduced their
cost and also there has been efficient
waste management system build up by
the company.
 Tesco has been able to become a cost
leader but they have also face a
problem of reduced margins of profits
in recent years.

Opportunity Threat
 Tesco has been involved in making
strategies with different companies
which can help them in attracting
increase number of customers
 Tesco has opportunity they can plan
their expansion in countries such as
turkey, Indonesia and south Korea.
 Present referendum of Brexit has
affected company in a way that that
many trade reforms formed by them
have been broken and their alliances
have also broken.
 Governmental regulations are
increasing and affecting Tesco as there
is increase pressure on company as it
has reduced operational efficiency of
Tesco.
SWOT analysis of Oxfam
Strength Weakness
 Oxfam is a company which is having
well defined goals and objectives, this
always proves very helpful in deciding
the direction of work to be done by
 Company is not having a very high
brand recognition as they are having
online presence only.
 This brand is less preferred by people

employees.
 Oxfam is having a strong global
presence, which helps them in having a
wide reach to maximum
customers(Virglerová, Dobeš and
Vojtovič, 2016).
who re looking for something
luxurious.
 This is voluntary organisation and they
are less preferred by people as there is
a perception that because they are not
earning profit then they might not
provide quality in their products this
affects overall sales of company.
Opportunity Threat
 Oxfam can increase their level of
operations by investing more on
marketing, promotional activities so
that they are able to create awareness
and persuade their target customers.
 Company can start their physical stores
so that they are able to easily approach
those segments of customers who are
looking for physical presence of stores.
 Oxfam has low motivated workforce
which is a threat for company as there
can be increase in turnover of
employees.
 Oxfam has many competitors in market
which are offering quality products to
the same segment of customers, apart
from this there are also emerging
companies which is a big threat for
Oxfam.
TASK 4
P6 How strength and weakness interrelate with external factors
Basis Strengths Weaknesses
Political
Tesco is a brand which has
proper implementation of
various governmental laws and
regulation.
Rules are very important to be
adhered, but this reduces
flexibility in functioning of
company.
Economical
Tesco is a company whenever
they entered in countries
Tesco always focussed on
expansion, if any country has

having high GDP growth this
led to increase in sales of
company and they had
increased profits. Tesco has
shifted its focus on building
value towards advertising their
brands of that they can attract
more customers. The
internationalization &
diversification are two major
economic strategies which has
been a major reason for the
success of this company.
low GDP and economic
growth then it will affect the
profitability of company.
There is lot of uncertainty in
the economic structure of a
country this may affect a
company's position in the
market. Such as in the year
2008 the high recession
conditions of the country had a
very negative impact on the
overall market of Tesco. As
the purchasing power of
people declined because many
lose their jobs and people had
no source of income.
Social Factor
Tesco as a supermarket brand
has always believed in
continuous basis of
improvement in their products
according to changing
preference of their target
customers(Sodeyfi, 2016).
Social factor is in relation to
customers behaviour which is
never constant they keep on
changing on continuous basis.
Technological
Tesco has become successful
in adoption of upgraded
technology; they are using
digital technology platforms
for marketing and promotion
of their products.
Tesco keeps on making
changes which leads to lot of
utilisation of time and financial
resources of company.
Companies are always affected Regulatory authorities keep on

Legal by changing laws of every
country. Such regulations are
important from customers
point as they can trust the
brand(Prajogo, 2016).
changing laws of company
which leads to very frequent
amendments and disturbs all
laid policies of company.
Environmental
Management of Tesco has
focussed on sustainable
development this has helped in
building of brand image in
market.
Many times, there is situation
for companies they must take
care of lot of factors which are
related to environmental. This
imposes lot of restrictions on
company.
CONCLUSION
From the above discussion, it is concluded that business environment is an important
factor which affects all companies in some way or other. It is that factor which is present in the
external environment of company. There are major three basis on which companies are divided
that is public, private and voluntary. Also, there are several other criteria which are used to
classify companies based on their size, structure, scope and stakeholders. Such classifications are
helpful in knowing the scale of operations. There is analysis done on other basis also which
includes SWOT, PESTLE etc, which is very useful for companies in planing their future
strategies.

REFERENCES
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F., VMware Inc, 2016. Controlling use of a business environment on a mobile device. U.S.
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Fabuš, M., 2017. Current development of business environment in Slovakia and Czech Republic.
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dynamic business environment. Amfiteatru Economic Journal, 17(38), pp.120-132.
Huang-Horowitz, N.C., 2015. Public relations in the small business environment: Creating
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