Business and the Business Environment Report - Module ABC, Semester 1

This report provides a comprehensive analysis of the business environment, exploring different types of organizations including private, public, and voluntary sectors, with Tesco as a case study. It examines the purpose, types, and legal structures of these organizations, along with their size and scope. The report further delves into the interrelationship between different organizational functions and the impact of the macro environment on business operations. Internal analysis, including SWOT analysis, is conducted to identify strengths, weaknesses, and their impact on decision-making. A critical evaluation of both macro and micro factors on decision-making is also included, offering insights into the complexities of the business environment and the factors influencing organizational success.

Business and the
business
Environment

Table of Contents
Introduction......................................................................................................................................3
TASK 1 ...........................................................................................................................................3
P1 : Different , purpose, types & legal structure...................................................................3
P2 : Size and Scope of organisations......................................................................................7
M1 : Analysis of Size, structure & scope of various organisations........................................8
TASK 2............................................................................................................................................9
P3 Interrelationship between functions of different organizations.......................................9
M2 : Advantages & disadvantages of interrelationship between functions of organisation 10
D1 : Critical analysis of complexities of different business types.......................................10
TASK 3 .........................................................................................................................................10
P4 & M3 : Positive and Negative impact of macro environment on operations of a business 10
TASK 4 .........................................................................................................................................12
P5 : Internal Analysis of organisation to identify strengths and weaknesses.......................12
P6 interrelation in strength & weakness of external macro factor.......................................14
M4 : Analysis of SWOT and their impact on decision making ..........................................16
D2 : Critical evaluation of both macro and micro factors on decision making....................16
Conclusion.....................................................................................................................................17
REFERENCE.................................................................................................................................18

Introduction
Business environment consist of micro and macro environment factors that are posing a
impact on functions of organisations. According to the motives of organisation there are three
major categories in which organisations are divided that includes private enterprises, public
enterprise and voluntary organisations (Aithal, 2016). The main mission of such organisations to
enhance overall profitability & Productivity. Tesco is a retail organisation of UK that was
founded by Jack Cohen in the year 1934. The operations and functions of every organisation are
affected by various internal & external factors. In Present report there are different organisations
that have to be differentiated based on public, private and voluntary sectors. Further, there is
discussion of relationship between different functions of organisation that are considered to
achieve some specific laid down organisations objectives.
TASK 1
P1 : Different , purpose, types & legal structure
Organisations can be classified in various different categories according to motive of
earning profitability, social objective and in some cases both. According to that their purpose and
scope always varies (Alsaad, Mohamad and Ismail, 2017). Presently there is discussion of
different organisation types:
Private organisation:
Business type:
A) Profit making:
There are some business who are working for a motive of maximisation of revenue and
profits. That is the mission and main objective of such business. It includes Regent college,
Tesco supermarket, Morrisons, Sainsbury's.
B) Not for profit:
There are some organisations that are build up as charities or organisations not working
for earning of profits. These organisations are only focussed towards enhancement of social work
and society's good. Such as British heart foundation, world food program, Oxfam are some
examples of not for profit organisation.
Types of business:
Private sector:

Private sector are enterprises are the ones that posses no Interference or government control.
Some examples of private enterprise are discussed below:
Sole trader:
Meaning: Sole trader can be described as business that are owned and controlled by one single
person.
Goal: Organisation has to focus on achievement of laid objectives by the sole owner that may or
may not be to maximise profitability.
Features: These organisations do not posses separate legal entity as ownership and business are
not different from each other (Bah and Fang, 2015).
Legal features: In these business owners are always liable personally for debts and losses of
business.
Examples: In organisation like Columbus photographer the owner and business are considered
same. In case of winding up or any other case owner is personally liable for all profit and losses.
Partnership:
Meaning: Partnership organisation are defined under partnership act 1890. that consist of people
who are part of same business with a motive of earning profits.
Goal: Goal is to maximise profits.
Features: Partnership is formed with more than two person coming together to start a business
Legal features: All partnership business are governed by Partnership Act 2002.
Examples: Solicitor doctors is a partnership business in UK.
Private limited company:
Meaning: Private limited company is a organization that is independent and can be started as
any form.
Goal: The main objective of private company is to lay down the mission and vision that has to be
achieved in course of business functioning.
Purpose: Core purpose of TESCO is to be champion for their customers so that they can help
them in leading a better quality of life and a easy way of living. Main objective is “Serving
shoppers a little better everyday” (Core Purpose and Values, 2020).

Size: TESCO is third largest retail store across world according to gross revenue. They are
having shops in countries like Europe, Asia and market leaders in UK with 28.4 percent market
share.
Scope: TESCO has diversified in areas like books retailing, electronic, clothing, furniture,
financial services, Internet, telecom, software.
Legal structure: TECSO has a hierarchical structure where board of directors consist of 10
members. John Allan is chairman of board, Dave Lewis is CEO, Alan steward is Chief financial
officer. They have a department of Corporate governance that is dealing with shareholders
(TESCO COMPANY ORGANISATIONAL STRUCTURE CHART EXAMPLE, 2016).
Features: Limited companies are independent and government may not posses any control on
the functioning and decision making aspect of such organisations.
Legal features: There are some legal aspects that a private enterprise has to work according to
their memorandum of association and articles of association that is governing the functioning of
such organisations.
Examples: Tesco and sainsburys are examples of such retail organisation. Major objective of
retail organisation to enhance their Present profitability and sales by dealing in quality of
products.
B) Public sector
Meaning: Public sector organisation are those that are having well known business and are
traded on stock exchange.
Features: Organisations are in control of government institutions, local authorities or trustees.
All stakeholders posses a influence on the working of such public organisation (Belás and et. al.,
2019).
Goals: The goal of public sector organisation is to maximise the welfare of society and work
towards achievement of monetary and non monetary objectives.
Purpose: The main purpose of NHS is to provide medical services to poor segment of society to
work towards improvement of living standards of people and provide them low cost or free of
cost services at times of need. NHS is focussed on “working together for patients”. They
followed principles of dignity & respect, quality of care, compassion core objective is to improve

health and well being of their patients through innovation and professionalism (NHS Values,
2020).
Size: According to data of march 217 NHS has employed 106,430 doctors, 285,893 nurses.
There are 207 clinical commission groups, 135 acute non specialist trusts, 17 acute specialist
trusts, 54 mental health trusts, 35 community providers and 10 ambulance trusts (NHS Values,
2020).
Scope: NHS is based on certain founding principles that includes services to be more
comprehensive, universal and free of cost. It is a health service offered free of cost at point of use
to ordinarily resident of UK (NHS Values, 2020). .
Legal structure: Legal structure of public organisation is related to activities that are in
government control. There is secretary of state that is governing health education England.
Further here are local NHS training and education boards under which there are deaneries and
academic health science networks.
Example: National health services is a public organisation that has a main objective of offering
healthcare services to people who belong to BPL.
C) Voluntary organization:
Meaning: Voluntary organisations are in control and guided by government. Their activities are
performed by volunteers to work towards improvement of social conditions of society. Such as
Oxfam is a voluntary organisation of UK.
Features: Voluntary organisations can work towards enhancement of vision that is to enhance
the living standards of people living in society.
Goals: Main goals is to take timely initiatives that can help in improvement of overall conditions
of people who are living in situations of poverty.
Objectives:The main objectives is to implement activities for welfare of society.
Purpose: Mission of OXFAM is to crate lasting solutions against injustice of poverty. They are
working towards global movement of change. They are empowering people so that a future can
be created that is secure & free of poverty.

Legal structure: Legal structure of such organisations is made according to vertical integration
that is flowing from board of directors to lower level employees. In Oxfam the responsibility of
law for charity activities and assets are with Trustees. There is council of Trustees that is
governing body of Association of Oxfam. Governance is by broad of supervisors and executive
board chaired by Oxfam international executive divorce (The power of people against poverty,
2020).
Size: Size of Oxfam is based on massive reach they are catering to 22.2 million people with their
long term humanitarian and development assistance program. They are having 300 staff
members globally, 50,000 interns & volunteers in 90 countries with a highly diverse workforce
(The power of people against poverty, 2020).
Scope: OXFAM has a wide scope based on their objectives that includes relieving poverty,
alleviate suffering. Informing public about possible solutions and working for international
partnership of goodwill. It is a confederation of 20 independent charitable organisation that is
focussed on alleviation of poverty (The power of people against poverty, 2020).
Example:Oxfam is a voluntary organisation that is having a objective to reduce poverty and
help people who are living below poverty line.

P2 : Size and Scope of organisations
Small Medium Large
Meaning Organisation who are
employing 10-49
employees can be
classified as small
enterprises. UK has
5.6 million of such
enterprises.
Medium enterprise
consist of less than
250 employees.
Large organisation
are employ more
than 250 employees.
Goal These organisations
are started in order to
achieve some specific
objectives. Such as
Bright star is engaged
in life lodging &
residential mortgages.
Smith brother was
started by John smith
in the year 1999 as a
contracting business.
Tesco is a large
private organisation
that is one of largest
grocery stores of
UK.
Market share Such organisations
have a very limited
market share as they
just focus on some
specific products and
were established 10
years before in year
2011.
Smith brothers are in
UK and they have
also planned to
expand their market
by some new launches
in Irish division in
year 2017.
There is presence in
Asia, Europe. Part
from this they are
also having market
share in UK,
Thailand, Ireland
and Hungary.
No. Of products
and services
Services like later life
lending are offered by
this organisation.
Services like
renewable energy and
construction related
are offered.
It consist wide
range of products
such as furnitures,
clothes, financial
services and
network services.
Legal structure These organisations There is top There is matrix

posses a specific
hierarchical structure.
management
according to their
directions whole
organisation are
functioning.
structure that consist
of mix of functional
& divisional
structure.
Stakeholder size Internal stakeholder
consist of founding
directors and size of
internal stakeholder
constitute 100 as total.
Stakeholders size
consist of total 200
employees that
includes owners,
directors and
employees.
The size of
stakeholder is
4,50,000.
Employees
Number
There are 50
employees in total.
There is team of 100
engineers.
7000 employees are
presently working
in different
locations of Tesco.
Profit volume Profitability ratio is
71 percent.
There has been profits
of $15000 dollars
according to data of
September 2020.
Tesco had a profit
amounting to 300
million in the year
2019.
Sales There are earnings of
approximate 35000
pounds each year.
There has been
turnover of 40 million
pounds in year 2017-
18.
Tesco had a
turnover of 63.911
for year ending
2018.
Geographical
location
Presently they are
catering to three
major sites across
UK.
This organisation has
a nationwide client
base.
There is presence
across 3400
locations across
different parts of
world.
M1 : Analysis of Size, structure & scope of various organisations
Each business has to enhance their performance in order to achieve the laid objectives. In
every organisation there is specific scope, size and structure that plays a very crucial part. BBC is

a voluntary organisation that is present in different countries to lunch new channels, websites and
programs to attract youth. Tesco is a private enterprise that has already build up a successful
brand image and can also expand further by using their wide range of products and price
leadership position.
TASK 2
P3 Interrelationship between functions of different organizations
Different functional units:
In every business there are different activities that have to be performed by business
organizations. All such activities have to be aligned together so that there can be achievement of
higher efficiency between all such departments. This interrelation between departments of Tesco
is discussed below:
 Marketing & sales: Marketing & sales are the two departments that are interrelated to
each other. Such as marketing department has the responsibility to create plan according
to the available information and market research (Belás and et. al., 2015).
 Human resource and Operations: HR department and operational departments are the
two departments that are functioning according to the main objectives of the
organization. According to requirement of functions human resource department has to
ensure that there are adequate number of staff.
 Finance and IT: Finance department has to perform all functions relate to fiance such as
arrangement of funds, allocation according to different functional units (Brennan,
Canning and McDowell, 2020). Optimum utilization of available financial resources. In
Tesco there is financial investment for updation of technology such as there has been
recent launching of self automation systems.
Organizations objective are specific goals that have to be achieved by ensuring high
coordination. In Tesco sales department is working towards timely feedback from customers
based on that marketing department has to further form their strategies.
Organizational structure: It is a system that explains the way activities and functions of
organization will be performed. It determines the information flow, authority and responsibility
relationship, duties and roles etc. Different organizations have adopted structures that can be
divisional, functional or matrix.

TESCO board of directors consist of 10 members that consist of appointment of John Allan as
noard chairman. There has been appointment of CEO Dave Lewis & chief financial officer Aln
steward. Further there has been retirement of four non executive directors & there is appointment
of three new non executive directors. In the year 2015 Mr Lewis has announced that there will
be reduction of cost across various head office functions by 30 percent that had a direct
implications on structure of management. Governance structure of TESCO consist of five major
committees who are reporting to TESCO PLC board. There are 11 members in TESCO
executive committee that is lead by Group chief executive Dave Lewis.
Source: Tesco Organizational Structure, 2016
Organizational structure of Tesco is hierarchical that is reflecting a large sized organization. At
store level there are four layers of management in their large stores. Below mentioned figure
discussed the typical organizational structure in their superstores, Metro and extra formats. It is
crucial to understand that TESCO has a flexible structure that is not rigid in all their stores. But
some of stores are operating with a different structure according to its size location and other
specific factors. The functional structure is working in such a way that there are different
committees such as audit committee, corporate social responsibility committee, nomination
committee, remuneration committee and disclosure committee.
Illustration 1: TESCO board structure

Source: Tesco Organizational Structure, 2016
Divisional structure: It is a Structure that is divided according to own division that is
facilitating flow of resources and operations. Division is based on specific product lines. There is
division of organization according to such product lines.
Matrix structure: In this the relationship prevailing between superior and subordinates is
according to matrix and grids. There are generally some specific projects on which there are
report variations with the presence of such grids (Čepel and et. al., 2018).
Functional structure: This structure is adopted in Tesco where there is division of
organization according to functions. Each functional head is responsible for all the functions that
are taking place in the organization. It consist of general manager and then production manager,
marketing manager, finance manager according to particular function. At store level it includes
managers that are divided in categories like food trading manager, non food trading manager and
personnel manager. There is always a interrelationship among all these departments as when
there is requirement of personnel assistance in clothing sections than coordination is established
between non food trading manager and personnel manager.
Illustration 2: store level structure of TESCO