Business Environment: Tesco PLC, Organizations, and Functions

This report provides a detailed analysis of the business environment, focusing on Tesco PLC as a case study. It explores different types of organizations, including public, private, and voluntary sectors, examining their purposes, legal structures, size, and scope. The report delves into the interrelationship between various organizational functions such as marketing, finance, HR, and IT, and how these functions contribute to achieving organizational objectives. Furthermore, it analyzes the positive and negative impacts of macro-environmental factors, using PESTLE analysis to assess the influence of political, economic, social, technological, legal, and environmental factors on Tesco PLC. The report highlights the significance of understanding the external environment for business success and provides insights into how organizations like Tesco adapt to and manage these factors.

Business and the business
Environment

INTRODUCTION
Business Environment is the process by which an business organization that is not
controlled by an business organization. In this factors like investors, customers, suppliers,
technologies, market condition and various factors is being included. This makes influence of
performance to be made in an organization. All business organization weather they are public,
private and voluntary sector is needed within an organization. Business organization Tesco PLC
is that kind of organization having large retail grocery of products ranging form households
items within which non households products. As per the report things that has been covered is
based over public, private and voluntary sector organization according to size, scope purpose and
nature and has been linked with various departments of an organization that is enlighten.
Interrelationship between external macro factors with strength and weaknesses.
TASK 1
P1. Different types of organisations with their Purposes and Legal Structures
Organization is considered to be that kind of human association that has been formed in
order to make attainment of some purpose. Aim of establishing the organization can be for profit
earning with social welfare. Different kinds of organization is explained as follows:
1. Public Sector Organizations : As per such these sectors that is included within an
organization on behalf of government general public. Main objective with public organization
this is to make sure that profit is being generated. The main objective within an public
organization is to enhance revenue generation. In this focus is over social welfare within public
and society. This is to be understood with the help of an example of BBC that is an public based
government organization for broadcasting all over the world. Purpose – Public organization has been providing services to general public which makes
utilization of resources possible in optimum manner.
 Legal Structures – Legal structure within public organization include and it includes:
a. Central Government – Funds are collected in the form of Income Tax from public.
Local Government: They have been collecting funds in the form of community charges
that has been formally to be known as Council Tax.
c. State Government – It is being provided with specialization of power over
particular department.

2. Private Sector Organizations – These organizations is being established and
controlled through private individuals. As per this owner of private organization there can be
either be single individual or group of individual. This has to be understood with the help of
example Tesco PLC that is an public limited organization which is retailed by business in
various countries like UK, US and various others. Purpose – Main aim of private organization is to generate profit that has been providing
over adequate competition to public sector which helps an organization to improve there
efficiency.
 Legal Structures – It includes :
a. Sole Proprietorship : These are those kinds of organization in which single employee
is there and whole business is handled by him. This is necessity that makes obtaining of license
from local authority through various kinds of business lies in tax that has been driving trading.
b. Partnership : Partnership is those association that is formed with the help of one
individual. Legal obligation in partnership agreement is making legally bound by paying debts
over sharing profit in agreed manner.
c. Limited Company : These are the entity that is registered and in limited organization
profit belonging within an organization not to shareholders. Profit is getting profit in the form of
dividend. Corporation tax is to be paid with the profit earned within last year by Tesco PLC that
is an registered organization.
3. Voluntary Organizations – These organizations includes group or individuals that has
been willingly enter in an agreement for forming a organization and making objectives to be
accomplished. Oxfam is an global charitable organisation structure who works towards reducing
the poverty in the nation. Purpose : Main aim of Voluntary organization for working with betterment of social
welfare. Social welfare includes development of individual with growth of society
overall.
 Legal Structure – The voluntary organization's legal structure involves :
a. Trust – Trust is illegal that means they enter into an agreement within the
organization. They are formed within their own name. This makes trustee to make personal
liability.

b. Unincorporated Association – Such associations is an legal entity and hence
limitation of liability as they enter within an agreement on behalf of charity personally liable.
Growth of International Business Environment
As continuous production over similar products, domestic market which has been leading
to saturation point at stages that has increased growth within international market. In certain
years trade barriers implication is been made by government that has opened doors for not doing
business globally. In this long term profitability is to be attained within long term. Business has
started for making diversify to global level.
P2. Size and Scope of various types of Organisations
British Broadcasting Corporation (BBC) : This is an organization that is being owned
by public. This is known as largest broadcasting organization of world. BBC is funded through
licence fee which is being paid by UK households.
 Background: BBC this is an public ally owned organization that has been formed in
1992 and gets funds from UK households. This is there to provide nine TV channels and
also makes radio broadcasting with TV licensing and trademark is done.
 Size: Employees working within BBC corporation is 20,000.
 Scope: BBC should expand in emerging market like China, India and major focus is
upon entertainment and technology.
 Vision: BBC is there to make sure that most creative organization in the world.
 Mission: Mission of an organization is to make information, education and entertainment
to be done within individual programs and services.
 Business Objectives: Objective is based on making establishment of BBC that makes
specialization of content within education across UK. Various parts of world and
impartial news and information is ton help in making persons understand and engaged
within the world
 Stakeholders: Presenters, Program editors , BBC Trust , local community , government
are the internal and external stakeholders of BBC.
TESCO PLC: Tesco PLC is an public limited that has been founded 100 years ago. This
is one of the most effective factor with wide range of products to be offered.

 Background: Tesco is that type of public limited organization which is part of private
sector organization. It has been selling different products with grocery items included
within it.
 Product or Services offered : These products is been offered by Tesco with variety of
grocery with clothing, electronics and others.
 Size: Tesco is an british multinational grocery which is currently having 6800 stores
across the world and 40000 employees.
 Scope: Tesco has been covering improvements within the delivery over services with
global trends.
 Vision: Tesco's vision is being valued by an business organization for earning trust and
loyal customers.
 Business Objectives: Tesco is aimed for creating wider products that has been ranging
with products and cutting prices that is being offered with discounts.
 Stakeholders: The stakeholders of Tesco are employees, supplier with whole supply of
products to Tesco and customers.
OXFAM: Oxfam is one of non profit group with an extensive collection of functioning
like working towards tackling through poverty and natural disaster.
 Background: Oxfam is an voluntary organization which has been structuring global
organization in order to end any kind of injustice with poverty. Non-profit organization
various operations like poverty and alleviation disaster.
 Product or Services offered : Oxfam make sure that fair trade, education and natural
disaster (Kim, 2016).
 Size: Oxfam is being operating in 94 countries across the glob with around thousand of
partners locally connected . This has been helping in making social welfare with more
then 50,000 volunteers worldwide.
 Scope: Oxfam has scope of increasing volunteers form across the country with rapid
growth in social welfare.
 Vision: Vision of Oxfam is that with world poverty and people is being treated equally.
 Mission: Mission is to help in making favourite charity of people that has been
convening with donation of funds in an organization.

 Business Objectives: Objective is to make good solutions with injustice poverty. In this
aiming to empower persons to create secure future in the form of poverty.
 Stakeholders: The trustees of Oxfam staff has been volunteers, supplier and
communities wher in operation is included within stakeholders of Oxfam
P3Interrelationship between different Organisational Functions and Their Linkage with
Organisational Objectives
Organizational functions Support system (contribution
towards achievement of
organizational goals)
Marketing Function Financial Function
Tesco is a multinational retailer
company based on groceries
and general merchandise. It is
the 3rd largest retailer company.
Tesco is doing business all over
the world so the marketing
techniques and functions taking
a important place. Company is
doing online marketing.
With the help of social media
and websites company
marketing is going on.
Company is doing marketing
through advertisement on news
paper, magazines , social
media, radio.
In Tesco, financial functions
divided in to 2 areas:- first is
management accounting
department, In this department
they systematically plan their
budget for the future period and
circulate other departments of
the company. And second is
financial accounting department
in which company maintain and
produce all the documents that
based on what going to happen
in the company.
Marketing and financial
functions both the interrelated
with each other because with
out finance company marketing
is not possible and with out
marketing company will not
meet financial outcomes and
earn more profit. Marketing and
financial functions contribution
is remarkable to accomplish
company goal.
HR Function IT Function
HR Function is very significant

for every organization. HR
manager main focus on how to
approach right candidate for a
specific job role. Main function
of the HR is to managing
employees in line for
developing business strategies
to improve employees and
company performance both.
This function helps to recruit
right person for the right job.
Recruitment and selection
activities are taking main place
in this function. Tesco company
proper manage HR function and
develop more strategy to
IT functions is everywhere
without technology nothing is
possible. Company follow
proper advance technologies to
maintain each and every
functions of the organization.
With the help of information
technology company easily
manage the activity of all the
department.
IT functions are very helpful in
HR field because with the help
of technology HR manager
easily recruit the candidate and
select them for the specific job.
Same as with IT sector HR
manager appoint good and
capable employees for the IT
sector job so that they perform
their job role in a best way. HR
and IT functions both the
interrelated and it help together
to complete the organizational
objective and also contribute in
the growth of the organization.
Positive & Negative Impact Of Macro Environment factors on Tesco
macro environment factors are positively and negatively affects an organisation. These
external factors are affected in various manner. Macro environment-factors are analyse by
PESTLE analysis. PESTLE analysis is a method in which analysis of external factors that affects
an organisation. The analysis is conducted in context of Tesco PLC.
Political Factor
It is affect externally on an organisation. in this factor check the government policies and
rules intervene the economy that affects to an organisation. Trade restrictions, trade policies,
taxes, bureaucracy these factors are included in it. In this include the act of legislation and
stability of country where the organisation operates in.

Positive impact – due to financial instability in world many government motivates retailer to
create jobs. Tesco is taking this like a great opportunity to increasing the demand and expansion
of their business in international market.
Negative – Due to increment in taxes or trade restriction the import or export is costly for
organisation.
Economic Factor
there is interest rates, exchange rates, economic growth factors are externally affecting an
organisation. It is affects on business and profit. The company should be aware about the
government policies and changes in taxes.
Positive – when the recession is increase in market, the cost of raw material is decrease. So that
is profitable in production.
Negative – unemployment rate is increases that's why the labour is also increases.
Social Factor
This factor is focus on culture style, social trends, styles, purchasing power of customer.
There is many factors which is educational level, lifestyle, cultural level that is important in this
analysis. These factors are helps in selection of product according to customer.
Positive – For enhancing customers follow these factors and doing production according to
social trends or cultural style.
Negative – When they doesn't follow the customer requirement and trends not attract to
customers for own product.
Technological Factor
Technological factors are important in production or dealing with market. Technological
innovation participate in production line, communicate to customers, time management. It is
greatly affects to market.
Positive – With the help of technological factor easy to communicate with customer and easy to
increase production.
Negative – When proper technology is not use in production that is directly affects the demand.
Legal Factor

In legal factor there are many laws, that are bound to be followed for an organisation. In
this trademark, labour law, license, permits, industry regulation are included. These factors are
affected cost of labour.
Positive – The trademark and branding are important for a company that is helps in increase the
popularity of company.
Negative – When they are not follow the regulation and laws then it will creating a legal
problem.
Environment Factor
P5 SWOT analysis
SWOT analysis can be define a Framework which is used by the organisation in relation to
identify the internal environment and capabilities. It is a Framework which can used by Tesco to
improve its internal environment and perform the functions. There are number of strengths
weaknesses opportunities and threats of Tesco which are discussed below:
Strength
Global presence: global presence is a major strength of Tesco which help organisation in selling
its product to larger markets. Tesco is operating globally where it supply products to different
nations which act as an strength of organisation.
Loyal customers: Tesco is operating within the British market from a long time where company
has loyal customers. This is because organism provide quality products and services to the
customer which help them in their needs and requirements and attained with organisation for
longitude of time.
Weakness
Legal issues: one of the weakness of Tesco is that organisation is facing number of legal issues
because of unethical practices. this impact negatively on the brand value of the organisation and
also reduce its profitability.
High cost: high cost is also acting as a issue to the organisation which is related to the products
and services offered by the business entity. Under this, because of using high quality product
organisation has no control over its cost which impacted on the sales in negative manor.

Opportunities
Partnership: making new partnerships as an great opportunity in front of Tesco. This is because
organisation is using appropriate system. Under this organisation use its partnership with other
organisations which will help in expanding the market and performing an appropriate way.
Increase product mix: Tesco is using appropriate product mix in the market but it is also an
opportunity to the firm that it can expand its business to other products like healthcare. This will
help organisation in improving its product mix as well as increasing its functions.
Threats
Increasing competition: Increasing competition is a major threat in front of organisation. This is
because there is continuous increment within the competition where Tesco is trading. Negatively
on the organisation.
Failure of operation in Japan in America: one more threat in front of organisation is related to
pay area of operations in different Nations. This impact negatively on the organisation because
organisation can use its operation and can expend its function.
P6
Interrelationship between macro and micro environment
Micro and macro environment of organisation are interlinked to each other this is because there
are a number of strengths and weaknesses which can be used by the organisation in order to the
macro environment of the firm.. in context of Tesco, this can be seen organisation is operating in
environment of UK. There are number of strength of organisation like loyal customers which can
be used by organisation in order to achieve its objectives within the political and economic
factors. This will minimise the negative impact of organisational weaknesses and threats related
to failure of operation and high cost. Economic factors like improving GDP ratio will helpful to
the organisation in matching its function related to economic environment. Social factors can
also be coordinated with organisational weaknesses and strength. This is because it help the
organisation in moving its functions where it can use the current trends according to its strength
and weaknesses. Along with this, it can be seen that organisation can perform in an appropriate
manner by combining internal and external environment in an appropriate and working with
better strategies.

CONCLUSION
From the above report, it can be marked out that an business environment is one of the
most important factor which has been helping in analysing of different kinds of aspects required
to make business environment better. It has been helping within development of both internal
and external factors. This increases coordination in the department of business which helps in
accomplishing of long term objectives. In this external factors in an organization has been told
with both positive and negative impact. Tesco PLC follows herarchy organization structure that
has helped in smooth operations that helps organization to earn more and more profit by
increasing shares.

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