Business Environment Report: Tesco, Firm Types, and Structures

This report provides a comprehensive analysis of the business environment, focusing on various firm types and their structures. It begins with an introduction to the business environment, highlighting the external factors that influence business operations, and then delves into the analysis of different types of firms, including private, public, and voluntary sectors. The report examines the purposes, legal structures, and objectives of these firms, using Tesco as a case study to illustrate the concepts. It evaluates the size and scope of different firms, linking these aspects to their objectives, structure, and scope. Furthermore, the report explores the interrelationships between different organizational functions, such as HR, finance, production, and sales, and their impact on the organizational structure. The report also analyzes the advantages and disadvantages of these interrelationships and their influence on the overall business structure. In conclusion, the report emphasizes the importance of understanding the business environment and the various factors that contribute to the success of firms within it.

BUSINESS ENVIRONMENT

TABLE OF CONTENTS
PROJECT 1 .....................................................................................................................................1
INTRODUCTION ..........................................................................................................................1
TASK1.............................................................................................................................................1
1.1Analysis of various types and purposes of firms like private, public, voluntary and legal
structures.................................................................................................................................1
1.2 Evaluation of size and scope of a range of different kinds of firms.................................3
1.3 Analysis of link between objectives, size, structure and scope........................................4
TASK 2............................................................................................................................................4
2.1 Different organisational function relationship and their link to organisation objectives and
structure..................................................................................................................................4
2.2 Analyse advantages and disadvantage of interrelationship between organisation functions
and impact on structure..........................................................................................................7
2.3 Critical analysis of different types of business structures................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

PROJECT 1
INTRODUCTION
Business environment connotes the externals factors and institutions that are not in control
of organization and affects the functioning of a business enterprise. It is also considered as the
environment that combines both internal and external factors that influence and change the
conditions of business to sustain in market of particular industry (Craig and Campbell, 2012).
This report is based on the concept and provides the background knowledge and understanding
of business, functions of retail organization TESCO and the wider the business environment in
which it operates. Along with this, there are various types of organisational sectors have
discussed providing the complete understanding about its size and scope of different types of
organizations. Structure of organization has also been discussed to provide complete
understanding about the activities which are to be accomplished by management in order to
sustain in competitive market situations.
TASK1
1.1Analysis of various types and purposes of firms like private, public, voluntary and legal
structures.
In competitive environment of business, mainly there are various organization that
regulates their business operations in three different sectors like private, voluntary and public
sector enterprises. Firms in these sectors have different motives, vision, mission and objectives
towards regulation of business operations (Eriksson, 2013). In give scenario, analysis of different
organization in retails business sectors is taken in to considerations to determine several business
purposes and ways to regulate in market. It also describes the condition in which this
organization where established in market. These different organizations are as follows:
Public sector firms: Those business enterprises that regulates their business operation at
international level and also has partnership of public, government in business operations. It is
also considered as the organizations that regulates their business with an aim to maximize
profitability by satisfying the needs of its people within the country (Klapper and Parker, 2010).
For example: TESCO is an international level of organization that provides wide range of retail
products to its customers and fulfil the needs of customers. The main purpose of organisation is
capture the market by adopting various effective business strategies.
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Legal structures: there are mainly two legal structures of public sector firms which are as
follows:
Franchise: Business owners pays remunerations to business firm to use their name and selling
the re brands products and services.
Workers cooperatives: Those business organization in which all workers have equal pay scale
and take joint business decisions.
Voluntary sector firms: Basically, those enterprises that establish or continue their
business operations with aim to satisfy the social needs as well as resolving problems of people
which are target under specific market segments (Björklund, 2011). It is basically owned group
of people or organisations that have an aim to serve the society at large rather than increasing
market share, accomplishment of needs people like employment or welfare condition, facilities,
education etc. These are also social or non-profit enterprises which have their focus on
accomplishment of various needs people in country, to provide opportunities for growth and
increasing the level of income within the country.
Legal structures: basically, these enterprises set up for the religious social, political or similar
purpose. These organizations have legal structure like:
Government organization: Not less than 51% shares are owned by government and
includes a company which is considered subsidiary company (Björklund, 2011).
Cooperatives: these organizations are controlled by and operated for the benefits of those
who are using its services. The income from the retail cooperative is returned back to the
consumers in the form of dividends.
Private sectors firms: In UK, there are various private firms have been established and captured
a high market in retail industry. These are owned and regulate by single entrepreneur or partners
with aim to maximize profits. The capital of these private have been invested by entrepreneurs or
partners themselves at their own risk (Klapper and Parker, 2010). In simple words private
organizations are profit oriented firms that have their own business motivates and regulate their
business operations at international. The profitability ratio of these is considered as low as
compared to public sector firms (Eriksson, 2013). For example: B&M is a private organization of
UK which has its business operations in retail industry and has its focus on increasing probability
to sustain in competitive business environment. It is doesn't have an investment of public or
government in their business operations.
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Legal structures: A variety of legal structures has been existing for the private sector business
organization which depends upon the jurisdiction in which they have their legal domicile. The
main types of legal structure in private sectors are as follows:
Sole trade: Those business firms which are owned by the single person or entrepreneur at
his own investments (Nah and Saxton, 2013). In this, the liability of business profits and loss lies
upon the owner as there are no other partners in business operations.
Partnerships: Those firms in business environment which are regulate two or more
persons and companies with an aim to maximize profit.
1.2 Evaluation of size and scope of a range of different kinds of firms.
As per the above analysis, it is also considered that these organisations also regulate their
business operations with different size and scope within the economy (Craig and Campbell, 2012
1). They also have their own importance and specialization in retails sector of UK. In this
context, size and scope of this organization are evaluated to provide clear understanding about
their specification within economic environment of country.
Size and scope
 Public sector organization: TESCO is considered as global retailer which has its
operation across 45 countries with 6553 retail stores (Kew and Stredwick, 2017.). They
are continuously expanding their legal structure s in across various counties in the form
of franchises. Moreover, they also have large scope to increase the export of their
products in other countries and satisfy the demand of people.
Objectives: they regulate their business practices with varied objectives of earning
profits, sustaining growth, increasing the market share and getting the capital from the public by
issuing shares and securities etc.
 Private sector organizations: In this, organization also regulates their business at
international level but doesn't issue there shares to public. These are also considered as
small medium enterprises that possess low market share as compared to private firms
(Aterido, Hallward-Driemeier and Pagés, 2011). B&M is also considered as private
organization which has achieved a wide profitability of around 5 million. They presently
have their 500 retails store in around 25 countries in form of partnerships or business
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ownership. The main scope of these firms is to expand their business in retail market and
increase their profits through expansion of business in other countries.
 Voluntary organization: Also considered as charitable organizations which are owned
by government or cooperative with an objective to provide benefits to users of its services
(Gecevska and et.al., 2010). The size of these organizations is considered as small as
compared private or public-sector organisation. They gain capital in the form of donation
or charity as they considered as non-profit organization and resolve thee social needs like
shelter, clothes, food and other products.
1.3 Analysis of link between objectives, size, structure and scope.
From the effective research practices, it has been recognised that there is strong
interrelationship between the size scope and structure with the objectives, products and services
of these relevant business enterprises. In this context, the public-sector organization has the wide
business operations and cover major areas of market share (Siewiorek and et.al., 2012). They
considered major source for people to purchase the products therefore have objective of
customers satisfaction. They achieve sustainable profits and capital in market because their
shares are also owned by public. In this, TESCO wide organization structures that consist of
various franchises which are owned by public. Apart from this, private firms usually have matrix
organization structure in which every individual should delegate responsibility to each other. All
the individuals in organization work with an objective to maximize sales and profitability to
achieve common goal (Discovering the “Right” Organization Structure. 2017).
TASK 2
2.1 Different organisational function relationship and their link to organisation objectives and
structure
Tesco uses matrix organisational structure and this structure states that the departments
functions with different set of objectives. The main power and authority is with the department
heads who reports to the senior management. Communication is through line structure and
members convey their messages to their seniors or subordinates. The different organisation
functions and their relations are as follows:
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 Human resource department- This department has its relation with all the department of
the organisation and their work is interrelated. For example, if the finance department
needs accountant for their work-related programmes then they will convey it with the HR
department and they will recruit the suitable candidate for it (Budhwar and Debrah,
2013). Moreover, if the production department required raw material they will also notify
it to the HR department that will arrange it for them with their sources. Finance department- This department in the organisation is important for its work
culture as they control the finance of the company and distribute it to all the department
for their further activities (Pikka, Iskanius and Page, 2011). They communicate to all the
departments about their budgets and distribute it as per the requirements. Production department- They produce the required product in the company and are
responsible for the final production and if there is a need of raw material they convey it to
the HR department and also to the finance department for the allotment of the funds
(López-Gamero, Molina-Azorín and Claver-Cortés, 2011).
 Sales department- This department is responsible for the sales and marketing of the
product, so they focus on giving their response to its function and if any requirement is
their they transfer their messages to the marketing department to carry out the sales
process further. It is essential that they have good communication between them so to
formulate the business practices.
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Their link to organisational objectives and structure evaluation is done on the basis of their
relationship with the other departments and for what purpose they are conducting their business
activities. These practices include:
 To decide the objectives of the organisation and to carry out the desired outcomes from
the business.
 Allocation of resources, they are related as they focus on distributing the resources to the
departments and to carry out the business activities (Bansal and Hoffman, 2012).
 To delegate the responsibilities and duties so that all the practices in the organisation can
be completed effectively.
 To provide training to the employees to make their skills develop in the organisation and
bring out the desired outcomes.
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2.2 Analyse advantages and disadvantage of interrelationship between organisation functions and
impact on structure
It is analysed from the organisational structure that there is a relationship between
function of organisation and its structure (Bovee, Thill and Raina, 2016.) The functions of
organisation are delegated by the responsible personnel in the company and is structured from
the top management to the lower management. It is a need in the organisation to delegate the
roles and responsibilities of the employees in the company and to allocate these resources and
utilise them effectively. Providing adequate knowledge about the organisation to make it easier
for the employees and so that they can give their best in the company. Providing training to the
employees to develop their skills and enhancing their abilities to achieve the organisation
objectives.
2.3 Critical analysis of different types of business structures
In the competitive analysis, there different types of complexities in different organization
structures and their interrelationship with the different functions in organizations. In this context,
in the retail organization like TESCO various business functions are operated like finance,
marketing, research and development, various critical organization that associated their problems
with other business functions (Wheelen and Hunger, 2011). Every business structure of TESCO
has been operating these major functions with aims of managing the organization as well as
managing the work within the enterprise. These business functions also have their
interrelationship with each other as they have managed the operations together to accomplish the
business objectives. Finance department in organization coordinate with research department to
analyse the information of market trends and objectives(Bremser and Chung, 2005). In
franchises, these functions are operated by owners themselves and also have assigned various
task to accomplish the objectives.
CONCLUSION
In this report, it has been concluded that the positive and favourable business conditions
help organizations to achieve success in business operations. Various types of business
organizations have been discussed in order to determine their size and scope within competitive
business environment. It is also considered that these business organization regulate their
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business transaction with different objectives that they want to accomplish in the specified time
duration.
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REFERENCES
Books and journals
Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Bansal, P. and Hoffman, A. J. eds., 2012. The Oxford handbook of business and the natural
environment. Oxford University Press.
Björklund, M., 2011. Influence from the business environment on environmental purchasing—
Drivers and hinders of purchasing green transportation services. Journal of Purchasing
and Supply Management. 17(1). pp.11-22.
Bovee, C. L., Thill, J. V. and Raina, R. L., 2016. Business communication today. Pearson
Education India.
Bremser, W. G. and Chung, Q. B., 2005. A framework for performance measurement in the e-
business environment. Electronic Commerce Research and Applications. 4(4). pp.395-
412.
Budhwar, P. S. and Debrah, Y. A. eds., 2013. Human resource management in developing
countries. Routledge.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge
Eriksson, P. E., 2013. Exploration and exploitation in project-based organizations: Development
and diffusion of knowledge at different organizational levels in construction companies.
International Journal of Project Management. 31(3). pp.333-341.
Gecevska, V., Chiabert, P., Anisic, Z., Lombardi, F. and Cus, F., 2010. Product lifecycle
management through innovative and competitive business environment. Journal of
Industrial Engineering and Management. 3(2). pp.323-336.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan
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Klapper, L. F. and Parker, S.C., 2010. Gender and the business environment for new firm
creation. The World Bank Research Observer. 26(2). pp.237-257.
López-Gamero, M. D., Molina-Azorín, J. F. and Claver-Cortés, E., 2011. Environmental
uncertainty and environmental management perception: A multiple case study. Journal of
Business Research. 64(4). pp.427-435.
Nah, S. and Saxton, G.D., 2013. Modelling the adoption and use of social media by non-profit
organizations. New Media & Society.15(2).pp.294-313.
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Pikka, V., Iskanius, P. and Page, T., 2011. The business enabling network–a tool for regional
development. International Journal of Innovation and Regional Development. 3(3-4).
pp.324-344.
Siewiorek, A., Saarinen, E., Lainema, T. and Lehtinen, E., 2012. Learning leadership skills in a
simulated business environment. Computers & Education. 58(1). pp.121-135.
Wheelen, T. L. and Hunger, J.D., 2011. Concepts in strategic management and business policy.
Pearson Education India.
Online
Discovering the “Right” Organization Structure. 2017. [Online]. Available through
<https://christianchurchdevelopment.wordpress.com/2008/10/20/church-organizational-
structure>.[Accessed On: 5th October 2017].
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