Analysis of Business Organisation Types, Structures, and Tesco Report

This report provides a comprehensive analysis of different types of business organizations, including private, public, and voluntary sectors, along with their organizational structures. It details the characteristics, objectives, and legal structures of each type, using examples like McDonald's, Tesco, and OXFAM. The report further explores the functions within a business, such as production, human resources, finance, marketing, and innovation, and examines their interrelationships and impact on organizational objectives. It also discusses the advantages and disadvantages of these interrelationships. The second part of the report focuses on Tesco, analyzing both internal and macro environmental factors that influence its operations, aiming to understand the company's strategic positioning and market dynamics. The report concludes with a discussion of the implications of these factors on Tesco's overall performance and future strategies.

Business and the businesses

Table of Contents
INTRODUCTION...........................................................................................................................1
ACTIVITY 1....................................................................................................................................1
Different types of organisation and their organisational structure.........................................1
ACTIVITY 2...................................................................................................................................6
Internal and macro environmental factors of Tesco...............................................................6
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
There are different types of business organisation such as public sector, private sector and
voluntary sector organisation. Business environment brings impact on different aspects within
business organisation such as business operations, activities, performance of employees and
decision-making process. Tesco's aims at effectively analysing the both internal and external
factors that brings impact and influences on the working. The present study explains different
types of business organisation and its size, scope and detailed information. Relationship between
different functions and positive and negative impacts of macro environmental factors are also
explained. The report further explains the internal and external analysis of a business
organisation for identifying strengths and weaknesses.
ACTIVITY 1
Different types of organisation and their organisational structure
Private Sector
Private sector firms refers to those companies which are owned independently by
individual rather then government. In this organisations free from the government intervention
and ownership. The main aim of this type organisation is to maximise their profitability and
productivity and expand their business globally across the world.
For example – McDonald's is the American fast food company established inn 1940 in Chicago,
united states and the main objective of this company is to maximise their profitability through
providing delicious food as well as quick services to their consumers for improving their brand
image(Meissner, 2015).
Public limited company
Public sector company refers to those enterprises which have limited liability and they
can sell and trade their shares in the stock exchange. It includes different type of shares such as
preference share, ordinary share and equity shares which are offered by the company in the stock
exchange market. The main purpose of this type of companies is to provides better goods and
services to their local communities.
For example Tesco is the public sector company and it is the multinational grocery and
merchandise retailer. It was founded in 1919 in the England. The main purpose of tesco is to
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offer a wide range of products and services for creating value in consumers to earn their lifetime
loyalty.
Voluntary Sector
it refers to a group of peoples which are recognized as a volunteer and work towards to
accomplish common goals. The main goal of this type association is to contributes in the mission
of reducing global poverty(Mellor, 2018).
For example- OXFAM is the major non profit groups with extensive collection and operations
and it was established in 1942. The main purpose of this type charitable trust is to work together
in the alleviation of the global poverty.
Detailed explanation about the different types of organisation
Basis of Comparison Public limited
Organisation
(Tesco)
Private Sector
Organisation
(McDonald's)
Voluntary Sector
Organisation
(OXFAM)
Background Details Tesco is the
multinational
merchandise retailer
and it was established
in 1919.
McDonald is the
American fast food
company and it was
established in 1940 by
Richard and Maurice
MacDonald in
California, united
states.
Oxford committee for
famine relief is an
charitable trust and
founded in 1942 which
is led by the Oxfam
international.
Products and Services
Organisation supplies
Tesco provides home
made products,
grocery and it is a
merchandise retailer
company(Zentes,
Morschett and
Schramm-Klein,
2017).
The products of
McDonald's includes
hamburgers and cheese
burger, the big-mac
fillet- O-fish, French
fries, chicken and
salad etc. it also
provides the home
delivery services to
Around the world
OXFAM find out the
innovative ways for
peoples to lift them
from to poverty and
thrives. It also
provides the various
facilities for saving
lives of the
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their
consumers(Mackintos
and et.al.,2016).
communities.
Size of the
organisation
Tesco has 6553 stores
across the United
kingdom, Ireland,
India and Malaysia.
McDonald's is the
world largest
restaurant chain which
are located more than
100 countries across
the worlds. It have
37,241 number of
restaurants worldwide.
OXFAM is the
association of 20
charitable organisation
across the world and
working together with
partners in more than
90 countries.
Scope of organisation Tesco is the largest
retailer of the UK and
through providing
better goods and
services. With this it
planned to expand
their business in the
United States.
McDonald's can grow
effectively in the
market place through
providing delicious
food with proper
sitting facility to their
consumers in their
restaurants.
OXFAM can provides
their services globally
through arranging
campaigns for peoples
to give a voice against
the law and policies
that keep them in
poverty(Mellor, 2018).
Mission The mission statement
of the Tesco is to
expand their business
globally wit full of
opportunities.
The mission statement
of the McDonald is to9
become a favourite of
consumers through
providing better place
and way to eat and
drink.
The mission of the
OXFAM is to help in
reducing the poverty
of the world.
Vision The vision statement
of the tesco is to make
them as a wanted and
needed business
The vision statement
of the McDonald is to
drive with high
profitable growth and
The Vision of the
OXFAM is to create
the world where
peoples are values and
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around the world. become a company
who served delicious
food daily to
thousands consumers.
treated equally and
enjoy their rights full
as citizen.
Business Objectives The business objective
of Tesco is to provide
clothing and
electronics goods as
well as number of
services their online to
fulfil the social need of
the consumers.
The business objective
of McDonald's is to
maximise their profit
through providing
better goods and
services to their
consumers.
The objective of the
OXFASM is to
empowering peoples
for creating secure
future and are free
from poverty.
Legal structure The legal structure of
tecso is the corporate
governance, the people
in this sector deal with
shareholders. In this
the share of company
are presented in the
stock exchange market
to sell or trade.
It is an incorporate
business which has
separate legal identity
by their owners. In this
when company formed
they have to complete
various legal
documents such their
trade mark, registered
office and their
business objective.
OXFAM is the non
profit organisation and
wants to help people.
It is the association of
the various individuals
which not work
together for getting
any type wage. They
all are unpaid
employees in the
organisation(Mellor,
2018.).
Information of the
Stakeholders
The stake holders of
Tesco is government,
investors and their
local communities and
consumers
McDonald's includes
various stakeholders
such as their
employees, customers,
banks and investors.
It includes trustee,
donor, investor,
corporate partners and
governments.
Organisation structure of public sector firm
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The public sector organisation majorly follow the vertical organisation structure which
shows that company has the director, middle manager and more lower level positions. In this the
director of the company handle the operational procedures, the middle managers implement
those procedures through creating plans for effective implementation and the lower level workers
accomplish required task(Woods, 2018.). This procedures help the organisation in accomplishing
organisational goals efficiently through this chain of command which are interrelated with
various functions of the company such human resource,finance and marketing department.
Organisational structure of private sector firm
Private sector firm follow the functional organisation structure which involves their head
of department with various functional department such human resource department, finance,
marketing and production department and each of function is interrelated with others and
managed by an manager for completing organisational goals. With the help of this organisation
structure a business firm can run successfully towards achieving desired results.
Organisation structure of voluntary organisation
Voluntary organisation follows the Matrix organisation structure which includes
management committee with various independent volunteers who works together for providing
various health services to their local communities(Mellor, 2018). This organisation structure is
interrelated with their functions which includes certain volunteers who manage the organisation
effectively towards achieving desired results.
Various functions within the business are:
Various functions of the business can be classified into 6 main categories such as
production function, human resource function, finance function, marketing function, innovation
and sales function.
Production function of TESCO is concerned with producing various kinds of goods such
as home made products with the help of certain processes while the human resource function of
the company is concerned with the employees of the organisation that is how to improve the
efficiency of employees. On the other hand, finance function is concerned with taking various
finance related decisions such as from where to acquire funds. Marketing function is concerned
with how to market the product of the company so as to increase its sales and finally innovation
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function is concerned with the decision regarding research and development(Tunisini and
Sebastiani, 2015).
Inter-relationship between these functions and how much do they contribute towards the
organisational objectives
Inter-relationship between various functions of business such as relationship between
marketing and sales function. Depending upon the objective of company to increase sales,
marketing department will market its product, proper link has to be maintained between these
departments in order to run the business smoothly so as to achieve organisational objectives
efficiently and effectively. Apart from this, production function, finance function and innovation
function all are linked with each other so as to run the business effectively such as both
innovation department helps production department to produce goods through new and upgraded
technology as to produce quality goods and reduce the cost of production. On the other hand,
innovation department depends upon finance department for funds so as to carry out effective
research and development. Hence, management of TESCO should make sure that there is a
proper link between different departments in order to run the business smoothly and achieve the
organisational objectives.
Analysis of advantages and disadvantages of inter relationship between business functions
and its impact on the structure of the organisation
Advantages of inter-relationship between business functions is that it helps in providing
quality services to its customers, building trust among various members in different teams as it
fosters team work as well as improving the efficiency in communication(The importance of
communication between different departments in an organisation, 2019). This would in turn help
in maintaining proper and systematic structure of the organisation.
Similarly, like every coin has two faces, there are disadvantages associated with
advantages such as it may lead to conflicts arising at the workplace due to difference in opinion
which in turn may hinder the smooth running of the business as well as creating disharmony at
the workplace. This will in turn lead to disruption in the structure of the organisation and would
hinder the free flow of communication.
ACTIVITY 2
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Internal and macro environmental factors of Tesco
Tesco is a Food retailing supermarket company which is the 2nd largest company in terms of
profit in the world. It is operating in 12 countries with having 6553 stores. It is generally known
for selling its food and non-food products. Now it is also providing hardware, finance, mobile
and many more services to their customers. There are some factors that affect its business
activities in positive manner and in negative manner such as political factors, social factors,
ecological factors, environmental factors and legal factors.
Political factors: Tesco operates worldwide so political factors influence and impact the
processes and performance of the company. Some political factors are tax rates, political
instability, import duty etc. For example Tesco imports some products and inventory from
outside like East India and China so import duty affects its business. In order to resolve the
problem related financial instability government has encouraged many retailers to create job and
employment for the local population. Tesco also provides employment opportunities which help
them in increasing the demand of its goods and services. So political factors affect company in
negative as well as in negative manner.
Social factor: There are some social factors that include market trends and changes in
demand of people of the community in which Tesco operates. Company is selling non-food
products which is demanded by consumers. Customers are becoming more conscious and aware
about their health by which their demands and approach towards food is changing rapidly. For
being in a competition, Tesco should adapt these changes related organic products (Price and
Moore, 2018).
Technological factors: Technological factors impact on the business of Tesco in
negative manner and in positive manner. Now many companies are using advance technology
which are creating competition in the market. Tesco is also using technologies and provide
opportunities to their customers of online shopping, mobile App facility and home delivery
services etc. Customers of the company can order their food at home which can consume their
time and that lead in increasing loyalty of customers towards company and products. On the
other hand this factor and advance technology increases the overall cost and time of the company
as they have to hire promotional and delivery boy for this facility.
Environmental factors: There are several companies which are facing pressure from
government policies and agencies in order to address environmental problems. Some
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environmental factors that affect and impact on the activities of the company are pollution which
is created from wastage, fuel etc. In order to environmental satisfaction Tesco van drivers use
fuel saving routes and also focus on collecting unwanted waste and plastic bags from their
customers and then recycle them. By reducing wastage from workplace it can be in competitive
market. Now it has committed to use renewable sources and promises to reduce carbon footprint
unto 50% by 2020.
Legal factors: Some legal factors like changes in laws and governmental policies,
employees law, consumers act also impact majorly on the business activities on Tesco. For the
changes in employees and consumers law they have to faces many problems. For example, The
workers of Tesco took a legal action against manager of the company regarding gender and age
discrimination. It is compulsory to pay minimum wage to all the workers which decrease the
morale of those employees who have skills and more experience from another. Employers
frustrated after noticing low pay rates for weekend, night and bank holiday shifts. For resolving
these type of problems it should conduct its business operations according food retailing
commission.
Economic factors: The major economic factor that affect UK supermarkets that is labour
cost. For instance, The annual wage bill is GBP 4.5 billion. There is an increment in minimum
wage rate by 4.4% in 2018. This level of increment has increased the cost of Tesco. In-spite of
this factor there are another various factors that affect the company like price, cost and profit.
The company is still dependent on the UK market and it possesses market share of 30%.
Diversification and internationalization are the main two factors and strategies for the success of
the company (Palermo, 2017).
Internal analysis of TESCO that may influence the decision making are:
Strengths
TESCO is a very big company and is one of the leading retailer in this entire world, this
has played a huge role towards gaining the confidence of customers and creating customer
satisfaction. Customers of the company are not only satisfied but also are loyal towards the
company and have positive perception for the company. Apart from this, company has a strong
property portfolio which in turn has lead to strong financial position of the company.
Furthermore, the company operates all across the world in many different countries which in turn
has lead to more brand recognition and more revenue(ZHAO and et.al., 2018). Another major
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strength of the company is that it has a strong distribution network which has always fostered
smooth running of the business rather than suffering from failures such as shortage of stock,
unavailability of the raw material at the right time, etc. hence, all this have contributed a lot in
building the image of the company.
Weaknesses
Major weakness of the company is that it has faced many failures, which has resulted in
spoiling the image of the company. One of the major failure was the income scandal that took
place in 2015. apart from that, employee turnover in the company is very high due to diminished
employee morale. TESCO does not have efficiency in its operations in all the markets, it is
highly dependent on the UK and Europe market, which in turn has lead to the perception that the
company faces difficulty in understanding the different market and culture. Moreover, it was also
found that the company has very low investment in new technology and innovation because of
low investment in research and development department.
Opportunities
There is a great opportunity for TESCO to maintain and grow its market share in highly
competitive world by diversification of products by expanding its product line through alliances
with different brands(Grundy, 2017). Apart from that, there are various untouched markets
where the company can extend its access and increase its brand awareness and brand equity. The
company even has a wide opportunity to increase its operations through online platform.
Furthermore, the company has an opportunity to achieve economies of scale by reducing its cost
of production because of wide number of suppliers as well as decrease in cost of transportation.
Hence, the company should analyse these opportunities and grab it at the right time in order to
improve the efficiency of the business.
Threats
There are various threats for the company in the existing environment. One of the major
threat for TESCO is high competition from the rivalry firms. Apart from this, the value of pound
is falling which has resulted in increase in the prices for the company. There are lot of
uncertainties prevailing in the market which has resulted in huge threat for the company.
Moreover, complex government regulation, up gradation in technology and less entry barrier for
new firms; have further contributed towards the smooth running of the business in order to
achieve the organisational objectives effectively and efficiently.
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Interrelationship of macro environmental factors with internal factors
There are internal and external factors that effect Tesco in positive manner and in
negative manner. Internal factors are strengths, weaknesses of company. Macro environmental
factors involve economic factors, political factors, social factors. There is an interrelationship
between both factors as strength of the company is it provides higher quality products and satisfy
their customers. Social factors also include the taste and demands of the customers so strength of
the company is interrelated with social factors as it can adopt the changes of customers and make
the products accordingly.
The weakness of the company is it is not effective in all the market and lack in using
technology compare to another competitor companies. External factors like advance technology
which impact on the business activity of the company. They both are interrelated with each other
and that decrease in sales and profits. The another main strength of the company is it focuses on
reducing waste and unemployment rate that satisfy environmental and economic needs and
requirements. It can increase the employees' morale and customers loyalty by providing eco
friendly and products which resolve health problems (Schlegelmilch, 2016).
It has opportunities to grow online shopping and provide home delivery services to its
customer in order to increase sales and reduce the time of customers. With the help of its
opportunities it can fulfil technological satisfaction and be in competitive market.
CONCLUSION
From the above study it has been concluded that various types of organisations like
public, private and voluntary play an important role in providing the best services to the
customers. Different organisational structure help company in achieving their determined goals.
Internal factors of the company like strengths, weaknesses, threat and opportunities helped and
impacted on the activities of businesses in positive manner and in negative manner. External
business factors also impacted on the decision-making process by leaders and managers.
Interrelationship of all the functional departments support the company to meet employees as
well as organisational goals.
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