Unit 1: Macro Environmental Influence Report, BTEC Higher National

This report delves into the macro environmental influences affecting businesses, using Tesco as a case study. It begins by defining the business environment and then explores different types of businesses, including profit-making, non-profit, private, public, and voluntary sectors, along with their key features and goals. The report examines the size and scope of various organizations, categorizing them by size (micro, small, medium, and large) and comparing public, voluntary, and private sector organizations. It also analyzes Tesco's organizational structure, specifically its divisional structure, and highlights its goals. Furthermore, the report explains organizational functions like production, purchasing, and marketing, illustrating their interrelations. The report also focuses on the external and internal environments of a business, and concludes by explaining the interrelationship between the internal and external business environments.

MACRO
ENVIRONMENTAL
INFLUENCE

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
Different type of business and difference between the same......................................................3
Size and scope of range of different types of organisations. ......................................................6
LO 2.................................................................................................................................................8
Organization function and their interrelation..............................................................................8
LO 3.................................................................................................................................................9
External environment..................................................................................................................9
Internal Environment................................................................................................................10
LO4................................................................................................................................................13
Interrelation of External and Internal Environment..................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business Environment generally means all the internal and external factor that used to
affects how the company used to function different activity. Tesco is the retail sector
organization who used to offer good amount of the product to market. This report explain
different type of Business, also the report used to explain the difference between the same. After
that the report explain the internal and external environment of different business. In the end the
report explain the interrelationship between internal and external environment.
LO 1
Different type of business and difference between the same
Type of Business
There are two different type of business on the basis of the rewards, that is profit making and non
profit making organization.
 Profit making organization is the firm which generally regarded as a organization who
used to operate in the organization with the sole motive of satisfying the need of the
consumer in the market and in return of the same used to hope for a money. Profit
making organization used to take the different decision in the organization by considering
cost of taking the decision and the return which organization might see due to making
these sort of decision in organization (Nandonde, 2019).
 Non Profit making organization are the type of the business which generally used to
operate the different activity in the market with the sole motive of satisfying the need of
the consumer or solve any of the issue which is prevailing in the market. Non profit
making organization generally makes the different decision in the organization by
considering the size of the issue which is prevailing in the market as company sole
motive of overcoming variety of the issue.
Type of Other Business
Private sector organization: Private sector organization is the section of national
economy which is owned, controlled and managed by the private individual and enterprises.
Private sector organization is generally operated with the sole motive of making good sort of
profit by offering variety of the product to the consumer in the market. Tesco is one of the

example of private sector organization who generally used to offer the different product to the
consumer with the sole motive of earning profit. There are many different type of private sector
organization. Some of them are as follows:
Sole trader: It is the type of the private sector organization in which one individual itself
used to manages and control the business. Owner of the firm has full liability of business.
Partnership: It is the type of private sector organization in which two or more individual
generally used to come together with the motive of operating business. In this the liability of the
individual is up to the profit share mention on partnership deed.
Pvt Ltd company: A company is a legal entity formed by a group of individuals to engage
in and operate a business. Ownership of the company is generally depend upon the Unit of share
a individual is possessing.
Features
 Owner ship and control of private sector organization is in the hand of one individual in
the market, there is no short of participation of government in any of the decision
making.
 Finance of the different private sector organization is generally done by the individual
itself who is the owner of the firm (Kudriavtceva, 2019).
GOAL and Purpose
 Main goal and purpose of Private sector organization is to earn good sort of the profit by
offering variety of different type of services and product to the consumer in the market.
Legality
 Private sector organization is legally recognized as a pvt. Ltd. Organization in the eye of
the Law. Tesco is on e of the organization as Legal name of Tesco is Tesco Pvt. Ltd.
Public Sector Organization: Public sector organization is the type of the firm which is
generally owned, controlled and managed by the state or the central government. NHS is one of
the biggest example of Public sector organization, as it operation of NHS is controlled by
authority who are hired by the government.
Features

 Ownership and control of public sector organization is in the hand of the government of
the nation, all the decision are taken by the authority who is assigned by government of
nation.
 Finance of the different public sector organization is done by the different deficit of
governmental fund.
GOAL and Purpose
 Main Goal and Purpose of different activity which is performed by the public sector
organization is to solve the variety of the issue which is being faced by the consumer in
the nation rather than making profit out of the different decision which are being taken in
the market.
Legality
 Public sector organization are generally recognized as a Pub. Ltd. In the eye of law. NHS
is recognized as National Health Organization Public Limited.
Voluntary Sector: Voluntary sector organization are the organization which are form
when number of the member comes together to improve the standard of civil society.
Features
 Ownership and control of voluntary sector organisation are in the hand of all the member
who has come together. Oxfam is one of the example which has been formed as 16
member has come together.
 Finance of the voluntary sector organization is done with the help of different sort of
donation which are generally made.
GOAL and Purpose
Goal and Purpose of Voluntary sector organization is to improve the standard of civil society of
the nation. As Oxfam looked to improve the level of poverty in the nation rather than making
profit in the market.
Legality
Voluntary sector organization is generally recognized as a NGO in the eye of Law.

Size and scope of range of different types of organisations.
Types of organisation based on size
Micro Small Medium Large
It is also referred as
micro business which
employs small number
of individuals. This
microenterprise
operates usually with
less than 10 persons
and are started with
small capital which
could be advanced
from the bank or
organisation. These
micro-enterprises are
specialised mainly in
providing the goods
and services in local
areas.
Small organisation is
privately owner
company, sole
proprietorship or
partnership which is
having fewer number
of employees. Such
organisation have
lesser annual revenues
than the corporations
or the regular size
business. Small
business may employ
people from around 50
to 500 employees as
per the requirements
and capital
investments in
company. Small
business provide
goods or services to a
bigger area from the
local areas.
Mid sized
organisations are the
businesses which
maintains assets,
revenues and the
employees below
threshold limits.
Medium sized
business also has
around 100 to 9000
employees. The capital
investments in this
company are lower
than the large sized
company but higher
than the mid sized
company (Maloney
and McCarthy, 2019).
The company provides
goods or services to
wider network of
customers.
Large organisation
could be a corporation
owned privately or
publicly and is having
high number of
employees. A large
organisation has more
than 1000 employees
working with it. The
business involves huge
amount of capital
investments in the
company that could be
raised from public or
from banks. These
organisations may
serve the demands of
cross border nations.
Size of Public, Voluntary and private organisation.

Public Voluntary Private
Size of the public
organisations are owned by the
government either wholly or
partially. Size of public
organisations is very big. NHS
is a public organisation which
is employing 1,4 million
across the country. The
organisation has annual budget
of around 134 billion which is
higher than voluntary and
private sector organisation.
Voluntary organisation range
from every type of groups or
association that are made for
serving the society. They do
not have the motive of earning
profits. Oxfam is a voluntary
organisation with 5000
employees and using services
of around 23000 volunteers.
The organisation had total
income of around 408 million.
Private organisations are
generally smaller than the
public organisations and
bigger than the voluntary
organisation. Large private
organisations could serve cross
border nations. Tesco employs
around 450000 employees and
has total operating income of
2.2 billion.
Scope of the organisation
Public Voluntary Private
The scope of public sector
organisation is limited to the
nation in which they are
operating. They could serve
the whole of the nation with
the goods and services that are
being provided by the
company. Public sectors
organisation like NHS operates
within country and is not
providing its services beyond
UK. The scope of the entity
may differ as per the
Voluntary sector is made of
increased variety of
organisations and groups
ranging on structure, scale,
size and culture of the
organisation. Scope of the
voluntary sector depends over
the size and membership of
organisation (Guerrero, 2019).
There are large organisations
in the voluntary sector that are
having high scope as they
operate at international levels
Private organisations are part
of economy run by individuals
and corporations for profit and
do not have control of the
government. Private sector
unlike public sector have high
scope. These organisations
mainly run with the motive of
earning profits and take all the
measures and strategies for
growth and expanding their
business.

governing policies and
strategies of the organisation.
Public organisations have
major sharing of the
government.
and small organisations have
limited scope to the area being
served by them. The voluntary
sectors is not for profit but
there are organisations that
make high profits but are used
for charitable purposes.
LO 2
Structure of Organization
Organization Structure
Tesco in the organization generally uses the Divisional structure in the long run. It is the
structure in which the organization used to divide the different operation of the organization in
different division. After that different division used to perform the different activity according to
the task which has been allotted to them and on the basis of the same whole division used to
work together to achieve the different objectives of the company that easily at the workplace.
Goal of Company
Tesco by using the Divisional Structure in the organization look to achieve the goal of the
business that easily in the market and also Goal of the business used to provide good quality of
the product to the consumer at the global level.
Another goal of the business to increase the market share of the company in the market.

Organization function and their interrelation
Organization function are generally define as a set of the activity and process which are
generally performed in the organization with the sole motive of achieving the goal of the
business efficiently. There are many different type of organization function and they are linked
with the other function of organization (Phadermrod, Crowder and Wills, 2019).
Production Function: Production function of Tesco, generally looks at manufacturing
variety of the product which can be offer to the consumer. These function of organization is
depended upon the procurement function, who used to provide raw material and also depended
upon the research and development function as they used to provide the information about
consumer need.
Purchase Function: Purchase Function of Tesco, generally looks at purchasing the
variety of the raw material and also sub finished good. This is interrelated with the Production
and Marketing function. As different material purchase are converted into finished product with
the help of production function. Marketing department used to get the information about product
from purchasing function on basis of which marketing function are done.
Marketing /Sales Function: It is the two function which generally looks at creating the
awareness of the product in the market and on the basis of same selling it to the consumer in the
market. This function is interrelated with Human resource function, HR function of the
organization used to provide the different employee who used to carry out different marketing
and sales activity.
Finance function: finance function of business generally looks at allocating different
finance to different department to carry out different operation. This function is interrelated with
the purchase department, as different purchasing decision are taken on the basis of finance
allotted by finance function.
R&D Function: It is the function of the organization which looks at researching market
and on basis of same different development are done. This function is interrelated with the
marketing and production department. As production department will develop different product
on basis research and marketing activity will use this information in marketing activity (Salvato
and et.al., 2019).

Human Resource Function: This function of business generally looks at managing
employee in the organization. This is related with all the function as they are the one who used to
provide different Human manpower on the basis of which different function are carried out.
LO 3
External environment
Source: Tesco Swot and Pestle. 2016
PESTLE
A PESTLE analysis is a framework to analyse the key factors (Political, Economic, Sociological,
Technological, Legal and Environmental) influencing an organisation from the outside.
Political Factor: Political Factor in the organization is very favourable for organization
in industry as there is political stability in UK At the same time decision like Brexit has created

negative impact for Tesco, as it has open up good sort of barrier for company to trade with
neighbour.
Positive: This political stability will help the company in going with the same policy for longer
period of time as there will be less changes in the political condition.
Negative: Decision like Brexit in the market will increase the cost of the company in the long
run. As there will be good sort of the restriction in transportation and trade barrier in between
UK and neighbour nation.
Economic Factor: Looking at the Favourable point it has been analysed that interest rate
and inflation rate are positive in the nation, this help the company at the time they are any need
of finance. At the same time rate of water and diesel in the nation has increased rapidly.
Positive:. Favourable interest and inflation rate in the nation will help the company in getting
low cost benefit which can be used to maximise profit. Also, it will help in raising the fund at
lower interest rate in the market.
Negative: Economic factor will also create the negative impact as it will be increasing the cost
of organization in the long run. As it will get difficult for the company to transport the variety of
the product of the company to another place. Delivery cost will also increase
Social Factor: Looking at the social factor it has been identified that need and preference
of different customer is changing these has created good sort of impact in managing the same in
organization. .
Positive: Positive impact of social factor is that with the help of updated technology Tesco used
to make different changes in product which help them in getting competitive advantage.
Negative: It generally used to increase the cost of the company in context of the investment
toward the Research and development aspect in the organization. As they need to invest good
amount of the resources to understand customer need.
Technology Factor: Technology of carrying out different operation of the business used
to change on regular basis. Which generally ask all the organization in the industry to look at the
best technology which can be procure by them in the market (Salvato and et.al., 2019).
Positive: Latest technology in Tesco help the company in attracting customer toward the store
of the company. As they will be using the technology to develop a customer friendly product in
the market. (Salvato and et.al., 2019).

Negative: These eventually used to increase the cost of Tesco as procuring new technology in
the organization increases the cost of the company in the long run.
Legal factor: There are variety of the different type of legal laws which are brought in the
organisation and all the organization used to compile all the activity with the same to maintain
efficiency.
Positive: These factor generally used to help the company in building good image. As consumer
generally used to preferred the organization who used to compile different activity with the legal
need
Negative: At the same time it used to impact the efficiency of business as it requires good sort of
the efforts to compile different activity with different laws and regulation.
Environmental Factor: There are many different type of the environmental issue which
has been faced by the organization in the past. Issue was not proper composing of wastage. At
the same time organization has used the recycling raw material in the organization to reduce the
impact of Environmental factor in positive way.
Positive: Organization generally uses the recycling raw material in the organization to reduce the
impact of Environmental factor in positive way. This help the company in presenting the good
image of the company in front of the other in the market.
Negative: Also, going through the variety of the crises in the past has created a good sort of the
burden on the company to overcome the variety of the issue. This has impacted the brand value
of the company in the market.
Internal Environment
SWOT Analysis
SWOT Analysis is a study undertaken by an organization to identify its internal strengths and
weaknesses, as well as its external opportunities and threats.