Business Environment Report: Macro and Micro Factors Impact

This report provides a comprehensive analysis of the business environment, encompassing different types of organizations such as private, public, and voluntary entities. It explores their structures, functions, and scopes, with examples like Tesco, BBC, and Cancer Research UK. The report delves into the size and scope of these organizations, examining their business purposes, products, services, market shares, and profit shares. It further analyzes organizational structures, including hierarchical and flat structures, and their interrelation with various functional areas. The report also evaluates macro and micro factors influencing businesses, including a SWOT analysis of Tesco, and examines the interrelation between strengths, weaknesses, and external environmental factors. The report concludes with a detailed discussion on the impact of these factors on business operations and strategic decision-making, providing valuable insights into the complexities of the business landscape.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ..........................................................................................................................................3
P1 Types of different organisation.........................................................................................3
2) Size and scope of the organisation.....................................................................................6
3) Organisation structures and functions................................................................................8
PART 2..........................................................................................................................................10
1) Critical evaluation of various macro and micro factors on business'...............................10
2)SWOT analysis of Tesco...................................................................................................11
3) Interrelation between strengths and weaknesses with factors of extremal macro
environment..........................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business can be defined as a procedure that is undertaken by an individual to generate
revenue or profit from an organisational operations and functions. This is essential for an
organisation to analyse all aspects of market that influence on business decision making. It also
help company in formulating right strategy as per current environment conditions of business
that assist management to monitor and understand existing opportunities and threats in market.
Moreover, this report highlights on different types of organisation along with their size. structure
and scope. Along with this with right organisational functions and operations will also be
discussed that are performed by organisation. In the last, all internal and external factors that
impact on organisation will also be focused in this report which helps to analyse strength and
weakness of company.
TASK 1
P1 Types of different organisation
The term organisation can be defined as the entity that consists and undertakes human
resources, raw-materials and labour which leads company to gain top position in market. Along
with this organisation also helps individuals to earn better amount of profits. Further, business
are designed with essential principles that leads company for achieving huge success in market.
All organisation are classified on basis of nature that help business to analyse size, goals and
objectives which company wants to achieve(Duignan, 2016).
Private organisation- This organisation refers to complete task by operating and
establishing all work as per individual basis. As the main function of private organisation is to
earn high profits from market. Example- Tesco
Purpose of Private organisation- The purpose of private organisation is to earn better
amount of profits by offering company products and services into wide market. Along with this
private organisation implement innovation in company products and services on constant basis.
In similar way Tesco aims at earning profit.
Legal structure: legal structure of an profit making organisation is as follows:
Sole Proprietorship: Sole proprietors is that type of organisation which is run by an
individual. All kinds of investment done in these organisations because of this risk accrued has to
be bear by owner himself. It less complex in legal aspect.

Company: Company is that organisation which is funded through the investors and all
investment is done through shares(Gulden and Attfield, 2016). There profits are divided between
shareholders as per there share in the company. In these types of companies business is done at
higher level and the funds of public is invested in such companies. They are known as Public
Ltd. Whereas in a private organisation funds are invested privately by the companies members.
Partnership: Organisations of these types are formed by two or more than two persons
and they come together to form a business. Mutual decision over various terms and conditions is
done. After this only distribution of profit and loss takes place.
Public organisation Organisation of these types are managed and regulation of the
organisations is handled by government. Main aim of these organisations is welfare of society.
Example of these organisation is BBC.
Purpose of Public organisation These organisations are owned by government because
of this aim of the organisation is towards welfare of society. Also organisations like this needs
to earn funds which can be used for the purpose of welfare. Similar manner in BBC its main aim
is earning of profit which helps them in bearing expenses. Also awareness regarding various
types of concerns is prevailed throughout the world.
Legal structure:
Centre: It is the main body that is there for controlling and managing a territory in an
effective manner(Gupta, 2016). Powers are delegated in different departments, this is done to
keep consideration upon every segment.
State: Responsibility of managing of a specific territory is assigned to them by central
authorities.
Local: government at local level is responsible in management of all local communities.
This is done by doing lots of programs which helps in welfare of a community.
Voluntary organisation: Organisations of these types are involved in that type of
voluntary work in which lot of action is take for creating betterment within an society.
Organisations of these kinds are of voluntary nature an contributes in welfare of society. Its
example is Cancer research organisations in UK.
Purpose of Voluntary organisation : They are also known as non – profit and non-
governmental organisation. Working of these organisations aims at social welfare and also

improvement of services is focused upon. This is related as cancer research is doing an social
cause of treating cancer(Linder, and Williander 2017).
Legislature structure:
Charitable Trust: It is that type of organisation which are responsible in management
and utilization of the property. Also of funds that is received for an specific purpose. If funds are
received by the trust with aim of giving scholarship. Then it should be used fro this purpose
only.
Unincorporated Association: Organisations of these kinds consist of group of people.
Those are there for achieving of some goals of specific nature.
Basis Profit organisation Non-government
organisation
Not for profit

Meaning Organisations of these
kinds are formed with the
aim of profits earning.
This is done by providing
products and services
according to the needs and
wants of customer. The
companies of this kind
provides ownership to
public by selling of its
shares to them. In this
company the money of
public is invested and
they have to deal with
legal complicities which
are imposed upon them
through regulatory
authorities(Lyu and
Hwang 2017).
These organisation works
independently from
government in order to
deal with social concerns.
NGO's is an subgroups of
organisations that involves
lot of clubs and
associations in it. These
are there to provide
services and benefits for
its members. Funds of
these organisations is
managed through
donations and is run by
the volunteers or group of
persons.
Not for profit organisation
are that type of
organisation which aims
at dedicated efforts for
any kind of social cause
that helps in sharing of
vision. These organisation
uses its surplus from
revenues in such activities
instead of distributing of
funds among their
shareholders and investors.
Most important aspects
which is related to these
organisations are truth,
honest, openness with all
investors of such
organisation.
Scope Organisations of these
kinds operates in different
locations with the aim of
enhancing its profitability.
Its aim is to deal with
common concerns over a
large scale by involving
various
organisations(Nyström
and Mustonen, 2017).
They are formed for
creating welfare in the
society. Its covers
various issues which are
present in the market.
2) Size and scope of the organisation
Tesco Plc: Tesco Plc this is a British multinational private company that offers groceries
to its customers. These are considered to be ninth-largest retailer in UK through revenue.

Business Purpose: Tesco has positioned itself as a lower cost retailer as aim of this
organisation is to attract large number of people which belongs to various groups of social
nature(Orhan,2016).
Size and scope: Tesco has been doing business in various countries other than UK which
has increased its scope for expansion of its company . Strength of employees is above 450000
and they are working in company which makes them a bigger entity.
Products and Services: Wide range of products is sold by this company. Different types
of products such as books, grocery, clothing, financial services, furniture etc. is provided by by
this company.
Market share and profit share: percentage of shares in market is 28.4% the revenue
generated is £63,911 million. This company is a larger organisation and contains 250 employees
who is working with them currently.
BBC: Is a broadcasting company of Britain. It is an public sector organisation and has
its headquarters in London. This is one of the oldest company in broadcasting all over the
world(Pearson 2017). It formed under Royal charter and funds is gained through license fee
which collected from public and government.
Business Purpose: The main objective of the company is education of people , providing
inform and entertainment is done through variety of channels such as new and programmes.
Size and scope: This organisation is operating all over the world and has employee
strength of 22401 which is largest of all broadcasting companies present . BBC has successfully
expanded its market in various countries in which their roots is not present.
Products and Services: The products that are offered by them are broadcasting, radio and
web portals. BBC includes television, radio and online services.
Market share and profit share: As BBC is largest company of broadcasting all over the
world and holds large employee strength. Net income of this company is sixty nine million
euros. It receives funds for the operations conducted by them from government. This is the
largest organisation with employee strength of 250 employees working in it(Sales and
Beschorner, 2017).
Cancer research organisation UK: This is an organisation which works on voluntary
basis. Its aim is to make people of UK aware about cancer. This is useful for reduction in deaths
which are caused because of cancer in UK and at global level also.

Business purpose: Aim of this organisation is identification of those techniques and
medication which is helpful in reduction of numbers of patients. Also create awareness for
cancer.
Size and scope: Being world's largest and independent charity of performing research on
cancer. It has large number of volunteers which consist of student, doctor and researcher.
Products and Services: Identification of various kinds of techniques and development of
medicines such as radio and chemo therapy(Schlesinger and Rahman, 2016). These can help in
curing of cancer.
Market share and profit share: This organisation is an voluntary organisation and its aim
is for welfare of society. Cancer research organisation is a medium organisation which do not
have employee strength of 205. Lot of volunteers are working in this organisation but are not
really part of it.
Difference between micro, small and medium enterprises
Micro enterprises Small enterprise Medium enterprise
Micro enterprise is the one
that contains less than ten
employees and its turnover is
up to €2 million. Total
balance sheet should be up to
€2 million.
Small enterprise are those
enterprises in which there is
not more than 50 employees
working and persist turnover
of €10 million or a sum total of
€10 million in its balance
sheet.
A medium enterprise is the one
in which there are less than
250 employee working. A total
of balance sheet is €43 million
or the turnover is of €50
million .
3) Organisation structures and functions
Organisation structure: Organisational structure is that kind of system in which outlines
and activities are their to be considered. On the basis of this different roles and responsibility is
given to people. Assurance of flow in information at various level of a company is smooth.
Various types of structures are adopted by organisations according to its nature. Some of the
structures are explained below:

Hierarchical structure: This structure organising of people at various level is done.
Then only work is allotted to people who are on different positions. It helps in identifying and
allocating of responsibility which determines flow of information.
Flat structure: It is one of those structure in which employees are taken at an level
which leads to direct interaction with the managers.
Tesco has adopted hierarchical structure that effectively helps in allocation of roles and
responsibility to the employees. This also leads to systematic performance of operations and let
employees respond and follow it(Schwepker and Ingram, 2016).
Interrelation among various functional areas
In an organisation it is important to manage successful l functioning as all function are
interrelated to each other. This facilitates an organisation in achieving its objectives and goals
that is performed for organisation. Interrelation of Tesco are explained as follows:
Interrelationship between marketing and Sales department: Marketing department of
an organisation has to adopt various strategies which helps in creating awareness within the
customers and then over sales department. That creates different efforts of building relations
which is going to increase sales of Tesco. Due to this aim of profitability can be achieved in
effective manner. Sales department focus upon finding market which is going to provide
marketing. This is going to help in taking necessary steps for improvements of products.
Interrelationship between marketing and finance department: Department of marketing is
based upon research which are their for determination of features which is to be included in its
product and services. On this basis determination of funds is done. These funds are provided by

the finance department after analysing various sources. It enables an organisation in achieving
effectiveness in performing operations because no interruption is their in the process.
Complexities of transnational, international and global organisation structure
Global organisation are the organisations whose investment has been done in other
countries and are managed by centre place. Complexities faced because of strategies formation at
different market is not possible. Transnational companies are those companies who has invested
in other countries but power of taking decision is with local managers. Major complexity that is
faced by this kind of organisation is coordination and integration which are taking place at
different levels. This creates an impact upon corporate decision making. International businesses
that are involved in import and export business are required to have certain documents which are
to be submitted(Sun and Richardson, 2016). This makes process of import and export of more
complex nature.
Structure of an organisation plays an very important role as it helps in achieving of goals
and objectives. In hierarchical structure a link is established because of different functions
because of which an understanding is developed. It help[s in achieving of effective
communication, utilisation of resources and many more. This achieved through allocation of
work to employees. This structure enables flow of roles and distribution of responsibilities
among various functions through which Tesco is able to achieve its goals and objectives. Flow of
communication among department can be helpful in facilitating decision making.
PART 2
1) Critical evaluation of various macro and micro factors on business'
Impact of various kinds of micro factors over organisations like Tesco can use PESTLE
analysis. This can help in analysing of influence of various factors upon performing of
operations in Tesco. Analysis of these factors are explained below.
Political factors: These factors are those types of factors which leads intervention of
government in operations of business. Factors of this kind include various policies which are
imposed by the ruling government Positive impact: Condition like Brexit is also generated some opportunities to Tesco for
there betterment and future growth. Tecso is able to create many employment

opportunities as political also supporting them and helping in contributing towards
increase in GDP. Negative impact: Some political conditions like terrorism have also negative impact on
firm market. This is a factor that is posing a impact on overall working of this
organization as there are many barriers that have been increased because of such
changing scenario in global environment.
Economical factor: There are number economic factors which have direct impact on firm
these factors are inflation rates,interest rates, employment rates and exchange rates. Tesco have
different impact on there firm which are stated below: Positive impact: Good economic conditions like increase in revenue or living standard
have positive impact on firm which facilitate them in getting profit and financial stability.
In situations of better fiscal health of UK and more government spending for the retailing
sector there has been a enhancement of success rate of retailers such as Tesco. It helps
them in planning their expansion strategies in different parts of world. Negative impact: Increased tax rates have negative impact on Tesco profit as it will get
lower. With the changing economic conditions there are many times there has been a
impact on overall policies of Tesco. Such as Brexit referendum has lead to more trade
barriers in Europe so it is leading to reduction in revenue for Tesco.
Social factor: These are those factors which induces social factors like behavior, culture,
believes and individual of organization(Tho, 2017). These have direct impact on Tesco which is
stated below: Positive impact : The positive impact of this environment is it aid firm in motivating its
employees and identify the culture and trend of outside organization . Negative impact: The negative impact of social factors on Tesco is that it will sometime
it will increase conflicts in organization because of different culture.
Technological factor: It includes those factor which are related to technological changes
in business environment of organization. For Tesco these changes are adoption of new
techniques of production. Positive impact: Change in technology will facilitate company in facilitating smoothness
in working conditions.

 Negative impact :It will also increase capital investment of company which act as an
negative impact on firm.
Legal factor: These are those factors which are relatet to requirement of law of nation
where Tesco is working. Positive impact: help in complying with rules and regulation. Negative impact: fulfilling legal requirements will bring rigidity in organization.
Environmental factor: In this factor all the requirement related to nature ans atmosphere
of natural environment is consider.
Positive impact: There is positive impact of environmental factors as they will help in incresing
good will of firm because of there follow up.
2)SWOT analysis of Tesco
Strength Weakness
The main strength of Tesco is to there brand
image.
Teco is having a leading market share in four
biog super markets in UK. It is dominating
retail market with a share of 27 percent.
Tesco competitor price war acted as main
weakness of firm.
Tecso has not been able to operate successfully
in markets of Japan and since October 2018,
this is a brand that is facing decrease in
profitability level.
Opportunity Threat
Company have great opportunities to make
joint ventures in business for facilitating
profits.
There is a opportunity for Tesco as they can
expand their newly open discount store that is
Jacks store for experiencing a significant
growth in their business and compete with
other rivals such as Aldi who are offering
products at low cost.
Biggest threat of company is to political
condition of their nations economy.
There is a threat from bigger competitors such
as Walmart, Aldi who are biggest competitor
for Tesco.
SWOT analysis of Sainsbury's

Strength Weakness
Main strengths of company is to acquire other
company and form mare and more joint
venture.
Research department of company have its
biggest default as they are not working
Opportunity Threat
Company have opportunities to start in
different sectors other than current .
The demand of highly profitable products in
season increases and thus people compare price
with other supermarkets.
3) Interrelation between strengths and weaknesses with factors of extremal macro environment
Through having a better interrelation among internal strengths and weakness and external
macro factors can organisation can achieve more success and better results. Through analysis of
external factors an organisation becomes to know about the various opportunities and threats that
are prevailing in business environment thus, a correlation of these opportunities with strengths of
organisation facilitates better strategies and plans to grab that existing opportunity in more
effective way. Beside this, interrelation in internal and external factor also ensures better
evaluation of current threats thus, allows better decision making and planning to encounter and
overcome these threats to ensure better success and free flow of business operations.
In context of Tesco organisation it can be analysed that the political factor in its macro
environment is showing a higher level of rigidity and strict polices thus, creates a threat for this
organisation. An interrelation of this macro factor with internal decision making can lead to
better success and growth of Tesco as it lead to better plans and policies to encounter this issues.
Further, an opportunity is seen in social and environmental factor of Tesco as a demand for
environmental friendly products is highly increasing. A proper connection of these external
opportunity with strength of Tesco of providing highly innovative and environmental friendly
product is facilitating better results or this organisation. Further, a high level of technological
improvement is seen in macro environment of Tesco a connection of which with its internal
factors and strengths has improved its efficiency and makes its operation most effective and
sooth thus lead to better results and more success of Tesco. Thus, it can be evaluated that an

interrelation among internal and external factors is necessary and beneficial for Tesco as lead to
better tapping of opportunity together with timely resolution and overcome of current threats that
ensure better success and growth.
CONCLUSION
On the basis of above assignment it can be concluded that their are various type of
organisation in a business environment that includes a range of private, public and social
organisation. All these organisation have different size, scope and objective like private
organisation work for maximization of profit while social firms aim at serving society. Further, it
can be concluded that their are various factors in macro environment like political, social, legal,
technical, etc. that have both positive and negative impact on business operation. At last, it can
be concluded that use of SWOT analysis is made to evaluate internal strengths and weakness and
an interrelation of these internal factors with macro factors yield better results and success for
organization.

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