Comprehensive Report: Sainsbury's Business Environment and Structure

This report provides a comprehensive analysis of Sainsbury's business environment and organizational structure. It begins by defining different types of business structures, including private, public, and voluntary sectors, and explores the size and scope of organizations. The report then delves into the interrelationships between various organizational functions, such as marketing, technology, human resources, and finance, highlighting their interconnectedness in achieving business goals. Furthermore, it applies PESTLE and SWOT analyses to Sainsbury's, evaluating the impact of external and internal factors on the company's operations and decision-making processes. The report concludes with an overview of how organizational structure influences business objectives and strategic planning. This student report offers valuable insights into Sainsbury's business strategies and overall operational environment, which is available on Desklib, a platform providing AI-based study tools for students.

Business and business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
Provide different type of business structure...........................................................................1
Size and scope of different type of organisation....................................................................3
LO2..................................................................................................................................................4
Interrelationship between different organisational functions.................................................4
LO 3.................................................................................................................................................6
PESTLE Analysis of Sainbury...............................................................................................6
LO 4.................................................................................................................................................8
SWOT of Sainbury.................................................................................................................8
interrelation between strengths and weaknesses with external macro factors.....................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business and business environment is sum total or collection of the all internal and
external factors that may impact on operations of company. These factors include the employees,
suppliers, customers, owners, innovation, market trend, economic changes and new technology
(Falkner, 2017). Present study is based on “Sainsbury” is the second largest chain of supermarket
in UK with 16.9% shares of the supermarket. Study lays emphasis on the different type of
organisation like private, public and voluntary organisation which are important part of the
economy with its business and organisational structure. Organisational structure will support and
help to make effective and valuable strategies for the growth of company. Report is also covers
by various functional department of organisation are interrelated to each other and help to
achieve goal of firm. Impact of external and internal factor of organisation such as macro and
micro factor is affect to business. That factor are give negative and positive impact on the
business and it decision-making process.
LO1
Provide different type of business structure.
An organisation consists the group of peoples with the same purpose and aim. All are try
to achieve that purpose and goals of the business (Hamilton and Webster, 2018). There are
mainly three types of organisation which are performed for achieving goal such as private, public
and voluntary organisation. It is important.
Each and every organisation and its legal structure are as follows:
Private sector organisation
Private sector is the part of the country economic system and that run and owned by
individual peoples. Most of the private companies are run for profit making and earning
something. The main objective of this type of company is to make profit and earn money by
providing all the services which can satisfy to customers. Sainbury is the second largest
supermarket sector in the UK. It has the 186900 employees with 309 million net income (Huang-
Horowitz, 2015).
Business structure
The vision of this firm is to become leading provider in the global power sector a mission
of this is to increase and improve sale of company by attract most of the customer with higher

quality products and goods. It has 1000 employees and that are work together for earning and
reach the goals and aims of company. The company also has the venture into home by marketing
and internet retailing and into overseas market. It focuses on the providing the all product to
customers according to needs and demands of customers. This will help to increase demand of
customers and increase sales and profit of firm. It has the supermarket chain in their local area by
this they can make effective and valuable changes according to their business structure.
Public sector organisation
Public sector organisation has play an important role in order to achieve goals and aim of
the firm by taking efforts of humans. This firm is under control of the government. That has give
free services to peoples. This firm is to make their roles and policies. This company concerns
with the government take and includes that in their policies (Hillary, 2017). That is owned and
run by people and by government. In exist to provide services to the peoples and citizens. This
firm generally not generate profits. This main purpose of this firm is to provide services to
peoples for instance, tourist information centres.
Business structure
Tourist information centre is a public sector company who provides information related
location to their visitors. This will help to collect information which is related to location and
places related. The vision of this type of firm to share and make unique network among public
and private sector. Mission of this is to share valuable skill and promote success.
Voluntary sector organisation
This sector organisation are generally charitable sector and not a part of the government.
The main purpose of this sector organisation is to serve people and promote a particular point of
view. National trust is the voluntary sector firm. The voluntary organisation has been used for
the interchangeably with voluntary association or agencies or action (Laudon and Traver, 2016).
Business structure
This organisation is the voluntary sector firm which aim is to support and help to
voluntary actions. Mission and objectives of this organisation is to support the development and
build a new project in order to enhance community actions.

Size and scope of different type of organisation.
According to size and scope there are mainly three type of organisation that includes:
small, medium and large size of organisation and other having organisation like sole
proprietorship, partnership and corporation.
Small sized organisation
Small sized organisation is small a little organisation and in this firm there is no required
the high level investment. In this having less than 100 employees with 2 million annual turnover.
The vision is become a successful business with effective goodwill of the business and mission
of this provide the best quality of goods to customers. The main objective of firm is ta make
effective and efficient profit of firm (Meyer and Pen, 2016). Goal is to improve their living life
by earning profit from business. This firm is operates the primary firm.
Medium sized organisation
Medium sized organisation is required a normal sized investment. In this having a 250
employees with 5 million annual turnover. It is also operates the primary firm. The vision of this
is to be recognized the representative and making effective and efficient organisation and
mission is help to creating enabling objectives to promote the business directly and indirectly.
Main objective is to promote international performance and put effective and efficiently efforts
of business. The goal of this firm is to be a part of the global value chain and supply.
Large sized organisation
Large sized of business wants the huge amount of investment to earn and established
goodwill of firm. In this business having the 500 employees with 10 million annual turnover.
The vision of this business is successful business with high amount of profits and mission is to
provide high effective products to improve human life and make changes in their living life.
Sole proprietorship
Sole proprietorship is a type of business that is owned and run by one person. The main
advantage of this type of organisation is owner of the company makes all the decision related
business activities and growth of the business (Prajogo, 2016). They are responsible for profit
and loss that is generated by business. They are generally made effective and valuable products
and have effective liability for any claim. Example: local grocery, single person art studio.
Partnership

It is also a type of business and it is owned by more than two persons by less than 50
people. The main advantage of this organisation is funding a sharing of losses among all the
partner's basis of their shares and investment. In this firm having a various partners and all have
various ideas and styles of work process. These skills are helps them in increasing demand of
their products. Example: partners at John lewis partnership firm.
Corporation
This firm is an organisation that consists a group of people. It exists separate entity and
has all the legal rights. It is difficult to start and limited liability. It can raise money by selling its
product and goods by providing services to customers. The owners of these types of company
and corporation do not posses liability regards any claim the business (Schaltegger and et.al.,
2016).
LO2
Interrelationship between different organisational functions.
In the organisation have various types of organisational function. That are interrelated to
each other and support for working. That all functions are work together for same purpose and
goal. It will be effective and important for the work and achieve goals of organisation. Various
functional departments such as the marketing, technology, human resource, finance, operation
and research & development department. Interrelations between the function departments are as
follows:
Marketing and research & development department
Marketing and R&D department are interrelated to the each other in the organisation.
Both are plays their role in to achieve goal of Sainbury. Marketing department is responsible for
setting goal of market and promote products at market place for customer attraction with the help
to research and development department. R&D section is help to make and set the goals of
marketing and search and collect data of market by analysis (Teece, 2018). By this both are
interrelated to each other in the organisation.
Technology and operation department
Technological and operation department is also linked and related to each other. That
both are work together for achieving the goal of market with high result of sale. Technology
department is responsible for making and creating new technologies and software easy work by

the human resource who are working operation and production department. Operation and
production department is responsible for making effective and attractive packing of product and
warehousing of it by using effective technologies. By this both are interrelated to each other in
the Sainbury.
Human resource and finance department
Human resource and finance departments are important and foremost part of the
organisation. Hr section is help to hire candidates for work and finance department allocate the
funds for work. Human resource team is responsible for hiring new candidates for vacant post by
organising pool and campus recruitment program with the help of finance department. Finance
department is allocated the funds to Hr department for organising the pool and campus interview
drive (vom Brocke and et.al., 2016). By this both are interrelated to each other and try to achieve
goal of company by hiring and allocating funds in organisation for work.
Organisational structure of voluntary sector
The voluntary sector business have main function which is play that involves services
delivery, campaigning and support group of peoples. Association is the most common form of
business structure and its favoured by new small business. It exists the group of peoples work
together in order to carry out an object which are not related to the market. The main advantages
of this type of structure is that has more flexible for free control of business. It has one more
advantage which is association and voluntary sector is an unincorporated association is cheap to
run and set up. Other hand it has some disadvantage like they have no separate legal entity and
personal liability. National trust is follows the traditional structure for a charity. This trust is
usually governed by a trust deed. It is uses the hierarchical structure of the business this have
boarded of directors, members, committee and volunteers.
Organisational structure of private sector
In the private organisation have a various stakeholder like directors, officers, share
holders and manager that help and guide company in order to fulfilment of business objectives.
Sainbury is uses the hierarchical business structure to guide and control each and every
employees. By this structure company has various advantages like employees are defined levels
of leadership with the organisation by authority and levels of responsibilities (Meyer, 2016). By
this having opportunities for promotion motivate employees to perform well. It is effective and
calculative for the company and its work. Other had it has disadvantage like management of

company faces the miscommunication across different departments. This structure creates the
miscommunication between the departments and directors. According to this structure salaries of
multiple layers of management increase an organisation cost. This create poor communication
between the employees and each members of organisation.
Impact of organisational structure on business objectives and decision-making
Organisational structure is always impact to business objectives and its decision making
process. It refers the relationship between the employee's relation and different organisational
functions. That influences to each other by making and creating goals for firm. In organisation
having a various type of functions. That all have various work and functions and improve growth
of organisation (Teece, 2018). It will influence the decision-making and objectives of the firm.
Like human resource department has responsibility to hire new candidates for work and vacant
post but when some time happens they are not able to hire right candidate according to skills and
qualification. By this they influence the decision-making process of organisation.
Functions are impact the needs and wants of the customers by satisfying them. Sainbury
have various functional departments like finance, marketing, human resources, technology,
operations and research and development departments. That all are work together for achieving
goal of company and to satisfy the peoples and customers. The main objective of this is to
provide the best services to attract customers with higher quality products in order maximize the
profit of company. Marketing department work for setting goals of market place by covering
needs and wants of customers. Other hand finance department take decisions which are related to
the finance and cost. Finance manager have records of cash flows and cost. By this
organisational structure is affect to decision making process of organisation and its objectives.
LO 3
PESTLE Analysis of Sainbury
PESTLE analysis is a combination of six elements which is used to examine different
factors of business environment that is micro and macro environment that may impact on
business operations of firm. Here the report will outline the PESTLE of Sainbury which is as
follows:
Political factor- These factors includes governmental factors which affect the business
environment. This includes political stability, foreign trade policy, government policies, tax

policy, labour laws etc. All these are political factors that can affect the business and its working.
It is clear that political and governmental factor often have the impact on the working of the
business. As during the time of Brixit the political condition was not on favour of Brixit as UK 's
political relation with Qatar impact the business of Sainsbury negatively. This impact can be
illustrated with the help of few examples like, the government has increased the national
minimum wages, which negatively impact the Sainbury because now it has to pay more wages to
its employees. Another change is that the government has lowered the tax which affected the
Sainbury positively because now the company has to pay less taxes as compared to earlier.
Economic factors- These factors have impact on how an organisation do its business.
These factors include interest rate changes, exchange rates changes, inflation, economic growth
etc. These factors allows Sainbury to see how it has performed its business over the years. The
inflation rates has been increased due to which the purchasing power of the consumer have
decreased (Dunning, 2014). This impacted the company negatively because now the consumer
will purchase less. Also, the exchange rate has been devalued which has a positive impact
because of Brexit on the company because now the consumer would be paying more for the
same product in the different country.
Social factors- It is also known as socio- cultural factors. These includes the attitude and
shared beliefs of the population. These factors include consumer buying behaviour, corporate
social responsibility, social attitudes, age distribution, population growth, career attitudes, health
consciousness and so on. For this, the company has established a Fashion Footprint which
basically manages any ethical and environmental factors which has either direct or indirect
impact on the business. It also supports company's employees by improving the working
conditions of the employees which will result in friendlier environment. The Sainbury uses the
waste materials to create new products which is a way to improve the social side of the business.
By using waste products means the company can maximise the use of the limited resources.
Brexit has affected the sales and profits of the Sainsbury negatively
Technological factors- A technological change can have a sudden and dramatic impact
on the business environment. Changes in technology impacts the business either positively or
negatively. Nowadays, everything is becoming online. And because of this Sainbury has started
boosting online purchases on mobile applications. Another essential aspect of technological
factor is inclusion of products being advertised on social media by celebrities and sponsors

(PESTLE ANALYSIS OF Sainbury, 2016). The company's customer service in- store and online
business has been improved because of improvement in technology. Use of Wi-Fi system in the
stores have made it easier for the consumer to find the products if they are not found in the
stores. Due to Brexit, Sainsbury positively started online retail and due to which sales have
increased by over 80% and orders increased by nearly 20%
Legal factors- It is necessary that companies to know what is and what is not legal in
order to do business ethically and successfully. If the business is trading globally than it becomes
complicated to be correct as each country has its own set of rules and regulations. The Sainbury
supplies a code of conduct guidebook which consists of four parts:
 Provides the process of setting up new factories and auditing
 Part two includes minimum ethical trading standards
 Part three covers health and safety
 Part four provides the working practice on labour topics.
According to The minimum wages act 1998, the minimum wages are being increasing gradually
which affect the Sainbury brexit affected negatively because no it has to pay more wages.
Environmental factors- These factors relate to the ecological and environmental aspects
that will impact the demand for an organisation's products and how that business operates. This
factor has gained popularity nowadays only because of increasing scarcity of raw materials,
pollution targets doing business in ethical way, attaining carbon footprint targets set by
governments (Pourabdollahian, Taisch and Piller, 2014). In Arcadia, Fashion Footprint section of
their website, they have a page dedicated to animal welfare where it states that:
 Leathers, skin and feathers must be obtained as a by product and not be the sole purpose
of slaughter of animals
 Feathers should not be plucked from live animals
 Angora, down, real fur or pelts are not to be used on any product supplied to Sainbury
 For environment also the company has reduced its Co2 emission by 8%.

LO 4
SWOT of Sainbury
SWOT analysis is a method through a company undertakes a study through which it
identifies its internal strengths and internal weaknesses and with also the opportunities being
available in the market and the possible threats from the environment and the competitors.
Strengths- It means what an organisation excels and in what quality it has an edge over its
competitors. The strengths of Sainbury is as follows:
 Access to target market with over 300 stores nationwide
 It has a wide variety of merchandise
 It has a staff with ability of creative design concepts with fresh ideas coming in
 It has collaborations with designers and celebrities
 It also offers free personal style consultant who are competing with the high end
department stores.
Weaknesses- These are the drawbacks which stops an organisation from performing to its
optimum level. In these areas the company has to work hard and need to improve it. The
weaknesses of Sainbury are listed below:
 Garments quality does not match to the price offered
 Most of the merchandise suits only for the young segment of the society
 The advertising campaigns are not eye catching
 The company is at global level but than also it has presence in few countries only
 Online shopping not a way of life beyond US
Opportunities- These are the favourable external factors which if grabbed will give the
company a competitive advantage over its competitors (Sainbury SWOT, 2017). He
opportunities available in the market for Sainbury are:
 It has a potential for further globalisation
 It has an opportunity to collaborate with more upcoming designers for more creative
ideas
 It also has a potential of franchising the brand Arcadia
Threats- It refers to a factor which have a potential to harm the organisation. It can also be
defined as the elements in the environment which can cause trouble for the organisation and
hampers the working of the organisation. The threats faced by the Sainbury is listed below:

 The first and foremost threat is the new entries of competitors in the market
 Being a global brand Arcadia is exposed to many political problems
 Stiff competition for sales of product lines in service and storage
 Talent drain because of many competitions
interrelation between strengths and weaknesses with external macro factors
There is a relationship between the strengths and weaknesses with the external macro
factors because both the things are interconnected to each other. The relationship among these
factors can be illustrated in the following points:
Strength with macro environment- Strengths have a direct relation with the macro factors. All
the strength have a direct link with the environment. It can be illustrated with help of the
following points:
 The strength access to target market with over 300 stores nationwide can be maintained
and improved by continuous research of the political and the economic factors (Kolk,
2016). This is so because these two factors majorly impacts the business and its working.
Any negative change in the government policies or any economic change will decrease
the target market of the Sainbury.
 Currently the company is having a wide variety of merchandise made available to the end
users. If the company don't study the social factor from time to time than the company
will not be able to keep a track of the consumer buying behaviour and consumer
preferences. And because of which the products will become obsolete. Also, with social
factor the company should focus on the technological factor because if the technology
will not be upgraded with the changes in the market then the company will start losing its
market share.
 The company has a staff with ability of creative design concepts with fresh ideas coming
in, so the company should provide these employees the latest and the best technology to
these employees. This is so because technology will reduce their efforts of doing manual
work and the employees will get more time in doing brain storming which will increase
their thinking and mental abilities.
 The company has collaborations with designers and celebrities which builds faith among
customers and increases the customer loyalty. The collaboration with the celebrities is