Business and Business Environment: An Analysis of Tesco

Desklib provides past papers and solved assignments for students. This report analyzes Tesco's business environment and operations.

BUSINESS AND BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION........................................................................................................................3
LO1........................................................................................................................................... 4
P1 DIFFERENT TYPES OF ORGANISATIONS AND THEIR PURPOSES.......................................4
P2 SIZE AND SCOPE OF DIFFERENT TYPES OF ORGANISATIONS...........................................7
M1 RELATIONSHIP BETWEEN SIZE, STRUCTURE, AND SCOPE WITH OBJECTIVES OF THE
ORGANISATIONS.................................................................................................................. 8
LO2........................................................................................................................................... 9
P3 RELATIONSHIP BETWEEN DIFFERENT ORGANISATIONAL FUNCTIONS AND THEIR
RELATIONSHIP WITH ORGANISATIONAL OBJECTIVES AND STRUCTURE...............................9
M2 ADVANTAGES AND DISADVANTAGES OF INTERRELATIONSHIPS BETWEEN
ORGANISATIONAL FUNCTIONS...........................................................................................10
LO3......................................................................................................................................... 12
P4 & M3 POSITIVE AND NEGATIVE IMPACT OF MACRO ENVIRONMENT ON BUSINESS
OPERATIONS BY APPLICATION OF PESTLE ANALYSIS..........................................................12
LO4......................................................................................................................................... 15
P5 INTERNAL AND EXTERNAL ANALYSIS OF TESCO TO IDENTIFY ITS STRENGTHS AND
WEAKNESSES......................................................................................................................15
P6 RELATIONSHIP BETWEEN STRENGTHS AND WEAKNESSES WITH EXTERNAL MACRO
FACTORS OF THE ENVIRONMENT.......................................................................................15
M4 SWOT ANALYSIS OF TESCO AND JUSTIFICATION OF ITS effect ON THE DECISION
MAKING OF TESCO............................................................................................................. 16
CONCLUSION.......................................................................................................................... 20
REFERENCES...................................................................................................................21
1

LIST OF FIGURES
Figure 1: TESCO........................................................................................................................5
Figure 2: National Health Service............................................................................................6
Figure 3: Oxfam....................................................................................................................... 6
Figure 4: PESTLE analysis.......................................................................................................11
Figure 5: SWOT Analysis........................................................................................................15
2

INTRODUCTION
The report discusses about various types of organizations such as public, private and
voluntary sectors and legal structures along with their scope and purpose. The vision and
missions of these organizations are explained in detail in this report. The relationships
between various functional departments of an organization are analysed in detail. The
merits and demerits of these interrelationships are studied in this report along with its
relevance to the organization and its operations. Further, the impact of the macro
environment on the business both in positive and negative prospects are discussed in the
report. PESTLE model is shown in this report in order to discuss the macro environment
within an organization. At last, strengths and weaknesses internal to the organization are
analysed with respect to external factors of the environment.
3

LO1
P1 DIFFERENT TYPES OF ORGANISATIONS AND THEIR
PURPOSES
An organization is a group of people who are working together at a place for achieving
common goals and objectives. The people who are working in a coordinated manner for
attaining a certain objective is known as an organization (Hatch, 2013). An organization is a
collective meeting of a group of people that is subdivided into different activities to be
conducted according to their roles and responsibilities (Business Dictionary, 2018).
There are mainly three types of organizations which are public, private and voluntary
organizations. TESCO is a private organization which is British groceries retailer, NHS or
National Health Service is a public organization which is in England, Scotland, Wales and
Northern Ireland and provides the wide range of health services, and Oxfam is a voluntary
organization which is an independent charitable organization who aims at removing global
poverty.
PURPOSE AND LEGAL STRUCTURE
Figure 1: TESCO
[Source: Scott, 2017]
4

5

TESCO
TESCO is a private multinational company who sell general merchandise and grocery items
all over the world. The organizational structure followed by TESCO is hierarchal which is
consists of many levels and degrees controlled by each different individual. The instruction
or message is passed through one individual to another until the message is passed to the
bottom level of the hierarchal structure. The main purpose of Tesco is to provide better
quality to its customers and to serve them better every day (TESCO PLC, 2019).
Figure 2: National Health Service
National Health Service
National Health Service or NHS is a public sector organization which was formed in the year
1948 (NHS, 2016). The organizational structure of the National Health Service is also
following a hierarchical structure that has many layers between various levels and a long
chain of instructions from the top to the bottom layer. The main purpose of NHS is to
provide health services to the needed people without concerning about wealth. They aimed
at providing universal services free at the point of delivery to all patients who cannot afford
payment (NHS, 2018).
6

Figure 3: Oxfam
[Source: Sharman, 2016]
OXFAM
Oxfam is a federation of 20 independent charitable organizations which aimed at removing
global poverty. This was founded in the year 1942 at Oxford, England and is a non-profit
group with a considerable large collection of operations. The organizational structure of
Oxfam is geographic due to their operations around the world in various parts of the
universe. The man purpose of Oxfam is to promote sustainable livelihood to people all over
the world with the security of living.
7

P2 SIZE AND SCOPE OF DIFFERENT TYPES OF
ORGANISATIONS
Size of the organization is depended on its scope and is connected with the objectives and
goals of a business. There is the varying size of organization present in the industry which
has a different scale of operations. Size of a firm can be determined by its market share,
capital, number of employees, revenue, buildings, and collaborations, etc.
TESCO
Tesco was founded by Jack Cohen in the year 1919 as a group of market stalls at the
beginning (TESCO PLC, 2019). It is a leading retailer of grocery which has around 6800 stores
all around the world. The company has its headquarters at Welwyn Garden
City, Hertfordshire, England, and the United Kingdom. Tesco is considered as the largest
retailer company ranked at third level in the world in terms of gross revenue. The company
earned a group sale of £51.0bn in the financial year 2016-17 and has made statutory
revenue of £57.5bn. The statutory and operating profit of the company is £1,298m and
£1,837m respectively in the same financial year (TESCO PLC, 2019).
National Health Service
NHS or National Health Service was founded in the year 1948 by Aneurin Bevan who was
appointed as the health minister in the UK. The man aim of starting this organization was to
provide free healthcare services to people all over the world. The organization is known as
the third largest employer of the world which provides employment to 1.7 million
employees. The National Health Service is funded by payroll contributions, local taxes, and
patient fees by keeping its costs relatively low (NHS, 2016).
OXFAM
Oxfam is a federation of 20 charitable organization which was founded in the year 1942 and
headquartered at Oxfam International, Oxfam House, John Smith Drive, Oxford, and
England. This organization work for eradicating poverty from the world and aimed at
creating a society where people have a sustainable livelihood. This organization works in 90
countries in innovative ways to start a standard of living for people around the globe.
8

M1 RELATIONSHIP BETWEEN SIZE, STRUCTURE, AND
SCOPE WITH OBJECTIVES OF THE ORGANISATIONS
An organization set its objectives based on its size in such a manner that it can fulfill its goals
within its limited size of capital, employees, profits, customers, etc. An organization can set
big targets only if it has a large amount of capital and invested a huge amount of money in
the business. Objectives are based on an organizational structure in such a way that when
the organizational structure is good and everyone knows his roles and responsibilities,
targets can be met easily. When the scope of a company is to serve people without making
any profit, then the objectives and target are set accordingly.
The main objective of TESCO is to provide superior quality products and to serve their
customers in a better manner every day. Hierarchy organizational system of TESCO helps it
achieve this objective by providing clarity in roles and responsibilities. The improved use of
technologies greatly helps the organization throughout its operations and enhances services
given by it. Worldwide acceptance of the company after winning various awards adds in the
popularity of the organization which helps TESCO to attain its objective more easily.
The objective of the National Health Service is to provide free healthcare to people who
cannot afford treatment. For attaining this purpose the structure of an organization is very
helpful that also follows hierarchical structure for its operations. The organization gets
funded from the total budget from the department of health, local taxes and patient fees.
The scope of NHS is worldwide which makes it a well-known organization with a noble
cause. This helps the organization in achieving its goals and objectives.
The main purpose of Oxfam is to remove poverty all over the world and to provide a better
living standard for people globally. To attain its objective, the organization appointed many
employees for working and has a wide range of the network to provide its services. Oxfam
responds to the emergencies in a very fast manner through these networks. Infrastructures
are built by Oxfam in order to reach 6.5 million people for providing relief.
9

LO2
P3 RELATIONSHIP BETWEEN DIFFERENT
ORGANISATIONAL FUNCTIONS AND THEIR RELATIONSHIP
WITH ORGANISATIONAL OBJECTIVES AND STRUCTURE
The organizational structure of a company defines the interrelationship between its various
departments and their impact on the achievement of goals and objectives of the
organization (Sherman, 2019). The various functional departments of a company ensure
that the work and operations are carried out in a planned manner by each department. The
relationship between these departments is essential as no department can function alone
without any assistance from another department of the organization. For example, the sales
department is dependent on the production department for goods that can be sole.
Similarly, marketing is essential for sales that will help in increasing sales by making the
product popular among customers.
The finance department is also related to all the other department of the company which
needs finance to conduct their operations. Various departments of TESCO such as finance,
marketing, research, sales, production, human resource, administration etc. play an
important role in defining organizational objectives of TESCO. The finance department of
TESCO takes timely financing decisions after measuring the financial performance of TESCO.
It controls the cost of the company and helps the company in its objective of providing
continuously standard price products. Human resources recruit employees according to the
need of the company after analyzing the capabilities of applicants. Marketing makes sure
about market research activities with the research department and advertise the products.
The production department is responsible for providing services of TESCO such as offices,
vehicles, retailing products, etc. The administrative department of TESCO helps the
company in ensuring that operations are conducted in an ordered manner. It keeps all the
functions of the company together and helps them work towards a common goal of TESCO
(Mrcox, 2012).
10

M2 ADVANTAGES AND DISADVANTAGES OF
INTERRELATIONSHIPS BETWEEN ORGANISATIONAL
FUNCTIONS
Although the functional departments working together in an organization help it in
achieving its objectives and bring success to the company, there are several disadvantages
associated with the collective functioning of these departments which are explained below
in detail:
ADVANTAGES DISADVANTAGES
1. The problems or issues arise in the
operations are solved quickly in a
team-based organization (Quain,
2019).
1. Since the function of one department
is related to the other, the low
performance of one department will
affect the performance of another
department.
2. Working in an organizational
structure promotes rationality and
stability by giving responsibilities of
work to a particular employee.
2. There are chances of conflicts when
one functional department is
affected by the non-performance of
another department.
3. Collective functioning helps the
organization facing new challenges
easily by group efforts.
3. Communication barriers can become
another disadvantage of the
company which will create
confusions and conflicts.
4. Each department supports another
department thus collectively help in
achieving goals.
4. Management issues may arise due to
poor coordination between the
departments.
5. Expertise level is achieved by the
organization since each department
work in its own special areas.
One of the main reasons for the success of TESCO is the collective functioning of its various
departments. The hierarchical structure of TESCO helps it in defining clear responsibilities
11