Analyzing the Business Environment and Tesco's Operational Performance

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

[BUSINESS AND BUSINESS ENVIRONMENT]

Contents
INTRODUCTION............................................................................................................................. 2
LO1.................................................................................................................................................3
P1 EXPLAIN DIFFERENT TYPES OF ORGANIZATION AND THEIR PURPOSE..................................3
P2 EXPLAIN THE SIZE AND SCOPE OF DIFFERENT TYPES OF ORGANISATION CHOSEN FOR THE
PURPOSE....................................................................................................................................5
LO2.................................................................................................................................................7
P3 EXPLAIN THE RELATIONSHIP BETWEEN DIFFERENT ORGANIZATIONAL FUNCTIONS AND
THEIR LINK TO ORGANIZATION STRUCTURE AND OBJECTIVES..................................................7
LO3............................................................................................................................................... 11
P4 IDENTIFY THE POSITIVE AND NEGATIVE IMPACTS THAT MACRO ENVIRONMENT HAS UPON
BUSINESS OPERATIONS............................................................................................................11
LO4............................................................................................................................................... 14
P5 CONDUCT INTERNAL AND EXTERNAL ANALYSIS IN ORDER TO IDENTIFY THE STRENGTH
AND WEAKNESS FOR THE TESCO.............................................................................................14
P6 EXPLAIN HOW STRENGTH AND WEAKNESS INTERRELATE WITH EXTERNAL MACRO
FACTORS.................................................................................................................................. 19
CONCLUSION............................................................................................................................... 20

INTRODUCTION
The study focuses on the influence of the business environment on the overall performance of
the organization. The report produces various aspects of a business environment that needs to
understand the effective functioning of business operations. There are different types of
organization in the economy like profit-making companies, non-profit making companies and
the voluntary sector (Fatema, 2017).
The report throws light on the organizational structure and purpose of various organizations. It
also analyses the positive and negative factors that ultimately influence business operations.
For the purpose of this assignment, the organization like NHS, TESCO and Wellcome Trust are
chosen in order to delineate the relationship between functions of an organization (Ho, 2012).

LO1
P1 EXPLAIN DIFFERENT TYPES OF ORGANIZATION AND THEIR PURPOSE
There are different types of sectors in a business organization with its established mission and
objectives. They carry out their business operations for the purpose of achieving their business
motives along with establishing a brand image in the market. Every organization has its own set
of principles and values to achieve long term objectives and sustainable growth of the company
(Omar et al., 2011).
Organizations are broadly classified as Public, Private and Voluntary sector.
PUBLIC SECTOR
The enterprises that are owned by the government are usually known as Public Corporations.
They are governed by various rules, regulations and structural principles. The basic purpose of
the organization is to serve the public interest by selling the quality goods to the citizens and
providing effective services to them. Public sector generally consists of the departmental
undertaking, statutory corporations and government companies (Omar et al., 2011).

For example- NHS Trust is an organizational unit in England that provides specialized functions
to the citizens of the UK. The trust provides various health care services in order to serve the
residents. The organization is funded by the government and employs over 14 lacs people in
the UK.
PRIVATE SECTOR
A Private sector consists of various organizations that consist of various people working
together with the motive of earning a potential profit. It is the in the form of Sole
Proprietorship, Partnership and another form of companies. Private sectors have the freedom
to operate and are governed by their unique set of principles.
For Example- Tesco was an established Supermarket chain in the UK that owns 3751 branches
and serving over 70 million customers across the country. The purpose of the company is to sell
the quality goods at a specific price by reasonably booking a profit margin.
VOLUNTARY SECTOR
The voluntary sector is the non-profit sectors that are owned by the government and individual
charities. This sector is also known as the community sector that works for the sole purpose of
charity rather than revenue generation.
For Example- Wellcome Trust is a UK based voluntary sector that introduces various funding
schemes so as to offer a grant to various scientists and researcher. This is a way for medical
innovation by dealing with the biggest health challenges (Day and Reynolds, 2011).

P2 EXPLAIN THE SIZE AND SCOPE OF DIFFERENT TYPES OF ORGANISATION
CHOSEN FOR THE PURPOSE
Size, scope and structure differ from organization to organization. Organizational size is
determined in terms of a number of employees working in the organization while
organizational structure defines the activities related to the allocation of the task so as to
coordinate in a better way. The scope of the organization describes the required number of
resources required for the achievement of business objectives in the competitive environment
(Davies, 2012).
The various category of organization on the basis of size and scope as follows:
Micro Enterprise
A microenterprise is the one where investment in Plant & machinery is not more than 25 lakhs.
It runs a business in the form of small enterprises that can be found in the nearby surroundings.
For example- Coffee shops, parlous, Kirana Merchant and others. Such enterprises are privately
owned and managed by the owner of the firm and can be started with minimum capital (Ho,
2012).
Small enterprise
A enterprise where investments in Plant & Machinery is more than 25 lacs but less than 5
crores. They employ over less than 500 employees with maximum capital of $ 500000. They run
their business for earning a potential profit and are controlled by the owner of the organization
(Ling, 2017).
Medium Enterprise
A enterprise where investment is more than 2 crores but less than 5 crores. They account for 99
% of economic activities and run their business with the sole motive of earning a potential
profit. They achieve sustainable market share by achieving a steady growth in the market.

Large Enterprise
Large corporations usually run with the sole motive of maximizing profit by utilizing the
allocated resources in the best possible manner. The long term vision of the company is
achieved through effective management of skilled talent as well as managing the sources of
fund.
It is required by the large enterprise to employ at least 5000 employees. Such corporations are
in the form of supermarkets and big companies that majorly contributes to the GDP of the
economy (Davies, 2012).

LO2
P3 EXPLAIN THE RELATIONSHIP BETWEEN DIFFERENT ORGANIZATIONAL
FUNCTIONS AND THEIR LINK TO ORGANIZATION STRUCTURE AND
OBJECTIVES
Organizational structure defines the level of hierarchy and distribution of authority and
responsibility at various levels. It provides the divisional structure that is to be followed in the
organization and clearly defines the roles and responsibility of each individual. This further
coordinates the efforts of various departments so as to achieve the business objectives in a
timely manner (Allen, 2013).
An organizational structure with respect to Tesco
Tesco follows a hierarchical organizational structure that defines the position and obligation of
each individual in the line of authority so as to carry out the business operations smoothly and
efficiently. The highest power resides with the top authority. Thus, it is required by a various
layer of management to coordinate their efforts so as to ensure flexibility and speedy flow of
information (Fatema, 2017).

Figure: Tesco Organizational structure at various stores
An organizational structure with respect to NHS Trust
NHS is the world largest public organization that provides its services to improve health service
across the UK. The organizational structure of the NHS explains the accountability to the
parliament. It consists of various activities such as allocation of task, coordination and
supervision to achieve the organizational aims. The overall structure of NHS is further classified
into various departments and workgroups so as to manage and monitor the local health care
services.
Figure: Organizational structure of NHS
[Source: Everett, 2014]
The various functions of organizations are related to organizational structure. A well-defined
structure also consists of the various functions of the department such as Finance, operation,
Human resource and research and development. The efforts of all such department need to be

coordinated for the purpose of achieving a leading position in the market. Thus, the
organizational structure clearly outlines the functional activities of various departments.
An Organizational structure with respect to Wellcome Trust
Wellcome trusts is an independent charitable organization that introduces funding schemes
and other resources to the researcher and their team. The innovative Organizational chart with
respect to wellcome trust as follows:
Figure: Organizational chart of wellcome trust
[Source: Ho, 2012]
Finance Department
The finance department is the heart of the organization that helps to manage the flow of
money. They undertake a wide range of activities so as to control the finance cost which is a

very important aspect of the business. The department is also requiring investing in positive
NPV projects in order to ensure the financial viability of the company.
Operation Department
The main purpose of this department is to appropriately manage the production of goods or
services through planning and controlling the resources required to produce the goods or
services. It is further required to ensure the free flow of activities for the effective functioning
of the company (Day and Reynolds, 2011).
Human Resource Department
People are the most important asset in the organization for the overall success of the
organization. Human resource department in the supermarket is required to make appropriate
recruitment and selection policies so as to attract fresh talent as well as retaining the potential
employees.
Marketing Department
The purpose of his department is to draw reasonable sales strategies that can help the
organization to achieve sustainable market share. It is required to design attractive sales
strategies and other promotional campaigns so as to attract potential customers in the market.
Thus, the marketing department of Tesco frames the competitive sales strategy for offering
goods or services (Ho, 2012).

Advantages and Disadvantages of various organizational functions upon the organizational
structure
The various functions of the organization are interrelated with each other that can help to
create a strong organizational culture. It also helps to build better human relation by
strengthening the beliefs and values of the organization (Allen, 2013).
Following are the Advantages and Disadvantages of organizational function:
Advantages
 Achievement of the common goal
The integrated efforts of various department help to achieve strategic goals and policies
in order to achieve a competitive advantage in the market. Also, the establishment of a
healthy relationship among the various departments at Tesco tends to achieve overall
business objectives (Allen, 2013).
 Effective utilization of resources
The inter-departmental relation can be really helpful in managing the allocated
resources for the efficient purpose. Also, the clear segregation of duties and
responsibilities avoids misuse of resources and overlapping.
Disadvantages
 The difference in the interest of the individual
Sometimes, there is a difference in opinion of various people that may give rise to
organizational conflicts, this will further affect the overall functioning of the business
and may hinder the organizational growth (Fatema, 2017).
 Lack of coordination
Improper coordination among various departments can affect the overall working of the
organization which can further impact the brand image and goodwill of the business.