Business and the Business Environment: Tesco Case Study

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Business and the Business Environment
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Table of Contents
Introduction...................................................................................................................... 2
1. Introduction to provide an overview of different types of organizations and the growth
of the international business environment (LO1)..............................................................3
2. An explanation of each of the chosen organisations, including: background details of
the organisation; the products and services they supply; the size and scope of the
organisation; their vision, mission and business objectives; the organisational and legal
structure; and information about their stakeholders (LO2)...............................................8
3. In detail, explain the functions for one of the chosen organisations, using an
organisation chart to show how the functions interrelate and an explanation of how they
relate to structure (LO2)...................................................................................................8
Figure 1: Organizational Chart................................................................................... 11
4. Use contemporary examples to demonstrate both the positive and negative
influence/impact the macro environment has on business operations (LO3).................13
Table 2: Positive and negative impacts the macro environment.................................15
Table 3: PESTLE Analysis......................................................................................... 18
5. Determine the internal strengths and weaknesses of specific businesses and explain
their interrelationship with external macro factors (LO4)................................................18
Table 4: SWOT Analysis of Tesco..............................................................................19
Conclusion..................................................................................................................... 23
References.....................................................................................................................24
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Introduction
Business is considered as an economic activity which is directly relational to a daily and
uninterrupted production and distribution of good and services to satisfy the human
necessities and desires. On the other hand, business environment is considered as the
collection of all the internal and external factors. It affects and influences a business,
such as; demand and supply, management, necessities, desires and expectations of
customers and employees, government activities, economic fluctuations, technology
advancement, market share, suppliers and similarly many others. In order to perform
the duties and responsibilities of a business analyst, various factors based on different
organizations such as, their background details, products and services, size, scope,
legal and organizational structure, vision, mission, business objectives, organizational
functions are vividly defined and described. However, in regards to the chosen UK
based organization Tesco, the present study emphasizes upon PESTLE and
SWOT/TOWS analysis to understand their strengths and weaknesses and the impact
those creates on their business operations and decision making. Tesco is baking and
producing finest tasting breads for nearly 100 years and delivers wonderful muffins,
pies, and house baked scones.
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1. Introduction to provide an overview of different types of organizations and the
growth of the international business environment (LO1).
P1 Explain different types and purposes of organizations; public, private and
voluntary sectors and legal structures.
Successively growing opportunities in the foreign market, increasing demands,
declination of the trade barriers, opportunity of availing low cost labors, massive
advancement of technology and infrastructure facilitated the growth of the international
business environment. Along with that a well diversified market and saturation in the
domestic market are known as the factors for developing the business environment (De
Vries et al., 2016). There are various types of organizations that are mentioned below:
Public Organization
Public organizations are referred to those institutions which are owned and operated by
the government, to provide services as well as cater to the necessities of the citizens
and local public. These organizations are not focused upon generating profit and most
of their funding are generated through taxes, fees and financial transfers from different
levels of government.
The primary purpose of the public organizations are to provide services to the public
which is inclusive of public goods and governmental services such as public education,
public health, public care, police and military etc.
Generally the public organizations follow the legal structure of a public limited company
where they have limited liability and usually sell their shares to the common general
public (Johnson et al., 2017).
The example, a large public organization based on United Kingdom is The Cabinet
Office. The key stakeholder of the particular public organization are commonly known to
be; customers, employees, creditors, suppliers, stockholders and certain individuals
possessing a financial interest in the pubic product.
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Private Organization
A private organization refers to any kind of corporation, individual, agency, or
partnership which is not owned and operated by a public body or public sector. These
organizations remain out of the league of government ownership and conducts business
solely for profit generation. Certain private organizations are non-federal bodies which
are established in an union property and self-dependent in their existence.
For example, the chosen organization within the present study, that is, Tesco is known
to be a private organization. The primary purpose of the concerned organization
remains in generating maximum profit so that it can be beneficial for the shareholders,
investors and owners. Apart from that, their other purposes that includes, providing
transparency in reporting and providing restriction in the access of organizational
strategies and marketing plans (Read, 2018).
Generally the legal structure of the respective private organization follows a corporation,
and all the shareholders possess a limited liability for the organization’s debts.
The key stakeholders of a private organization are creditors, directors, owners,
employees, union and the community from where the organization receives their
valuable resources.
Voluntary Organizations
Voluntary organization specifically refers to certain kinds of communities or institutions
such as; social enterprises, associations, mutual and cooperatives and self help
communities. Their motive is not included for profit generation and they are absolutely
free from any local or national government intercession.
The primary purpose of a voluntary organization remains in providing benefits and
enrichment to the society along with creating a significant social impact through charity,
care and nourishment.
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In the initial stage the legal structure followed by voluntary organizations are sole
proprietorship, and afterwards the structure mainly concentrates on association and
partnership (Maduenyi et al., 2015).
For instance, a large United Kingdom based voluntary organization is Wellcome Trust.
The primary stakeholders of the particular voluntary organizations are; organizational
partners, funders and donors, members and supporters, board members and trustees,
regulators and similarly many others while the secondary stakeholders include
advocacy and interest groups, government and policymakers, media and similar other
related organizations.
P2 Explain the size and scope of a range of different types of organizations.
Size
In the United Kingdom, according to the computation of employee numbers the size of
public sector organization was found to be 5.424 million in 2017 and amongst them the
local government sector organizations contributed 2.123 million and central government
sector organizations contributed 2.995 million.
In relation to that, according to the computation of employee numbers, the size of
private sector organizations was found out to be 26.530 million.
Besides this, the voluntary sector organizations are considered to be a major employer
as 765,000 people work in the voluntary sector organizations constituting of 2.7% of the
United Kingdom whole workforce (Paglayan, 2019).
Scope
The scope of public sector organizations lies inside adapting progressive strategies and
government policies to monitor and perform the economic development. Their scope
included the proposed advancement and betterment of certain sectors like public health
and education, tertiary education, cemetery trusts, technological domains, trust boards,
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licensing trusts, crown entities and similarly many others by utilizing public resource and
power. Above all producing and equally distributing the essential goods and services to
all citizens in a reasonable price is the highest scope of a public sector organization.
The primary scope of private sector organizations is to increase the job opportunities
maintaining a proper format of their vacancy structure. Although the scope of private
sector organizations are very limited in present days due to the massive growth of
public sector but still their scopes include defence production by manufacturing defence
equipments and advanced technologies, along with resolving the red tapes like
corruption, political interference, political and ethnic violence, feeble legal rules and
many more (Pedersen, 2018).
The voluntary sector organizations primarily focus upon, charity, nutrition, health and
social care and similarly many others, thus there remains a massive scope of
implementing charity registration, focusing on campaigning, applying civil rules, creating
a trustee board etc. Apart from these, the voluntary sector organizations also possess
sizeable scope for civic engagement, proper evaluation and impact, ameliorated
relationship with other competing sectors, volunteering, timely service delivery and
advocacy (Nickel and Eikenberry, 2016).
M1 Analyse how the structure, size and scope of different organisations link to
the business objectives and product and services offered by the organisation.
Generally the products and services of Tesco constitute of producing and distributing
bakery which is created from fresh breads. They possess a strong popularity and
recognition all over United Kingdom for their unparalleled quality and ingredients of the
bread.
In order to expand their reputation more amongst the population of United Kingdom
along with extending the goods and services in abroad countries, so that when the
foreign visitors or travellers arrive at United Kingdom, at first they visit Tesco, they
schedule and maintain certain business objectives which helps them to grow in various
grounds. Some of their business objectives are respectively; minimize the wastages and
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help the urban communities and remote rural cities. Preparing a increasing revenue
goal through advertisements and promotions, repeating the same business model in the
reckoned area, setting a marginal goal of production. Last but not the least increasing
their reputation more in the food industry both nationally and internationally (Rozman,
2017)
These business objectives and offered products and services by Tesco are all linked
and interconnected with the size, scope and structure of different organization. It can be
described as, mostly the size of the public organizations in United Kingdom is massive
and constitutes a larger part of the whole industry alongshore 2.7% of of the UK’s whole
workforce is generated from the voluntary organizations. If Tescocan expertise in their
provided goods and services, they can influence and motivate a larger amount or
organizational population to buy their products and services (Sumin et al., 2016).
Generally, in the legal structure of public organization they perform a limited liability and
sells all of their shares to the common general public. Tesco performs a different legal
structure but their business objectives and offered goods and services can massively
facilitate if they sell some portions of their shares to the common public, as by that they
will experience a better expanded recognition and their food and services will be known
to maximum people which will be bought by them in future process. Limited liability
adoption will release the stress and pressure. Apart from these, through the legal
structure of voluntary organizations, Tesco will experience the true essence of
association which will execute their business objectives smoothly.
Tesco can deliver the scopes of public sectors and voluntary sectors which will in order
smoothen out their business objectives and their goods and services will support many
of the rural places and underdeveloped region. Through employing general public,
Tesco can contribute in the scope of public education and their fresh nutritious food will
be enhancing and improving the public health. They can implement license trust, and
cemetery trusts to meliorate their business objectives and certain activities in
technological domains will produce goods comprising more quality ingredients. Apart
from it maintaining a civic engagement for their goods and services and applying the
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distribution in civil rules which will be properly evaluated can bring sustainable impact in
the rural people. Campaigning will result in completion of a successful business
objective (Carayannis et al., 2015).
2. An explanation of each of the chosen organisations, including: background
details of the organisation; the products and services they supply; the size and
scope of the organisation; their vision, mission and business objectives; the
organisational and legal structure; and information about their stakeholders
(LO2).
3. In detail, explain the functions for one of the chosen organisations, using an
organisation chart to show how the functions interrelate and an explanation of
how they relate to structure (LO2).
P3 Explain the relationship between different organisational functions and how
they link to organisational objectives and structure.
There are certain different organizational function of Tesco which can be depicted as;
Leadership board functions in leading, Production departments functions in planning
and producing, Accounting and finance department functioning in financial control and
accountability, Marketing department functioning in organizing and sales, Human
Resource department functioning in overall controlling, R&D team functioning in
research and development (Bah and Fang, 2015).
Organizational
Function
Relationship with other
organizational function
Link to the
Organizational
Structure
Link to the
Organizational
Objective
Leadership
Board
For maintaining a proper
leadership in conducting
The leadership
board department
Leadership
functions helps to
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organizational operation,
all the other departments
respectively helps in
perceiving the all total
production, cost incurred
behind that, how it can be
marketed i a controlled
way and what can be
done to further develop
the goods and services.
helps to smoothen
up the chain of
command inside the
divisional
organizational
structure which gets
followed in order.
maintain the
objective in a
structured way.
Production
Department
The production
department of Tesco can
understand that how
much money can be
incurred, how it can be
marketed and in the next
approach how it can be
developed can be known
from the other functional
departments.
Production
department helps in
progressing the
product based
divisional structure
of Tesco.
Production
department
functions in
minimizing the
wastage.
Accounting
and Finance
Department
Before incurring money or
perceiving how much
revenue can be
generated from the goods
and services of Tesco,
The accounting and
finance department
receives help about what
Accounting and
finance department
is effective for
assimilating every
people’s opinion
from different teams
in a divisional
Accounting and
finance
department
functions to meet
the revenue goal
of Tesco.
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is the good that will be
produced, how it will be
marketed, and how it will
be modified and
controlled to meliorate
more in the future from
other departments.
structure.
Marketing
Department
When the marketing team
of Tesco initiates the
marketing of a certain
products they receives
knowledge about what
was the ingredient, how
much money is needed to
generate, what they can
tell about the further
development from other
functional departments.
The marketing
department helps in
the progress and
betterment of
market-based
divisional structure
of Tesco.
Marketing
department
functions in
repeating the
same business
model in the
reckoned area.
Human
Resource
Management
The human resource
management team of
Tesco initially discusses
with every other functional
departments before
mapping or inaugurating a
project.
The prime divisional
structure of Tesco
gets benefited in
their span of control
region through the
functional
department of
human resource
management
Human resource
management
department
functions in
maintaining the
marginal
production goal.
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R&D Team All the other functional
departments of Tesco
provides input from their
daily activities on how the
products and services can
be made better.
R&D team
accelerates the
whole divisional
structure in
distinguished way.
R&D team caters
to the desire of
the whole
business
objective through
changes and
alteration.
Figure 1: Organizational Chart
(Source: Created by Learner)
M2 Analyse the advantages and disadvantages of interrelationships between
organisational functions and the impact that can have upon organisational
structure.
As opined by, Winnubst, (2017), generally as an advantage it can be told that the
empowerment of research and development and its smooth relationship with other
organizational departmental functions helps to control the divisional structure of Tesco
in an optimum state and that’s how the work tasks get equally divided, apart from that
the close connection and sharing between the accounting and finance department,
production department, marketing department functions in proper balancing and
command generation of the divisional structure of the Tesco.
On the other hand, all the interior small activities and discussions often do not reach to
the leadership board and the R&D team are not properly and completely informed about
the minute dispositions of products or services of Tesco, naturally that does not let the
organizational divisional structure to function in a multi-dimensional way with its
supreme efficiency.
D1 Provide a critical analysis of the complexities of different types of business
structures and the interrelationships of the different organisational functions.
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