This sample will let you know about the:
- What is Business Environment.
- Discuss about the different types, size and scope of organisations.
- Discuss about the strengths and weaknesses interrelate with macro factors.
Business environment is considered as collection of different internal as well as external factors related to an organisation such as customer need and demand, management, owner, clients, government activities, social trends, supply and demand, employees, market trends, change in economy and many more (Amankwah-Amoah and Wang, 2019). Organisation selected for this report is TESCO which is public limited company operating in retail industry. It is founded by Jack Cohen in year 1919. Respective company operate their business operation and functions at global level. Topics included in this report are explanation of scope, size, legal structure, purpose, types, vision and other factors of private, public and voluntary sector as well as it include relationship among the different organisational function.
Part 1- Essay
Explain the different types, size and scope of organisations
An individual can established their business unit in three types i.e. private, public and voluntary sectors. Private sector is considered as those business unit which is a part of country economic system which run by an individual or companies, instead of government bodies. Generally private sector companies are operating with intentions of earning profit. Example of private sector is TESCO. TESCO is private limited company which is conducting their business at retail sector (Aydiner and et. al., 2019). It is founded by Jack Cohen in they year 1919. Its head office is located at Welwyn Garden City, England, United Kingdom and they operate at the multinational level such as United Kingdom, India, Thailand, Republic, Poland, Malaysia and so on. Respective company offer their products through supermarkets, super stores, hypermarket and convenience shop. TESCO offer their products and services through several divisions such as groceries, Tesco Clubcard, Tesco Bank, Clothing, Tesco magazine, Tesco mobile and many more.
TESCO vision is to become most high value retail business brand who serve high quality products to their loyal and potential customers as well as their mission is to develop value for customers in order to earn lifetime loyalty from potential customers. Moreover there are different types of Private sector such as Sole Proprietorship which refers to those companies which are operate by an individual and in this risk as well as profit are share by owner itself (Belas and Rozsa, 2019). This mode of private sector is simplest and oldest form that are generally used today. In respective type of business there are minimum restriction as well as it can be dissolve easily. Such as Carpenter, Local Grocery store, Tailor and so on. Another types is Partnership which is considered as agreement among the two or more people who conduct business operations together as well as shares profitability and liabilities. Generally in partnership companies members share both liabilities as well as profit. This is normally agreement is based on shares, authorised capital, ownership and many other factors.
Third type is Joint Stock Companies those venture have limited financial resources as well as this business include heavy load of risk while forming business. In this capital can be upraised by selling shares of different values. In this business managing bodies of company are Board of Director, CEO, Shareholders and many others. Along with this purpose of TESCO is to become biggest retail brand by serving quality products and services to customers to make their every day better. The legal structure of TESCO is corporate governance, in which company deal along with shareholders (Tesco Legal Structure, 2020). Moreover in this respective company want to attain that strategy which their shareholders want to attain. Want to get Assignment help? Talk Our Expert Now!
Furthermore, Public sector is also known as state sector which is considered as part of economy composed by public sector as well as public sector enterprise. There are several industries which are include in public sector such as school, electricity, emergency service, fire services, gas, healthcare and many more. Example of public sector enterprise is NHS (National Health Service). NHS is publicly funded healthcare system established at United Kingdom. It is developed with four separate systems i.e. NHS England, NHS Wales, Health and Social Care in Northern Ireland and NHS Scotland (Bratianu, Hadad and Bejinaru, 2020). It is considered as one of the largest single payer healthcare system around the world. It is founded in 1948 by Aneurin Bevan. National Health Service offer wide range of products and services related to medicine and test as well as they offer their products and services at reasonable cost.
National Health Service's Vision is based on three factors i.e. to develop and promote better care, better health as well as better value as well as their mission is to provide quality health care services to society so that they can leave their life happily and disease free. There are different types of Public sector, first is Departmental Undertakings which is one of the oldest type of public enterprise that is also a part of governance department. These firm didn't have any apart existence from government bodies for example railways, telephone service, broadcasting and so on. Second type is Public Corporation/ Statutory Corporation which is a companies are generally formed under specific legalisation developed by parliaments, state or central government. Such as State back, Airlines and so on. Next type is Government Company which is partly or 51 percent of paid up capital are belongs to central or state governance of nation (Charter, 2017). Along with this, at respective company all activities are performed under guidance of government in order to get effective outcome.
The purpose of NHS is based on the four aspects i.e. developing enthusiasm for scholarship, challenging desire for rendition services, creating character for secondary school students and promoting leadership among peoples. Along with this, National Health Service's legal structure is public corporates because it is developed by rules and regulation of parliaments. Along with this, NHS operates at the international level due to which they adopt different legal structure according to the location or nation.
Voluntary sector is also known as Civil sector whose duty is to conduct social practices in order to resolve issues of people. It is generally non government as well as non profitable firm. These firm earn funding from private sector companies, National lottery, other section of voluntary sector and from investment (Cross and Miller, 2020). Example of voluntary sector enterprise is Oxfam.Oxfam is introduced by Cecil Jackson Cole in year 1942 at Oxford, England, United Kingdom. Its head office is located at Nairobi, Kenya and they offer their services at the worldwide level. Respective company focus on several aspects such as poverty eradication, disaster relief, pro migration, advocacy and policy research.Products and services offer by Oxfam are related to providing financial support to poor, help to disaster sufferer, provide counselling to clients, help in developing policies and many more.
The main vision of Oxfam is to minimise or remove poverty from world so that every person leave their life properly. Along with this they want to make world where every individual treat each other equally. Moreover, mission of respective company is to develop effective solution for injuries, disease and poverty so that they can change the world and make it effective (Gaganis, Pasiouras and Voulgari, 2019). there are different types of voluntary sector, fist is Unincorporated Association which is considered as business unit which is developed by considering group of people who come together for some specific reason other then profit. They didn't need any types of cost in order to get set up at the marketplace. Another is Trust which is a types of organisation considered as three party fiducial relationship at which first party is trustor, second party is for benefits for the third part i.e. beneficiary. It is generally developed when an individual (Settlor) gives property to some other individual (Trustee) (Gölgeci, Karakas and Tatoglu, 2019).
The purpose of respective company is to help other or society in order to offer them long lasting solution of injustice in respect of poverty. Along with this, they also want to change the world and make it better for every person. Moreover, Oxfam's legal structure is unincorporated which is setup along by considering agreement with peoples. They generally conduct their business operations and functions for society instead of making profits.
TESCO is private company which is large in size which have more than 4,60,000 employees at the worldwide location. Respective company have number of subsidiaries such as Ireland, Stores Ltd, Bank and so on (Gregory, Ngo and Karavdic, 2019). TESCO activities are considered as fundamental element of practices. The scope of company is to extend their business at the global level in order to earn more and more profitability. For this they need to conduct market analysis which help in identifying whether to expand business effectively.
In respect of public company like NHS, the size of NHS is huge as they are operating in numbers of countries in order to provide healthcare services to society. Along with this they also provide free medical services to the residents of United Kingdom. Moreover, the NHS scope is to offer media services to more than 64.6 million citizen at the United Kingdom as well as 54.3 million at England. Along with this respective company deal with 1 million patients per 36 hours which include several services. Such as treatments, routine screening, emergency case and so on (Hillary, 2017).
Voluntary Organisation example is Oxfam, the Oxfam size is middle to large as they are offering social services at the United Kingdom in order to minimise or remove poverty, help disaster faced people and so on. Moreover there are 20 independent voluntary companies are working in order to make nation free from poverty. The scope of respective company is that they expand their services around the world. This is so because through that they able to make world a better place to leave.
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Demonstrate the interrelationship of the various functions within an organisation and how they link to organisational structure
Organisation include different departments those who conduct their functioning towards a common organisational objective. In order to ensure effective growth it is essential for entity to make sure that there is formative set of coordination in every department (Heirati and Siahtiri, 2019). As this stimulate entity to gain prosperous growth opportunities along with increased profitability ratio. In this TESCO is required to ensure that there is formative set relationship in every department of organisational work structure as to effectively fulfil company vision, mission and objectives in a best effective manner. Interrelationship between different departments of TESCO are like Finance with human resource department- TESCO human resource department efficiently conduct their functions. In order to stimulate high growth for company this department operate their functioning with finance department. This has been identified that HR department of entity provide skilled, potential and knowledgable candidates to finance department. This ensure effective functioning of finance department (Kwilinski and et. al., 2019). While on the other hand as to operate functioning of HR department like training, seminars and recruitment, finance department offer adequate finance as to duly fulfil organisational objectives.
Moreover, Marketing with finance department:- Finance and marketing department are consider as an essential departmental unit with TESCO. Thus, it becomes important for company to ensure that both of these department have formative coordination. This ensure organisational profitability and productivity in a well defined manner. Marketing department provide finance department with increase organisational sales that simultaneously increase entity fund reserves. While on the other hand finance department offer effective funds to marketing unit in order to conduct marketing activities like advertising and promotion in a well defined manner. This ensure high growth and profitability for TESCO.
Illustration 1: Organisational Structure
(Source: Organisational Structure, 2019)
In addition to this another comparison is among Human resource with sales department:- Both human resource and sale department of TESCO have interrelation that allow them to conduct their operating with effective coordination. Due to increase in competition it is essential for company to have skilled staff those who can effectively result to increase overall sales of organisation (Lu, Wang and Xu, 2019). This will lead entity to gain more competitive advancements in marketplace. In addition to this, it has been identified that HR manager of TESCO provide effective as well as skilled candidates those who contribute towards high sales of organisation. While sales department provide effective communication and balance between employees in sales department through which HR can effectively able to manage human resource in well effective manner. This helps organisation to stimulate their profitability in best effective manner.
Part 2- Report
For every company it is essential to conduct analysis of business environment so that they can conduct develop strategies properly according to the factors. This will help them in understanding opportunities and identifying risk which arise due to business environment factors (McDonald and Eisenhardt, 2019). Organisation selected for this report is TESCO whose head office is located at England, United Kingdom. Respective report will also include analysis of business environment through different models i.e. PESTEL and SWOT.
The impacts that both macro and micro factors have upon business objectives and decision-making by appropriately applying a PESTLE analysis.
PESTLE analysis is a framework which is used by company to track activities of market. This tool is mostly used to analyse the external factors which are affecting the business organisation. Such analysis is useful when opening a new business and entering into UK market. The positive and negative impact of PESTLE analysis on TESCO which is given below:
Political Factor: Political factors are those which includes rules,restrictions,laws etc. These factors are important for each and every organisation to be stabilised in the market. TESCO has broad market all over the world so it should maintain its relations with the government (Quinlan and et. al., 2019). Over the years ago,when UK government increases tax rate to overcome the financial crisis all over the country, it affected TESCO sales revenue. Due to high taxes, gross and sales revenue of company was fluctuated.
Positive Impact: Due to changes in political law, it increase price of product thus accelerating revenue of company.
Negative impact:Due to Brexit,TESCO reduces its sales and profit which imposes negative impact on the company.
Economic Factor: Further comes economic factor, these factor are most crucial part of the framework. These comprises of deflation and inflation rates, unemployment etc. Tesco should have been more careful while dealing with such factors.
Positive Impact:When the tax rates were high, country's economy was uprising. The purchasing power of customers was increasing , which was beneficial for company.
Negative Impact:Due to decrease in income of individuals , TESCO has reduced their sales and profit.
Social Factor:These factors includes demographic,age,income,regions etc. TESCO is the biggest retailer in the market so it target people with disposable income who can easily buy the product (Richards and et. al., 2019).
Positive Impact:TESCO provides wide range of variety of products used by everyone from toddlers to old age people thus it increases sales of the company.
Negative Impact:Due to increase in unemployment rate, TESCO has reduces its profit .
Technological Factor: Technology is important because it simplify the work , reduces manpower and resources and has affected organisation production capacity and cost efficiency. But TESCO should improve its technology at advancement level because market is changing at every phase .
Positive Impact: TESCO has boost up its business online such as groceries thus it triggered sales revenue of company
Negative Impact:The cost of implementation of advanced technology is very high it added cost to the product.
Legal factor:Last but not the least; legal factor which include, employment law, antitrust law, money laundering etc. TESCO selling its product and providing financial services all over the market , more legally it has been engaged.
Positive Impact:The positive impact of following legal policy and procedure is it increases brand image or goodwill of company.
Negative Impact:Due to changes in legal procedure results in alteration of companies policies imposed negative impact on the company.
Environmental Factor:The rules and regulations followed by TESCO with the purpose of protecting environment which is given below.
Positive Impact:The rules and regulations followed by company that helps in protecting environment (Roetzel, 2019).
Negative Impact:Due to Environment enactment law, it imposes penalty on companies which eroded brand image or goodwill of company.
PESTLE OF Aldi
Political Factor: Political factor involves taxation policy, rules, laws, regulations, legislation and many more. All these factor affect positively and negatively on the working of company. In context of Aldi, if there is a change in the taxation policy it affect sales of the business organisation. Due to change in law imposes direct impact on whole activities of Aldi for implement their task in ethical manner.
Positive impact: Due to political stability of Batavia, Illinois thus it affect positively on whole productivity and profitability of Aldi.
Negative impact: A high level of taxation policy affect the sale of company in negative manner.
Economic factor: Economic factors includes inflation as well as deflation rate which affect the sales of the business organisation. In reference of Aldi, the economic position of Batavia, Illinois is strong that will generate revenue for company for achieving competitive advantage in the marketplace.
Positive impact: It provides employment opportunities to individual that assists in enhancing the living standard.
Negative Impact: Due to increase in wage rate affect the sales and productivity of the business organisation.
Social factor: It involves income, age and regions that imposes direct impact on profitability of the company (Soppelsa, Lozano Gracia and Xu, 2019). The manager of Aldi focuses on satisfying the need and requirement of consumer in effective manner.
Positive impact: It helps in satisfying the need and requirement of consumer that assists company in building reputation of company.
Negative impact: Herein, sometime business organisation adopt CSR policy that affect the sales of organisation in adverse manner.
Technological : These are those factors which are related to change in technology of business environment these are change in production methods, etc. change in technology used by Aldi and other super markets is continuously changing.
Positive impact : positive impact of these factor on Aldi is it help it in using innovative ways in there working.
Negative impact : It have also impacted negatively on Aldi by increasing their cost
Environmental : these are the natural factors which impact on organtion the imapct of this factor are stated below
Positive impact : It have great positive impact on firm as it help it in mainlining goodwill in market
Negative impact : Aldi is also facing negative impact of this as it will deceases there profit because of various environment laws.
Legal : This factor include laws and regulation of government of area where Aldi is working
Positive impact: Aldi have positive impact of this as it will help them in making rules and regulations
Negative impact : Brings rigidity in working structure of Aldi
Apply appropriately SWOT analysis and justify how they influence decision-making.
In order to conduct analysis of internal and external environment, TESCO can conduct SWOT analysis which is given below:-
SWOT Analysis of TESCO
SWOT Analysis of ALDI
Explain how strengths and weaknesses interrelate with macro factors.
Political Factors- Respective factor will include elements like tax rate, government policy, interest rate and so on.
- Strength- At United Kingdom, political condition is stable which is consider as strength because through it TESCO can expand their business at respective location.
- Weaknesses- Due to change in political condition and law cost of import as well as export get fluctuate which is weaknesses for respective company operations.
Economic Factors- This factor will include elements like exchange rate, unemployment rate, income tax and so on.
- Strength- Respective company offer all price range of products which help them in attract each income group people which is strength for them.
- Weaknesses- At United Kingdom sometime inflation arise which is weakness for the respective retail company as it impact on their sales (Sebikari, 2019).
Social Factors- Factors included in social factor is age, demography, gender and so on.
- Strength- TESCO conduct market analysis on continuous basis which is strength for them because it help them in developing products according to customers.
- Weaknesses- Taste and preference of customers change on continuous basis which is weaknesses for respective company because they need to develop new strategies and plan accordingly.
Technological Factors- Respective factors include elements like research and development, technological change and many more.
- Strength- Through implementation of new technology, TESCO can increase their productivity which is strength for them.
- Weaknesses- Implementation of each and every new advance technology impact on respective company budget which is weakness.
Environmental Factors- This will include factors like climate change, weather, rules and regulation for environment and so on.
- Strength- TESCO follow each and every rules and regulation which are developed by UK government which is strength for them (Shukla and Pattnaik, 2019).
- Weaknesses- Implementation of eco friendly material in procedure is expensive for company which is their weakness as they need to manager their budget.
Legal Factors- Respective factor include elements like health, safety, protection, discrimination law.
- Strength- Respective company follow all legal practices developed by government of UK which help them in conducting work effectively and legally.
- Weaknesses- But at some situation respective company not able to follow all rules and regulation which are developed by government bodies. Get Finance Assignment Help Online!
By analysing above discussed point it can be summarise that, a company can be operate at the three level i.e. private, public and voluntary. The business types is generally decided by an individual who want to established a unit. Different types of business have different scope, size, purpose, types and so on. Along with this, it is essential for a company management to conduct evaluation of market in both internal as well as external manner because that will help them in developing effective decision and attaining goal. For which management can adopt different models such as for internal they can adopt SWOT as well as for external evaluation they implement PESTEL analysis. Through this firm able to get better as well as effective outcome.
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