This assessment will cover certain questions which are like:
- What is the different size, purpose and functions of companies?
- Elaborate on the interrelation departments and the effective organisational objectives within Tesco.
- Give the internal and external factors in an organisation through which the growth is managed.
Business and business environment are the external factors which affect the performance of the company indirectly. Although these factors are not directly related to company but these affects the performance of the company. In this report, three types of companies i.e. public, private and voluntary are taken to explain the legal structures of these organizations. The companies taken here are Child support agency, Tesco and Save the children for public, private and voluntary respectively. In this report, difference between these organizations, size, scope and structure of these organizations are discussed. Apart from that, Pestle, SWOT are also used to explain the internal and external factors which affects the performance of the company.
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P1. Different types and purposes of organisations: public, private and voluntary sectors and legal structures.
These are the organizations having their control in the hands of government. These organizations are for the public i.e. they are involved in economic and social development of the country (Botha, Kourie, and Snyman, 2014). The main aim of these organizations is not to earn profit but to enhance the living of people and to the welfare of the society. The example of such type of company can be child support agency. It is a arm of department of pension and work based in UK. It was established in 1993.
The legal structures of Public organizations are:
- Central government: This type of government is central authority which governs the whole nation. All the responsibilities to allot duties and responsibility depends upon the central government. This is responsible for the entire safety and security of the country also.
- State government: This is another type of government which makes rules and regulations for the state. This government is responsible to handle the issues related to a particular state.
- Local government: This is a type of government which handles the local area such as a city or town. This government has only the power to handle the situation in a particular region.
The main aim of these organizations is to maximize the profit and enhance the productivity of the organization. These organizations are handled by an individual who is the head of the company (Deasy and et. Al,. 2016). The example of such type of company can be Tesco. It is one of the largest retailers in the world in terms of revenue having its headquartered in UK. This company mostly deals in clothing, books, electronics, furniture, financial services, toys, petrol, software, etc.
The legal structure of private organizations are:
- Proprietorship: It is a type of business which is run by an individual who has the proprietary of that company.
- Partnership: This is the agreement between two or more parties which are shared in all the profit and loss of organization.
- Limited Company: It is a type of company in which owner is responsible for the debts it can undertake to limit of amount invested in the company.
These organizations have a main aim of welfare of the society. These have their particular field in which they are working. The example of such organization is Save the Children. It is one of the largest non-governmental organization which has its headquarter in UK. This organization is also working in developing countries of Asia and Europe. This NGO helps in saving the rights of the children in the field of education, prohibition of child labour and against sexual harassment of children. Although, these organization is not handled by government but funds can be allotted by the government to assist financial help.
- Trust: It is a type of a team of charity organization which does not require membership. The duties and power are taken into trusty act.
- Association: This is a group or team which are associated with each other to perform a specific task.
P2. Size and scope of different types of organizations
There are three types of organizations which are explained here:
- Background details of the company: It is the delivery arm of Department of works and pensions. It was introduced in 1993 after the failure of child support act 1991 (Smith, 2016).
- Products and services: Child support agency provides services for the welfare of children such as child maintenance, collection, enforcement and transferral of payment from non resident parents.
- Size: This is a large size organization which has a huge number of employees.
- Scope: Child support agency have huge scope in the UK economy due to its services for welfare of the society.
- Mission & Vision: The mission and vision of this organization is to improve the condition of children in UK.
- Objective: The objective of the company is to enhance the growth of the children in securing their basic rights.
- Organizational Structure: This type of organization is using non-profit organizational structure.
- Stakeholders: The main stakeholder of this organization is government which has overall control.
- Background details of the company: Tesco is multinational British retail company having its headquarter in Hertfordshire, UK. This company mainly deals in clothing, software, furniture and many more items.
- Products and services: The products and services which the company provides are clothing, software, finance, books, electronics etc (Savrul, Incekara, and Sener, 2014).
- Size: It is a very large organization in which thousands of employees work for the company.
- Scope: The scope of this company is to provide its services in different countries of the Asia which has a good number of population.
- Mission & Vision: The company has a core vision of adapting themselves in the changing environment of business. The mission of Tesco is to manufacture the desires product of customers.
- Objective: The main objective of Tesco is to remain number one position of retail marketing in UK.
- Organizational Structure: The company follows the hierarchical organizational structure.
- Stakeholders: The stakeholders of the company are the investors who has invested in the company.
- Background details of the company: Save the children is an international NGO which is working in UK and other developing countries where the situation of children is not good. It has opened in 1919 in UK and now it is operating its operations in more than 120 countries.
- Product and services: The services provided by this NGO is to protect the rights of the children around the world.
- Size: This is a large organization having its operations in more than 120 countries.
- Scope: The scope of the organization is to provide its services in almost all over the world.
- Mission and Vision: The vision statement of this company is the right of every child to attain good education, nutrition etc and the mission statement is to change the thinking of the world to improve the lives of children (Cai and Yang, 2014).
- Objective: The organization has an objective of not letting no stone unturned to save the rights of children.
P3 Interrelation between different organisational departments and their linkage with organisational objectives
The sustainability and growth of a firm is depends on the contribution of various departments which includes human resource, marketing, finance etc. In an organisation there are various employees who are liable to create plans and policies for getting combined contributions from every departments. If there are no link between departments organisation can't get their desired objectives in a given time frame. A MNC such as Tesco plc have to understand the roles of every departments in their company so that, they will achieved their desired goals and objectives in a limited period of time. It can be more understood through the following points:
HR department: This is the segment who performs the various functions in an organisation such as recruitment, performance appraisal of the employees, determination of salary of the employees etc. For this, HR manager has a liability towards the firm which connects with recruiting the skilled and knowledgeable applicants with taking help of marketing department in form of giving an advertisement of job vacancies so that company can get a healthy supports from their HR department for gaining their desired goals in limited period of time. Knowledgeable and skilled staff will be helpful in decision making process also. For example, recruiting staff members who have proper knowledge and experience about marketing tools and techniques which assists the company in increasing number of their customers.
Finance department- Without finance any organisation can't handle their business activities. So that, It is essential for a firm to maintain financial stability through raising funds from various sources such as financial institutions, banks, debentures, shares etc. It takes helps from other departments of the firm to perform its roles and responsibilities in a systematic way. For example, Production department requires budget for purchase various material for manufacturing the product. It helps production department to fulfil its requirement so they achieve their production target in given time frame which is helpful in getting growth to the firm.
Production department – It is connected with producing goods with quality and delivering services with satisfy the customers through the help of advanced technology which can be possible by the funds availability from finance department (Belás and et. Al,. 2014). These activities are based on the needs and wants of the customers which can be done after research of market with the help of marketing department
Marketing department : This department is liable to build brand image of the organisations such as Tesco plc through investing more money in adoption of different promotional tools such as TV advertisement, newspapers, magazines, etc. So that, it requires support from finance department for availability of sufficient amount of funds.
Therefore, all departments are very much interrelated with each other and contribute maximum support to an organisation to achieving desired goals and objectives within given time frame. In addition to this, it will helpful in achievement of growth and success which makes competitive advantage of the firm at the market place.
P4. Analysis of the positive and negative impacts of macro environment factors on business.
The macro environmental factors does not linked directly to the business but they effect the working of the business in directly. To analyse the negative and positive impact of these factors, PESTLE is used here:
This is the factor in which political factors which are regulated by the government are included. As, government is responsible for making the rules and regulations for any company to perform its business, therefore it affects the performance of the company to a very extent. Here negative and positive effects are discussed which affects the working of Tesco.
- Negative: Since Tesco is operating its business in different countries and financial instability of any country can affect its business. Therefore it can be said that financial instability in the world can leads to different political changes.
- Positive: Since Tesco has huge market share in the retail sector of UK therefore in any financial critical situation happening in other countries can be handled easily with the help of market share in UK.
This is the important factor for Tesco because it is a company which is operating its business in outside UK also. Therefore any financial crisis occurs in other country can affect its business. Here, the positive and negative aspects of this factor is discussed below:
- Negative: As Tesco is operating its business in different countries and each country has its own financial stability (Arasti, Zandi, and Bahmani, 2014). Therefore it is not an easy task for Tesco to operate in each country and making profit.
- Positive: Because Tesco has a big retail market share in UK therefore it will be easy for the company to maintain the losses occurred in other countries.
These are the factors of changing trends in the market place. Tesco can be affected from this factor too.
- Positive: Tesco should develop their quality of products according to the recent trends required by the customer.
- Negative: Although, Tesco is providing good food to its customers but personnel aspect of changing a trend could increase problem.
This is the factor which can influence the working and productivity of Tesco. Here the positive and negative impacts are discussed:
- Positive: A technological change in Tesco can increase its productivity and performance.
- Negative: To adapt a technology, a specific time is required. But in between time, a company can loss its customers.
The legal factor includes the acts and policies of operating a business which are created by the government. This factor has both negative and positive aspect.
- Positive: To operate a business there are some norms which are essential to follow and helps the organization to attain its target.
- Negative: Some countries have tough legal policies to operate a business. This could be serious issue for the Tesco to perform it business operations.
These are the factors which are around the company and the customers. The positive and negative effects of this factor are:
- Negative: Since Tesco is performing its business mostly in UK which has cold climate. But increasing global temperature can reduce the productivity of the organization (Grosanu and et. al., 2015).
- Positive: If a product is not sold due to environment change the company can sell its products by giving a small amount of discount which will enhance the productivity of Tesco.
P5. Internal and External analysis in order to identify the strength and Weakness of the chosen organization.
It is a part of SWOT analysis which includes the Strength, Weakness, Opportunity and Threat to Tesco. This analysis helps in finding the strength and weakness for Tesco.
Effect of SWOT on decision making
By using SWOT analysis a manager is able to find the strength weakness and other threats for the company. This finding helps the company to change its perception of doing business to increase the productivity and the efficiency of the organization. Since Weakness and Threats can be find out with the help of SWOT analysis, hence the manager of Tesco is able to make some policies of operating its business. So that the weakness and threats can be overcome.
P6: Interrelation of weakness and strengths with macro environmental factors
The strength and weakness of Tesco have the interrelationship with the external factors of macro environment which are stated below:
Political: These are the factors which are controlled and governed by the government like various policy and restrictions and many more. Tesco has achieved their major strength just because they are working as per the policy traded by government. The reason for weakness of Tesco is that the company is not unable to implement some changes which are taking place due to political factor. Hence, it can be said that strength and weakness of the Tesco have close relationship with the political factors (Lee, Kao and Yang, 2014).
Economical: Brand image of the Tesco is the major strength for the company which has improved just because the company has adopted the changes related to inflation rate, exchange rate and many more. Whereas the weakness of the Tesco has taken place just because company doesn't have appropriate funds in order to conducts business effectively and efficiently. So that, it can be said that strength and weakness of Tesco are closely related with external factor.
Social: These factors are related to the culture, traditions and changes taking places in the norms of the society. The major strength of Tesco is their employees, the company takes due care of the workers according their culture and traditions. Apart of this the major weakness of Tesco is employees turn over which is taking place just because the company is not considering the equality among the workers. Thus, it can be said that there is a interrelationship between strength and weakness of Tesco with the social cultural factor.
Technological: These are those factors which are taking place due to the advancement taking place in technology. The strength of Tesco, brand image is clear in the market which is just because the company is working and adopting the changes taking place in the technology. Therefore, in some cases company fails to adopts the advancement in technology because if insufficient funds which is the major weakness for Tesco company (Lee, Kao and Yang, 2014). Therefore, it can be said that there is a close interrelationship between the strength and weakness of Tesco with the technological factor.
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From above report, it has been concluded that business environment is very essential term of the company success and growth. In order to identify business performance and profitability, company use different concepts such as SWOT, PESTLE and many other tools. It seems that there is huge relation between all departments which provides support each other to achieve their individual and organisational objectives. This report also discuss both the negative and positive affects of macro environment on business operations of an organisation.Through this large number of benefits are gathered by Tesco like higher sales, better brand image, higher market share, more profits etc. The report also discuss about the strengths and weakness with relation to macro environmental factors.
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