For the business it is crucial to develop better understanding of the concepts of business environment by considering the size of different type of organisation. To support this following task must be undertaken:
- Discuss different types, size and scope of organisations
- Determine the interrelationship of the various functions within the organisation
- Determine the positive and negative impact of macro environment factors on the operations of business
- Analyse the interrelationship between internal factors and external macro factors for the organisation
Business environment can be defined as the place where various activities and operations of the business are being carried out in an effective manner so as to achieve the goals and objectives of the organisation. Environment comprises of both external and internal factors which greatly influences operations and functioning of organisations. It is very crucial for every company to identify all necessary factors which can pose negative as well as positive impact on company. TESCO is multinational groceries and merchandise supplier and is headquartered in England, United Kingdom. It has been operating in different parts of the world and employing large number of workforce. This assignment will mainly focus on different types and purposes of organisations and their size and scopes. Relationship and interrelations of different organizational functions are also mentioned in this assignment. Positive and negative aspects of macro environment and internal and external analysis of organization and their inter relations are covered under this assignment.
P3 Relationship between different organisational functions and its link with organisation objectives
Every company are established with some goals and objectives, which they accomplish with the help of employees and different departments involved in organisation. Every department play equal role in the success of company. There are many departments in an organisation such as, human resource management, marketing department, research and development department, accounting and finance, production department, etc (Jeston, 2014). Since TESCO is a multinational groceries and merchandise retailer and is operating in different parts of the world. This requires great efficiency and communication between different departments of TESCO Company to operate in such a large scale.
It has been observed that TESCO has a hierarchical structure reflecting large size of business. Even at store level they have at least four layers of management. In this main decisions are taken by top level managements and further operations are carried out by employees and managers.
Several types of functions which are performed by TESCO are Human Resource Management, Research and Development department, accounting, sales, finance etc. There should be good communication between department and flow of information should be on time to impellent business tasks on time (Onetti and et al, 2012). The employees who are performing the operations there are required to be effective so that they can help in achieving the goals and objectives of the company. So, the inter relationship of organizational structure with the function that is being followed in TESCO are mentioned below:
Marketing department: This department plays many important functions as they are mainly responsible for marketing the products and services of company. Marketers have to devise strong and effective marketing plans with the help of which they can sell their product and services. They can also provide customers with unique products which seek the attention of many customers towards their company.
Human resource development: This department is considered as the backbone of any organisation as they are mainly concerned with hiring of talented and skilled people and manage all the activities going on in the organisation. They communicate important information about changes, recent advancements, etc to all the employees and concerned staff. They also provide necessary resources and help to other departments in order to carry out their tasks or activities.
Production department: This is also perform several functions like developing and designing new products, manufacture unique and innovative products or services, etc. They are mainly responsible for above functions. This department manufactures appropriate products or service after analyzing customer need and requirements in order to fulfill them (Trompenaars and Hampden-Turner, 2011). By this they satisfy their customers as well as satisfying desires of company. It is necessary for managers of production department to check whether quality standard are met or not and employees are working according to prescribed procedures.
Finance department: This department provides appropriate finances and funds to company in order to carry out their activities smoothly. It also keep track record on previous transactions, income, profit and loss statements, etc. This helps in providing crucial information to company whether their company is in loss or making profits.
Above are some functions of different departments of company which help them to achieve their desired goals and objectives. They all play equal roles in making the company successful. It is necessary for departments to have inter - relations with each other and should initiate effective communications between them. This is also initiate healthy and good working environment.
P4 Positive and negative impact of Macro environment on Business operations
There are many factors which affect business and it is essential to analyze them so there are positive results out of it (Kolk, 2016). It is essential that company has to make strategies which are profitable for enhancing company's growth. Inter- relation of strengths and weakness with external factors are discussed in detail as under:-
Political- Political stability, values and beliefs of ruling political party greatly impact the operations of a business. An organization need to formulate and modify its policies, procedure, infrastructure, mode of operations and other critical plan in accordance with regulatory norms of political parties. This affects internal environmental of business
- Strengths- It gives a proper and standard framework for TESCO to run their business accordingly. There are many political policies which help company to avoid any kind of discrimination with employees.
- Weaknesses- A substantial increase in VAT Rate by UK government in order to increase its revenue in the year 2011 from 17.5 % to 20% adversely affected TESCO sales revenue (Weske , 2012).
Economical- These factors includes economic growth, interest rate, exchange rate, inflation etc. That significantly impacts the profitability and working of an organization.
- Strengths- The increase of 2.7% in UK GDP yielded positive resulted for TESCO leading to a significant increase in the purchasing power of people which positive resulted in attaining market growth
- Weaknesses- At the time of recession, TESCO in order to face economic crisis had to lay off some of its employees.
Social- These factors involve the values, beliefs and cultural norms followed by the people and society in which organization operates it activities. Factors like population, age distribution, health consciousness etc directly affects the type of products and services that an organization offers so as to satisfy needs and wants of its clients (Prajogo, 2016). Since TESCO is a global brand having its operations in different parts of country it becomes essential for the firm to frame policies as per requirement of society
- Strengths- With an increase in the number of elderly population in UK, TESCO adopted and introduces options like online shopping and home delivery for grocery products by considering mobility issues of old age people.
- Weaknesses- Due to horse meat scandal in 2013, wherein TESCO was accused of providing horse related puns in its burgers and not providing products as per the quality promised in advertisements which lead to negative mind set of people resulting in decline in sales.
Technological- These factors analysis how fast and drastically technological changes are occurring in the market and how readily an organization cope up with them. TESCO spent substantial part of its revenue in conducting research and developing new and innovative technology to maintain its market position by having an edge over its rivals.
- Strengths- TESCO pay close attention in technological advancements coming in market like with by making use of mobile technology along with internet company have improve its distribution services as customers can select their preferred products through mobile by using e-grocers (Gupta, 2013).
- Weaknesses- Company needs to very attentive for need to be attentive for fast emerging technological trends which becomes difficult to cope up with everyday..
Legal- An organization in order to successfully run its operations for long term needs to abide by all the rules and regulation enforce by government of particular nations in which firm is conducting its business activities. TESCO been world’s third largest chain of retail stores formulate all its policies and schemes in accordance with various labor and consumer protection laws.
- Strengths- There are many legal policies and laws which help TESCO to avoid any discrimination within premises (Crane and Matten, 2016).
- Weaknesses- Acts like minimum wage rate which was increased by 15.5% had forced TESCO to make amendments in its Labor budget.