This unit is considering functions of an organisation so as to understand business environment and to make market perception.
- Explanation of different size, and scope of varied organisation.
- Demonstration of interrelationship of various functions which are existed within organisational structure.
- Demonstration of positive and negative impact within macro environment of Tesco.
- Determination of internal strengths and weaknesses and interrelationship with external macro factors of Tesco.
Business environment plays an important role for the organization in assessing that whether it will prove to be profitable or not. The report makes comprehensive discussion regarding various types of organizations such as profit, non for profit and non-government organization. The report then focuses on size and scope of sole trader, partnership and large corporation. It will help in analysing that whether it is small, medium or large corporation. In order to concrete the knowledge base, the report will then focus upon conduction of SWOT analysis, PESTLE analysis and Porter’s five forces model for Tesco which is a retail sector organisation.
SECTION 1 P1. Different types of organizations
An entity is considered to be a social unit that is actually formed to manage and achieve collected goals being framed by management of the organization. There are various roles and responsibilities that are required to be carried out by the members belonging to that organization in such a waythat collective goalswill be achieved. However, the main objective of each and every organization may differ based upon the framework and type of organization it has chosen to become. Various types of organizations are discussed as below in detail:
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- Profit organization: Main objectiveof these types of entities is to earn adequate amount of profitwhere all the members collectively try to achieve this common goal of maximization of income. There are various organizations that are considered to be profit making such as insurance companies, real estate firms, restaurants, etc. Tesco is one such company which aims at earning maximum profits and enhance its overall market share in the economy as well. Since their business purpose is to achieve maximum profits, it has become important for them to delegate the duties in the same manner. Tesco tries to fulfil the requirements of grocery and other daily essential products to customers.Current motive of e company is to expand its branches worldwide (Adeoye and Elegunde, 2012).
- Not for profit organizations: These are the institutions which are not meant to earn profits but to serve requirements of society. It does not have stakeholder, but members, whose main aim is to serve the society rather than employing profits. They invest in the organization without having any expectations of receiving returns. All profits that are generated by the organization are then reinvested back in the organization so that better resources can be made available to the institution for fulfilment of its goals. Some of non-governmental organizationsalso granted with tax exemptions that can contribute in tax deductible aspect of the individuals who invest in the organization. Since, NPOs are the charitable trust, cooperatives or other voluntary organizations, they are formed so as to serve the professional, cultural and educational rights of the individuals. Common examples of the same is Oxfam which is focused to alleviate global poverty
- Non-governmental organizations: There are other non-governmental organizations as well which are private sector companies contributing to not for profit organizations as well and hence, work for the welfare of society. The main goals of these types of businesses are training, education and preserving human rights of individuals. They are commonly accredited by UN where they are responsible for gathering funds or donations so as to serve the requirements of distress people. Common examples of these types of NGOs areWorld Wildlife Fund (WWF), International committee of Red Cross and Word Wide Web (W3). The main aim of these organizations is to servethe society in a manner that it can be made a better place to live in (Babatunde and Adebisi, 2012).
P2. Size and scope of the organisations
The size and scope of business may vary where there are various forms of it. Its sizes can also have higher dependence on the form it belongs to. Various forms of businesses are described as under:
- Sole Traders: In sole trader type of business, there is exclusively one owner who is entitled to all types of profits and losses of the business. It is considered to be the simplest method to start and run a business as it does not require any type of registration fees to it. However, it becomes important for the individual to get himself / herself registered as a sole trader.It is not important for a sole trader to disclose its financial accounts. However, maintenance of records as per the convenience in the form of receipts and payment can help him in taking better business decisions. The size of sole trading company is generally small due to limited availability or resources and funds to runbusiness. The main issue linked to this aspect is thatthe person is solely liable to cope up with all the debts alone which makes it difficult for an individual to expand in a limited time period. It lies in small sized organization with less market and profitability share. Sustainability can be higher based upon the type of business that has been started by the individual (Bah and Fang, 2015).