Business environment

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Executive summary

This report contains the some new ideas about the limited organization business and sole

trade organisational business. The learner has described and analysed the businesses of

limited company and a sole trader. After that, the learner has analysed the purposes of these

two types of organizations along with the ownership structure of these two organizations.

After that, the learner has stated the effects of change in the ownership of a sole trader

companies. Ten the learner has selected four different stakeholders for two types of

businesses that are limited company and sole trader and analysed the how these stake holders

influence the purposes of these businesses.

The learner has analysed the organizational structure and the functional areas of the two types

of businesses that are limited company and the sole trader. The learner has provided the

organizational chart and stated the complexities in the organizational structures. The learner

has stated the organizational structure of TESCO and ASIA OFF LICENSE along with their

business missions and purposes. The learner has noticed some factors like inflation and

unemployment, trade cycle as the economic environments and stated those two contrasting

economic environment affect the supply and demand and the supply and demand elasticity of

the business of Tesco. Lastly the learner has expressed the political, legal and social factors

affect the business activity of Tesco

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Table of Contents

Introduction:...............................................................................................................................4

Task P1.......................................................................................................................................4

Describing two different types of business, their purposes and the ownership structure:.........4

Task P2:......................................................................................................................................5

Task P3.......................................................................................................................................7

Describing how the two businesses are organised.....................................................................7

Task 4.........................................................................................................................................9

Explaining how the organization styles help the companies to fulfil their purposes:................9

Task P5:....................................................................................................................................10

Describing the influence of two contrasting economic environments on business activities

within a selected organization:.................................................................................................10

Task 6.......................................................................................................................................11

Analysing how the political, legal and social factors affect the business activity of an

organization:.............................................................................................................................11

Conclusion:..............................................................................................................................12

Reference list:...........................................................................................................................13

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Introduction:

In this study, I am going to analyse the different factors about the limited organization and

sole treading business. Along with that, I am also going to evaluate the different aspects of

the business such as organizational structure, ownership structure and effective role of the

stakeholders and functional area of the business. Then I am going to analyse the mission,

aims, objectives and organization structure of two different organizations as TESCO and

ASIA OFF LICENSE which I have observed along with the political, legal and social

factors.

Task P1

Describing two different types of business, their purposes and the ownership structure:

The business of every organization depends on their types of business. There are different

types of business entities like public limited company like private limited company British

Petroleum private limited, partnership business like DHL, Character Company like TEL

Global Ltd, statutory company like British Railways, holding company like Leisure Holdings

plc. subsidiary company like Ford Motor Company, one Man Company like Public Transport

and NGO’s like ACT NOW etc.

Limited company like Greenery is considered to those companies where the total

responsibility or liability of the investment goes on the shareholders of the company. The

shareholders set their business and run their business with their own finance support. The

profit of the company or the organization is calculated after paying Tax (Useem, 2014, p.25).

The ownership of the limited company is in the hands of the shareholders. The purpose of the

limited organization is to provide a good customer service or a good product to improve the

organization performance and earn maximum amount of profit. There should be management

team and the main responsibility of managers is to run each and every operation of the

organization carefully (Hazlina et al. 2010, p.183). Therefore the financial responsibility and

the liberty go to the shareholders.

The sole trading company like Russell Walker & Co is considered as a business organization

of any single person. The financial responsibility such as investment, revenue, profit and loss

should be the owners’ responsibility. Beside this, the owner needs to keep the records of the

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business such as investment, expenses and the tax return (Klapper and Parker, 2011, p.238).

The purpose of the sole trading organization is to provide a good product to the customers so

that the organization can collect good revenue.

The change of the ownership of this organization means the organization can be sold by the

existing owner and purchased by the new owner. Then the new owner may make some new

plan to run the organization and the total responsibility of the organization goes on the new

owner. The effect of the change ownership is for the better innovation on the technology and

performance.

Task P2:

Description of the stakeholders who influence the purpose of two contrasting business:

Types of

organization

Stake holders Influence form

Customers Customers are considered as the main

stakeholder of any organization like

Greenery. The product or service quality and

pricing strategy has a good vies-versa

relation with the customers’ satisfaction.

Main influential of Greenery come from the

customers’ satisfaction and it grows the

confidence of the organization. After getting

the confidence Greenery can activate their

promotional strategy which helps the

Greenery to grow the popularity among the

customers.

Shareholders For a limited organization or company the

shareholders are considered as owners. The

shareholders always influence the

organization with the capital and it is also a

motivational factor for the organization

Which really helps the organization to

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Limited

business

perform well.

Managers or

Directors

In a limited company the main duty of the

manager or director is to perform the

organizational activity well. Though they

have no responsibility for any financial lose

but sometimes it has been observed that one

or two shareholders are considered as

director of the limited. Who influences and

motivate the workers and employees to

perform well.

Sole traders

Customers Customers are always considered as a main

stakeholder of any business organization like

Russell Walker & Co. For the sole traders it

is quite important to maintain the customers’

satisfaction by the product or service. This

helps the Russell Walker & Co to increase

the brand value and popularity in the

competitive market.

Owner For the sole traders the owners are one of the

major stakeholders. They invest their capital

in the business and motivate the employees

to perform the business well. Beside this the

owners maintain the investment, expenses

and the tax return of the Russell Walker &

Co.

Managers Sometimes owners and maximum times

other people are considered as of the Russell

Walker & Co. The main duty of the

managers is to maintain the work flow to

maintain the organisational performance.

For a small organization the managers need

to motivate the workers or the employees to

perform well.

Table 1: stakeholders’ analysis

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(Source: Useem, 2014, p.36)

Task P3

Describing how the two businesses are organised

In the limited business the management follow a structure in order to run the organizational

activity. All the shareholders select the directors for the organization. Then the directors

select the chief executive officer who handles both the sales managers and human resource

managers. The human resource manager observes the work and performance of the

employees and manages the work pressure. The sales managers manage the entire sales

department of the organization (Hazlina et al. 2010, p.186). Therefore the limited

organization has faced some problems due to the work allocation because there are no such

production managers who can handles the suppliers and production target which is very

important factors for the sales managers because this is very important to understand the

market demand.

Organizational structure of Limited organization:

The board of directors take the decision for their organization. Then the board of directors

passes that information to the chief executives and production managers. After having the

direction from the board of directors the chief managers provides the direction to the sales

managers and human resource managers. On the other hand the production managers direct

the employees as per the guidelines provided by the board of director.

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Figure1: organizational structure of Limited organization

(Source: Klapper and Parker, 2011, p.242)

The sole traders’ organization maintains a specific organizational structure to run their

management activity. The sole trade business has single owners who generally invested the

capital in the business and appointed the staffs or employee in the business and the profit or

loss in the business is totally the owner’s responsibility. Owner is considered as a head of the

sole trade business (Klapper and Parker, 2011, p.242). Under the owner there are there

departments such as sales department, accounts department and sales department. The entire

three departments have three managers. All the departments have staffs or employees to

perform the department. Therefore the sole trade organization has faced some issues on the

suppliers because there are no such production managers. There are some communication gap

observed between the owners and the employees.

Organizational structure of sole organization:

Owner takes any decision about the organization and passes those orders to the sales

department and accounts departments. Then the sales department passes the information

towards the staffs or the employees and the suppliers and tries to negotiate with them.

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board of directors

chief executive

sales managers

human resource managers

production managers

employees

Figure2: organizational structure of sole organization

(Source: Hazlina et al. 2010, p.189)

Task 4

Explaining how the organization styles help the companies to fulfil their purposes:

The learner has observed different organization structure and selects two organizations to

express the aim, objectives and administration structure. As per the organisational structure of

Tesco it has been observed that as it is a retail organization the head of the management is

considered as a commercial and trading director. Under the trading director there are three

departments such as brand management, human resource manager and international buying

and selling officers (Iskanius et al. 2010, p.396). Under the human resource managers

department there are four different departments such as store management department,

employee recruitment band development department, technical department and employment

structural or planning department.

Mission:

The mission of the Tesco is to provide the quality product to their customers, which

improves the brand value of the organization and influence the organization to hold

maximum market shares (Hazlina et al. 2010, p.189).

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Owner

Sales Department

Staffs Or Employees Suppliers

Accounts Department

Visions:

As per the vision statement of the organization it has been observed that the

organization provides the quality product and service to their customers as per the

correct pricing strategy.

Purpose:

Asia off licence organization also follows a specific organization structure. As it is a

small sole trading organization so it follows a small organizational structure.

Management is considered as a head of the organization. Under the manager there are

three different departments such as processing department, packing department and

supply department. All the orders come from the manager or the management

department and the other department follow the instructions. Generally this

organization is act as suppliers of other big organization so the mission of the

organization is to provide a good quality product in time. The purpose of the

organization is to provide good quality goods in time and maintain the good

relationship with the clients.

Task P5:

Describing the influence of two contrasting economic environments on business

activities within a selected organization:

The learners has observed that the product price in the market for every things like foods,

grocery items and other necessary things grow day by day and un employment is a major

issue in all the countries. As opined by Iskanius et al. (2010, p.402), the trade cycle of Tesco

is started from the performance attribution then the decision has taken by the management or

administration or human resource management and the order is generated as per the previous

taken decision. Then the administration set up the sales price of the product and finally

execution the process. The economic environment of Tesco depends on the product demand

on the market and supply of the product. Those are the most important factor for any retail

organization (Love et al. 2011, p.1440). Tesco has always maintained the good productivity

and good pricing strategy to attract the customers and this strategy also help the organization

to increase the brand value. Tesco is one of the largest retail organizations in UK which holds

maximum of the market share in the UK super market.

Trade cycle:

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As a big organization Tesco always maintains an important factor that is supply and demand

elasticity. The marketing team of Tesco firstly do the market research to observe the demand

of the each and every product and then Tesco directed the suppliers to supply those amount of

product in order to minimize the lose (Porter and Kramer, 2011, p.65). Tesco is always able

to understand the customers buying behaviour and offers variety of product to provide better

satisfaction.

Monitory policy:

As per the Asia off licence organization, they always observe the demand of the client

organization and supply the product as per their requirements (Welford, 2013, p.33). They

have observed change in the behaviour of the organization such as the demand of the

different products and sudden change the product types. The organization deals with the

flexibility characteristics of the demands and supply.

Inflation & unemployment:

As per Iskanius et al. (2010, p.405), the rates of the unemployment and the rate of inflation

reflects the economic structure of the organization. The decrease in the unemployment

reflects the increment of the inflection.

Fiscal policy:

The adjustment of the spending level of the government and the tax policy of the government

adjust by the fiscal policy. It is considered as a sister policy, which the nationalized banks

follow.

Task 6

Analysing how the political, legal and social factors affect the business activity of an

organization:

Political factors are considered as an important factor for setup a new business or run the

existing business. The owner of the organization needs to register the organization on the

government and needs to follow the union rules and policies. The learner has observed that

Russell Walker & Co always follow the rules and regulation of European Union and also the

tax policies of the UK government (Klapper and Parker, 2011, p.245).

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The organization needs to follow the legal policies, which act as a protection for the

customers. As per the rules, it has been observed that as if DHL has maintained the product

quality along with mentioned price in order to avoid legal issues. The organization needs to

maintain the social norms like the disposal of the waste, do some social work for the society.

The social factors are considered as an important factor also. As argued by Iskanius et al.

(2010, p.405), the habits of having food, clothes and household items varies culture to

culture. The organization needs to understand the culture of the customers which indicates the

customer buying behaviour and demand of the customers. Then the like Ford Motor

Company has provided the good customer support to their customers. This helps the

organization to gather the brand value, earning profit and hold market shares.

It has been observed that these factors are affecting the business of Tesco as well as the

businesses in Asia. As per the State regulation, Tesco and other businesses in Asia faced

different problems to reach out to the markets because the government provided the special

opportunity for the small and medium enterprise business with the help of the consumer law

(Useem, 2014, p.25). Those regulations and laws in UK affected the pricing strategy and the

service strategy of Tesco. Therefore, the Tesco has faced a huge risk factor on the

accountability policy to their customers.

Conclusion:

The learner has observed two types of organization like Limited organization and sole traders

and critically evaluates their strategy. The learner has discussed the stakeholders and their

activity in those organizations. Then the researcher has discussed the mission, vision and

organizational structure of two organizations such as Tesco and Asia off licence. Then the

learner has discussed about the supply and demand and its elasticity. At last, the learner has

discussed the various effects by the political, legal and social in the business performance.

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Reference list:

Books:

Useem, M. (2014). The inner circle: Large corporations and the rise of business political

activity in the US and UK. Oxford University Press, USA.

Welford, R. (2013). Hijacking environmentalism: Corporate responses to sustainable

development. Routledge.

Journals:

Hazlina Ahmad, N., Ramayah, T., Wilson, C., and Kummerow, L. (2010). “Is entrepreneurial

competency and business success relationship contingent upon business environment? A

study of Malaysian SMEs”, International Journal of Entrepreneurial Behavior &

Research, 16(3), pp.182-203.

Iskanius, P., Page, T., and Anbuudayasankar, S. P. (2010). “The traditional industry sector in

the changing business environment-a case study of the Finnish steel product

industry”, International Journal of Electronic Customer Relationship Management, 4(4),

pp.395-414.

Klapper, L. F., and Parker, S. C. (2011). “Gender and the business environment for new firm

creation”, The World Bank Research Observer, 26(2), pp.237-257.

Love, J. H., Roper, S., and Bryson, J. R. (2011). “Openness, knowledge, innovation and

growth in UK business services”, Research Policy, 40(10), pp.1438-1452.

Porter, M. E., and Kramer, M. R. (2011). “Creating shared value”, Harvard business

review, 89(1/2), pp.62-77.

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