Business Environment

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For this part of the task I have been asked to explain the term ‘the business environment’ and for each organisation identify the three external factors that which have an impact on the organisation and its stakeholders.

A business environment is the social, technological, economic and political environment in a business functions. They all affect organisations in different ways.

The pestle analysis is a useful tool for understanding market growth or decline, and as such the position, potential and direction for a business. A pestle analysis is a business measurement tool. Pestle is a short form for Political, Economic, Social, Technological, Legal and Environmental factors, which are used to assess the market for a business or organizational unit.

P – Political Factor
E - Economical Factor
S – Social Factor
T – Technological Factor
L – Legal Factor
E- Environmental Factor

Three external factors that affects Tesco and its stakeholders:

• Political Factor - Government has the biggest impact on Tesco and its stakeholders. The government doesn’t let Tesco to open a new store in United Kingdom because they have already got too many stores in United Kingdom. So that’s why Tesco started to open new stores in other countries.

The map below shows the countries that Tesco operates in.

Political Factor – There is legislation for wages and it’s called National Minimum Wage Act 1998.

The companies want to pay the minimum money they can pay to the workers so government has taken action and they set legislation.

The minimum wages from 2007 are:

The minimum wage for workers aged 22 and over its £5.52and for workers aged 18 and under its £3.40.

Tesco might don’t want to work with a person who has a criminal record same as the most companies. There is a legislation to prevent that which is called Rehabilitation of offenders act. This means that when a convicted criminal applies for a job they don’t have...
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