For Network Rail they also have interdependence between functional activities for instance the human resource function and the customer service function interdependent with each other as they share information and work together, the customer service might receive an complaint against on of the staff of Network Rail in which they closely share information and work together with the human resource function to solve the issues.
MEMORANDUM
TO: GILL SLATER
FROM: AKHTAR ESMAIL
DATE: 09TH JANUARY 2008
RE: Comparing the factors which influence the development of the internal structure, and the functional activities in Tesco PLC and Network Rail
Internal structure
Most large companies have departments or functions as their basis for internal structure, for example: Production, Finance, Marketing and Personnel. The head of each area is called a director.
The chain of command is the formal line of communication that starts with the Board of Directors and the Managing Director, who make the firm's decisions. Below them are the department managers, then the section heads and finally to the shop floor or office staff. This is a hierarchical structure.
The chain of command is a typical pyramid shape. At each stage in the chain, one person has a number of workers directly under them, within their span of control. This person directly responsible for a group of workers is called their line manager.
The development of the internal structure in Tesco Plc and Network Rail are influenced by :
- Size
- Business Environment
- Strategic plans
- Size, the larger the organisation is, the more formal the structure tends to become, in order to coordinate larger numbers of workers, departments/diversity of products or services. As Tesco Plc is influenced by its size as one of the major influence in its business internal structure as the business is large and to control it, its hard so in order for the smooth running of the organisation they need more departments. On the other hand Network Rail is influenced by the size as the bigger the sizes the more structure with more departments are needed.
- Business Environment: The business environment is a major determinant of organisational structure. The business environment consists of all those factors which lie outside the business. As Tesco Plc has a competitive environment in this case they are influenced since it is very important that businesses are able to make quick decisions to outsmart the competition. There is less pressure in non-competitive environments as Tesco Plc has a competitive environment indeed they have to keep up to date with their rivals. For Network Rail they are influenced by the business environment as they have other rival business organisation e.g. Virgin Trains.
- Strategic plans: Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, including SWOT analysis and PEST analysis. The outcome is normally a strategic plan which is used as guidance to define functional and divisional plans, including Technology, Marketing, etc. Tesco Plc is influenced by strategic plans as for them to survive in the market. For Network Rail they are influenced by the strategic plans aswell since they have to plan and have most updated technology.
The functional activities in Tesco PLC and Network Rail
Functional activities differ in most of the businesses as it depends on the size, environment and strategic plans. Furthermore as the business expands the need to develop of the functional activities arises. As in Tesco Plc there are many functional activities such as finance, human resource, marketing, sales, customer service, advertising,
PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro environmental factors used in environmental scanning. It is a part of the external analysis when doing market research and gives a certain overview of the different macro environmental factors that the company has to take into consideration. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.
Political factors include areas such as tax policy, employment laws, environmental regulations, trade restrictions and tariffs and political stability.
Economic factors are , , and .
Social factors often look at the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety.
Technological factors include ecological and environmental aspects and can determine , minimum efficient production level and influence outsourcing decisions. Technological factors look at elements such as R&D activity, automation, technology incentives and the rate of technological change.
Political– Employment laws which governs the employees e.g. minimum wages.
Economic- The Government increases tax on the products.
Environmental- How can Tesco adapt to different climate changes which affects Tesco’s suppliers. Environmental issues such as global warming.
SWOT Analysis is used to observe a strategic analysis or analysing the key objectives of the company. Most companies try to raise its market share to expand more dominance in the market however, Tesco’s core area of concentration is to increase its sales revenue
