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1.

0 Terms of Reference
For this assignment I been asked by the manager to produce a formal report for two
contrasting organisations Tesco and Cancer Research UK.

2.0 Procedure
In order to complete this assignments I need to gather as much information as I can from
different sources, such as course notes, internet and a Newspaper.

3.0 Findings
The two organisations chosen are Tesco and Cancer Research UK.

3.1 Tesco

3.01 The Type of Organisation
Tesco is a Public limited company (PLC), which means it is owned by shareholders and it is in
the private sector Also known as the for-profit sector and Activities outside the public sector
organizations and businesses that provide services and products based on market demands
for a cost with the purpose of producing a profit for owners and shareholders in the
organisations. Tesco is the biggest employer in the UK with over 250,000 employees and
over 1,800 stores.
Product innovation is not limited to Tesco’s food ranges, but its growing non-food ranges too
have introduced choices of many new product lines: from sporting goods including equestrian
equipment to new ranges of ‘homeware’ and recently PC software.
Tesco also has various and wide range of products and that is to meet customers’ needs of
whatever customers intend to buy, nearly whatever customer intends to buy would find it
underneath one ceiling (at Tesco). On the top of selling groceries Tesco sells others products
such as, books, CDs, DVDs to buy, DVDs to rent, games, flowers, electronics, cosmetics,
etc.
There are also services that Tesco sells for example, Telecoms, such as internet- broadband,
internet- dial-up, home phone, mobiles on contract, mobiles on pay as you go, travel services,
cars insurance, life insurance, home insurance, credit cards, loan, mortgages etc, which are
all competitively priced.
Tertiary sector of industry also known as the service sector or the service industry is one of
the three main industrial categories an a economy, the others being the secondary industry
manufacturing, and primary industry extraction such as mining, agriculture and fishing The
tertiary sector of industry involves of providing a services or a product to businesses as well
as final consumers. Services may involve the transport, distribution and sale of goods from
producer to a consumer as may happen in wholesaling and retailing.
Since the 1960s, there has been a large shift from the other two industry sectors to the
Tertiary Sector in the UK. The other two industry sectors Primary and secondary sectors have
either moved abroad where it is cheaper for goods to be manufactured or completely shut
down because of consumer trends.

3.1.2 The Purpose of the Organisation

The main business activity of Tesco is to sell food products. Tesco’s purpose is to sell
products and make a profit as it is owned by shareholders and want to expand by making
profit, and to make their organisation survive Tesco aims and strive to make profit as it is not
like other organisation that obtains the money by donations or funded by the government.
Tesco main purpose is to buy cheap and sell above cost, which makes Tesco huge sums of
profits.

This is Financial highlights Growth of 2007

2008 2007
Group sales (£m) (including value added tax) 51,773 46,611
Group revenue (£m) (excluding value added tax) 47,298 42,641
Underlying Group profit before tax (£m)† 2,846 2,545
Group profit before tax (£m) 2,803 2,653
Underlying diluted earnings per share (p) 27.02 22.36
Diluted earnings per share (p) 26.61 23.31
Dividend per share (p) 10.90 9.64
Group enterprise value (£m) (market capitalisation plus net debt) 37,656 40,469
Return on capital employed 12.9%§ 12.6%

3.1.3 The Ownership of the Organisation

Tesco is a Public Limited Company (PLC), so it is owned by shareholders. Tesco is run by
management who also have shares in it as anyone who works for Tesco has shares with this
big company. Tesco has shares for staff who works for it. The shares are not just limited to
directors and senior managers, 65% of the people who work for Tesco own shares. All the
staff with more than one year’s service received shares worth 3.6% of their salary.

Tesco is a public limited company and there are numerous benefits and constraints when
forming a public limited organisation. Many organisations start of as a private limited company
and later become a PLC to raise capital in order to expand and develop the company which
can play a key role in the competitive retail market. Tesco is under the control of several
shareholders who have purchased the company shares through the stock exchange and the
main chief executive, Sir Terry Leahy who owns most of the company share.

The advantage of a limited company is that shares can be sold to the general public unlike a
private limited company and can help to raise substantial amounts of capital easily and Tesco
can find it easier to
borrow from banks because the banks know that they will get their
money back with there interest and also Shareholders have limited liability.

Disadvantages of a Public Limited Company is that companies can find it expensive going
public and also Some plc’s can grow so large that they may become difficult to manage
effectively and finely Risk of takeover by rival companies who have bought shares in the
company. To enable Tesco to sell its share to the public it has to register at the Company
House based in London (Company Registration number 3699618)