Complete unit 1 - Business course PDF

Preview

Summary

Business course...

Description

To: Economic Development Unit (EDU) at Waverly Borough Council. From: Cristiano Heath

TITLE: Features of the business to include ownership and liability, purpose, sector, scope of activities and size Introduction This report will contain the following:     

Features of the business to include ownership and liability, purpose, sector, scope of activities and size organisational structure and functional areas the business mission, vision and values, aims and objectives the relationship with internal and external stakeholders, to include how it communicates with these stakeholders and the influence they have on the business Possible reasons for success.

P1 Features of the business to include ownership and liability, purpose, sector, scope of activities and size Features of a profit and non-for profit business – Both businesses want to make a profit; they need it to expand or help people. For profit businesses can raise money from investors by selling shares and then pay back dividends. Not for profit businesses, raise money by seeking donations from people or cooperation’s. Most for profit businesses operate with limited liability bar sole traders who have unlimited liability because of the risk they take. Non-for profits are granted to have limited liability by the government as long as they comply with government rules. Many businesses operate within an economy, in this report i will explain the features of 2 different businesses: cancer research UK and Sainsbury’s. Features of these businesses will be explained including liability status, scope of the businesses, which sector they operate in and reasons why these businesses are successful.  One business is cancer research UK which was founded on the 4th of February 2002. They now employee around 4000 full time workers (owler) and have and around 40,000 volunteers. It has around 600 stores across the UK. Cancer research UK operates in the public sector, nationally as one of the best known and most popular charities. Because it is a charity, cancer research aims to maximise profit so it can provide as much research as possible. It operates with limited liability meaning if there are debts the business can only loose what it has. According to

cancer researches website, the reason they are able to successfully operate is their simple aims and objectives: they aim to be able to provide faster, more effective diagnosis so there can be a more effective treatment. This is a step towards their goal of seeing three quarters of people survive cancer in the next 20 years. They believe this is fully attainable if progress is continued with the revenue, they bring in, £ 540 million in 2019, a 2% increase from 2018. Nick James and Sally Tweddle who are guarantors in the company and are limited by guarantee and charity setup own Cancer research. This means that they aren't liable for the business if it gets into any debt or financial difficulty. A different type of business operating in the economy is Sainsbury’s. It was founded in 1869 in Holborn by john James and Mary Ann Sainsbury. It currently has 116,400 employees and operates 1400 stores in the UK. Sainsbury’s has been growing steadily since its introduction to market having its first store on jury lane in one of the poorest parts of London at the time (1869). Since opening Sainsbury’s has operated as a public limited company meaning that shares can be bought and sold freely by the public. This means there are shareholders that are pressured by shareholders to make a return on investment meaning increased dividends and a rise in share value. Sainsbury’s operates in the secondary and tertiary sector as they sell food, clothes, home wear and a wide range of products available online with Argos. Sainsbury’s took over Argos in 2016 for £1.4 billion pounds meaning that now there are 300 Argos stores inside Sainsbury’s stores. Financial services in the form of Sainsbury’s bank are also offered however, the bank only started trading in 1997 with Sainsbury’s giving them the capital to start trading. Because of Sainsbury’s multiple businesses and the way they operate they can work effectively nationally. Sainsbury’s success is built from many aspects ranging from customers resonation to their ethical choice of suppliers. One aspect of this is their reliability to give a quality product with options; you can see this in stores where Sainsbury’s offer multiple product lines such as Sainsbury’s own, taste the difference then individual brands. Currently Sainsburys is owned by David Taylor who is the chairman of the board. If the business was to face financial difficulty, there would be limited liability as Sainsburys operates as a public limited company meaning its owned by shareholders. http://www.sf-express.com/cn/en/dynamic_function/waybill/ Sainsbury’s http://www.sf-express.com/cn/en/dynamic_function/waybill/ research uk http://www.sf-express.com/cn/en/dynamic_function/waybill/ http://www.sf-express.com/cn/en/dynamic_function/waybill/

: about employee numbers for : about employee number for cancer : cancer research owners : Sainsburys ownership

P2 the relationship with internal and external stakeholders, to include how it

communicates with these stakeholders and the influence they have on the business I believe that Sainsbury’s is successful in communication with its stakeholders. Sainsburys has many stakeholders to communicate with, some relationships are formal and need to have evidence of two-way exchanges, such as supplier invoices and, delivery notes and stock audits, most of

these would be produced using an EPOS system which links all the relevant stakeholders together. Examples of this in Sainsburys is the manager to employee communication. The managers must look at what the owners want to do and plan how they will achieve their aims and objectives. They will then feedback to the employees about what they can do to help meet these goals from the Sainsburys website is to be as welcoming and friendly towards customers as possible. Another example of this is EPOS, electronic point of sale. These are electronic, individual registers that allow customers to pay for their items all while tracking what they purchase and feeding the purchasing information back to a larger computer. This information can then be used by Sainsburys to study consumer trends and find buying patterns/habits. After the information has been analysed Sainsburys can then feedback to suppliers about the quantities and quality of products that are needed. However, a system like EPOS would not be effective for cancer research UK as for them it is not just making money off selling goods. They have a much broader scope of operation as they identify causes, develop prevention strategies, diagnosis, treatment and curing and much more. This means that there is many more parts of the business that carry out completely different functions. The structure can be seen below. Source for image : https://www.cruk.manchester.ac.uk/About/Organisation-Structure

This means that the feedback between members needs to be much more specific as there will be very different things to be communicated between the groups. Because of this there’s lots of interdepartmental communication needed for everyone to operate in a way that pleases management. This stems from cancer research UKs structure, their flat structure means that there is a wide span of control for managers of the sectors of the business making it essential that the managers give and receive feedback effectively. Cancer research UK operates across the globe meaning that communities that surround cancer research UK are all over Europe. One based in the UK is the Gurdon institute who are currently researching into tumour origin. When researching in indeed what it is like to work for cancer research UK and there were mixed responses depending on how high up the chain of command people are with the trends being the jobs are worse higher up and better at lower levels. At the higher levels people described the jobs as exhausting, having appalling management and stressful with unrealistic targets. This could be down to the wider span of control that they have meaning that they’re responsible for communication to high amounts of staff. However, for sales assistants, volunteers and assistants they have said that the job is easy

going and rewarding as they say that they receive excellent training for any role they must take up and they feel that the job is very rewarding. Link to info about working: https://uk.indeed.com/cmp/Cancer-Research-Uk/reviews?fcountry=ALL

How do stakeholders generally influence a business Internal stakeholders of your profit making organisation How do they influence the profits made by that business

profit They want to maximise profits

Employees, managers, owners This may decrease the profits if they want better conditions or they may increase profits it they can make sales. Shopper, government, police

External stakeholders of your profit making business How do they influence the Shoppers will influence sales as profits made by that business they are who Tesco's sell to Internal stakeholders of your non-profit making organisation How do they influence the service provided by that business External stakeholders of your non-profit making business How do they influence the service provided by that business Profit making STAKEHOLDER Internal managers

Employees

owners

External

Not for profit They want the business to work as efficiently as possible to achieve their aims

STAKEHOLDER NEEDS

employees and directors They can lead to different progression in researching cancers The people that donate and government They give it the funds to function

Stakeholder feedback

Feedback to stakeholder

To make decisions that will Regular meetings to Would feedback to the make the biggest return for ensure managers are owners and employees the investment aware of the aims of the on the decisions made organisation and have and how it will influence the knowledge and skills the business. available to communicate effectively to staff. A good salary and safe work They need to be told Need to be appraised by what is going on, what their manager about they need to improve on their work and what they're doing well They are told by the To maximise return on They have the overall managers what can investment reasonability for the be improved business.

Suppliers

Lenders

Debtors creditors Customers

Will want a fair price for They’ll get feedback what they are providing the from owners on what business with is needed

Feedback on the quality of supplies, any returns noted. Pre notice of order dates and stock control. Invoices paid on time thus maintaining a positive working relationships and regular supplies To receive prompt Details of transactions Will want to know about repayments of loans the dates that the transactions are due To have time to pay Need to know when Feedback about details of payments are due payment Will want to be paid Need to know when Feedback about details money is due of payment A price that reflects quality Will give details about Will say if it works as it is and a product / service the products meant to that’s beneficial

Not for Profit making STAKEHOLDER STAKEHOLDER NEEDS Internal managers

Employees

owners External Suppliers

Competitors

Stakeholder feedback

Feedback to stakeholder

Put themselves in positions Regular meetings to To tell them the facts to tackle problems ensure managers are and what is aware of the aims of the currently happening organisation and have the knowledge and skills available to communicate effectively to staff. To give opinions and suggestions on company actions To maximise return on investment To supply the company with Get feedback from the quality products owners about the quality of the product

Feedback on the quality of supplies, any returns noted. Pre notice of order dates and stock control. Invoices paid on time thus maintaining a positive working relationships and regular supplies To see how the company is They’ll feedback to the Get feedback from customers to see doing and try and do better employers to match if they're doing better or their competitors worse than competitors

Lenders

Return on investments

Receive repayments

Offer deals at good rates and understand business rates

Debtors

To pay off their debt to the company

They pay the debt at a sustainable rate

Offer deals to reduce payment

creditors

To be paid for what they are owed

Receive repayment

Customers

Will want the company to donate a good amount of their payment

Would feedback to the company about the due date Will be told about new They’ll tell the things that the company company about new or are doing different points of view

P3 Organisational structure and functional areas

The business mission, vision and values, aims and objectives Sainsbury's has a hierarchical structure. This is beneficial as it has clear lines of authority between layers which also allows for a clear path of communication from the top to the bottom however this can also result in isolation of certain roles and slower time for passing on decisions. This is because the power in the business is all at the top so lower employees may not feel involved in the business. This Is seen in the diagram above which shows the channels of communication from worker to CEO and the narrow span of control in this structure. Topping the structure is the CEO who is the driving force behind the business, they give the ideas about the way the business should operate. Their views are then passed down to the managers that are responsible for planning, directing and overseeing the vision of the CEO. Also included in Sainsburys setups are the different types of stores that they operate. This considers the different types of Sainsburys supermarkets, Sainsburys bank and Sainsbury’s Argos. They are all divisions of Sainsburys. Sainsbury’s supermarkets and Sainsburys Argos are more closely linked together as most of Sainsburys superstores now contain an Argos which can be beneficial to both divisions as it can add extra efficiency to consumers shopping experience which is heavily valued by consumers. It allows people to buy more home contents and reserve for pickup at the same time they are doing their shopping. Structurally this is important for Sainsburys as it allowed them to delayer the business by sharing storage facilities for these divisions which can decrease costs, increasing profit margins. Management for both divisions are overseen by a board of directors meaning they both operate by passing information along the chain of command. Info for directors: https://www.about.sainsburys.co.uk/about-us/our-management Sainsburys operates a tall structure with a direct chain of command from top to bottom. In these allimportant decisions are made by senior management and then passed down. This process can take

longer as there is more layers to go through. Some pros of this structure are having clear people to report to and communicate with. Some cons are that it can lack collaboration across vertical lines and can lead to lack of innovation due to less interaction with people that can act as motivators to the lower levels of the business. This is relevant for Sainsburys as it can make a difference in communication throughout the business which can greatly affect efficiency which is key for Sainsburys as they pride themselves on having driving efficiency. There structure allows for this efficiency as decisions are centralised which means that they will be made in the best interest of the business as having good efficiency can result in increased profits which is good for a PLC as it can increase share value and potentially increase dividends. Link for Sainsbury’s efficiency: https://www.about.sainsburys.co.uk/about-us/our-purpose Their main aims are to provide a high-quality service to customers and maximise or provide a good financial return to stakeholders. This could mean that they choose more financially beneficial options when it comes supplying and selling. Link to Sainsburys objectives: https://www.about.sainsburys.co.uk/about-us/our-purpose https://foodfoundation.org.uk/wp-content/uploads/2020/07/Sainsburys-scorecard-2020-update20.07.pdf some of the key targets are to reach net 0 by 2040 and half its plastic packages by 2025. Also wants to have a consistently competitive price. One example of a smart target from Sainsbury’s is to halve food waste by 2030 across the UK. It is a flat structure, fast responses from choices. It can also make the employees feel more valued as they get more choice in decisions regarding their stores. It can allow for less manager roles, which can reduce costs. This is used as the cancer research setup has many divisions that preform different functions. Each division is set up as seen bellow with the managers having a wider span of control as it is more cost effective which is essential for cancer research as they aim to priorities financing research and treatment. However, the downside to this is that managers have a higher workload meaning that their job can be more taxing which resulted in the aforementioned bad experience of working for cancer research UK. A flat structure is an organisational structure with only a few layers of management. In a flat structure, managers have a wide span of control with more subordinates, and there is usually a short chain of command. Flat organisational structures are commonly used by smaller businesses or those adopting a more modern approach to management. This is employed by cancer research as it can empower employees to work independently and take on more responsibility which is heavily beneficial in the research groups as it can lead to faster development meaning that they could be faster in meeting aims like finding a faster method of diagnosis. They are seen as more modern as there must be much better communication between levels and it is much cheaper as the business can save money on managers which cost an average of £41,000 each to pay in the UK. Manager pay : https://www.reed.co.uk/average-salary/average-manager-salary Cancer research structure: https://www.cruk.manchester.ac.uk/About/Organisation-Structure Cancer research aims and objectives: https://www.cancerresearchuk.org/funding-forresearchers/our-research-strategy

Cancer research’s vision is simply to “bring forward the day that all cancers are cured”. Their main objectives on this path are split into 4 parts: prevent, diagnose, treat and optimise. These are the areas of focus that they are researching and putting work into and it has shown to be effective as the survival rate has increased 25% in the last 40 years. What are the main differences between each type of organisation? They are structured differently to suit their aims and objectives, one is hierarchal which Is more cooperate this is used for Sainsbury’s as most of their stores and delivery options operate in the same manor (delivery accounts for 20% of Sainsbury’s food orders), so decisions are made for the whole business high up then communicated down. This contrasts the flat structure of cancer research which has multiple types of stores in similar areas to lots of other charity shops so the way they operate may have to be tailored to the demographic in the area and the availability of employees/ volunteers to make the operation more personal to the area can be effective. Both businesses also try to locate in areas of high footfall, as it is key to to customers. When researching on Indeed what it was like to work for the businesses, I noticed a trend; the jobs higher up the chain if command are said to be less rewarding and people with experien...