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How Business Operates

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Report on How Business Operates

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Introduction

Businesses runs with the help of effective key elements such as, progressing business plans, company vision, mission, objectives and goals. All these factors associatively works together to achieve business goals effectively (Ward, 2016). There are different types of business sectors and they have various functions to follow in order to achieve their target remarkably, it is essential for them to adopt effective measures, theories, concepts and strategies to perform at their level best. It is very important for company management to build a step-by-step procedures to guide all their subordinates and employees.

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Present study has been conducted on, How Business Operates. Different types of organisation which are mainly found in public and private sector and their structures are covered in this assignment. Furthermore, PESTLE analyses, importance of accounting and key features of employment legislation are included in this project. Lastly, stages of team development with the help of different theories, leadership styles and impact or benefit of customer services on business are also mentioned in this project. This project has been based on following factors through which a business can operate their functions smoothly without getting involved in any legal matters.

TASK 1

1.1 Importance of accounting for business success

Accounting is most important aspect for any business success. It is extremely crucial for recording financial transactions, profit and loss, credits and debts (Reim and Örtqvist, 2015). With help of this any business organisation can evaluate their past errors and take their business towards utmost growth. It is essential for company managers to understanding basic principles of accounting which benefits them to grow their business and generate efficient profit. Accounting not only helps big business firms but it also provide lot more advantages to small business units and entrepreneur in order to grow their business. Company can identify their strength and weakness in effective manner and make necessary requirements related to accounting methods and concept. Organisation can effectively maintain their balance sheet, income statement and cash flow statement and make right decisions by evaluating them and enhance their company wealth and profit. It is said that accounting is language of business. So it is very essential for business organisation to learn each and every concept of accounting as it will magnificently take their business into growth path.

TASK 2

2.1 Profit and loss accounts

Revenue

2017-18 (£)

2016-17 (£)

Total revenue

10698200

10622000

Cost of revenue

6745600

6629300

Gross profit

3952600

3992700

Selling general and administrative

3324700

3348600

Non-recurring

-

-

Others

-49500

-63200

Total operating expenses

10020800

9914700

Operating income or loss

677400

707300

Earnings before interest and taxes

677400

707300

Interest expense

-95400

-100200

Income before tax

66800

176400

Income tax expense

37700

60700

Minority interest

-2500

-5900

Net income from continuing ops

29100

115700

As per the above mentioned Profit and loss statements of Marks and Spencer of two consecutive years 2016-17 and 2017-18,. it has been evaluated that, it is global leader in Retail sector in UK and have several outlets in Europe. There is a slight decrease in their gross profit as it decrease from 3992700 to 3952600£. Company by providing effective products and services to their consumer generates remarkable results in total operating expense as it raised form 9914700 to 10020800 £. Total amount of company income before tax is decreased from 176400 to 66800£. This is a conditions in which it is essential for managers to adopt effective strategies and examine their P&L and formulate comprehensive measures to overcome this situation.

TASK 3

3.1 Stages of team development

Team is a group of individuals works as an entity towards a common goal and objective. Every individual in a team possess different type of skills and knowledge. In order to work effectively it is essential for team members to work together collectively (Brea‐Solís, 2015). It is essential for manager to create team appropriately and assign work according to one's knowledge to have remarkable outcome. There are mainly five stages of team development mentioned below each one of them have a vital role in building effective functioning team:-

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Forming Stage: Forming is a stage of orientation in which people interact with each other have acquire information about member's skills, their background and interests. In this stage project goals, individual roles and timeline are also discussed. In this stage when every one start to get fa miler roles and responsibilities are then assigned in this focus is more on people rather than work. In this stage team is depended on leader in order to guide them so it is essential for leader to ensure all roles and responsibilities are provide by them in an effective and clear direction.

Storming Stage: In this stage team members compete with one another and accept their ideas. As every individual have different perspective and opinion it results in generation of conflicts. In this stage it is essential for team leader to guide every individual in a team to solve problem and function together as a team in order to accomplish goals more effectively. It is very important to find and overcome the reason of conflicts in order to reduce long term problems

Norming Stage: In this stage, team members starts noticing and appreciating team person strengths. Every individual in a team works towards in a contributing manner and perform team objective as a unit in effective way. Team member share information and solve conflicts and starts trusting each other in order work together. It is the responsibility of team leader to ensure that their team are working in collaborative manner.

Performing Stage: At this stage, team is well established, mature and organized. In this team members are more focused towards meeting goals and objectives. Members are highly motivated and to accomplish goals and solve problem quickly. In this stage, team leader are not indulge in decision-making but they monitor performance and progress of team and their achievements in order to reach possible growth.

Adjourning Stage: This is a stage when a project comes to an end and team detach into different directions (Kandachar, and Halme, 2017). At this stage , it essential for team leader to celebrate success of goals and project and provide opportunity to every individual working in a team to say good by to one another.

By implementing all these stages in their team development process leader or manager can able to extract best out of their employees and accomplish organisational objectives in an effective manner.

3.2 Self goal and other roles within a team

Reporting Structure

Top most position in the organisation is managing director who is an overall in charge of a running organisation or business. A managing director is a who is authorized and responsible for company day to day operations. This individual is also known as Chief Executive Officer ( CEO). Managing director is responsible keep company solvent and promote business expansions and implement required innovations within and organisation. Marketing director, finance director, operations director and HRM director are responsible to report day-to-day activities of marketing managers, finance supervisors, production team leader and personal manager to company managing director. Whereas, all heads of these departments are fully responsible to provide report of sales team, accounts assistants and production team member to their separate directors.

Every department are authorized with their roles in an organisation that are briefly structured below:

AUTHORISED PERSON

ROLE

Managing Director

Managing director are appointer to execute day-to-day business functions. They are fully authorized to take required decisions in order to grow company in pleasant way.

Marketing director

Marketing director have responsibility to creating efficacious marketing plan. Most important role of marketing director is to evaluate all marketing process or environment.

Finance Director

Finance director is responsible for preparing company financial statements and maintaining transaction process. They are responsible to provide management information related to accounts and budgets to other department heads. They are authorised to prepare and monitor budgets (Paton, and Burt, 2014).

Operation Director

Operation director are responsible to manage inventory and procurement of packing and transportation. They have responsibility to manage quality and develop products and services as per requirement of plans.

Human Resource Director

Human resource manager have responsibility to manage valuable relationship with internal clients and identify gaps of management practises. They are authorises to create new job descriptions and conduct grievance process.

Marketing Manger

Marketing manager are authorised to understand current and potential consumer (Kohler, 2015). They are responsible to develop effective strategies by taking advantage of marketing mix element.

Finance Supervisors

Finance supervisors are authorized to supervise accounting process and ensure all federal laws. They are responsible to develop and distribute reports related to budgets and financial statements.

Production Team Leaders

They are responsible to provide leadership resource to team by providing them motivation, experience, support, knowledge and advice.

Personnel Manager

They are authorized to perform managerial and operative functions in a management. They have responsibilities to attend problems and grievances of workers.

Sales Team

They have responsibility to sell company offerings like products and services.

Accounts Assistants

Account assistants have responsibilities to provide support to accounts by preparing statutory accounts and check records.

Production Team Members

Members in production team have responsibilities to accomplish company goals and perform duties related to production.

3.3 Motivation theories

Maslow's theory: This theory states that by identifying basic needs and wants of an individual and fulfilling their requirements related to food, shelter, clothing and water company can increase morale of their employees. This theory is suitable to increase motivation level of their workers and fulfil company predetermined goals and targets in effective way. If an organisation fulfil basic needs of their employees then they are required to fulfil security and protection of their workers related to jobs and life (DaSilva, and Trkman, 2014). It is essential for manager to maintain smooth relationship in tier working culture to increase love and companionship among their employees. Lastly, employer are required to fulfil esteem needs of employees that are related to individual confidence and respect.

Mayo theory: According to this theory managers are required to treat their employees as a people not as a productive factor. They can increase their motivation level by interacting with them. This theory can be more suitable when there is better communication of flow between managers and workers. It is essential for manager to make their employees work in a team to look for their interest. This will helps in increasing their productivity and performance towards company goals.

McGregor's Participation Theory: Theory X and Theory Y are proposed by McGregor. According to this theory managers are advised to implement effective strategies of motivation in their workplace. Company can use mixture of both of these theories to motivate their employees and teams towards organisational objectives. Theory X can be suitable in target driven situation and Theory Y can be suitable in flatter structure where individual are involved in the process of decision making and have some appropriate responsibilities.

3.4 Different types of leadership style

A leader is an individual who guide and motivates other towards company goals and objectives. Leadership style is a way that are used by a leader to lead other. There are different types of leadership style that can be adopted by a leader according to their function and situation. Effective leadership style will benefit leaders to make appropriate decision and handle problem efficiently. Mentioned below there are some leadership style that can be adopted by a leader in different situations:

Autocratic: In this style of leadership, leaders are authorised to hold all responsibilities they can make their decisions without consulting to their subordinates. In this leaders use militant like style. They seek maximum output from their subordinates. In Autocratic leadership style leaders encourage individuals to perform their work under strict culture. This style of leadership helps in emergency situations when there is less time given for completion of a project.

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Democratic: In this style of leadership, subordinates are also involved on the process of decision-making. Final responsibility are in the hands of leaders but they have authority to delegate roles and responsibilities to other (Demil, and Zott, 2015). In this style communication moves from upward to downward. With help of this leadership style company can promote fairness, creativity and competence in their workplace.

Gratifier: In this leadership style, leader follow old carrot and stick method. Leaders first set objectives and then reward individual according to their contribution and achievement.

Innovator: In this leaders combine different types of leadership styles in order to influence employees. This will help workers to produce effective and creative ideas and products. In this leadership style leaders keep on adopting innovative techniques in their leadership style to increase production and profitability of employees.

TASK 4

4.1 Impact of customer service on business success

Consumer services are related to providing excellent services to consumers and the way in which a company interact to their consumers. By improving their consumer service company can move towards greater consumer satisfaction level and can generate great brand image and goodwill in a market place. Company like Marks and Spencer provide effective consumer service to their new as well as existing consumer. This will encourage customer to buy their products and services. It is essential for managers to develop formulate strategies and pursue them in efficient manner. This will benefit organisations to grow and prosper their business in best suitable way.

4.2 Benefits of customer profiling to a business

In today's market it is utmost essential for a company to not only acquire but retain consumer in effective way in order to gain more competitive advantage. Company can list out their consumer can increase their loyalty towards organisation by implementing various strategies in this consumer profiling structure (Tapscott, and Tapscott, 2016). It is essential of an organisation to target right consumer and offer them appropriate things at right time. Company like Marks and Spencer create descriptive list of their potential consumer as set them according to demographic and geographic manner. This will help them to do right offering and retain consumer for long run success. It is essential for a company to examine buying pattern of consumer in a particular area and them formulate effective strategies this will benefit them to create high profitability and productivity.

Conclusion

As per the above mentioned report, it has been conclude that it is essential for a business to consider all factors including company mission, vision, objective and goals to run effectively. It is important for an business organisation to consider all factors and adopt appropriate leadership and motivation theories to conduct business activities smoothly. Creating and maintaining accounting data helps company to analyse their day to day business operations in effective way. By providing good consumer service and developing proper costumer profiling helps business to perform their functions in formulation manner. With this company can increase their rate of return, market share and profitability.

References

  • Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership. Springer.
  • Tapscott, D. and Tapscott, A., 2016. Blockchain revolution: how the technology behind bitcoin is changing money, business, and the world. Penguin.
  • Davies, W., 2015. The happiness industry: How the government and big business sold us well-being. Verso Books.
  • Lehoux and et. al., 2014. How do business model and health technology design influence each other? Insights from a longitudinal case study of three academic spin-offs. Research Policy, 43(6), pp.1025-1038.
  • Mills, K. and McCarthy, B., 2014. The state of small business lending: Credit access during the recovery and how technology may change the game.
  • Demil, B., Lecocq, X., Ricart, J.E. and Zott, C., 2015. Introduction to the SEJ special issue on business models: business models within the domain of strategic entrepreneurship. Strategic Entrepreneurship Journal.9(1), pp.1-11.
  • DaSilva, C.M. and Trkman, P., 2014. Business model: What it is and what it is not. Long range planning.47(6), pp.379-389.
  • Paton, S., Chia, R. and Burt, G., 2014. Relevance or ‘relevate’? How university business schools can add value through reflexively learning from strategic partnerships with business. Management Learning. 45(3). pp.267-288.
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