How Business Operate

How Business Operate

Contents Introduction ..................................................................................................................................... 3 Task: 1- Understanding the key features of a business environment.............................................. 3 1.1 Describing the different types of organisations found in the public and private sectors in a named country............................................................................................................................. 3 1.2 Explaining the different structures within the businesses in the named country and suggest reasons for the variation .............................................................................................................. 4 1.3 Describing how the local, national and global economic environment impacts on a particular named business ........................................................................................................... 4 Task: 2- Knowing the importance of accounting for business ....................................................... 5 2.1 Explaining the importance of accounting for business success. ........................................... 5 Task: 3- Being able to apply key principles of accounting and present and interpret data ............ 6 3.1 Presenting and interpreting key accounting information using profit and loss accounts ..... 6 Task: 4- Understanding the principles of managing and leading teams in organizations .............. 6 4.1 Describing the stages of team development.......................................................................... 7 4.2 Carrying out an analysis to determine own and others’ roles within a team ........................ 7 4.3 Assessing three motivation theories...................................................................................... 8 4.4 Describing different types of leadership styles ..................................................................... 9 Task: -5- Knowing the role of the Human Resources department................................................ 10 5.1 Describing the different functions carried out by the HR department in a business .......... 10 5.2 Outlining key features of employment legislation .............................................................. 11 Task: 6- Understanding the importance of customer service to organisational success ............... 11 6.1 Explaining the impact of customer service on business success ........................................ 11 6.2 Explaining the benefits of customer profiling to a business. .............................................. 12 Conclusion .................................................................................................................................... 13 References ..................................................................................................................................... 14

Introduction Business organizations are several types by their structure and characteristics in several areas of the world. To run business organizations, many effective factors are used. Financial activities are evaluated by accounting in any company. Several leadership styles are used to run a business organization properly, where leaders use several motivational theories also. All companies of the world must ensure the good customer service to the customers to get the success. Accounting supports the real presentation of the information for knowing exact performance of the company and so accounting maintains all properly.

Task: 1- Understanding the key features of a business environment 1.1 Describing the different types of organizations found in the public and private sectors in a named country In United Kingdom, possible and practiced organizations are following types: Sole-Proprietorship No formalities are needed to formulate this business, where sole owner is free to make decision about the business solely (Salaman, 2001). Little capital owners are mostly successful by doing general and easy business through this business in UK. Partnership This organization is little broader concept than the sole business, where large capital is needed to formulate this organizations. A single person is not capable to do partnership business. Over two partners must be needed to make a contract to operate this organization. Company

Lots of shareholders are needed to run a public limited company, where there is a limitation of shareholder numbers in private limited company (Salaman, 2001). A company is treated as like a person in real life. Franchising Different companies might run their businesses by using the ideas of other companies or by using all supports of other companies, where they might use the same name of those companies product.

1.2 Explaining the different structures within the businesses in the named country and suggest reasons for the variation Companies are different in United Kingdom by their structures: Tall structure This supports the hierarchical position of all leaders and workers of a company in United Kingdom, where every employee will get specific directions from the specific managers. Flat structures Some companies in United Kingdom might support the idea of flat structure, where managers and leaders are not huge (Salaman, 2001). Matrix structure This structure is helpful in several companies in United Kingdom, where the structure is composite in those companies by their works and formation.

1.3 Describing how the local, national and global economic environment impacts on a particular named business Impact of local economic environment This might influence the business organization mostly because business’ success might depend on the purchasing power and product price available in the locality.

National economic environment Inflation and recession are the most effective factors in the business organizations, where these two are considered most effective in national economic environment in UK (Worthington and Britton, 2006). Global economic environment Large companies expand their business over the boundary of their native countries, where global economic factors like purchasing power, product price, and financial supports are important for those businesses.

Task: 2- Knowing the importance of accounting for business 2.1 Explaining the importance of accounting for business success. For knowing the advancement of a company financially, the necessity of accounting is: Tracking transaction In a business company in United Kingdom, lots of transactions are occurred and from where accounting tracks only the important transactions. Maintain accounts properly Accounting supports the real presentation of the information for knowing exact performance of the company and so accounting maintains all properly. Determine the business position Total ideas about the company can be enough to understand the company position and then the management can decide for the future improvement (Worthington and Britton, 2006). Inventory management

Proper information about inventory must be got from accounting and the company makes needed decision for future in production and sale.

Task: 3- Being able to apply key principles of accounting and present and interpret data 3.1 Presenting and interpreting key accounting information using profit and loss accounts Various data might be used in this account such as: Gross Revenue Cost of goods sold is considered in measuring gross revenue in a company by using accounting formula, where all expenditures are not subtracted. Cost of Goods sold Measuring this is very necessary to a company because it might help in knowing the profit by selling a product of the company (Francis, 1979). Earnings before interest and Taxes (EBIT) It might give effective help in measuring proper taxes which are payable to the government. The formula EBIT=Gross profit-Expenditures-depreciation is used in knowing this (Francis, 1979). Net Income This is the ultimate profit for the company, where net income subtracts the EBIT.

Task: 4- Understanding the principles of managing and leading teams in organizations

4.1 Describing the stages of team development Formulating a team can involve following steps:

Forming This is the preliminary stage of formulating a team in a company, where making acquaintance with the environment and organizational formalities to the members are important tasks (Francis, 1979). Storming Personal acquaintance is the main task in this step in developing a team in a company, where all share their experiences with each other. Norming Team members set their mind by considering the others’ views and try to go ahead with the understanding. Performing Freedom is given in this stage to make effective decisions and works in the team to the members in a team (Francis, 1979). Adjourning This is the stage of evaluating the performance of the team and team members after some periods.

4.2 Carrying out an analysis to determine own and others’ roles within a team Tasks might be easier in a team to be finished. Leader Leader will make effective decisions, policies and ways to finish work in a team by making effective everyone. Shapers

Leaders give duty to some members of the team to supervise everyone’s contribution to the team to make inactive members active in future (Johnson, Beyerlein and Beyerlein, 2000). Implementers All operational tasks are done by the implementers of a team, where leaders and shapers give directions to the operation unit. Finisher Evaluation of the performance of the team members are measured at the end of finishing the work in a team.

4.3 Assessing three motivation theories The followings are the perfect motivational theories: Hierarchy of needs The basic and most used theory is needs theory, where all basic necessity of human being is decorated in consistent pyramid (Chung, 1977). Meeting with one need might raise the next steps’ needs of the human beings.

Source: Maslow, 1943

Theory X, Y

Source: Douglas Macgregor, 1960 This theory might also be effective in a company for the employees. The main idea of this theory is about the two types’ characteristics’ people in the world. Some people like to do work and some are not. Herzberg theory

Source: Herzberg, 1959 This concept describes about two factors which are hygiene and motivational factors. Satisfaction, dissatisfaction, and neutrality are measured by these two factors in this theory. Human beings can be satisfied or dissatisfied by these two factors (Chung, 1977).

4.4 Describing different types of leadership styles A leader may follow the following styles:

Autocratic leadership In some time, leaders apply this style because of controlling employees strictly in the company to overcome a problem, where employees’ views are not considered any more. Democratic leadership This style offers proper and needed freedom to the employees of the company to make effective their views and choices for the companies betterment (Glanz, 2002). Laissez faire Subordinates are free to use their opinions in their field in some time, where they enjoy full right to make decisions.

Task: -5- Knowing the role of the Human Resources department 5.1 Describing the different functions carried out by the HR department in a business The following functions are carried out by the managers: HR planning Total overview of the procedures are needed in the initial stage by making proper plan for collecting active and effective workforce for the company. Job analysis and job description Managers will evaluate the skills of the employees and will appoint them in the right position of the company (Chanda and Shen, 2009). Training employees for development Employees might get some barriers to show their skills in the very beginning stage and so this department will arrange the training session.

Motivating and retaining employees The managers will apply different motivational theories to make them active in the company.

5.2 Outlining key features of employment legislation Employees’ right is backed by several legislations such as: Employment right Basic needs are very sensitive to the employees of a company, where for retaining the employees by making them satisfied; the company must be serious to this matter. Law related to equality and discrimination All employees must be considered equally by their several characteristics, where any disparity might grow the dissatisfaction to the company (Chanda and Shen, 2009). Legislation of health and safety The employees have different risks in the working areas such as being injured physically or mentally. The company must have give sight to this matter.

Task: 6- Understanding the importance of customer service to organizational success 6.1 Explaining the impact of customer service on business success The success of the business mainly depends on the satisfaction of the customers to the company. Impact of good customer service Good client service helps to increase sales and helps to acquire satisfaction. The company can offer several additional facilities to the clients (Rokes, 2001). Impact of bad customer service

Negative service will make the clients dissatisfied and the influence of that will harm the sales of the company greatly. They make understand other clients not to buy products from the company.

6.2 Explaining the benefits of customer profiling to a business. In this way, the company offers exact and needed service to the customers in time. Tracking customers Profiling will help to find the location of possible customers and make them awake about the company products. Facilitates communication The company might be able to make strong relation with the customers by communicating properly (Rokes, 2001). Increases profit This might help to raise the revenue of the company as it supports the good client service in the company. Comparative advantage Clients’ loyalty and selling increment will bring the comparative advantage for the company in the long run.

Conclusion In United Kingdom, businesses are formulated by several characteristics within deferent structures such as sole, partnership, company, franchising etc. Many factors are available in a business organization such as production, selling, accounting, team development, leadership, customer service etc. Leaders are always effective to make the employees motivated in acquiring the goal of the company. Large companies expand their business over the boundary of their native countries, where global economic factors like purchasing power, product price, and financial supports are important for those businesses. Leaders give duty to some members of the team to supervise everyone’s contribution to the team to make inactive members active in future.

References Chanda, A. and Shen, J. (2009). HRM strategic integration and organizational performance. Los Angeles: Response Books. Chung, K. (1977). Motivational theories and practices. Columbus, Ohio: Grid. Francis, E. (1979). The profit and loss account. Sydney: College of Law. Glanz, J. (2002). Finding your leadership style. Alexandria, Va.: Association for Supervision and Curriculum Development. Johnson, D., Beyerlein, S. and Beyerlein, M. (2000). Team development. Amsterdam: JAI. Rokes, B. (2001). Customer service. Cincinnati: South-Western/Thomson Learning. Salaman, G. (2001). Understanding business. London: Routledge in association with the Open University. Worthington, I. and Britton, C. (2006). The business environment. Harlow: Financial Times Prentice Hall.