Professional Documents
Culture Documents
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CURRICULUM TOPICS
Business planning
Business objectives
Stakeholders
Corporate responsibility
Introduction
When we visit a shopping centre or go into the centre of a modern city, we take for granted
all the services and facilities that are available. The skyline of almost every city within the UK
is dotted with new developments designed to serve the needs of modern consumers. These
GLOSSARY
building and property developments have changed the towns and cities and improved our
everyday lives. At the heart of such initiatives have been creative projects designed to
revitalise urban areas. Examples of these are the new Bullring in Birmingham, the Cardinal
Place re-development at Victoria in London and the new shopping quarter in Canterbury.
Land Securities, the UKs leading property company, played a key role in each of these
developments. It has had a huge influence on the day-to-day lives of people living across the
UK. Quoted on the London Stock Exchange, it is a member of the FTSE 100. Land Securities
owns property worth more than 15 billion across the UK. Its core purpose is to make the
best use of all its property in order to deliver results.
Land Securities has a rolling five-year plan that helps it to look forward in order to meet its
customers future needs. This case study focuses on Land Securities business strategy.
It describes how the company uses planning processes to provide a clear direction for the
organisation.
One of the most important functions of management is planning. Planning helps to identify
how business objectives are achieved. It involves thinking ahead, setting objectives and
creating the means to achieve them. It also involves setting up the processes needed to
measure how well an organisation is performing against its business objectives. Planning
provides the starting point for making the decisions and taking the actions that build the
organisations future.
Competitive advantage:
advantage obtained over
competitors through
benefits that competitors
may find difficult to copy.
When plans are put together, they will usually involve an element of change. For example, the
plan may involve internal or external changes for an organisation which will result in new
decisions and actions. It is vital that there is effective communication with all groups of
stakeholders so that they know the plan is working. Every six months, the management
team at Land Securities reviews business performance against its plan and communicates
these results to its stakeholders.
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As a property business, Land Securities has to make the properties it owns work effectively in
order to generate good results. It focuses on creative and customer-focused developments to
improve the value of the properties that it owns through property management, development
and other activities. An example of this is the Bullring in Birmingham. This creates income for
its shareholders through the profits it makes.
GLOSSARY
Shareholders: own
shares in a company in
return for profits in the
form of dividends as well
as the right to vote at
Annual General Meetings.
A rolling plan is one with a planning cycle that is regularly reviewed and refined based on
performance. For the plan to be successful, it is important that the company has business
objectives which are measurable and that it regularly reviews its progress against these
objectives. Land Securities calls these business objectives key performance indicators
(KPIs). The KPIs are very specific and clearly defined, so they can be used to measure the
performance of the organisation. By monitoring whether the business meets its KPIs,
Land Securities gains valuable feedback. This helps it to adjust and refine its business
strategies and set new KPIs/business objectives.
Business Strategy
Five-Year Plan
Land Securities
Stakeholders
Environment
Employees
a
He
lth a n d S af e
ty
Customers
Suppliers
Investors
Key performance
indicators : financial and
non-financial measures
that are used to measure
the success of an
organisation.
Feedback
Community
Business objectives:
these provide measurable
points within a business to
monitor progress.
These KPIs or business objectives provide a series of precise measures against which business
decisions and further action might need to be taken. They also help to show how well the
business is meeting the needs of its stakeholders. The table overleaf shows how the various
business objectives or KPIs measure the impact of the business on each stakeholder group.
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Stakeholder
Customers
Investors
Business ratios
For example, the return on capital employed is found by
dividing operating profit by total net assets and turning this into
a percentage. A return of more than 6.5% indicates that the
cost of investors has been met or exceeded.
Employees
Suppliers
Community
Environment
GLOSSARY
Business ratios: ratios
are standard calculations
used to analyse a
companys accounts in
order to judge business
performance.
Return on capital
employed: (Operating
profit /Average capital
employed) x 100%.
Corporate
responsibility: processes
that allow a business to be
managed in order to
provide positive effects
upon stakeholders.
Objective setting through KPIs is viewed as extremely important by Land Securities. By evaluating
its performance each year against these objectives, new targets can be set, which enables the
business to grow further.
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Financial/non-financial reporting
Land Securities reports on both the financial and non-financial aspects of its performance to
each of seven stakeholder groups. This is part of its corporate responsibility role.
For example, Land Securities uses Customer Relationship Management programmes
to manage relationships with its customers. Customer visits are also used as part of the
GLOSSARY
Customer Relationship
Management: methods
used by a business to
manage relationships with
customers.
Differentiate: to
distinguish a business from
its competitors.
reporting process. Land Securities uses the ways in which it deals with its customers to
differentiate and distinguish itself from its competitors.
Regular articles about health and safety appear in Landmark, the in-house magazine. The
company produces a health and safety plan each year and reports progress against objectives.
Land Securities communicates with its shareholders through its annual and corporate
responsibility reports. Its website also plays an important role. Senior management meet
regularly with investors to update them on the performance of the business.
Intranet: computer
network within an
organisation.
Employees are kept informed about events within the business in many ways. Its in-house
Pressure groups:
groups of individuals
representing a particular
interest.
campaigns. These are all designed to keep employees informed and up-to-date.
magazine, Landmark, deals with a whole range of business issues. Other means of communication
are internal poster campaigns, employee conferences, intranet, weekly newsletters and mini
Suppliers are key stakeholders. In order to listen to their views, Land Securities holds supplier
conferences. It also keeps suppliers up-to-date about developments within the industry. It uses a
brochure outlining some of the approaches that Land Securities is taking on development issues.
Land Securities consults with local communities throughout a development project. This goes from
the earliest stage right through all the processes of construction. It communicates with local
communities, local and national government representatives and pressure groups.
A recent conference reported the progress made by Land Securities in managing the
environment. The conference helped it to share its good practices and consider new ways of
taking responsibility for the environment.
Conclusion
Land Securities takes a wide view of its responsibilities for developing and improving the UKs urban
areas. The need for planning is at the heart of this process. Land Securities develops creative
projects and sets rigorous financial and non-financial objectives called Key Performance Indicators.
It is therefore able to exercise corporate responsibility in order to meet the needs of its seven different
stakeholder groups. Reporting on such developments enables Land Securities to inform its
stakeholders about what is happening within the business. It also enables its stakeholders to provide
valuable feedback for use within its planning cycle. This helps Land Securities to plan ahead.
Questions
1. What is the purpose of a plan?
2. Explain the role that key performance indicators have upon the planning cycle.
3. Using at least two examples, explain the purposes
of financial and non-financial reporting.
4. Evaluate how Land Securities approach to
reporting provides it with an advantage over its
competitors within the construction industry.
www.landsecurities.com
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permission.