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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 everyones 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 everyones 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.

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