Human Resource and Financial Management Strategies in The Body Shop

This report discusses the role of human resource department and financial management team in The Body Shop. It covers topics such as human resource strategies, financial management strategies, SWOT analysis, and different types of documents used for financial reporting. The report also provides an evaluation of the company's performance and recommendations for improvement.

Introduction to Business
Studies

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Human resource strategies..........................................................................................................3
Financial management strategies................................................................................................4
SWOT analysis...........................................................................................................................5
Evaluation...................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
APPENDICES.................................................................................................................................9
Appendix 1: Balance sheet..........................................................................................................9
Appendix 2: Profit and loss account...........................................................................................9
Appendix 3: Any relevant pictures/ graphs/ info......................................................................12

INTRODUCTION
Human resources department plays a vital role in company, as they are responsible who
make up the workforce of a company, economy and business sector. The major role HR in the
firm is to maximize employee productivity and protecting the firm from any problems that may
impact the reputation of firm. For every company, finance function plays an important role
because it is a task of providing funds needed by a firm on very favourable terms. The finance
manager makes all important decisions that are related to funds which can be helpful to take
investment decisions. The body shop is a British cosmetics company provides a wide range of
products such as body care products, perfumes and others, situated in UK.
The present report will provide detailed information about human resource department, and
also show how Financial management team in the company is responsible for proper planning,
directing, controlling and organising the financial and business activities such as utilization of
funds. Furthermore, the study will show the important of financial reporting which play a critical
role in the firm. Financial reporting is the systematic process of communicating business
transactions, with the help of reporting firm can analyse overall performance.
Human resource strategies
Human resources is the department in the company who make up the business environment
positively so that employees and workers can work effectively. According to (Boon, Den Hartog
and Lepak, 2019), HR team are also known as talent management which involves overseeing all
the business related things to manage human capital. They are more focused on a different area
such as training and development, learning and teaching, compensation and benefits, staffing and
recruiting of people. In short, they are responsible for overall organisation development.
In today’s business world, the HR team is responsible for administrative tasks and projects
such as adding value to strategic utilization of staff members. While implementing the task, they
ensure that employee programs are positively impacting the business. Human resources in the
firm develop programs that are designed to improve the effectiveness of the business. The human
resources department of body shop promote employee career development and providing job
training (Bulturbayevich and et,al., 2020). They are providing guidance and orientation programs
for new people, as they are asset for the firm. HR deals with staff members concerns such as
pension plans, investments, insurance and pay scale and other benefits.

The HR department of Body shop is improving morale of employee so that they can work
effectively. An effective HR department motivate company staff members to do their best, which
is beneficial for the overall success of the firm. It involves providing constructive feedback,
problem solving, rewarding staff members for good performance, solve issues between workers
and lastly creating a positive and safe work environment for people working in the firm.
Financial management strategies
No doubt financial management plays a vital role in the firm because this affects almost all
the business aspects which is related to company’s operations. According to (Chang, McAleer
and Wong, 2020), The financial function involves better understanding about whether a firm
should make more decisions about investment plans in fixed assets or not. With the help of
finance, any business can determine the allocation of profits and estimate cash flow, make
necessary adjustments by controlling expenses. Function of finance are concerned with the
proper controlling of cash flows and maintaining unnecessary expenses. This means that the
function of finance is to Determine asset management policies so that managers can estimate for
cash requirement in the present and future. Without having detailed information about financial
transactions, it is not possible for managers to arrange for cash or funds.
The major responsibility of the finance manager in the firm is to ensure an adequate cash
inflows and outflows. If financial management is not done in proper way, the smooth business
operations of a firm may not be possible, which can harm the productivity. Financial manager
manages business transactions and determine when additional funding is required exactly.
Financial management is important for company so that managers can evaluate the
efficiency of financial planning. By doing so, they can easily check upon financial performance
and evaluate on the basis of previous performance or past data. By understanding this financial
concept, they can improve procedures, techniques and controlling process which are essential
aspects of the finance function.
The body shop financial management team is responsible to draw a plan related to funds
such as borrowing funds in effective way. As company required cash for salaries, paying bills,
managing stock and purchase of raw materials, finance manager make decisions by evaluating all
data. Hence, they take important decisions such as debt capital and others. They check upon
financial performance of the firm and ensure safety on investments. It means if company wants

to invest then financial team guide firm whether they should be invested or not. In order to
achieve adequate rate of return, the finance manager guide company in a most effective way.
Different types of documents used for financial reporting
Profit and loss account- It is the financial statement prepared by company that will provide
information about costs, expenses done by firm, revenues, sales over a particular time period
(Financial management, 2022). With the help of this financial reporting, company can
understand its business performance and make decisions based on this reports.
This document is prepared by body shop, so that they can understand company’s
expenditure and revenue. A profit and loss account documents is extremely important for a firm
for making decisions. With the help of this document, body shop manager can get a clear picture
of whether a firm’s operations are resulting in a loss or profit.
Balance sheet- It is an important document or financial statement prepared by firm that will
provide them information about company’s liabilities, assets and equity shareholder. It is
basically used by company manager to evaluate a business performance and hence make
important decisions based on data.
Balance sheet document provides a clear picture of finances and make necessary
adjustments on the basis of previous information for future requirements. The body shop
manager can get an idea about financial health at a given point in time.
Cash flow statement- Along with Balance sheet and profit and loss account, a cash flow
statement can help business managers and owners evaluate their firm’s financial position. By
adopting this statement effectively, the firm can reduce unnecessary expenses which can impact
the business performance.
The body shop manager maintains cash flow statement in order to understand the cash
inflows and outflows of a firm. For example- if a manager wants to make any decision related to
investments, then they can easily make adjustments by referring to cash flow statement. Its helps
shareholders understand how much a profit a company is making and how much they are
spending. By analysing the cash flow statement company can easily forecast cash flow that is
helpful to operate financial activities.
SWOT analysis
This is the most important method for analysing and identifying weaknesses and strengths of
the company. With the help of this analysis company can evaluate competitive position in order

to improve strategic planning. It will provide external and internal factors information so that
proper decisions can be made. The body shop company use SWOT analysis as a guide by
focusing on real life contexts. This technique is helpful to assess the business performance, risk
in the market, competition and potential of a business.
Strengths- The body shop provides a wide range of goods such as cosmetics and perfumes in
their physical stores and online stores, domestic and international both (Hajizadeh, 2019). The
firm has successfully made its market position by providing their customers a positive ambience.
Weaknesses- Due to large number of retail outlets company has to face issues which impacts
sales volume and productivity (Teoli, Sanvictores and An, 2019). The firm needs to focus on
advertisement and promotional activities so that they can easily attract more customers.
Opportunities- due to heavy competition in this field of cosmetics and increasing awareness of
eco-friendly products and natural resources company has a huge potential to grow. Also, increase
in online shopping company can focus on its website portal for products sale and free delivery
that will satisfy customer needs in the market.
Threats- Nowadays, people are more attracted towards cosmetic market and new products, this
competition is a threat for company (Wang and Wang, 2020). New entry in the market is the
threat for body shop because they are providing a wide range of customized products as per the
requirements of audience. Some of the firms are selling eco-friendly products made according to
the preferences of customers and may become a serious threat to the body shop.
Evaluation
The body shop company is a trustworthy brand that provides a wide range of product of
great quality and satisfy its customer’s needs. The company focuses on differentiation method by
adding value to its products such as product shows a natural, ethical and compelling message
behind the branding of the goods. This makes the company different from another brand of
beauty products and gain competitive advantages strategy (Mousa and Othman, 2020). To
compete with rival brands in the beauty market the firm has adopted a pricing strategy which
keeps its product prices at par with the pricing strategy of other brands. The firm promotes its
brand by adopting method called as anti-animal testing campaign.

CONCLUSION
To conclude, the major role of HR department and its team is to create positive and safe
environment of the company so that employees can work effectively. They are responsible for
recruitment, selection, hiring and talent management which involves benefits, compensation and
pay scale for employees. Furthermore, the report has concluded that financial department and its
function is important for company’s managers so that they can make important decision such as
investment decisions. By evaluating the report, it has summarized that by maintain financial
reports such as cash flow statement, balance sheet and profit and loss account, the company can
know its position in the market. It is recommended to keep track on monthly and weekly basis
and collect important data from employees so that proper adjustments can be done. And also it is
suggested to focus on promotional activities with the help of social media, online marketing and
campaigns.

REFERENCES
Books and Journals
Boon, C., Den Hartog, D. N. and Lepak, D. P., 2019. A systematic review of human resource
management systems and their measurement. Journal of management. 45(6). pp.2498-
2537.
Bulturbayevich, M. B. and et,al., 2020. Modern features of financial management in small
businesses. International Engineering Journal For Research & Development. 5(4). pp.5-5.
Chang, C. L., McAleer, M. and Wong, W. K., 2020. Risk and financial management of COVID-
19 in business, economics and finance. Journal of Risk and Financial Management. 13(5).
p.102.
Hajizadeh, Y., 2019. Machine learning in oil and gas; a SWOT analysis approach. Journal of
Petroleum Science and Engineering. 176. pp.661-663.
Macke, J. and Genari, D., 2019. Systematic literature review on sustainable human resource
management. Journal of cleaner production. 208. pp.806-815.
Mousa, S. K. and Othman, M., 2020. The impact of green human resource management practices
on sustainable performance in healthcare organisations: A conceptual framework. Journal
of Cleaner Production. 243. p.118595.
Teoli, D., Sanvictores, T. and An, J., 2019. SWOT analysis.
Wang, J. and Wang, Z., 2020. Strengths, weaknesses, opportunities and threats (Swot) analysis
of china’s prevention and control strategy for the covid-19 epidemic. International Journal
of Environmental Research and Public Health. 17(7). p.2235.
Online
Financial management. 2022. [Online]. Available through: <
https://www.managementstudyguide.com/financial-management.htm>

APPENDICES
Appendix 1: Balance sheet
Appendix 2: Profit and loss account

Appendix 3: Any relevant pictures/ graphs/ info