Analyzing HR and Financial Management Strategies of The Body Shop

This report analyzes the human resource and financial management strategies of The Body Shop, including a SWOT analysis. It evaluates the importance of these strategies in the success of the organization and recommends effective strategies to achieve business objectives.

Introduction to Business Studies
FY021
Analyse the strengths and weaknesses of the HR and financial
management strategies within The Body Shop. Which of these do
you feel contributes most significantly to their business success?
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Contents
Introduction ..........................................................................................................................................2
Human Resource Strategies...................................................................................................................4
Financial Management Strategies.........................................................................................................4
SWOT analysis .......................................................................................................................................4
Strengths...........................................................................................................................................4
Weaknesses.......................................................................................................................................5
Opportunities.....................................................................................................................................5
Threats...............................................................................................................................................5
Evaluation .............................................................................................................................................5
Conclusion.............................................................................................................................................6
Reference list ........................................................................................................................................7
Appendices ...........................................................................................................................................8
Appendix 1: Balance Sheet................................................................................................................8
Appendix 2: Profit and loss account ..................................................................................................9
Appendix 3: Any other relevant pictures/graphs/info.....................................................................10
Appendix 4: Individual Poster .........................................................................................................11
Appendix 5: Group Presentation Slides...........................................................................................12
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Introduction
The study of business is the management study which is connected with the money
and business management (Cooke and et. al., 2021).The company chosen in this report is The
Body Shop which is a perfume and skin care company. This report will include the human
resources and finance management strategies, SWOT analysis for the respective company
and evaluation f relevant strategies.
The role of HR and finance functions within organisations
HR function- HR make ensure that every worker understand vision, mission, goals and
visualize their role with the organisation. It matches the opportunities of organisational
development to employees ( Dion, 2019).
Finance function- It raise funds to meet the company's obligation and decide ratio between
equity and debt. It allocate funds in such a manner that they are optimally used by
considering the size and growth capability of firm.
Financial management and reporting within the organisation
The financial management is described as dealing with the analysing money and investment
for a business in order to help in making business decisions. The financial reporting in the
organisation involve disclosure of the financial information to different stakeholders about
financial position an financial performance of the company over specific time period ( Grable
and Goetz, 2017).
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Human Resource Strategies
Human resources is that department of an organisation which deals with hiring,
administration and staff's training. It required the analysis of organisation and its external
environment. It also shape the directions and character of human resources management
activities (Linkweiler, 2018).
Human resource is the division of an organisation that is charged with the finding, screening,
recruiting and training job appliers as well as an administering workers benefits program. It
play an important role to help business deals in the changing business environment. It is an
essential factor of any organisation, regardless of company's size. This departments perform
the task to maximise productivity of employees and also protect the company from any issues
which cane arise in their workforce. The human resources strategies is overall business plans
to mange its human capital in order to align it with business activities. It set directions for the
key areas of HR such as performance appraisal, compensation and development.
In relation to The Body Shop, its human resource is responsible for recruitment and staffing
of most talents employees by identifying best candidates. It recruit the employees by
advertising on many social media platforms such as Facebook, twitter , Instagram. It is also
responsible for provide the training and development to new employee on organisational
practices and the procedure as the success of company is depend upon the training to its
employees. In an organisation, the human resource fulfil the responsibility of compensation
and benefits. It evaluate the employee's performance and compensate them by measuring
their performance.
Financial Management Strategies
The financial management is planning, organizing, directing and controlling the
activities related to the finance like procurement and the utilization of business funds. It
include the implementing principles of management to company's financial assets ( Pham and
et. al., 2020).
It is the activity of making business plans and make sure that all the departments in
organisation stay on the track. A solid management of finance enable the VP or CFO of
finance to provide that data which support the creation of long range vision , yield insight on
that how to fund investment, profitability, liquidity etc. and inform the decisions on where
they need to invest. It perform the functions such as estimating capital amount required,
determine capital structure, procurement of funds and many more It govern that how the
company perform monthly financial close, process the daily transactions and ensure them to
meet auditor and the tax requirements.
In context of The Body Shop, it finance are responsible to develop to a budget for its
financial actions and allow it to pinpoint the problem area in order to correct them. Its
financial function also build an emergency fund to cover the company in case of nay
emergency. The most important action of its successful financial plan is to pay back its debt
such as bad debts. Its financial strategies evaluate financial statement such as cash flow,
income statements and balance sheet. For the it is essential for it to make effective financial
management strategies.
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Explain that there are different types of documents used for financial reporting that are used in
companies such as the Body Shop
Profit and loss account
The profit and loss account of a company show its revenue and expenses over a
specific time period. It represent the company's profitability. This statement is prepared in
order to disclose the operational result of business's transaction in a given time period. It
indicate that how company's revenue are transformed into net income or profit (Sorati,
Babashahi and KARIMI, 2019).In context of The Body Shop, the profit and loss document
are important for it as it provide essential information to them about its income and expenses
that result in to net profit and net loss. This financial statement reflect outcome of the
business activities during accounting period.
Balance sheet
The balance sheet of an organisation include liabilities, assets, total debts, equity
capital and many more at a time point. This financial statement provide information of what a
particular company owns and owes. It is used in the evaluation of a business. It adheres to
equation which equate the assets with total of liabilities and shareholder equity. A company
used this statement in order to calculate their financial ratio. In relation to The Body Shop, it
is important for its owner and accountant to understand that how to read or interpret the
balance sheet. It give a quick overview about the company's financial standing
Cash flow statement
The cash flow statement provide an aggregate data related to cash flow that a
company receive from their ongoing operations and the external investment sources. It also
involve the company's cash outflow that pay for the business investment and activities during
given time period ( Virtanen and Stenvall, 2018).In case of The Body Shop, the cash flow
statement is an essential documents as it provide information to them about its gross receipt
and the gross payment for specific time period. This documents track its cash and cash
equivalents which are amassed from its ongoing operational activities and external
investment on the basis of annuls, quarterly and monthly basis.
SWOT analysis
Strengths
 It offer a large variety of products more than approximately 12000 and its stores are
located in more than 60 countries
 The Body Shop has reputed brand value and viewed as socially responsible (Xie,
2020).
 It has an excellent supplier system. Source the raw material by which community
trade fairly.
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Weaknesses
 There is little promotional advertising of company's products.
 Number of the retail outlets are very limited that impact its sale volume.
 The proprietor has little control due to the franchisee system ( Xie, Wang and Zhang,
2018).
Opportunities
 The Body Shop has potential to grow as the people are becoming more aware for Eco
friendly and natural products.
 It has the opportunity to use their website portal as the number of online purchasers
increasing continuously.
Threats
 Due to the legislation it has to face many difficulties in trade with the supplier nations
can impact its business functions.
 The stiff competition in cosmetic market is a big threat for the respective company
and the economic downturn can hamper its sales.
Evaluation
It is evaluated that, there are many strategies and departments which are involved in
the organizational success. The Human resource strategy and Financial management
strategies play a vital role in the smooth functioning of company. By using these stra5tgies a
company can attain their goals effectively ( Wagura and Shavulimo, 2017). The marketing
department of a company is also an important part as it promote company's product and
spread message to a large target audience. The marketing strategies help the organization
direct their advertising dollars where it will have the most effect. It is overall plan of a
company to reach its prospective customers of product and services. The marketing
department of a company is responsible to create image, ideas and messages that
communicate company's brand value effectively. Therefore, the success of an organization
depend on different strategies and departments.
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Conclusion
From the above report it is concluded that the human resource and financial
management perform essential function in the success of any organization. The financial
statement help the company to know about its financial picture and its cash inflow or cash
outflow. As these strategies help the business to maximizes company's productivity and also
come to know about their financial position in the company. These function make enable the
company operate its business smoothly. It is recommended to the respective company that it
should adopt effective strategies and analyse the market and define business goals clearly to
achieve their objective efficiently.
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Reference list
Cooke, F.L. and et. al., 2021. Riding the tides of mergers and acquisitions by building a
resilient workforce: A framework for studying the role of human resource
management. Human Resource Management Review. 31(3). p.100747.
Dion, M., 2019. A Gadamerian perspective on financial crimes: An issue of historically-
rooted prejudices and narrative strategies. Journal of Financial Crime.
Grable, J.E. and Goetz, J.W., 2017. Communication essentials for financial planners:
Strategies and techniques. John Wiley & Sons.
Linkweiler, H., 2018. Change management and post-acquisition considerations for smoothly
implementing new management strategies. Journal of Airport Management. 13(1).
pp.31-38.
Pham, N.T. and et. al., 2020. The role of green human resource management in driving
hotel’s environmental performance: Interaction and mediation analysis. International
Journal of Hospitality Management. 88. p.102392.
Sorati, A.N., Babashahi, J. and KARIMI, T., 2019. Providing a Model for Shaping Horizontal
Alignment among Human Resources Management Practices
Virtanen, P. and Stenvall, J., 2018. Leadership and human resource management. In
Intelligent Health Policy (pp. 117-134). Springer, Cham.
Wagura, E.W. and Shavulimo, P., 2017. Determinants of Financial Inclusion Strategies
Adoption by Savings and Credit Cooperatives in Kirinyaga County. International
Journal of Academic Research in Business and Social Sciences. 7(7). pp.415-434.
Xie, H., 2020. The Digital Transformation of Human Resource Management in the Post-
Epidemic Era. Frontiers in Economics and Management. 1(10).pp.273-278.
Xie, H., Wang, W. and Zhang, X., 2018. Evolutionary game and simulation of management
strategies of fallow cultivated land: a case study in Hunan province, China. Land use
policy. 71. pp.86-97.
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APPENDIX
Income statement
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