Analysis of HR and Financial Management Strategies in The Body Shop

This report analyzes the role of finance and human resource departments in The Body Shop and their contribution to business success. It includes a SWOT analysis and evaluation of the role of marketing and advertising departments. The report also discusses the different types of financial documents used for reporting purposes.

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?
Word count:1500 + or – 10% (minimum 1350 & maximum 1650)
Counted from introduction to conclusion
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Contents
Introduction..........................................................................................................................................4
Human Resource Strategies..................................................................................................................5
Financial Management Strategies........................................................................................................5
SWOT analysis.......................................................................................................................................5
Strengths...........................................................................................................................................5
Weaknesses.......................................................................................................................................5
Opportunities....................................................................................................................................5
Threats...............................................................................................................................................6
Evaluation.............................................................................................................................................6
Conclusion.............................................................................................................................................7
Reference list........................................................................................................................................8
Appendices............................................................................................................................................9
Appendix 1: Balance Sheet...............................................................................................................9
Appendix 2: Profit and loss account...............................................................................................10
Appendix 3: Any other relevant pictures/graphs/info...................................................................11
Appendix 4: Individual Poster.........................................................................................................12
Appendix 5: Group Presentation Slides..........................................................................................13
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Introduction
This report focuses on the role of finance and human resource department
responsible for organization’s growth and success. As in this, Body Shop
Company is considered with the purpose to analyze its internal and external
areas with the objective to improve its efficiency. It is a British cosmetics, skin
care and perfume company founded in 1976, by Anita Roddick. This report
highlights the role of human resource department, how businesses find the most
suitable candidate as per the job requirements and provide them with the
required trainings to grow in future. Other than this, it showcases the role of
financial managers in collecting, summarizing and presenting the financial
transactions in the books of organization and how it helps top level executives
in taking all the crucial decisions of the firm in order to boost up its profit
levels. At the last of report, SWOT analysis is conducted to analyze the
strengths, weaknesses, opportunities and threats of the organization in order to
frame right corporate strategies to grow in future.
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Human Resource Strategies
Human resource of the organization performs many important functions
in the organization such as recruitment, selection, training and development,
performance management and many more. Moreover, it is an approach used by
management to deploy highly skilled and committed workforce by using
personnel and strategic techniques.
Roles and responsibilities of human resource department in Body
Shop Company is as follows:
As in relation to Body Shop Company, human resource managers identify
about future needs of organization. They identify how many employees they
require in organization and what all skills and capability they should have. After
analyzing all these aspects they conduct rest of the functions.
Recruitment and selection of workforce: As per this, it means hiring right
kind of people at the right time of organization. Firstly, they ask applicants to
apply for jobs by looking at job descriptions. So, here a legal contract is signed
between employer and employee to follow a definite code of conduct in the
organization. (Zarei, Nazeri and Bafrouei, 2017)
 Performance appraisal: As in relation to Body Shop Company, human
resource manages encourages their employees to contribute best of their
abilities. Besides this, they keep on checking the performance of
employees on consistent basis and suggest ways to improve their
performance. It is done to ensure that employees are productive and
engaged. So, management conducts good leadership, set goals and
objectives, open feedback to enhance performance of workers.
 Learning and development : It means to train the workforce to perform
various functions of organization. It focuses on developing the skills,
company will be requiring from workforce in near future. Besides this,
they do the career planning of workforce in order to come up with the
most efficient workforce of the business concern.
 Developing healthy relations within an organization: As per this,
human resource department is responsible for conducting seminars,
workshops, meetings, group discussions and other activities on regular
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basis in order to address the concern of workforce and smoothly conduct
the operations of the business concern.
Financial Management Strategies
Finances are lifeline of any business concern. It is a resource which is
must need in the organization without which organization cannot run. Financial
management means managing funds of organization effectively and efficiently
in order to make long term profits. (RASAL and AL NAIEM, 2020.)
In relation to body shop Company, financial managers perform various crucial
function with regards to funds. Additionally, financial managers perform
various functions such as planning from which sources to raise funds, where to
allocate funds in order to have more returns. They spent less time in framing
financial reports and invests more time in conducting in depth analysis of
information available in order to make fruitful decisions. It is important for
companies to manage funds well because it helps businesses succeed in long run
by managing revenues and expenses well.
Roles and responsibilities of financial managers in body shop
company are as follows :
 Estimating the amount of capital required: This is first and foremost
function performed by financial managers. In this, they estimate how
much funds will be required to conduct operations such as, for purchasing
fixed or current assets of the company, meeting working capital
requirements, modernization and expansion purposes and so on. So, here
finance department of Body shop Company estimate the fund
requirements in order to carry operations of the business concern.
 Raising of funds: It means raising funds from internal and external
sources in order to meet needs of the business. Businesses have to make
choice whether to raise funds from equity or debt after conducting in
depth analysis of micro and macro factors.
 Allocation of funds: This is another major decision with respect to
allocation of finances. In addition to this, firm uses various financial tools
to decide which project to invest in. (Zhykharieva, Vlasenko and
Sokolova, 2020)
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 Monitor market trends: As per this, financial managers keep an eye on
internal and external factors of the organization. They examine all factors
keenly such as political, social, cultural, economical and so on. It
contributes in deciding where to invest funds in order to double up the
profits and minimize risk.
 Make dividend decisions: they are responsible to decide how much
profits are to be distributed as dividend and how much proportion of
funds should be retained in businesses for future use.
To conduct all these operations financial managers need to have certain skills
such as strong technical and accounting knowledge, excel and modeling skills,
should have understanding of preparation of statutory books and various
functions. So, by utilizing this entire skill s financial manager make all the
crucial decisions with regards to the finances of the business. (Moghddam, and
Nabavichashmi)
Different types of documents used for financial
reporting purposes:
Statement of profit and loss:
Income statement or statement of profit and loss provides the summary of
company’s revenues, expenses, profits and losses over a specific period of time.
It shows company’s ability to generate sales and how it manages its expenses to
have profits. Moreover, it shows the financial performance of the business
entity by calculating the differences of revenues and expenses. It is document
which is prepared by body shop Company with the purpose of ascertaining
expenses and incomes. It demonstrates actual financial health of company.
Moreover, it is calculated by deducting all operating and non operating
expenses from revenues. So, it is a result oriented report showing net
profits/loss for specific period and also assists managers in framing future
corporate strategies accordingly. (Galli, B.J., 2018)
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Balance sheet :
Balance sheet: It is a type of financial statement which showcases
company’s assets, liabilities and equity on a specific date. It is one of the main
financial statements used to evaluate the financial performance of the concern.
It reflects true and fair position as on date which helps to determine where
company stands in front of its competitors. In relation to body shop Company,
this document is prepared to ascertain true and actual position of the company
as on specific date. It showcases complete details of company’s assets and
liabilities which are used to evaluate performance of business concern.
Moreover, preparation of these statements helps to get complete overview of
how business is performing. Besides this, it helps to calculate financial ratios of
the business such as liquidity ratios, leverage ratios, turnover ratios and
profitability ratios to get in depth analysis of business concern.
Cash flow statement:
Cash flow statements: this showcases the cash inflows and outflows,
while performing the operations of the business. Moreover, it helps to ascertain
the liquidity and profitability position of the enterprise. It segregates transaction
into three main activities such as operational, investing and financing. The
reason behind preparing this statement by body shop company is, it shows
changes in cash due to inflows and outflows on consistent basis. Along with
this, it helps in forecasting cash requirements and ascertains liquidity and
profitability position of the company. This helps to do analysis how quickly
company would be able to make payment of short term debts. As well as it
demonstrates how much profit company is generating on regular basis.
(Kamanzi and Neema-Abooki, 2018)
SWOT analysis
SWOT stands for strength, weaknesses, opportunities and threats of the business
concern. Strength and weaknesses are internal to the company whereas,
opportunities and threats are external to the concern. It is a strategic
management technique which helps body shop Company to identify internal and
external factors of businesses with the purpose of business planning. In addition
to this, it is used to analyze position of the business as per current market trends
and implement changes where needed. (Tripathi and Thukral, 2018)
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Strengths: In relation to body shop Company, its strength is reputation in
market place. As it is an internal attribute which positively impact the
organization. It is the capacity of making effective use of resources in order to
accomplish its objectives. It is the favorable situation for the organization which
enables company to make fruitful strategies in order to boost its profits.
Weaknesses: It is an internal attribute which works against the successful
outcome of the business concern. As In Relation To Body Shop Company it has
shortage of consultants on operating level which becomes ineffective factor for
organization. Company has to face challenges in taking decisions because of
shortage of consultants. So, areas require attention on the part of managers.
Opportunities: As body shop company has well reputed business all over
which give its advantage to create brand image and apart from its competitors.
Company can grow its business by offering the products and services as per the
niche identified will give more profits to the organization.
Threats: With regards to body shop Company, company has to face
competition from existing players of the market place. As well as, new entrants
coming up with the qualitative products and services will be a tough
competition for the company. So, company has to identify all these threats
earlier in order to cope with all uncertainties.
Evaluation
Business strategies and departments role in enhancing
the growth of business:
Business strategies are the course of actions which companies
undertake in order to accomplish organizational objectives. It
highlights areas where more funds will be required and provide a
clear direction to work in a cooperative way in order to make more
profits. These strategies will help businesses secure competitive
position in the market place, improve customer satisfaction and
mobilize the business operations. Other than this, marketing and
logistics department are also involved in contributing the profits of
the organization. (Wahyudi, Wandawa, Samiaji, and Susilo, 2019. )
8

Role of marketing and advertising department: This department
plays a vital role in promoting the business concern. In this firstly,
they identify the needs and want of the customer segments and
accordingly come up with the products and services. This
department helps to analyze customer wants then promote the
products by using various promotional techniques. So, marketing and
advertising department helps the business to grow exponentially and
make profits
9

Conclusion
With regards to above report, the role of financial management in
planning, organizing and controlling the finances of the organization is
explained. It highlights how businesses raise funds from various sources and
invest in the most profitable projects. Besides this, role of human resource in
hiring, selection and training the workforce is explained. This report also
discusses SWOT matrix which helps organization to evaluate its internal and
external factors in order to frame most profitable strategies. In this body shop
company has to conduct SWOT analysis on consistent basis in order to improve
its weak areas.
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Reference list
Books and Journals:
Zarei, R., Nazeri, A. and Bafrouei, M. K., 2017. Investigating a model for the
impact of human resource management factors on the cleaner
production. Journal of Economic & Management Perspectives, 11(3). pp.696-
703.
RASAL, M. and AL NAIEM, M. A., 2020. E-Human Resource Management
Prospects and Challenges in Public Sector of Bangladesh. ABDULLAH, E-HRM
Prospects and Challenges in Public Sector of Bangladesh (April 22, 2020).
Zhykharieva, V., Vlasenko, O. and Sokolova, M., 2020. The Principles of
Innovative Human Resource Management. Modern Economics, 21(2020).
pp.89-94.
Moghddam, A. R., and S. R. Nabavichashmi. "Effect of Human Resource
Management Practices on Organizational Performance Improvement with the
Mediating Role of intellectual Capital; Case Study of Foundation of Martyrs
and Veterans Affairs of Semnan and Khorasan Razavi Provinces." Iranian
Journal of Isaar Studies 1, no. 4 (2020): 171-178.
Galli, B. J., 2018. The lessons of human resource in the theory of
constraints. International Journal of Organizational and Collective Intelligence
(IJOCI), 8(1). pp.13-27.
Kamanzi, S. M. and Neema-Abooki, P., 2018. Financing higher education:
income generation in Ugandan public universities. Journal of Public
Administration, 53(4). pp.904-918.
Tripathi, V. and Thukral, S., 2018. Determinants of financing of outward
foreign direct investment by Indian MNEs: A three-level analysis. International
Journal of Emerging Markets.
Wahyudi, A., Wandawa, G., Samiaji, R. and Susilo, A.K., 2019. STRATEGIC
DEVELOPMENT THE CAPABILITY OF INDONESIAN WARSHIP (KRI)
„dr. SOEHARSO-990 “FOR COMBINE OPERATION OF HUMAN
ASSISTANCE/DISASTER RESILIENCE (HA/DR) IN SOUTHEAST ASIAN
REGIONAL. Journal of Defense Resources Management, 10(2).
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Appendices
Appendix 1: Balance Sheet
13

Appendix 2: Profit and loss account
14

Appendix 3: Any other relevant pictures/graphs/info
15

Appendix 4: Individual Poster
16

Appendix 5: Group Presentation Slides
17