Evaluation of HR and Financial Management Strategies of The Body Shop

This report evaluates the strengths and weaknesses of the HR and financial management strategies of The Body Shop. It discusses the recruitment strategy, training and development reward, financial forecasting, and expected balance sheet. The report also includes a cash flow statement, financial projections, and SWOT analysis.

FY021 Introduction to
Business Studies CW1
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Table of contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Information on the HR strategies.................................................................................................3
Information on the financial management...................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8
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INTRODUCTION
The report is being formed for evaluating and assessing the strengths and weaknesses of the
strategies which are Human Resource Strategy and Financial Management Strategy. These are
two main points which will be discussed within the report as how research is to be conducted by
discussing the HR strategy and Financial Management Strategy. The company which will be
taken for the research is The Body Shop which is a British cosmetic, perfume and skin care
company which provides the products and services to customers in the market and makes them
available the services through online selling and customers buying them.
MAIN BODY
Information on the HR strategies
There are various HR strategies which are being framed for The Body Shop which also
helps in evaluating the basis through which all possible factors of strategies formation are
known. The HR strategies of The Body Shop include the recruiting strategy along with training
and development reward which are being provided to them. The HR strategies are described as –
Human Resource Strategy – Human Resource is the set of individual who make up the
workforce of an organization, business sector or an industry. Human Resource helps in framing
the rules and regulations which helps the individuals of the company to gain the advantages
while working in the organization (Cooke, 2018). This also helps in delivering their best
performance in enabling the work which is to be performed at large scale. The Body Shop is an
organization which has effective and workable HR that helps in achieving the goals and targets
which are being set for the employees. There are various strategies which are framed for the use
of how effectively and in productive manner The Body Shop is maintaining the scale of
delivering their best performance. The Body Shop is gaining the scale of forming the recruitment
strategies which are being framed for the benefits of how effectively the company is seeing the
major benefits at large scale with the employees involved in it.
The recruitment strategy which The Body Shop is following is ‘open hiring’ which
denotes that there is no background check of the individual, and the candidates are permanent in
stores (Tweedie and et.al., 2019). This ‘open hiring’ strategy which The Body Shop has availed
to the individuals is designed to promote a fair, systematic approach in attracting, recruiting,
selecting and on boarding the employees be eliminating the barriers and problems to
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employment at large scale. This recruitment strategy which is being followed and framed by The
Body Shop helps in creating value through which all perspectives of growth and development of
the employees is known which avails them opportunities and clears ways through which their
position can be gained by them within The Body Shop.
Along with this, the HR is also providing the training and development reward
programme for the individuals and employees who have been recruited through the process of
growing and delivering the best of what the organization wants them (Al, 2019). The training
and development is being provided to the employees which helps in denoting that what are the
employees’ key strengths and weaknesses which are to be evaluated along with their evaluation
of skills and abilities at large scale. This helps in delivering the basis through which all aspects of
improvement of the employees’ weakness can be assessed. The main aim of providing the
training and development is to deliver their rewards to the employees through which all the
perspectives of making and framing the basis of performance is being evaluated whether they are
to be rewarded or not.
The Human Resource strategy which is implemented by The Body Shop has helped in
recruiting the best employees and individuals which are contributing to the organization and
along with that the growth and development of the company is also evaluated throughout the
process of recruitment and selection (Macke and et.al., 2019). This Human Resource strategy
helps in gaining various opportunities to the employees and The Body Shop that they are open to
the new changes and modifications which are to be made available to employees through this
strategy which is being framed. The open hiring strategy has also led many of individuals seek
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jobs easily which helps them in growing and developing their career and future within the job
position to which they have been appointed as. Along with this, the training and development
within The Body Shop is also provided to gain the rewards which employees are determined for.
Strengths of the Human Resource Strategy – The strengths of human resource strategy while
applying open hiring are described as –
 This strategy framed helps in encouraging the employees to engage in increasing their
productivity in their performance.
 Open hiring helps in providing jobs without checking the backgrounds of the individuals’
at large scale (Stewart and et.al., 2019).
 This strategy is beneficial for the candidates seeking job.
Weaknesses of the Human Resource Strategy – The weaknesses of the human resource strategy
while applying open hiring are described as –
 This strategy can become a weakness and even a threat to The Body Shop that it devalues
the employee position for a certain job role.
 This strategy is the major weakness for the training and development of employees
within The Body Shop (Bakker and et.al., 2017).
 The main weakness is that it involves the major employee engagement which may be not
suitable for the job role but are selected under the open hiring strategy.
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Information on the financial management
The financial management of The Body Shop denotes that there are profits and losses
which are to be managed and this helps in creating the value of the organization through which
all perspectives of working effectively through which the financial statements are known and in
this manner the aspects through which all the information which are related to how the finances
are being managed within the market structure are known (Walters, 2017). The financial
management strategy which The Body Shop follows allows the major sources through which the
profits and losses are being managed. The financial management strategy is denoted and
described as below –
Financial Management Strategy – The financial management strategy which is being framed
for The Body Shop enables in knowing the financial forecasting which is the major part through
which all the aspects are analyzed through which the market structure and the basis through
which sales are incurred from the market are known. The Body Shop is following the t – account
and the percentage-of-sales financial forecasting which helps in denoting the value through
which all aspects of initiating the business have been identified (Purkayastha and et.al., 2017).
Both the approaches have provided the profits as the dividends of the company are substantial
and the losses are insignificant. Therefore, particular investment is being analyzed for reviewing
how effectively and in appropriate manner the basis of knowing the business of The Body Shop
is being done at large scale and considering the changes within the market structure at large scale
so that the investments are not hampered and the business is likely to grow and develop within
the reach of the individuals.
There are various strengths and weaknesses of the financial management strategy
which is being framed for The Body Shop which denotes the following –
Strengths of the Financial Management Strategy – There are some strengths which are
described as follows –
 The financial management strategy which is being framed within the Body Shop is
helping in creating the value through which investments are calculated through the
potential success which is being evaluated (Love and et.al., 2019).
 Success is assured by balancing the profits and loss statements through the strategy.
 Maintaining of balance sheet helps in framing the base through which all possible facts
are known at large scale.
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Weaknesses of the Financial Management Strategy – There are some weaknesses which are
described as –
 Due to lack of innovative resources financial constraints arises.
 Competition within market is very high.
 Decrease in sales volume is affecting The Body Shop growth (GURL, 2017).
These are the major strengths and weaknesses which are due to financial management strategies
which are framed for The Body Shop. The financial management strategy helps in creating the
value and the base through which all possible facts and information is known which helps in
acknowledging the base of how effectively the strategy is being framed.
Expected balance sheet at the end of year:
Balance sheet
Particular Amount Amount
Assets
Shop fitting 15000
bank 5000
cash 9000
debtors 11000
CL stock 9000
Total assets 49000
Liabilities
Creditors 11000
Capital 25000
Less: Drawing 5000
Add: net profit 18000 38000
Total liabilities and
equity 49000
Cash Flow statement
Month July August
Septemb
er October
Novemb
er
Projected Collection from sales 50742 60742 69742 65743 53743
Total Projected Sales 50742 60742 69742 65743 53743
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Inflows 3080742 98742 114742 110743 85743
Payment to Suppliers 0 30000 32000 35000 44000
Equipment 1500000 0 0 0 0
Property 1000000
Maintenance 125 125 125 125 125
Utility Expenses 133.33 133.33 133.33 133.33 133.33
Legal expenses 0 100 100 100 100
General Expenses 35 35 40 50 40
Rent 0 0 2000 0 0
Insurance 0 0 500 0 0
Power 250 280 450 400 320
Salaries, Benefits and Wages 20000 20000 20000 20000 20000
Total Expenses 2520668.3 20798.3 23473.3 20933.3 20843.3
Total Outflows 2520668.33 50798.33
55473.3
3
55933.3
3
64843.3
3
Net Cash Flows 560073.67 47943.67
59268.6
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54809.6
7
20899.6
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Amount
total income 15,66,000
Sale of by-products 44,500
Total sales revenues 1,75,000
Rental Income 950
Commission Income 25
Total Revenues 1,75,975
total expenses
materials cost 24000
other variable cost 75000
Complimentary items 2000
Salaries 18,333
Wages 11,667
Marketing cost 5000
General Maintenance 5,000
labour 9166.7
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Total Expenses 72000
Profit 1,03,975
Financial
projections
Sales £
10,000.00
Sales of By-products £
1,200.00
Net Revenues £
11,200.00
Materials £
300.00
Labour £
300.00
Overhead costs £
200.00
-
Cost of goods sold £
800.00
Gross profit 93% £
10,400.00
Other Expenses:
Rent Expense
£
645.00
Marketing cost
£
500.00
Salaries £
1,000.00
General expense £
100.00
Legal expense £
200.00
Maintenance expense £
300.00
Utility Expenses £
200.00
Catering £
500.00
Total Other
expenses
£
3,695.00
Earnings Before Tax £
6,705.00
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Less: Tax @ 30% £
2,011.50
Earnings After Tax £
4,693.50
CONCLUSION
Thus, it is concluded from the above report that the financial management strategy helped in
contributing effectively for The Body Shop and this engaged in involving the profits and loss
structure and balance sheet which helped in enabling the base of how the success is measured at
large scale. With the help of the financial management strategy the analysis of the company
resources was also done and whether the products and services of the company are worth
reaching the customers within the market structure.
The financial management strategy also helped in analyzing the sales and profits in the
manner which helped in seeking through different measures such as providing the company The
Body Shop the major changes along with the modifications which were being observed. Thus,
financial management strategy helped in providing the basis through which The Body Shop
resources and financial scales were being measured at large scale progressively.
REFERENCES
Books and journals
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Al, M.A., 2019. Examining the effects of perceived organizational support, a fair rewards
system, training and development and information sharing on employees engagement in
Saudi Arabia Telecom sector. Humanities.7(3).pp.181-190.
Bakker, A.B. and et.al., 2017. Strategic and proactive approaches to work
engagement. Organizational Dynamics.46(2).pp.67-75.
Cooke, F.L., 2018. Concepts, contexts, and mindsets: Putting human resource management
research in perspectives. Human Resource Management Journal.28(1).pp.1-13.
GURL, E., 2017. SWOT analysis: A theoretical review.
Love, P.E. and et.al., 2019. The ‘how’of benefits management for digital technology: From
engineering to asset management. Automation in Construction.107.p.102930.
Macke, J. and et.al., 2019. Systematic literature review on sustainable human resource
management. Journal of cleaner production.208.pp.806-815.
Purkayastha, D. and et.al., 2017. The Body Shop: Social Responsibility or Sustained
Greenwashing? 1. In Case studies in sustainability management and strategy (pp. 226-
251). Routledge.
Stewart, G.L. and et.al., 2019. Human resource management. John Wiley & Sons.
Tweedie, D. and et.al., 2019. How does performance management affect workers? Beyond
human resource management and its critique. International Journal of Management
Reviews.21(1).pp.76-96.
Walters, D., 2017. Marketing and Financial Management: new economy-new interfaces.
Macmillan International Higher Education.
Online
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