How Business Operates Report

This report examines the key aspects of business operations, including organizational structures, economic environment impact, accounting principles, HR functions, team development, motivation theories, leadership styles, and the importance of customer service. It provides a detailed analysis of these concepts and their relevance to business success.

HOW BUSINESS OPERATES

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
1.1 Different Types Of Organization in Public and Private sectors............................................4
2.2 Different structure of Organization.......................................................................................4
3. Economic Environment Impact on Business..........................................................................5
TASK 2............................................................................................................................................6
2.1 Importance of Accounting for Business................................................................................6
2.2 Different function of HR department....................................................................................6
2.3 Key feature of Employment Legislation...............................................................................7
TASK 3............................................................................................................................................7
3.1 Profit and Loss Account in Business and its Interpretation..................................................7
TASK 4............................................................................................................................................8
4.1 Own and others role in a Team.............................................................................................8
4.2 Stages of Team Development...............................................................................................9
4.3 Motivation theories...............................................................................................................9
4.4 Different types of Leadership Styles...................................................................................11
TASK 5..........................................................................................................................................12
5.1 Impact of customer service.................................................................................................12
5.2 Benefits of Customer Profiling...........................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

Illustration Index
Illustration 1: Profit or Loss Statement............................................................................................8
Illustration 2: Maslow’s Hierarchy of Needs.................................................................................10
Illustration 3: Herzberg’s Two Factor Theory...............................................................................11

INTRODUCTION
Business operation is very important for any organization to run successfully in the target
industry. It helps to create the efficiency of the company to increase their sales and production in
the market. In this report it explains different types of organization found in public and private
sectors operating in UK. It will also discuss about how a company is affected by global
economic environment. Importance of accounting and different functions. It also explains
importance of accounting for business and describe different function carried out by HR
department. The report also interpret the information on profit and loss account. It also presents
different stages of team development and describe the impact of customer service on a business
success.
TASK 1
1.1 Different Types Of Organization in Public and Private sectors
There are various types of organization which is operating in UK in different sectors, for
example, public and private sector organization, which is explained below, Private Sector: These sectors are owned by private parties or individuals and their main
objective from their business is to generate good revenue and earn high profit from the
market. In the economy of UK, private sectors do not contribute. There are various
organization operating in this sector, for example, ASDA which is a leading retailer
company in UK who offer variety of products and services to their customers (Mamic,
2017). Private sector cannot enjoy the powers enjoyed by public sector. In this
entrepreneurs create jobs wherever needed.
 Public Sector: In these sectors, organization is basically owned by the local government.
Their main aim or objective is to serve for public and public enterprises usually do not
mean to earn money from the public. They are helpful in reducing inequalities in the
society. They are not affected by recession. There are so many types of public sectors,
such as, The Child Support Agency which works for the children's welfare in UK.
2.2 Different structure of Organization
There are various structure found in an Organization which can help them to progress to
achieve their goals. There are basically three main types of organizational structure: functional,
divisional and mixture of both of these, known as matrix structure.

Functional Structure  In an organization functional structure
is based of different groups according
to their purposes, for example it can be
a sales department, marketing
department or a production department.
 Team is managed by an experience
person who have adequate knowledge
and skills.
 It is good for small size businesses as it
will help them to explore their talent
and knowledge of their workers
(Castrogiovanni and et.al., 2016).
Divisional Structure  These types of structures are generally
found in large organizations which
operates in a larger geographic area.
 Advantage of this structure is that it can
help them to meet the needs of their
customers very quickly.
 It enhances quick decsion making as
each devision is independent.
Matrix Structure  It is a blend of divisional and functional
structure.
 These are used in large multinational
company which can allow the benefits
of both the structures, i.e., divisional
and functional.
3. Economic Environment Impact on Business
There many economic factors which can affect the functioning of any business, such as,
local, national and global factors.

 Local Economic Factor: In these factors, ASDA is affected by high employment rates
which impact the profit and pricing strategies of the organization. It also affects their
marketing opportunities and performance in local markets.
 National Economic Factor: Leading as a top retail organization in the industry, it creates
lot of competition in the business. Due to its low price of their product in the market, it
faces loss in its national economy (Bretthauer, 2017).
 Global Economic Factor: Manufacturing facilities vary from country to country which
can affect ASDA. Cheaper labor, low taxes in foreign countries encourage ASDA to
establish facilities in other countries as well.
TASK 2
2.1 Importance of Accounting for Business
Accounting is a process which is used by the organization to identify, measure and
communicating with economic information which can help their employees to make informed
judgment and decisions for the business. It also includes recording and interpreting financial
transactions of company. Accounting method generally consists of preparation of financial
statements and its analysis. It helps the organization to plan their financial budget and strategies.
It also ensures to give information related to their financial position of the business, such as;
profit and loss, cost and earnings, liabilities and assets, etc (Patel, 2015).
For making any decisions or plan, organization is highly depends on their statistical data
and information that accounting management provides them. Accounting prevents the misuse of
their assets and help them to increase their profit and control cost and overall increases the
efficiency of management system of the organization. It also helps in making cash flow
statement which shows the overall changes in the balance sheet income statement which can be
beneficial for them. It helps to evaluate their performance in the business and manage to work
effectively in the industry. The accounting system provides a number of qualitative and
quantitative customized reports to the company which are required to accomplish day to day
business activities (James, 2017).
2.2 Different function of HR department
For any organization, it is very important to have a good and effective HR management,
as they play crucial role in the proper functioning of the firm. HR department is helpful in
recruiting function of an organisation which helps to identify the best suitable person for the

applied application .The human resource department handles a range of different functions
within an organization, for example, recruiting new employees for the company, giving them
training for their personal development, maintaining office relationships between employees and
interpreting employment laws. Various functions of HR department are as follows,
 Legal Responsibility: For any organization it is very crucial to follow all the legal rules
and responsibilities to work smoothly in the industry. It is the duty of HR department to
handle employment and labor laws, for example, equal employment opportunity, fair
labor standards, benefits and wages and work hour requirements in the organization
(Tracey, 2016).
 Training and Development: After recruiting employees, their responsibility is to give
them proper training which can help them enhance their working capacity. This helps in
the overall development of the employees (Noelke, 2015).
 Maintaining Work Culture: It is the responsibility of HR to maintain a healthy and safe
working environment for the employees which can ultimately helps in the increase in
their performance. It has to manage all the work in proper manner. Motivation will help
employess to work more towards the benefit of an organisation.
 Managing Employee Relations: For a HR, it is very important to manage employee
relationship with the organization. Employee relations involves employee participation in
different aspects of organizational activities. They also have to manage the conflicts
between employees and management as well.
 Recruiting and Selecting: This is the most important task of HR in any organization to
look after hiring and recruiting new employees for them. They have to make sure that all
the recruited candidates are well qualified for the respective post in the company.
2.3 Key feature of Employment Legislation
Employment Legislation is very important for organization to work smoothly in the
industry. Employment law in the UK covers mainly three area, i.e., Employment Rights,
Equality and Discrimination law and Health and safety legislation.
 Employment legislation helps to support age discrimination in the work station.
 Its main function is to forbid discrimination of their employees who work there on the
basis of following factors, their race, sex, gender, religion, etc.

 It also helps to support the minimum wages and equal pay to all the workers or labors in
the organization.
 It also states to provide grievances to their employees (Bratton and Gold, 2017).
 It should focus on providing employees against harm and manipulation in an
organisation.
TASK 3
3.1 Profit and Loss Account in Business and its Interpretation
One of the key components of your company accounts is your Profit and loss account.
This shows your company performance (profit or loss) over a period – generally one year
(accounting period).
Illustration 1: Profit or Loss Statement
Source : (Profit and loss account, 2018)

From the above profit or loss statement, it can be interpreted that, the overall sales of the
company at the end of year 2016 is £100,00 in which it spends £20,000 on its purchases and
£10,000 on their subcontractors. So, the gross profit of the company is £70,000. Overhead
expenses of company, for example, salary, rent, insurance expenses, etc is £13,534. So from the
above statement it can be concluded that the net profit of the company before tax is £56,466 and
paying the tax, final net profit is calculated as £45,642.
TASK 4
4.1 Own and others role in a Team
For any organization it is very important to work as a team as it will help them to do their
work more effectively.For this purpose, proper team leader should be assigned who have the
skilled and ability to lead the team with contol and coordination. The main role of all the team
members is to perform their tasks successfully that has been allocated to them. For me it is very
important that have the best leadership qualities in you which can help me to motivate and
encourage my team members and build a good communication skills will create a positive
environment at the work station for the employees. Having a good coordination and
collaboration between my team members will also enhance the performance level and being a
good team leader I always support them and resolve the problems which is faced by the members
(Crossler and et.al., 2014).
My team members should have positive attitude towards their work because it has a great
importance in the organization. This will help them to enhance their overall personality. They
should concentrate on their work to complete it on time to get the best results.
4.2 Stages of Team Development
There are basically five stages to develop an effective team for the organization, which is
explained below,
1. Forming: This is the first stage of team development. In this process all the team
members are introduced with each other. During this stage member's skill, background
and project goal are discussed. This is the initial stage for team growth.
2. Storming: In this stage, all the members starts to work as a team. In this stage, the team
members compete with each other for their status and for acceptance of their ideas as
they all have different opinions on things which can give rise to conflicts between them.
This has to managed by the team leader (Nuttin, 2014).

3. Norming: In this stage they start to work more effectively and efficiently as a team. They
become focused on developing ideas in which they work as a team rather than focusing
on their individual goals. They began to trust other team members.
4. Performing: In this stage, whole team focuses on performing their task in effective way.
At this stage, they are capable enough to make decisions and can solve problems quickly
and effectively.
5. Adjourning: This is the last stage of team development in which team members are
moved into different directions a per their requirements (Understanding the Stages of
Team Formation, 2018).
4.3 Motivation theories
Motivation refers to that process which helps to lead someone to do work in an effective
and efficient manner. The employee needs to motivated and dedicated towards their work.
Motivation can either be financial or non financial in nature. Financial motivation deals in
rewards, etc. and non financial deals in attention, respect etc. According to various theories,
motivation can be explained as a basic need to increase strength and minimizes the physical pain.
There are various theories of Motivation, such as hierarchy of needs from Abraham Maslow,
McGregor's Theory of Motivation, the two-factor theory from Frederick Herzberg, etc. These
theories are explained below:
1. Maslow’s Hierarchy of Needs: This theory is also known as Need-based Theories. This
theory states that, that are some basic needs of all the employees which has to me
fulfilled by the organization, for example, physiological, safety, social esteem needs and
self actualization. All these are needs are very important for them to work properly in the
organization. In his theory, the lowest unsatisfied need becomes the dominant, or the
most powerful and significant need. Individual pursues to seek a higher need when lower
needs are fulfilled (Holten and Brenner, 2015).

2. Two-Factor Theory: Also known as Herzberg Theory. According to this theory, there
are some factors which can affect their employees as well as organization. It can be
described as motivating factors and hygiene factors. Motivating Factors : These factors are those which helps to increase the job satisfaction
and helps to motivate their employees for their personal growth.
 Hygiene Factors : This factors is related to the dissatisfaction of their employees which
can include salary, working conditions, work environment, safety and security, etc. in the
organization (Holten and Brenner, 2015).
Illustration 2: Maslow’s Hierarchy of Needs
Source : (Motivation theories, 2016)

3. Mcclelland Theory: This is also known as Acquired Needs Theory. This theory focus on
the satisfying the existing needs of their employees rather than creating or developing
new needs. This theory is based on three factors, i.e., achievement, affiliation and power.
All these are important for the organization to manage their workers.
4.4 Different types of Leadership Styles
Leaders are those who manages to lead a group of people generally known as his/her
team. They follow all the work which the leader has allotted them to do. There are various types
of leadership styles, for example, Autocratic leadership: In this style, leader of the organization has all the authority and
responsibility. They can also make or take decision without consulting with their team
members. This is helful where quicker decisions are needed to be taken. Leaders are
Illustration 3: Herzberg’s Two Factor Theory
Source : (Motivation Theory, 2016)

given authority to take commonad of decision in their hand which in turn motivates them
n heps in contributing towards organisations growth and productivity. Democratic leadership: In this leadership style, all the members are involved in the
decision making process but the final response will be of the team leader only.
 Strategic leadership: In this style, leaders set the habit of its team member and he is the
only head of an organization to create high performance for the organization (Roles &
Responsibilities of HR Managers in Growing Organizations, 2017).
TASK 5
5.1 Impact of customer service
For organization it is very important to have a proper and effective customer service
which can help them to satisfy their customers from their services. Various impacts of customer
service are as follows,
 It helps the organization to improve their business's profit.
 It helps organisation to critically analyse the needs of the customer.
 Helps to build brand awareness and goodwill of the organisations
 Customer services can help to respond to every feedback or complaints on time which
creates a good brand image of a business in the market.
 It also ensures that they are providing their services according to their customers
preferences and needs.
 Positive feedback will help the organization to stay strong in the market.
 It also ensures to increase their customer as well as profitability rate.
 Helps to build loyalty (Renko and et.al., 2015).
5.2 Benefits of Customer Profiling
Customer profiling is a type of method which helps to provide information which can
help the organization to understand their customers. It helps to develop your marketing activities
and programs. There are various advantages of this method, such as,
 It will help to build a better communication between you and your customers.
 It will provide great opportunities for the organization as customers will provide feedback
and suggestion which can help them to enhance their service.
 It helps to increase their profit.

 If a company know customer profile then it helps to attract more customers and making
the best strategy for them.
 It reduces the chances of competition in the market (Holten and Brenner, 2015).
CONCLUSION
From the above report it can be concluded that to operate any business it is very
important to have a sound knowledge of all the local and national economic factors as it has a
great impact on organization. This report explains about different organizational structure,
function of HR departments in the organization. It also explains about different motivational
theories which is very important to work smoothly with their employees and what are the
benefits of team working and customer service and customer profiling in the company.

REFERENCES
Books and Journals
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice.
Bretthauer, K. A., 2017. Integrated fuel dispensing and accounting system. U.S. Patent
Application 14/998,150.
Castrogiovanni, G. and et.al., 2016. Where to acquire knowledge: Adapting knowledge
management to financial institutions. Journal of Business Research, 69(5), pp.1812-1816.
Crossler, R. E. and et.al., 2014. Understanding compliance with bring your own device policies
utilizing protection motivation theory: Bridging the intention-behavior gap. Journal of
Information Systems. 28(1). pp.209-226.
Holten, A. L. and Brenner, S. O., 2015. Leadership style and the process of organizational
change. Leadership & Organization Development Journal. 36(1). pp.2-16.
James, N., 2017. Evidence to Education and Employment Legislation Committee. Senate,
Canberra, March, 2.
Mamic, I., 2017. Implementing Codes of Conduct: How Businesses Manage Social Performance
in Global Supply Chains.
Noelke, C., 2015. Employment protection legislation and the youth labour market. European
Sociological Review. 32(4). pp.471-485.
Nuttin, J., 2014. Future time perspective and motivation: Theory and research method.
Psychology Press.
Patel, F., 2015. Effects of accounting information system on organizational profitability.
International Journal of Research and Analytical Reviews. 2(1). pp.168-174.
Renko, M. and et.al., 2015. Understanding and measuring entrepreneurial leadership style.
Journal of Small Business Management. 53(1). pp.54-74.
Tracey, W. R., 2016. The human resource's glossary: The complete desk reference for HR
executives, managers, and practitioners.
Online
Roles & Responsibilities of HR Managers in Growing Organizations. 2017. [Online]. Available
through: <https://www.sumhr.com/hr-manager-role/>
Understanding the Stages of Team Formation. 2018. [Online]. Available through:
<https://www.mindtools.com/pages/article/newLDR_86.htm>