How Business Operates

This report explores the topic of how business operates, covering various aspects such as the importance of accounting for business success, profit and loss accounts, phases of effective team development, motivation theories, different types of leadership styles, and the influence of customer service on business success. It also discusses the benefits of user profiling to an organization. The report provides insights into different business organizations, their functionality, and strategies for achieving organizational objectives.

How Business
Operates

Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
TASK 2..........................................................................................................................................................3
2.1 Importance of accounting for business success.................................................................................3
TASK 3..........................................................................................................................................................4
3.1 Profit and loss accounts.....................................................................................................................4
TASK 4..........................................................................................................................................................5
4.1 Phases of effective team development..............................................................................................5
4.2 Self goal & other roles in a team.......................................................................................................6
4.3 Motivation theories...........................................................................................................................9
4.4 Different types of leadership style.....................................................................................................9
TASK 5........................................................................................................................................................10
TASK 6........................................................................................................................................................10
6.1 Influence of customer service on the success of business entity.....................................................10
6.2 Benefits of users profiling to an organization..................................................................................10
CONCLUSION.............................................................................................................................................11
References.................................................................................................................................................12

INTRODUCTION
A business organization runs by some effective key factors which includes vision,
mission, goals and objectives of the company. These are the elements which commonly work
together in order to attain their organizational objectives in an effective manner. It has been
identified that there are various sort of business organization and each of them have their own
functionality so that they can attain their targets by adopting effective methods, theories,
strategies and concepts. For the management team of the organization, it is very necessary to
develop a step by step process so that it will guide their team members. The present report is
based on the topic “How Business Operates”. There are various sort of organization such as
public as well as private sector which are going to be discussed in this report. Apart from this,
significance of accounting, PESTLE analyses, key elements of employment law are going to be
discussed in this report. At last various leadership style, influence of customer service, team
development stages are going to be discussed in the present report.
TASK 1
Covered in PPT
TASK 2
2.1 Importance of accounting for business success
Accounting define as the most essential and crucial aspect for a successful business. For
every business organization it is very critical to record and maintain all their financial records,
balance sheet, profit, loss, credits as well as debts. This will assist business entity in order to
examine their past errors which can easily be leads towards the attainment of growth and
success. It is very essential for the manager of the company that they must understand the basic
accounting principles which assist them in order to grow business and to generate more
profitability. Organizations can examine their internal strength & weakness as well as make
essential requirements associated with the accounting methods & concept. It has been identified
that business entity can maintain their all financial statements such as balance sheet, cash flow
statement, income statement and many more which help in taking right decisions by examining
them and leads towards the growth and success. Therefore, it is very essential for the
organization to enhance their learning about various

TASK 3
3.1 Profit and loss accounts
Revenue 2017-18 (£) 2016-17 (£)
Total revenue 10698200 10622000
Cost of revenue 6745600 6629300
Gross profit 3952600 3992700
Selling general and
administrative 3324700 3348600
Non-recurring - -
Others -49500 -63200
Total operating
expenses 10020800 9914700
Operating income or
loss 677400 707300
Earnings before
interest and taxes 677400 707300
Interest expense -95400 -100200
Income before tax 66800 176400
Income tax expense 37700 60700
Minority interest -2500 -5900
Net income from
continuing ops 29100 115700
According to the above stated Profit & loss statements of M&S of 2 consecutive years
which is of 2016-2017 and 2017-2018. With the assistance of an analysis it has been concluded
that Marks and Spencer is a international and global leader among retail sector within the
marketplace of UK along with this they have various physical outlets in the market of Europe. It
has been examined that there is decrease in company’s gross profit which is identified as
3992700 to 3952600£. It is said that Marks and Spencer provide high quality products to their
users which assist in generating remarkable outcomes in the overall operating expense which has

been increased form 9914700 to 10020800 £. Apart from this, the total amount which is before
tax has been reduced from 176400 to 66800£. Therefore, it has been concluded that this
condition is where manager of Marks and Spencer need to adopt some effective financial
strategies as well as develop some comprehensive measures in order to overcome the adverse
situation and produce best results.
TASK 4
4.1 Phases of effective team development
Team define as the group of large number of people works for the attainment of
organizational goals and objectives. Each and every individual have various sort of knowledge,
skills and capabilities. In order to form a team effectively there are mainly five stages which are
going to be discussed as follows:
Forming Stage: This is the first stage where individuals interact with their team members
so that they can gather data and information related to their interest, skills, background and many
more. Apart from this, it has been concluded that in this team members are highly dependent on
the leader as they will guide them to perform their work in an effective manner and will know
about their roles and responsibilities.
Storming Stage: The second stage includes team members accepting their ideas and start
competing with each other as every person have their own perception and values which as a
result creates conflicts and disputes. For this, team leader provide guidance to the team members
so that they can solve issues and accomplish their goals.
Norming Stage: It is the phase where team mates start appreciating individuals strengths
as every individual works contributes in the attainment of organizational goals and objectives.
Along with this, team member start sharing information as well as solve conflicts and increase
collaboration between other team members.
Performing Stage: In the fourth phase team members develop, mature as well as
organized and are more emphasis on attaining organizational goals and objectives. In this, each
and every team members are highly motivated and are indulge in the process of decision-making
so that they can attain the goal within limited time period.

Adjourning Stage: At this phase, the whole team dismiss as the project comes to the end.
Along with this, team leader start celebrating their success as their goals and objectives will be
attained but on the other hand every individual need to say good bye as the project comes to the
end.
4.2 Self goal & other roles in a team
Reporting Structure

Higher authority of the company is managing director who takes all the charge in order to
run their business in a successful manner. A managing director is the responsible and authorized
person in a company who conduct all the daily operations. The person is commonly known as
the Chief Executive Officer (CEO). This is the person who keep the organization solvent as well
as promote the organizational expansions as well as execute necessary innovations among the
business entity. It has been identified that various departments such as marketing director,
operation director, finance director, HRM, production team leader who perform daily activities
in an appropriate manner. All the head of these departments responsible to give report on day to
day basis which assist in performing goals in an effective manner.
Each department have their own roles within a business entity which are as follows:
AUTHORISED PERSON ROLE
Managing Director They are responsible for implementation of day-to-
day operations in a proper manner. In addition to this,
they have the authority to take decision that reaches
company towards success and growth.
Marketing director Their main role is to process all marketing activities
in an effective manner. In addition to this, they
develop effective marketing strategy that help
company to increase its customer base level in an
effective manner.
Finance Director They are responsible for developing budget that
ensure availability of resources for execution of
activities. In addition to this, finance director keep a
track in daily transactions and monitor budget in an
effective manner (Paton, and Burt, 2014).
Operation Director It is analyse that operation managers role is to manage
inventory & procurement of packaging as well as
transportation. In addition to this, their responsibility
is to ensure quality is offered in market.

Human Resource Director HR manager is responsible for different functions
such as training and development, recruitment and
selection, employees engagement, maintain positive
working culture and many more.
Marketing Manger They are responsible to understand potential an
current consumer in order to develop strategy. In
addition to this, they analyse market trends and
customer requirements in order to satisfy customers
and gain success at marketplace.
Finance Supervisors Their role is to ensure all federal laws and to
supervise accounting processes. In addition to this,
they developed reports and financial statements that
help company to know its profit and losses as well.
Production Team Leaders Their role is to motivate and support staff members in
order to enhance their productivity level in an
effective manner.
Personnel Manager Their main role is to perform operative and
managerial functions of a company. They overlook on
the issues as well as grievances of staff members.
Sales Team One of the main role of sales team is to selling
company product and service in market effectively. In
addition to this, they take feedback from customers
and communicate to marketing departments that help
in fulfilling requirements of customer.
Accounts Assistants They provide support to finance teams by developing
statutory documents and check records in an effective
manner.
Production Team Members The members of team is responsible to ensure that
production take place on time as it help company to

attain objectives or goals within stipulate time frame
by matching with demand and supply in market.
4.3 Motivation theories
Maslow's theory: It is the theory which says that by examining the basic requirements of
a a person which is associated with clothing, water, shelter, food which is very essential for an
individual. It is the theory which assist in enhancing the level of motivation and help in attaining
desired goals of the company. If a company satisfy the requirements of their staff members then
it is essential for the management to provide them security associated with their life and jobs. For
a manager it is necessary for them to develop strong relationship with their workers so that they
can fulfil esteem requirements of employees.
Mayo theory: As per this theory, it is very necessary for the management team to treat
their workers as the most productive element for the organization. It has also been said that they
enhance the motivation level when there is better interact and communication among both
managers and employees. It is very necessary for the management team to know the interest of
their workers which enhance the performance and productivity of the company.
4.4 Different types of leadership style
A leader refers to the person who provide guidance, direction and motivation to their
subordinates which assist them to attain organizational objective in an efficient and effective
manner. There are ample number of leadership style adapted by a leader as per their needs and
requirements. Some of these leadership style are going to be discussed as follows:
Autocratic: It is a leadership style where leader have the whole responsibility when it
comes to take decisions. They are the one who do not include their team members in the process
of decision making and motivates them to perform all their functions under a strict platform. This
style assist a leader in emergency environment when time is limited in order to complete the
project.
Democratic: Another type of leadership style is democratic where leaders includes and
take opinion from their subordinates before taking final decision. But the final responsibilities
are of leader but they indulge a the staff members in taking decision which is beneficial for the

whole organization. This will help in moving positive communication among the workplace and
promotes creativity and fairness at the workplace.
TASK 5
Covered in PPT
TASK 6
6.1 Influence of customer service on the success of business entity
Consumer services mainly linked with providing high quality services to the users as well
as the method in which a business organization interact with their consumers. It has been
identified that by improving and enhancing their consumer service with the help of which they
can increase the level of satisfaction of their end users. This as a result leads towards the
enhancement of organizational image and reputation of the company at the competitive market
place. Organization such as Marks and Spencer gives best and most effective consumer service
to new as well as existing users. It will motivate their users in order to buy goods and services
offered by the business entity. For this, it is also very necessary to create highly effective
strategies and policies so that they can easily retain their customers for a longer duration of time.
As a result it will provide benefits to the organization in order to conduct their business functions
in more effective and efficient manner and maintain their sustainability at the marketplace.
6.2 Benefits of users profiling to an organization
In the present competitive marketplace, it is very essential for a business organization not
only acquire but also retain their consumer for longer period of time so that they can gain
competitive advantage at the market place. It has been identified that organizations can list out
users who can enhance their loyalty for the business entity with the assistance of executing
different strategies for the user profiling structure. For a business organization it is very
important to target right users as well as offer right product to them. Organizations such as
Marks & Spencer develop detailed list of target and potential users and set them as per the
demographic as well as geographic way. This will assist them in order to offer right product as
well as retain users for long duration of time period. In addition to this, it is also very necessary

to identify the buying behavior of consumer within a specific region and develop strategies
which will assist them to produce high profitability as well as revenue.
CONCLUSION
According to the information, it is concluded that for running a smooth business it is very
essential to have vision, mission and goals. It is very essential for a business that they must
consider all the elements as well as adopt effective leadership strategies so they can attain all the
predetermined objectives in an effective manner. Creating as well as maintaining all the
accounting data assist the business entity to examine their regular performance so they can easily
operate their activities in best possible way. Along with this, it has been concluded that by
providing high quality customer service it will assist them in retaining their potential customers
for a longer period of time.

References
Books and journals
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
Tapscott, D. and Tapscott, A., 2016. Blockchain revolution: how the technology behind bitcoin
is changing money, business, and the world. Penguin.
Davies, W., 2015. The happiness industry: How the government and big business sold us well-
being. Verso Books.
Lehoux and et. al., 2014. How do business model and health technology design influence each
other? Insights from a longitudinal case study of three academic spin-offs. Research
Policy, 43(6), pp.1025-1038.
Mills, K. and McCarthy, B., 2014. The state of small business lending: Credit access during the
recovery and how technology may change the game.
Demil, B., Lecocq, X., Ricart, J.E. and Zott, C., 2015. Introduction to the SEJ special issue on
business models: business models within the domain of strategic entrepreneurship.
Strategic Entrepreneurship Journal. 9(1), pp.1-11.
DaSilva, C.M. and Trkman, P., 2014. Business model: What it is and what it is not. Long range
planning. 47(6), pp.379-389.
Paton, S., Chia, R. and Burt, G., 2014. Relevance or ‘relevate’? How university business schools
can add value through reflexively learning from strategic partnerships with business.
Management Learning. 45(3). pp.267-288.
Kohler, T., 2015. Crowdsourcing-based business models: how to create and capture value.
California Management Review. 57(4), pp.63-84.
Spieth, P., Schneckenberg, D. and Ricart, J.E., 2014. Business model innovation–state of the art
and future challenges for the field. R&d Management. 44(3), pp.237-247.
Kandachar, P. and Halme, M., 2017. Introduction. Farewell to pyramids: how can business and
technology help to eradicate poverty?. In Sustainability Challenges and Solutions at the
Base of the Pyramid(pp. 13-40). Routledge.
Brea‐Solís and et. al., 2015. Business Model Evaluation: Quantifying W almart's Sources of
Advantage. Strategic Entrepreneurship Journal. 9(1), pp.12-33.
Sanders, M.L. and McClellan, J.G., 2014. Being business-like while pursuing a social mission:
Acknowledging the inherent tensions in US nonprofit organizing. Organization.21(1),
pp.68-89.
Reim, W., Parida, V. and Örtqvist, D., 2015. Product–Service Systems (PSS) business models
and tactics–a systematic literature review. Journal of Cleaner Production. 97, pp.61-75.