How Business Works Report

This report analyzes the key aspects of business operations using Virgin Atlantic as a case study. It examines different types of organizations, business structures, the importance of accounting, HR functions, employment legislation, team development, motivation theories, leadership styles, and the impact of customer service on business success. The report provides insights into how these elements contribute to the overall success of a business.

How Business Works

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1) Describe the different types of organisations found in the public
and private sectors......................................................................................................................3
1.2) Explain the different structures within the businesses........................................................4
TASK 2............................................................................................................................................4
2.1) Explain the importance of accounting for business success................................................4
5.1) Describe the different functions carried out by the HR department....................................5
5.2) Outline key features of employment legislation..................................................................6
TASK 3............................................................................................................................................6
3.1) Present and interpret key accounting information using profit and.....................................6
TASK 4............................................................................................................................................8
4.1) Describe the stages of team development...........................................................................8
4.2) Carry out an analysis to determine own and others’ roles within a team...........................8
4.3) Assess three motivation theories.........................................................................................9
4.4) Describe different types of leadership style......................................................................10
TASK 6..........................................................................................................................................10
6.1) Explain the impact of customer service on business success...........................................10
6.2) Explain the benefits of customer profiling to a business..................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business is an important aspects of every firm or entities. Also, its survival is also
necessary and continuation for longer period of time. In today's scenario, where business entities
are becoming advance with new and innovative strategy & action planning. Along with this,
environment and culture in which firm or entities are operating are required to be flexible and
moderate (Ricart, 2012). To understand such, Virgin Atlantic is the leading airliner company,
which provides transportation carrier of people via air mode and also headquartered in London,
UK. It provides service to almost 45 location and have fleet size of 46 aircraft's. They are well-
known for its world class service to customer's including business class, which is gained lots of
appraisals. For clear understanding of its business, this report will cover importance of
accounting for business activities, different functions carried out by HR Dept. and features of
employment legislation. This report will also disclose key accounting information using the
profit & loss accounts and also, in separate stages of team development. Lastly, report will
suggest motivation theories along with leadership style to carry out business effectively.
TASK 1
1.1) Describe the different types of organisations found in the public
and private sectors
Business environment is the clear collaboration of external & internal factors that
influences a company operating system. There are various elements include in business like
suppliers, investors, latest technologies, law and regulations etc. To make clear understanding of
different types of organisation such as public and private sector, this will be possible through
taking examples of companies in both context.
Private sector: This type of organisation are mainly owned by an individual entities,
firms, private people or independent authorities. In other ways, private sector can be termed as
sole traders, who do their self business (Cascades-Masanell, 2018). The major sources of raising
funding for private sector are investments from various investors, financial bodies or other
business. When talking about private sector, Virgin Atlantic is most suitable example, who is
owned by Virgin group.

Public sector: This type of organisation are governed by various legal government
bodies, legislative agencies, bodies who are controlled by government regions. In this sector,
major focus is lies on public welfare that profit generation. Because funding for this sector
receives from support of governments. British airways is the example of public sector.
1.2) Explain the different structures within the businesses
Hierarchical structure: In this structure, many different level of an employee's are their
with team leader's and operational managers. This structure has person belongs to different
functions of organisation such as marketing, finance, operations, human resource etc. (Cescau,
2017). But, due to huge structure, lack of effective communication and slow decision making
may occur. This is also known as role culture, where leader is on top position with full rights to
eliminate any team members.
Flat structure: In this organisational structure, vary few layers of management, which
has wide span of control and decision making. This structure is important to operate the company
to assess the communication with managers easily and quickly. Employee's who have
responsibility are being preferred here. This is also known as task culture.
Matrix structure: Matrix structure is the companies structure in which reporting relation-
ship are set as a grid or matrix, rather that in traditional hierarchy. In simple words, employee's
have dual reporting relationship-generally to both functional manager and product manager.
Illustration 1: Organisational structure of Virgin Atlantic

Virgin Atlantic is using matrix structure, responsibilities to an individual are given on
regular, so that tasks or activities will be completed on time and also suitable results.
TASK 2
2.1) Explain the importance of accounting for business success
Accounting has been considered as key function to do in every business entities to record
their money outflown & inflow at regular point of time. In accounting, where major priority is
used to given on recording daily, weekly, monthly etc. (Laszlo, 2017). expenses and incomes in
order to find suitable revenue and profitability for business purpose or operations. In accounting,
different entities are used to taken care which are as follows: speculators, administration,
government, lenders, controllers and even investors. Proper structured bookkeeping is required to
record the valuable information & data of the Virgin Atlantic to know its financial position at the
end of specific period. Business accounting system consists of three concepts: Profit & loss
account, Balance sheet and cash flow statement. For Virgin Atlantic, the importance of
accounting will be explained through given three components:
Particular Valuable Importance
Profit & loss account It provides actual base for recording expenses & incomes, which has
been occurred during business activities of Virgin Atlantic. As, P&L is
necessary structure of accounting, it has resulted to increasing of
business efficiency & profitability.
Balance sheet Balance sheet comes into the last stage of accounting to show financial
position of business entity at the end of circulated year. It is helpful in
checking the strategies or business opportunities to raise its financial
growth.
Cash flow statement Cash flow is assistive in proper information of cash inflow & outflow
by business entities in its functioning and process. For Virgin Atlantic,
this will inform about cash investment and retentions.

5.1) Describe the different functions carried out by the HR department
Human resource management is the focal department of any organisation. To carry out
business operations, HR personnel needs to be active and focused towards working in team
group to make business working effective (Babson, 2012). In context with Virgin Atlantic, HR
department needs to perform several function such as recruitment & selection, training &
development along with enhancing learning into employee credentials. For Virgin Atlantic,
result based functions of HR department are as under:
Conflict management: This function needs to be practices with effective strategies on
how conflicts or issues can be solve with zero loss to company. Virgin Atlantic must have clear
vision & mission with pure communication among their employee's to carry out business task
effectively with less conflicts.
Training & development: In this HR function, key personnel needs to make ensure that
complete training & development must be provided to each and every employee towards vision
& mission to make its happen in shape of business objectives (Clark, 2018). Virgin Atlantic must
focus on giving training which mainly focuses on their business operation.
Recruitment & selection: This is the major task of every HR personnel as key activity to
hire most skilled, talented and enriched candidates to any position as per the requirements. For
Virgin Atlantic, company has its focus on recruiting right employees, who are enriched with
what actually want by company to enhance and maintain business operations.
5.2) Outline key features of employment legislation
Employment legislation has been proved necessary to maintain decorum of working
culture in every business entities with higher expectancy of increased productivity. Key laws
such as anti-discrimination act, Equality act, employment regulation act etc. In respect to HR
context, department needs to have correct practices of these laws & regulation to maintain
interest of an employee at every critical part of business organisation (Daniel, 2012). In context
with Virgin, two major employment legislation such as Anti-discrimination act, 1982 and
employment regulation act, 1998 will be explained to know how they have played major role in
employee development along with its results for business regulation. The explanation of these
legislation are as follows:
Anti-discrimination act, 1982: This law is important to remove any kind of difference
among people regarding their colour, shape, size, religion, caste, income level or social class etc.

This law was enacted in year 1982 and brought for amendment in 2013 for specific changes. In
UK, this law has brought proper relationship among peoples (Pies, 2014). This regulation has
brought clear behaviour for different people by considering them equal as human first. For
Virgin Atlantic, Discrimination has completely removed from working culture through equalism
for people to accomplish their defined goals & targets.
Employment regulation act, 1998: This law has initiated to make employee's be clear
about their vision & mission to accomplish their defined goals and personal career development.
This act was enacted in 1998 and amended in 2015 with major changes such as regulation over
working time for employee, more incentives & rewards and employee actual wants. In Virgin
Atlantic, This law has enacted to maintain common interest of employee, while they are giving
their efforts for Virgin Atlantic business goals or targets.
TASK 3
3.1) Present and interpret key accounting information using profit and
loss accounts
Profit & Loss statement of Virgin Atlantic at the end of year
Virgin Atlantic Aviation Ltd (2017-18) (in £)
Turnover in millions 100000
(-) Cost of sales 50000
Gross profit 50000
(-) Other expenses 8000
Operating profit 42000
Associates & joint ventures 5000
EBIT 47000
EBITDA 52000
(-) Depreciation & amortisation 3000
(-) Interest paid (Net) 1000
Pre tax profit 48000
Tax paid net 4500
Post tax profit 43500

(-) Minority interest 500
(-) Extraordinary items 1000
(-) Discontinued operations 1500
Profit available for dividends 40500
(-) Ordinary dividends 4000
(-) Non equity dividends 1500
Retained profit 35000
Post tax profit 43500
Minority interest 500
Non equity dividends 1000
Profit for financial year 45000
Brief summary: From the above profit & loss account, it has to be revealed that financial
condition of Virgin Atlantic is strong with higher profit recorded in comparison with 2016-17. In
2016-17. profit was 38000 thousands pounds. Higher profit has been derived through accurate
turnover, which was expected at 42000 thousands pound and also Virgin Atlantic has controlled
their useless expenses such as over utilisation of resources, flights offers, even when flight are
not fully equipped by customer's. The maximum business was generated from London to Dubai,
Tokyo, Delhi, Doha routes. This year expenses were low, because of effective budget in clear
comparison with 2016, 12000 thousand pounds. Depreciation or amortisation was similar and
distribution of dividend has been raised by 1.83 %. During year 2017-18, Virgin Atlantic has
undergone through strategic alliances with easy jet to increase their flight routes. Tax relief to
corporates by UK government has raised post tax profit of Virgin Atlantic for bearing further
expenses.
TASK 4
4.1) Describe the stages of team development
Virgin Atlantic must follow various stages for development of effective team groups with
purpose to bring large performance to organisation are as follows:

Forming: This first stage of team development belongs to forming phase, which is like
orientation phase for any new task (Hielscher, 2016). During this phase, team has been
introduced with right and skilled person. During this phase, team person's skills, project goals,
timeline and ground rules. This phase focuses more on people rather than work.
Storming: In this stage, reality and weight of completion of task at hand have now hit
everyone. In this phase, initial feeling is of excitement and of be polite with behaviour and
attitude.
Norming: During this stage, generally people starts to notice and get appreciation from
their own team member's. In this phase, strength of an individual would be raised, through which
contribution of every individual would working as a cohesive units. Storming stage overlaps with
norming stage.
Performing: In this fourth stage, team members are confident & motivated along with
this, they are familiar with entire project and also teams are busy with their supervisor for
completion of team project. Here, entire team is on same page of project with their respective
efforts.
Adjourning: In this five stage, once project ended, might be chances that whole team
may get disbanded (Beckmann, 2016). This stage is also known as mourning because members
have stepped up to close their business and feel a loss of experience which has over.
Lastly, Virgin Atlantic should focus on effective team building with right person in group
who has ability or potential to get well-groomed with others.

Sources: Stages of team development, 2018
4.2) Carry out an analysis to determine own and others’ roles within a team
Action oriented roles: In this kind of role, sharpness is required to face new challenges,
person should work as implementer to put new and innovative idea's and complete finisher to
work successfully.
People oriented roles: In this role, person should be co-ordinator to maintain tasks with
equal efficiency along with team worker to provide adequate support to squad. Person should be
investigator to access right and suitable opportunities.
Thought oriented roles: Person is thought roles must be planner to plan different tasks or
targets (McCarthy, 2014). In this specific role, person should must have ability to monitor
critical process to make defined roles complete and co-relative.
Illustration 2: Stages of team development

4.3) Assess three motivation theories
Motivation has been characterized as ability to get inspired through various forces which
actually comes from other's actions through sharing any thought, opinions and views to motivate
the common individual person. Also, motivation has led scenario to push any person with right
intention, vision, mission or ability. For Virgin Atlantic, various theories of motivation has raised
performance expectancy of their every employee's or person. Maslow theory has given major
focus with positive intention to fulfil employee basic wants (Mills, 2015). Maslow has focused
majorly on five different needs: Self-actualisation, safety, self-esteem, social, Psychological
needs. These actually focuses on fulfilling each and every needs of person such as food, clothes,
shelter, love, confidence or belongingness to encourage them to contribute into company goals.
As, it provides base for fulfilling basic needs, Maslow theory has proved beneficial for
Virgin Atlantic.
Herzberg's motivation: This theory has demonstrated that there are numerous elements at
premised which aid to fulfil their job satisfaction to staff members. This is considered as
fundamental for superior to cater appropriate working circumstances as well as facilitates to staff
members. This model finds outs factor, which has led dissatisfied performance of an employee.
Alderfer's ERG theory: This theory has been associated with existence, growth as well as
relatedness of any employee's. Along with existence, staff members will significantly disclose
many kinds of elements. Through complete understanding, administration would help employee
to accomplish its desired success and development.
Illustration 3: Maslow theory of motivation

Suitability of Maslow hierarchical theory is high and useful to understand every needs of
an employee's with future performance growth & development. Virgin Atlantic should give high
priority to Maslow theory to know employee confidence points to deliver it with growth based
performance.
4.4) Describe different types of leadership style
Leadership has been considered role model, which has resulted into motivation or enables
the confidence of other person. Leader is who encourages any person in its critical time with
pure intention to make that individual or group people effective to accomplish what they are
looking. Emotional intelligence, ability to enrich other's and potential to interact with other's
makes a leader collectively ideal for others (Amit, 2013). In organisation, where leadership is
necessary, because there exist different groups or team, with people belongs to different religion,
caste or culture and also chances of conflicts or ineffective working would create. Leadership
style come s into existence to make team or group work complete with clear vision or mission. In
context with Virgin Atlantic, there are various leadership style such as: demographic, autocratic
etc. The explanation is as follows:
Autocratic style: This leadership style has been characterized by individual person's or a
specific group control over all the decisions and little input from group members. In this, power
to team members are not authorised and even no separate decision making power to them. In
Virgin Atlantic, this style was previously implemented and organisational structure was gone
through with certain conflicts and dictatorship of top level.
Democratic style: To overcome leadership issues, Virgin Atlantic has begins with style
where priority to separate and independent decision making has to be given to team members or
any individual person (Williams, 2013). Sharing of open ideas, views and opinion has raised
without any fear or top level forces to accomplish the designed goals or targets. Separate
decision making has led at optimised level to enhance productivity of each and every employees.
They are still working on this leadership style to make it better and result based.

TASK 6
6.1) Explain the impact of customer service on business success
In aviation industry, major priority has been given to products & customer service offered
to passengers at specific pricing. As, airline sector is the bulky sector, so efforts to raise customer
base has increased with cost composition (Zott, 2016). In Virgin Atlantic, where customer
service is major focus with luxury service to passenger of all economy, premium economy and
business class. Virgin provides welcome drinks to customer's with snacks along with they
listened to their needs at during flight duration in respect of food, water, sitting arrangement or
any comfortability matter. Crew members are well-trained and have impressive acknowledging
to greet customer. Also, there major investment is in improving future customer services. There
results are profit ended.
6.2) Explain the benefits of customer profiling to a business
Customer profiling is one of the major marketing tool that business uses to arrange their
prospective customer on the basis of their needs or wants (Vorley, 2015). Virgin Atlantic has
profile their customers, which depends on their ability to pay for a flight and also they have
categorised class of economy, premium-economy on income, so that every customer feels
comfortable while paying. In addition to this, customer profiling sets out a base on basis of
which Virgin Atlantic can improve their in-flight service to engage more and more customers.
Also, profiling has led to rise in customer needs or wants, which Virgin Atlantic always look to
fulfil in future to grab market share. In simple words, profiling sets out when, who, how virgin
Atlantic can pull their potential customer to rise their profitability.

CONCLUSION
From the above, it has been concluded that business operation has been resulted into its
efficiency and growth for future period of time. Team development has been proven necessary to
accomplish defined goals or targets along with initiating its formation. In entire business
operation practices, motivation is necessary to every employee's to inspire them, motivates and
encourages same to enrich organisation with increased performance and result based objectives.
Also, customer profiling is necessary to engages for business scenario. Also, such profiling is
necessary to target them accordingly.

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