Motivational Theories and Investment Appraisal for Zylla Limited and Jack Discount Stores
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This report analyzes different motivational theories that can work for Jack discount stores and meet the objectives of Tesco. It also evaluates the financial sources and techniques of investment appraisal for Zylla Limited to acquire a new ferry.
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Task 3: Case Study/ Task 4: Business Scenario for Individual Report
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Table of Contents TASK 3............................................................................................................................................3 INTRODUCTION...........................................................................................................................3 MAIN BODY...................................................................................................................................3 Examining and analysing different motivational theories that will work for Jack discount stores and satisfy Tesco management..........................................................................................3 Maslow's Hierarchy of needs.............................................................................................3 McClelland's Theory of needs-..........................................................................................4 The theory ignores basic needs of the employees such as food, shelter, safety etc........................5 CONCLUSION................................................................................................................................5 TASK 4............................................................................................................................................6 INTRODUCTION...........................................................................................................................6 MAIN BODY...................................................................................................................................6 Financial Sources.........................................................................................................................6 Techniques of Investment Appraisal...........................................................................................7 CONCLUSION................................................................................................................................9 REFERENCES................................................................................................................................1
TASK 3 INTRODUCTION Business studies can be defined as a combination of elements of business such as accountancy, finance, marketing, HRM and other operations. Tesco, one of the leading retailers ofUKhasintroducednewdiscountstores“Jack”tocompeteagainstitsclosemarket competitors. The current report analyse different motivational theories that can work for Jack discount stores and meet the objectives of Tesco. It also analyses the advantages and limitations of motivation theories for the company. MAIN BODY Examining and analysing different motivational theories that will work for Jack discount stores and satisfy Tesco management. Motivation plays a quite important role in increasing employee productivity and high job satisfaction and loyalty. Their tendency of skipping work decreases and the commitment towards the work increases when they are adequately motivated (Verma and Sharma, 2018). In order to satisfy the Tesco management, Jack discount stores may use different motivational theories and assure similar culture and values like other Tesco stores. Some of the motivational theories are- Maslow's Hierarchy of needs and McClelland's Theory of needs. Maslow's Hierarchy of needs It states that job satisfaction directly depends on the needs of the employees and the degree of fulfilment of those needs. The best way to motivate the employees is to fulfil their needs as it drives them to contribute to the company with their skills and commitment and not just working for money. The pyramid of the theory suggest that one cannot go up to the next level unless lower level needs are fulfilled (Hopper, 2020). The hierarchy of needs are- Phycological needs- These are the basic needs for survival such as adequate sleep, shelter, food and refreshments, healthy environment etc. Safety needs- Insurance, job security, medical benefits to counter threats, deprivation and other dangers. Social needs- These are the interactions and relationship needs at the workplace. Self esteem needs- The individual employees may hope for respect and recognition for certain efforts and achievements they make in their work.
Self actualization needs- The opportunities of learning and personal development. It is the highest level of need as it contain an individual future desires and goals. Advantages of Maslow's Theory of motivation for Jack discount stores- ď‚·This theory is quite easy to understand and apply to the Jack discount stores (Vidili, 2021). It helps the senior executives and managers of the new stores to understand the needs of the employees and motivate them appropriately. ď‚·It understands both the inter- personal and intra- personal variations in the behaviour of the employees. ď‚·It is very flexible in approach and usually focus on basic needs of the employees. Jack discount stores may fulfil the lower level needs of the employees in order to drive them to level up in their approach. It creates a systematic way of motivation. ď‚·The theory considers motivation as a force that can bring positive change as it is centralized around the employees only. Limitations of Maslow's hierarchy Theory for Jack discount stores- ď‚·There is no specific way by which the needs of the employees can be measured. ď‚·It will be complicated for the company to meet the self- esteem, self actualization and safety needs of the employees especially due to different cultures, demographics etc. (Chan, 2022). ď‚·Not everybody has same needs and level of requirement of a different individuals also vary. The organization may not be able to rank those needs and the quantity of requirements. McClelland's Theory of needs- It suggests three drivers of motivation that depends on our life experiences (Rybnicek, Bergner and Gutschelhofer, 2019). These three motivators are- Achievements-Ambitious people prefer tasks that helps in improving their skills and carryoutresultsonthebasisoftheirowneffortsandresponsibility.Theyalsodesire acknowledgement of their progress. Affiliation-The ambitious people are always motivated by complements and feedbacks of others. They feel social accepted and confidence and tend to participate in group meetings and tasks.
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Power-Some employees desire to have power of controlling their own work or instruct others. This motivates them to develop leadership skills and take more responsibility during group tasks. They become more concerned about their level of influence and performance. Advantages of McClelland's Theory of needs for Jack discount stores- ď‚·The biggest advantage for Jack discount store in using this theory is that the employees of the organization are assigned projects as per their demands that keeps their work interests high. ď‚·It counters the problem of inconvenience and boredom of the employees as unfamiliar work sometimes make the employees uncomfortable with certain tasks, and they start working half heartedly. ď‚·Since the employees are assigned tasks according to their choice, the chance of excuse and complains becomes minimal (Hussainy, 2020). The work flow gets manages easily for the managers. ď‚·It creates a high level of satisfaction among the employees. These satisfied employees can prove to be big assets for the company in future. ď‚·The employees develop the desired skills that will initially benefit the company. Limitations of McClelland's Theory of needs for Jack discount stores- The theory ignores basic needs of the employees such as food, shelter, safety etc. ď‚·It may create a situation where particular employee may not like to get transferred to other departmentdue to its perception or stereotype. It will impact the employee flexibility of the store. ď‚·Sometimes it becomes difficult for the organizations to find matching positions with the needsanddesiresoftheemployees(Mazeres,BrinkmannandRichter,2019). Accommodation and management of employees becomes difficult and also the chances of mistakes become high. CONCLUSION It has been concluded from the above report that motivation is very important in driving a smooth employeemanagementprocess. There are different motivational theoriessuch as Maslow's Hierarchy of needs and McClelland's Theory of needs that help the companies to identify the needs of the employees and improve the areas of motivation. These theories have
their own advantages and disadvantages that the company needs to focus before applying it to its employees. TASK 4 INTRODUCTION Zylla Limited company was started with the vision of helping peoples, vehicles and good to cross the rivers by operating some ferries. The performance of the company is substantially well and therefore in coming future company has opportunities to expand the business. Company aims in purchasing new ferry to provide the facilities of increasing demand among the services of river crossing. Thus, this research will include the acquisition of finance for working capital of the company and evaluation of appraisal techniques and will include recommendation on viability of operations. MAIN BODY Financial Sources Every business requires short term and long term finance for various programmes like expansion, project implementation, modernization, etc. Thus, the company requires short and long term funds for the expansion of business process. Financial Sources- Short Term Short term funds are required for current financing which are completed in a short duration, and related in the requirements of company's working capital. The short term finance includes two types of sources which are as follows: Bank Source- Bank Source includes sources like Line of credit, overdraft, discounting of bills, Secured loans and letter of credit. Non-Banking Source- The non banking sources includes Trade credits, public deposits, short term loans, accrued expenses, promissory notes and hundies, advance from customers, factoring, commercial paper, forfeiting, provisions and reserves (Bhattacharya, 2021). Zylla Limited can arrange short term finance for acquiring finance through secured loans from bank, bank will provide credit on the basis of securities of like inventory of current assets. This current asset will be held with bank as secured deposit till the loan repayment time. Company can also take trade credit from the ferry company for purchasing ferry. Trade credit
period starts when the Zylla limited receive the goods and till the payment for the product. Time period for trade credits are for short durations. Financial Sources- Long Term Long term finance are required for the period more than five years. The long term funds are raise by the company for investing in various types of fixed assets and for the working capital needs of the company. The long term source of finance includes equity share capital, debentures, preference shares, loans from financial institutions and ploughing back of profits or through retained earnings. Zylla Limited can raise long term funds through issue of shares to the public or institutions and raise funds from them for need of company's capital needs and for acquisition of new ferry (Shrotriya, 2019). The individual or the institutions purchasing shares are the shareholders or the owners of the company which have the rights to attend meetings and provide ideas for the expansion of business. Company can raise funds from the financial institutions in term of 'Term Loan', term loan refers to companies borrowed capital which repayable is not less than one year and not more than ten years. Financial institutions such as commercial banks, industrial finance corporation of India, Life Insurance corporations, etc. provides this types of loans. Techniques of Investment Appraisal The techniques of investment appraisal are also known as capital budgeting techniques. Using this techniques Zylla Limited can identify whether acquisition of new ferry will profitable or not. One of the common assessment techniques are: Net present valueis used as an appraisal technique which measures cash flows of company to establish whether it incurred profit or loss from investments (Aspen and Sparrevik, 2020). This technique was used to identify the estimated profit for acquisition of new ferry and it accounts for the money on the value of time by the capital budgeting. Inflows and the Outflows of cash were managed with the time value of money principle. Net Present value of the new ferry will be:
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Thus, the project of present net value will be equal to the sum of cash flows over five- year life isÂŁ209943. Company will need to purchase new ferry as the cash flow in the operations of company as per net present value it will be positive. Payback Period- The simplest method of appraisal technique is payback. For its initial investment the payback period takes time for the project. Depending on the project life the payback period measures in the terms of months and years (Diana and et.al., 2019).
Thus, to return initial expenditure it is expected that Zylla limited will take 2.37 years and to complete it will take five years. In this program Zylla limited will be profitable in rest of the period. To establish the efficiency in the project Zylla Limited will use appraisal techniques. If the discounting rate will be zero according to the organization cash flow statement as per the internal rate of return. To reject or accept the project company will determine whether capital cost exceed the rate of return or not in the technique. To increase the feasibility on the expansion of business Zylla Limited can use net present value technique. It will help company to identify cash flow by evaluating the difference between the present cash outflow and cash flow for a particular period of time(Pawlak and Zarzecki, 2020). It is also useful in understanding the inflation rate and adjusting the budget and investment by adjusting the profit in an adequate manner. In Zylla Limited the financial manager can evaluate techniques for purchasing new ferry. The appraisal techniques involves the calculation of inflow at specific period depend on the investment of ferry project.
CONCLUSION It has been also concluded from the above report that Zylla Limited can arrange short and longtermsourceoffinanceforexpansion.Thenetappraisaltechniquesthatcanhelp organization in investment to boost the financial quota and identify whether the acquisition of new project will be profitable or not. The report also concludes that a suitable investment appraisal technique is necessary for the company's expansion plans such as the net present value technique.
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REFERENCES Books and Journals Aspen,D.M.andSparrevik,M.,2020.Evaluatingalternativeenergycarriersinferry transportationusingastochasticmulti-criteriadecisionanalysis approach.Transportation Research Part D: Transport and Environment.86. p.102383. Bhattacharya, H., 2021.Working capital management: Strategies and techniques. PHI Learning Pvt. Ltd.. Chan, T.M., 2022. Maslow’s Hierarchy of Needs.Education Theory Made Practical, Volume 4. Diana, S.R., and et.al., 2019. Economic assesstment of satellite remote sensing data in Indonesia: anetpresentvalueapproach.InternationalJournalofEconomicsandFinancial Issues.9(1). p.140. Hopper, E., 2020. Maslow’s hierarchy of needs explained.ThoughtCo, ThoughtCo.24. Hussainy,S.S.,2020.ReviewonMotivationalTheories&Models:Itsapplicationfor Employees’ Retention in Organizations.International Journal of Business and Applied Social Science.6(1). pp.40-46. Mazeres, F., Brinkmann, K. and Richter, M., 2019. Implicit achievement motive limits the impact of task difficulty on effort-related cardiovascular response.Journal of Research in Personality.82. p.103842. Pawlak, M. and Zarzecki, D., 2020. Investment Appraisal Practice in the European Union Countries.European Research Studies.23(2). pp.687-699. Rybnicek,R.,Bergner,S.andGutschelhofer,A.,2019.Howindividualneedsinfluence motivation effects: a neuroscientific study on McClelland’s need theory.Review of Managerial Science.13(2). pp.443-482. Shrotriya, V., 2019. Internal sources of finance for business organizations.International Journal of Research and Analytical Reviews (IJRAR).6(2). pp.933-940. Verma,P.andSharma,D.,2018.Qualityofworklifeinacademicswithreferenceto motivational theories.Pacific Business Review International.11(4). pp.159-165. Vidili, I., 2021. Customer experience: the new competitive advantage for companies that want their customer at the center of their business. InHandbook of Research on User Experience in Web 2.0 Technologies and its Impact on Universities and Businesses(pp. 183-209). IGI Global.