Donut Restaurant Organization Development

This assignment focuses on developing an organization culture for a donut restaurant facing challenges in attracting new customers due to high competition. It outlines the role of management in driving organizational development, identifies data-driven problems, and proposes strategies like market research to establish the business in tourist-heavy areas. The plan utilizes forcefield analysis as a change management technique and includes employee feedback mechanisms and meeting minutes to demonstrate program effectiveness.

MANAGE FINANCE & CONTRIBUTE TO
ORGANISATIONAL DEVELOPMENT

TABLE OF CONTENTS
Assignment 1...............................................................................................................................................................................................3
Strategic opportunity in terms of tactical and operational objectives......................................................................................................3
Transformation of opportunity in special projects...................................................................................................................................3
Analyzing financial trends and interpreting them in context of objectives.............................................................................................3
It can be seen that financial trends during a year in different months are excellent. As sales in the month of February is £14760
which increased to £49206. This reflects that huge plunge comes in the sales value during the relevant time period. The operational
objective of earning profit by controlling cost is reduced by maintaining stability in cost of core business operations........................4
Financial planning objectives and process timeframes as well as resources...........................................................................................6
Consulting with relevant people..............................................................................................................................................................7
Past experience, present trends and future expectations..........................................................................................................................7
Linkage of proposal to strategic objectives.............................................................................................................................................7
Cost benefit and risk analysis..................................................................................................................................................................7
Investment target rates and capital expenditure proposals......................................................................................................................8
Performance measures and tactics for monitoring and control processes for proposal...........................................................................8
Proposal and its relationship to organization values, policies and code of conduct................................................................................8
Use of software’s.....................................................................................................................................................................................8
Project evaluation method, cost benefit analysis and market research results........................................................................................9
Part B.........................................................................................................................................................................................................11

Negotiation............................................................................................................................................................................................11
Identifying and agreeing on the links to the achievement of organization strategies............................................................................11
Outcomes of budget in terms of objectives and timeframes..................................................................................................................11
Written confirmation of delegation, accountability and responsibility.................................................................................................12
Communication plan..............................................................................................................................................................................12
Part C.........................................................................................................................................................................................................12
Details about budget accountability for implementation and management of package........................................................................12
Recording system and documentation process for monitoring and control of activities.......................................................................13
Risk management and contingency plan...............................................................................................................................................13
Development of plan..................................................................................................................................................................................13
Analysis of organization strategic plans to determine firm needs and objectives.................................................................................13
Consulting with relevant groups............................................................................................................................................................13
Role of entity in organization development process..............................................................................................................................13
Collection and analysis of data on areas where business experiencing a problem................................................................................14
Objectives and strategies for organization development.......................................................................................................................14
Change management techniques............................................................................................................................................................14
Observation................................................................................................................................................................................................14
Undertaking regular surveys..................................................................................................................................................................14
Copies of surveys...................................................................................................................................................................................14
Minutes of meetings..............................................................................................................................................................................16
Evidence of championing the program..................................................................................................................................................16
Final evaluation.....................................................................................................................................................................................16

Assignment 1
Strategic opportunity in terms of tactical and operational objectives
Operational objective of the Donut restaurant is to increased business profit by reducing its overall cost of production. In this
regard it planned to expand its operations. Under this new products will be launched in the market. Raw material will be purchased
from single supplier in large quantity which will generate economies of scale in business. Thus, in this way new product development
will help firm in achieving its operational objective.
Transformation of opportunity in special projects
There are ample opportunity in the restaurant industry as number of people visiting restaurant is increasing consistently. This
opportunity is tapped in the specific project under which many new dishes like Indian, Mexican, Chinese and Intercontinental will be
served to the customers under single roof.
Analyzing financial trends and interpreting them in context of objectives
Table 1Projected revenue from varied products
Revenue per
person
Februa
ry
Marc
h
Apri
l May June July August
Sept
emb
er
Octob
er
Novem
ber
Decem
ber January Total
British 1800 2250 2925
3217
.5
4343.6
25
4777.98
75
4790.13
75
5269
.151
25
5796.0
6638
7245.08
297
7259.0
3297
10888.54
95 60562.133
Indian 3150
3174.
15
3198
.3
3223
.5
4351.7
25
4379.02
5
4407.37
5
4436
.775
4467.2
25
6254.11
5
6286.6
65
9429.997
5 56758.8525
Mexican 2090
2102.
65
2115
.3
2128
.5
2873.4
75
2887.77
5
2902.62
5
2918
.025
2933.9
75
4107.56
5
4124.6
15
6186.922
5 37371.4275
Chinese 5000 5023 5046 5070 6844.5 6870.5 6897.5
6925
.5 6954.5 9736.3 9767.3 14650.95 88786.05

Intercontinental 2720
2738.
4
2756
.8
2775
.2
3746.5
2 3764.92 3783.32
3801
.72
3820.1
2
5348.16
8
5366.5
68 8049.852 48671.588
Revenue 14760 15288
1604
1
1641
5 22160 22680 22781
2335
1 23972 32691 32804 49206 292150
Figure 1Sales projection
It can be seen that financial trends during a year in different months are excellent. As sales in the month of February is £14760 which
increased to £49206. This reflects that huge plunge comes in the sales value during the relevant time period. The operational
objective of earning profit by controlling cost is reduced by maintaining stability in cost of core business operations.
British 5
Indian 8
Mexican 6
Chinese 6

Intercontinental 7
Cost of producing each unit of specific dish remain stable for 12 month time period at value stated in the above table.
Figure 2Percentage change in sales and cost
It can be seen from the chart that sales revenue and cost are strictly changing in alignment to each almost by same percentage. This
proved that Donut restaurant maintain stiff control on its cost and achieve operational objective.
Table 2Income statement
2017-18
Revenue 292150
Less: Cost of goods sold 123582
Gross profit 168568
Expenses
Marketing expenses 1200
Administration expenses 6000
Finance cost 8000
Insurance 2400

Rent 1800
Salary and wages 120000
Depreciation 14958
Other operating expenses 12000
Sum of expenses 166358
PBIT 2210
Tax 0
Net profit 2210
Financial planning objectives and process timeframes as well as resources
The main objective of financial planning is to make investment in the business in structured way so that in single month huge
amount of capital investment cannot be made. Thus, by doing so stiff control will be maintained on the capital expenditure that will be
made in the business. Financial planning is prepared for one year and under this budget is prepared.
Table 3Cash budget
Februar
y March April May June July August
Septembe
r October
Novembe
r
Opening balance 20000 19675.1 19877.3 20831.8 22158.6 29229.5 36819.8 44509.8 52769 61648
Sales 14760 15288.2 16041.4 16414.7 22159.8 22680.2 22781 23351.2 23971.9 32691.2
Total 34760 34963.3 35918.7 37246.5 44318.4 51909.7 59600.7 67860.9 76740.9 94339.2
Expense
Marketing expenses 80 80 80 80 80 80 80 80 80 80
Administration expenses 400 400 400 400 400 400 400 400 400 400
Finance cost 533.333 533.333 533.333 533.333 533.333 533.333 533.333 533.333 533.333 533.333
Insurance 160 160 160 160 160 160 160 160 160 160
Rent 120 120 120 120 120 120 120 120 120 120
Salary and wages 10000 10001 10002 10003 10004 10005 10006 10007 10008 10009

Depreciation 997.2 997.2 997.2 997.2 997.2 997.2 997.2 997.2 997.2 997.2
Preliminary expenses written
off 1994.4 1994.4 1994.4 1994.4 1994.4 1994.4 1994.4 1994.4 1994.4 1994.4
Other operating expenses 800 800 800 800 800 800 800 800 800 800
Sum of expenses 15084.93
15085.9
3
15086.9
3
15087.9
3
15088.9
3
15089.9
3
15090.9
3 15091.93
15092.9
3 15093.93
Net balance 19675.07
19877.3
3 20831.8
22158.5
7
29229.4
8
36819.7
5
44509.7
8 52769.01
61647.9
7 79245.27
December January
79245.3 96954.5
32804.2 49206.3
112049 146161
80 80
400 400
533.333 533.333
160 160
120 120
10010 10011
997.2 997.2
1994.4 1994.4
800 800
15094.93 15095.93
96954.51 131064.9
Table 4Budget for business firm
Capital expenditure budget

Capital expenditure
Februar
y March April May June July August
Septembe
r October
Novembe
r
Decembe
r January
Exterior signs and
decorations 26080
Equipment and machine 20000 20000 20000 20000 20000 20000
Furniture’s 500 500 500 500 500 500 500
Total capital expenditure 46580 500 20000 500 20000 500 20000 500 20000 500 20000 500
Cash inflow from project
Sales revenue 14760 15288
16041.
4
16414.
7
22159.8
5
22680.2
1
22780.9
6 23351.17
23971.8
9 32691.23 32804.18
49206.2
7
Net cash inflow -31820
14788.
2 -3958.6
15914.
7
2159.84
5
22180.2
1
2780.95
8 22851.17
3971.88
6 32191.23 12804.18
48706.2
7
Consulting with relevant people
For developing good business proposal contact will be established with the friends that have experience in the restaurant
industry for long time period. By taking necessary guidance from them business proposal will be prepared in better way.
Past experience, present trends and future expectations
Firm is in restaurant business since last 3 years. During this time period tourism in the UK increased at rapid pace. On this basis,
it is expected that in upcoming time period also tourism will increased by higher growth rate which will lead to increase in revenue of
the restaurants. Current trend is that restaurant industry is increasing by 2% and tourism industry is growing at 14% CAGR. Thus,
with further elevation in growth rate of tourism industry revenue of restaurants will surely get elevate.
Linkage of proposal to strategic objectives
Proposal is linked to the strategic objective. This is because main objective is to increase profit and controlling cost. This
proposal help firm in elevating its business profit and cost control as proved above by results depicted by Figure 1. Hence, proposal
and strategic objectives are interlinked to each other.

Cost benefit and risk analysis
Cost Benefit
Material purchase cost: Material purchase cost is associated with
restaurant business. In large quantity raw items will be purchased
from suppliers.
Capitalizing opportunity: There is a huge growth potential of
tourism industry. By increasing product line this opportunity can
be grabbed and huge amount of profit can be earned in business.
Capital expenditures on machines: Huge amount of expenditure
will be made on machines and furniture’s as well as fixtures up to
certain amount so that customers feel well in the restaurant.
Employee cost: There will be 5 Chefs which will be intern
students. Each will be paid £2000 for a month.
Exterior and painting cost: Exterior and painting cost will be
£26080.
Investment target rates and capital expenditure proposals
Investment target rate is earning of 9% IRR on capital expenditure proposals.
Performance measures and tactics for monitoring and control processes for proposal
As part of performance measures for each and every stage of the project start and completion time will be determined along with
cost. If all business idea implementation stages will be completed on time and at determined cost then it means that project is
effectively controlled. As part of tactics there will be senior manager who will keep an eye on project progress. On half day and
completion of working hours subordinates will communicate all necessary progress related details to the project manager. In this way
project will be monitored in best way.

Proposal and its relationship to organization values, policies and code of conduct
There is a relationship between proposal and organizational values. As making available dishes at affordable price to the people
is target of the firm. This can be done only by controlling expenditures and reducing same. Through this proposal cost will be
controlled strictly which will lead to achievement of organization values. Firm code of conduct state that customers must not be
exploited and as per relevant proposal at right price dishes will be made available to the customers. Thus, in this way through proposal
code of conduct is strictly implemented in the organization.
Use of software’s
Excel is the software that could be used in project for financial management purpose.
Project evaluation method, cost benefit analysis and market research results
Table 5 Calculation of payback period
-149580
1 14760 -134820
2 15288 30048
3 16041 31330
4 16415 32456
5 22160 38575
6 22680 44840
7 22781 45461
8 23351 46132
9 23972 47323
10 32691 56663
11 32804 65495
12 49206 82010

Table 6 Calculation of NPV
Years Cash flows PV factor
Present
value
1 14760 0.926 13667
2 15288 0.857 13107
3 16041 0.794 12734
4 16415 0.735 12065
5 22160 0.681 15082
6 22680 0.630 14292
7 22781 0.583 13292
8 23351 0.540 12616
9 23972 0.500 11992
10 32691 0.463 15142
11 32804 0.429 14069
12 49206 0.397 19540
Total of
PV values 167600
NPV 18020
Table 7 Calculation of IRR
-149580
1 14760
2 15288
3 16041
4 16415
5 22160
6 22680
7 22781
8 23351
9 23972

10 32691
11 32804
12 49206
IRR 10%
Interpretation
Project is profitable for the firm as its IRR is moderate 10% and NPV is 18020. Moreover, payback period is also very low as
investment is covered only in one month time period by the project. This, same is assumed viable for the business firm.
Part B
Negotiation
Negotiation is done with the bank branch manager. In order to establish contact with branch manager senior employee approach
bank and explain entire business plan and reasons due to which it will receive huge success in the market. Moreover restaurant owner
specifically establish contact with business friends and obtain information about current trends that exist in the market. Commitment
of support is received from both entities through negotiation process.
Identifying and agreeing on the links to the achievement of organization strategies
Links are identified during the meeting that was conducted with managers. Through discussion strategy that must be followed to
improve business performance are identified.
Outcomes of budget in terms of objectives and timeframes
Capital expenditure budget
Capital expenditure
Februar
y March April May June July August
Septembe
r October
Novembe
r
Decembe
r January
Exterior signs and
decorations 26080
Equipment and machine 20000 20000 20000 20000 20000 20000
Furniture’s 500 500 500 500 500 500 500

Total capital expenditure 46580 500 20000 500 20000 500 20000 500 20000 500 20000 500
Cash inflow from project
Sales revenue 14760 15288
16041.
4
16414.
7
22159.8
5
22680.2
1
22780.9
6 23351.17
23971.8
9 32691.23 32804.18
49206.2
7
Net cash inflow -31820
14788.
2 -3958.6
15914.
7
2159.84
5
22180.2
1
2780.95
8 22851.17
3971.88
6 32191.23 12804.18
48706.2
7
Main objective was to increase profit by controlling cost and sake is prepared for 12m months. This target is achievable as revealed by
the budget where capital expenditure is made in varied items in specific sequence. By doing so it is ensured that heavy capital
expenditure will not negatively affect the cash flows for 12 months. This ensured that cash flows will be positive for each month and
profit will be earned in each month time period.
Written confirmation of delegation, accountability and responsibility
Chefs
Accountability
 Chef will be accountable for quality of food item to the manager of the firm which is owner himself.
Responsibility
 Chef will be responsible to make best use of resources.
 They will also be responsible to make available ordered item on time to the customers.
Communication plan
Chef will be directly accountable and answerable to the manager which is owner of the firm. There will be no intermediary
between both and entities will directly contact to each other. Weekly meetings will also be conducted between manager and Chef and
during same both entities will share their thoughts on varied business issues.

Part C
Details about budget accountability for implementation and management of package
Manager and sole trader both are same entity and due to this reason managers will be accountable to himself for the
implementation of budget in proper manner in the business. As a software package excel will be used to perform simple to complex
calculations. Manager will be accountable to make all purchase as per reflected by the budget only up to relevant value.
Recording system and documentation process for monitoring and control of activities
In the excel record will be maintained about quantity of raw material that is consumed on single day. Apart from this, date by
which specific asset is purchased in the business will also be mentioned in the excel. In this way recording system will be digitalized.
No paper documentation will be done.
Risk management and contingency plan
It is possible that in future cost of raw material get increased and no economies of scale generated in the business. As part of risk
management and contingency plan contract is signed with supplier under which in case of increase in price at 20% discount raw
material will be available to Donuts restaurant.
Development of plan
Analysis of organization strategic plans to determine firm needs and objectives
Firm main objective is to maximize profit and reduce cost or controlling same. In this regard strategy is prepared under which
bulk purchase will be made at low value which will originate economies of scale in business and will help firm in achieving its
objective in terms of cost and profit.

Consulting with relevant groups
Friends that are operating in restaurant industry are consulted in order to develop a best organization culture at the workplace.
There will be liberal work culture in the organization.
Role of entity in organization development process
Manager will play key role in organization development process because he is owner and manager both in the Donut restaurant.
Collection and analysis of data on areas where business experiencing a problem
Firm is experiencing a difficulty in creating a new customers in the business. On analysis of data it is identified that there are
number of restaurants in the UK and they have good image among the customers. Hence, it become difficult to create new customers
in business.
Objectives and strategies for organization development
In respect to organization development main objective is to establish business in the area where large number of tourists comes
during entire year. In this regard specific strategy will be followed under which market research will be done about area where
restaurants are earning higher amount of money in their business.
Change management techniques
Forcefield analysis method will be used as change management technique. This is because mentioned method focuses on the
driver for change and inhibitor of same. Thus, by using this method the way in which change must be implemented can be easily
determined.
Observation
Undertaking regular surveys
2 regular surveys are conducted which reflect s that employees still support the activities that are based on organization
development program.

Copies of surveys
Name: ___________________
Age: ____________________
Experience:_______________
Do you think organization value system is excellent?
 Yes
 No
Change management technique that is used by the management is highly effective.
 Strongly agree
 Agree
 Neutral
 Disagree
 Highly disagree
Do you that strategic plan prepared by management is perfect?
 Yes
 No
Current structure of communication is suitable for the firm.
 Strongly agree
 Agree
 Neutral
 Disagree
 Highly disagree

Management decision to taking guidance from others in respect to business is right.
 Strongly agree
 Agree
 Neutral
 Disagree
 Highly disagree
Your feedback.
______________________________________________
Minutes of meetings
Half hour meeting is organized under which employees and manager discuss lots of issues.
Evidence of championing the program
Program proved effective as strategic plan is matching to the organization needs and objectives. Moreover, change management
technique use is helping business firm in managing change in the business. Clear structure of communication positively affect the
business operations. Thus, organization development program is successful.
Final evaluation
On evaluation it is identified that project is viable for the business firm as it have moderate IRR and NPV less payback period.
Organization development plan is excellent and it proved effective for the business firm. It can be said that there is high scope of
growth in tourism sector. Thus, restaurant industry will grow at rapid pace.