H&M Business Management: Objectives, Finance, Motivation and Location

This report provides a comprehensive analysis of H&M's business management strategies. It begins by identifying the various resources required for the business to function effectively, including financial, human, and natural resources. It then discusses the different sectors of the economy and ex...Read More

BUSINESS
MANAGEMENT

Table of Contents
TASK 1............................................................................................................................................2
Several resources required by business to function effectively...................................................2
Different sectors of economy and state in which sector the organizations fall under.................2
Main types of legal structures and explain the one in which the organization falls....................3
Business Objectives of organization and define important business terms.................................3
Table to identify main stakeholders, expectations and accountability........................................4
Define the concept of Assets = Liabilities + Equity and budget.................................................4
Sources of Finance with advantages and disadvantages..............................................................5
TASK 2............................................................................................................................................6
Draw a diagram with the concept of economy and diseconomies of scales................................6
Various factors that has influence on the selection of the location of the business.....................6
Evaluate the Efficiency and effectiveness of production process...............................................7
How effective motivation and workforce planning helps an organization to manage labor
turnover........................................................................................................................................7
Different motivation theories.......................................................................................................7
Contemporary approaches to motivation.....................................................................................8
TASK 3 covered in PPT..................................................................................................................8
REFERENCES................................................................................................................................9
Books and Journal........................................................................................................................9

TASK 1
Several resources required by business to function effectively
In order to run a business in effective manner there are so many resources that are required to
fulfil functions in the business (Colvin, Witt, and Lacey, 2020). Such as in order to fulfil
production function business required to have human resource raw material and finance to
complete the production process in effective manner. There are so many function that are
performed in H&M to manufacture and adopt fast fashion in the company which requires the
company to fulfil the demands of resources that are given below:
Financial resources: Financial resources are the money that is required to carry out several
functions of the business of H&M. It is the most important resource that is required by a business
to function effectively as lack of money can affect the work.
Human resources: Human resources are the human beings or labors or workforce of H&M that
is required by a business to carry out their business functions in effective manner.
Natural resources: The cotton and thread used by H&M in their business is the natural resource
that helps them to make their production possible. Apart from that the company also uses land to
set up their manufacturing unit which is also considered a natural resources.
Different sectors of economy and state in which sector the organizations fall under
There are three main sectors of any economy that are primary, secondary and tertiary
sector. In primary sector raw materials are extracted to provide resources to the other sectors
which has secondary and tertiary sector. Secondary sector is a sector of manufacturing in which
goods are manufactured in factories and other organizations to add value to the primary goods. In
case of tertiary sector services are treated or provided to the customers such as transportation
distribution service and many more (Zehir, and Zehir, 2020). H&M is a Swedish clothing retail
brand who provides fast fashion women, men, children and teenagers. As the company deals in
manufacturing of clothes they are considered in secondary sector of the economy of Sweden.

Main types of legal structures and explain the one in which the organization falls
Generally there are four basic types of legal structures in which a business can operate
their business in the market. First type of legal structure is the sole trader and which one person
is responsible to manage all the functions of the business and take risk for the failure of the
business. The second legal structure is the partnership business which is a business in which two
or more person join hands together to form a mutual business to share their profits and losses
with the help of common deed generally known as partnership deed. The third legal Structure is
the company in which two or more persons decided to register their business organization as a
corporate under companies act so that they can provide a separate legal entity and perpetual
succession to a business (Sensini, 2020). The fourth form of a business structure is a trust in
which one person is elected democratically to control the trust who have the job to distribute
profits to the person who is recorded as a beneficiary of the trust according to the trust deed. In
the present scenario of h and m the company follows company form of legal structure as they are
registered under the companies act business in retail sector and became a multinational clothing
brand.
Business Objectives of organization and define important business terms
H&M has several objectives that they are requires to accomplished and formulate in SMART
objectives that are given below:
 Reduce packaging across our value chain by 25% (compared with 2018 baseline) by
2025
 Absolute transport-related emissions by 30% (2018 baseline) by 2025
 Reduce water usage in production by 25% (2017 baseline) by 2025
The important business terms related to these objectives are given below:
SMART Objectives: Smart objectives are very essential for h and m as it helps the
company to formulate effective objectives that are specific, measurable, achievable, and realistic
and are to be achieved in a proper time period.
Sustainability: The smart object as given above helps H&M ensure their sustainability.
Sustainability insurance that the company can be able to sustain in the market by providing
benefits to the people and environment and which they are operating.

Goods: Goods refers to the products that are offered by a business. In case of H&M fast
fashion clothing are the goods of the company that are offered by them to the general public.
Supply chain: Supply chain refers to the chain of supply of an organization through
which the companies able to distribute their goods and services in different markets (Bratianu,
Stanescu, and Mocanu, 2021). In case of H&M the company operates in approximately 74
countries which requires a large supply chain and the company has smart objectives to maintain
their supply chain.
Table to identify main stakeholders, expectations and accountability
Stakeholders Their role Expectations Accountability
Shareholders They are the owners
of the company who
provide their funds to
the business to
operate effectively.
They expect higher
returns for their
investment in the
company.
They are not
accountable to
anyone in the
company and
management is
accountable to them
in case of any losses.
Suppliers They provide
required raw
materials for the
business to carry on
the business in
effective manner.
They expect to get
their payment for
supplies on time.
They are accountable
to the business in
case of any defect in
supplies.
Customers They are the main
stakeholders as they
are the one who
provide profitability
to the company
(Zuhaira, and Ahmad,
2020).
The customers expect
best quality of
products from the
company with latest
fashion.
They are not
accountable but the
company is in case of
any defect in the
clothing and material
sold to them.

Define the concept of Assets = Liabilities + Equity and budget.
The equation helps to understand the double entry bookkeeping system in which both
asset side and liabilities is equal due to recording of transaction two times in the journal entry.
The investment which has been done by the company in assets and other cash in hand and Bank
will always be equal to the amount provided by equity shareholders and the liabilities which are
required to be collected by the company. This equation also helps the company to formulate their
budgets. The budgets or the planning of financial resources in prior to identify the need of money
during the business operations.
Sources of Finance with advantages and disadvantages
Sources of Funds Define Advantages Disadvantages
Bank loan Bank loan refers to
the loan which has
been taken by bank
on fixed rate of
interest.
The major advantage
of bank loan is that
the interest which is
paid on the loan is
deductible under tax.
The major
disadvantage to take
bank loan is to
qualify the criteria
after which a
company can be able
to get the loan and
also their high
interest rates are the
disadvantages of
bank loans.
Equity Capital Equity capital also
known as owner's
capital is a capital
which has been
borrowed by a
company from open
market to provide
funds to the business
(Reijers, 2021).
It is a less risky
source of fine and
also enhance the cash
flow as equity
finance does not take
the finance out from
the business.
The disadvantage of
issuing equity shares
to arrange finance is
that the investors
does not only share
profits in the business
but also get control
over the business as it
increase the owners

for the company.
Friends and Family Friends and families
are also source from
which a business can
be able to arrange
funds by borrowing
money from them as
a loan.
The source of fund
has no interest and
help the business to
get flexible loans
from the market.
This source can best
the relationships due
to conflicts related to
the money and also
have a limited legal
protection of the
loans taken from
friends and family.
TASK 2
Draw a diagram with the concept of economy and diseconomies of scales
Various factors that has influence on the selection of the location of the business
There are various factors which has influence on H&M during selection of their new location
that are explained below:

Accessibility: The location which has been selected by H&M should be taken care that it is
easily accessible by their customers.
Business rates: The rates of business in the country or in the location are also considered by the
business before setting up their business in that location.
Security: Proper research has been taken place to identify the security of business in the location
as more chances of theft can provide unnecessary loss to the business.
Competition: High competition can also provide loss to the organization and H&M always
focus to work and mild all low competition so that they can gain competitive advantage (Baiyere,
Salmela, and Tapanainen, 2020).
Evaluate the Efficiency and effectiveness of production process
Efficiency refers to the capabilities of an organization to provide the work on a given time with
the given resources whereas effectiveness refers to attain maximum output with the given
sources in a business. In case of H&M the company is required to check there effectiveness and
efficiency in their production process with the help of proper management process in which at
the controlling function they should compare the planned performance with the actual
performance of the business. It helps to find the deviations in the business organization which
shows the effectiveness and efficiency of the production process.
How effective motivation and workforce planning helps an organization to manage labor
turnover
Workforce planning is a planning through which a company a certain the needs of employees in
the organization and the management of already existing employees in the company. Workforce
planning and motivation is very essential for a company to make their employees related with the
company. H&M always focus in motivating their employees with the help of their workforce
planning so that they can be able to reduce their employment and over (Baiyere, Salmela, and
Tapanainen, 2020). Taking an example of incentive programs in H&M, the company motivate
their employees with the help of various incentives which not only motivate their employees but
also keep them connected with the company due to extra pay and reduces employments turnover
rate.

Different motivation theories
There are so many motivation theories that helps a business in the workforce planning. The main
motivation theories that are used by business organizations are given below:
Maslow's Hierarchy of Needs: Maslow's hierarchy of needs is a need based theory which has
been designed to provide different types of employees in an organization with a pyramid which
shows that satisfaction of one need of an employee give rise to another need in the organization.
The five needs of an individual in working in the organization that are provided by the maslow
hierarchy of needs theory are physiological needs safety needs social needs self-esteem needs
and self-actualization needs.
Herzberg's dual factor theory: Two factor theory has been given by Frederick Herzberg in
which he provides that motivation of employees is depend on two important factors that is
hygiene factors and motivators in the company. Hygiene factors includes company policies
related to health and hygiene supervision and relationship among superiors and subordinates
working conditions security and salary. Whereas motivators in the company includes
achievement interesting work, rewards, recognition, advancement and growth and many more.
Contemporary approaches to motivation
Contemporary approaches to motivation are those approaches that helps H&M to solve
various contemporary motivational issues in the organization such as motivating a diverse
workforce motivating minimum wage employees pay for performance programs technical
employees and motivating professionals in the company. There can be four approaches that can
be used as contemporary approaches to motivation and that our psychological behavior cognitive
and social approaches. In order to explain these approaches to motivation there are various
theories that has been provided by various authors and some of them are explained above.
Psychological approach helps to target the psychology of employees to motivate them such as
fulfilling their basic needs. Behavioral approach can be used to change the behavior of
employees in H&M by motivating them towards their goals and objectives. Similarly, cognitive
and social approaches are also crucial elements that are used in setting and retaining walls with
the help of motivation among employees(Baiyere, Salmela, and Tapanainen, 2020).

TASK 3 covered in PPT

REFERENCES
Books and Journal
Colvin, R.M., Witt, G.B. and Lacey, J., 2020. Power, perspective, and privilege: the challenge of
translating stakeholder theory from business management to environmental and natural
resource management. Journal of Environmental Management, 271, p.110974.
Zehir, S. and Zehir, M., 2020. Internet of things in blockchain ecosystem from organizational
and business management perspectives. In Digital business strategies in blockchain
ecosystems (pp. 47-62). Springer, Cham.
Sensini, L., 2020. Working capital management and performance: evidence from Italian
SME’s. International Journal of Business Management and Economic Research
(IJBMER), 11(2), pp.1749-1755.
Bratianu, C., Stanescu, D.F. and Mocanu, R., 2021. Exploring the Knowledge Management
Impact on Business Education. Sustainability, 13(4), p.2313.
Zuhaira, B. and Ahmad, N., 2020. Business process modeling, implementation, analysis, and
management: the case of business process management tools. Business Process
Management Journal.
Reijers, H.A., 2021. Business Process Management: The evolution of a discipline. Computers in
Industry, 126, p.103404.
Baiyere, A., Salmela, H. and Tapanainen, T., 2020. Digital transformation and the new logics of
business process management. European Journal of Information Systems, 29(3), pp.238-
259.