Business Operations Report: H&M Business Operations Analysis

This report provides a comprehensive analysis of business operations, using Hennes & Mauritz (H&M) as a case study. It explores different organizational structures within both public and private sectors in the United Kingdom, with a focus on H&M's functional organizational structure. The report delves into the impact of local and global environments on business operations, highlighting accounting's importance in business success and presenting a profit and loss account analysis. Furthermore, it examines the roles within a team, the significance of motivational theories (Herzberg and Maslow), and the impact of various leadership styles on employees. The functions of the Human Resource department and the influence of customer service on business success are also discussed. The report concludes with an overview of the key findings and insights gained from the analysis of H&M's business operations.

HOW BUSINESS OPERATE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Kinds of organisation that are found in both public and private sector in United Kingdom 1
1.2 Different structure within business in United Kingdom.......................................................1
1.3 Impact of local and global environment on business operations by Hennes & Mauritz.......2
TASK 2............................................................................................................................................3
2.1 Importance of accounting for business success....................................................................3
5.1 Different functions carried out by Human Resource department in business.......................3
5.2 Key features of employment legislations..............................................................................3
TASK 3 ...........................................................................................................................................4
3.1 Information on profit and loss account.................................................................................4
TASK 4............................................................................................................................................4
4.1 Analysis to determine own and other's role within a team....................................................4
4.2 Notes which can be incorporated for having support in future training events....................5
4.3 Adequate use of different motivational theories for business activities...............................6
4.4 Impact of various leadership styles on employees................................................................6
TASK 5............................................................................................................................................6
6.1 Impact of customer service on business success\..................................................................6
6.2 Benefits of customer profiling to a business.........................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment plays a crucial role in operating a business in a better manner as it
includes both internal and external factor which can have an impact on company's performance.
In this, factors that are included are like suppliers, technologies, rules and regulations, social
environment etc., For this assignment, company which has been taken is Hennes & Mauritz;
which deals in clothing in United Kingdom (Adjei, H and et. al., 2014). Report will majorly
focus on different kind of structure that are followed by public and private sectors in United
Kingdom. Other than this business functions and environment that are present in a company is
included in this assignment. Accounting concept and its value to the company will be explained
with different examples.
TASK 1
1.1 Kinds of organisation that are found in both public and private sector in United Kingdom
Basically three kinds of organisational sectors are there but report will focus on two i.e.
public and private and these are explained below:
Public Organisation: These are the sectors that are run and regulated by regulatory
bodies of nation. In terms of finance, taxes that are paid by citizens are used for providing better
services and facilities. Public organisation can be further classified into two categories i.e.
Central that includes defence, national health care services, activities that are related to social
security etc., whereas local government constitutes primary and secondary educations to every
individual, big libraries and many more. Henceforth,
Private Organisation: These kind of businesses are run and maintained by an individual
or group of people where there goals is to increase the revenue so that profit would be high..
Main purpose of these companies is to get maximum amount of profit from goods and services
that the firm is giving to its customers. Private organisation can be further divided or classified
into sole traders, partnership, franchises and many more. It contributes ample amount of money
to the economy that's why every country is trying to attract MNC to invest there.
1.2 Different structure within business in United Kingdom
Every company has its own structure of operating its business whether small, medium or
large. Thus, entire concept depends upon size and structure of firms. For having better operations
it is necessary that an effective communication is established in enterprise so that superiors can
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have better interaction with its subordinates. In total there are 5 common business organisational
structure that are being followed by most of the companies. In terms of Hennes & Mauritz they
are using Functional Organisational Structure that are explained below:
Functional Organisational Structure: This kind of functions are opted by many
companies in which whole company is divided according to their work which has been assigned
to them. Hennes & Mauritz has adopted this organisational structure for operating their business
and it is assisting them in classifying groups as per the functions in which they are good. Thus,
company has separate departments for their functioning like human resource, operation
management, finance department etc., therefore, it helps organisation in performing their task in
a systematic manner. For example: Managers in an organisation play their role and analyse
functions that are performed by employees and report to their superiors which includes directors
or vice presidents. Work performed by expertise help organisation helps firm in executing plans
in a better manner.
1.3 Impact of local and global environment on business operations by Hennes & Mauritz
H&M is one of the leading company that work for providing services in clothing sectors
of different age group whether men, women, teenagers, old aged people etc., company is big and
they are operating its business in around 62 countries under which H&M have close to 4,500
stores and approximately 132,000 number of people are working for providing maximum
benefits in return. While establishing its business, company has chosen countries that are
politically stabled and doesn't face any serious kind of problems like France, Denmark, Germany
etc., because of some currency translations and current incident of Brexit, H&M faced lower
down of sales and profitability of around 59.7 percent. Although in the initial years of BREXIT
complications were there but due to the cheap fashion commodities provided by company had
level up entire issues. Therefore, for increasing sales Hennes & Mauritz are planning to establish
new stores which is around 2,700 in China, U.S and Great Britain as well. In terms of global
level company is gradually getting maximum benefits from the stores that are located in local
and national level.
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TASK 2
2.1 Importance of accounting for business success
In order to get effective information about how much company has gained profit in terms
of profit and loss; accounting plays an important role in deciding a budget plan so as to run
business in an effective manner. Thus, it can be said that accounting gives detailed information
of financial statement which can further be used for making strategies. Main role of accounting
in the organisation is to asses the financial status of the company and how they can perform
better in future so to increase their profitability. Therefore, accounting also assist organisation in
expanding business using appropriate funds and methodologies (Aronoff and Ward, 2016).
TASK 3
3.1 Information on profit and loss account
Profit and Loss statement of H&M
All numbers in thousands
Revenue 11/30/2017
Total Revenue 200004000
Cost of Revenue 91914000
Gross Profit 108090000
Operating Expenses
Selling General and Administrative 87521000
Total Operating Expenses 179435000
Operating Income or Loss 20569000
Income from Continuing Operations
Total Other Income/Expenses Net 240000
Earnings Before Interest and Taxes 20569000
Interest Expense -41000
Income Before Tax 20809000
Income Tax Expense 4625000
Net Income From Continuing Ops 16184000
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Net Income 16184000
Net Income Applicable To Common Shares 16184000
Interpretation:
TASK 4
4.1 Analysis to determine own and other's role within a team
Every company built team in order to achieve set goals and objectives for this, it is
required that mutual understanding is maintained between employees who share same opinions
and thoughts. As I am working as a manager and my prime role is to assign task and
responsibilities according capabilities that are possessed by an individual. For this, I am
monitoring performance of employees on a regular basis and this is enabling me in identifying
strong and weak points of a person respectively. Although I am a manager in this company and
its my prime responsibility to maintain a better environment at workplace, along with this, I am
giving employees freedom in expressing all their views and thoughts for betterment of the
company.
4.2 Notes which can be incorporated for having support in future training events
An effective team always give positive results which help company in sustaining a better
position at workplace. To form an appropriate team it is required that company follow certain
steps which are explained below:
Forming: It is considered as the first step of forming an effective team and through this
step superiors try to identify nature and behaviour of employees so that people sharing same
thought can be kept while generating a team. In this, people those who are included are very
humble and polite because all individuals are new to organisation.
Storming: It is next step after forming in which new employees starts pushing their limits
for performing the task effectively which disabled company in having proper control over
activities (Buhmann, 2016).
Norming: In this, employees try to interact with every individual who are there in an
organisation so as to resolve issues and differences. Workers starts respecting their superiors and
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leaders. Leader work is to provide all the information to their candidates which is essential for
them to complete their assigned task.
Performing: This is the last step in which employees start performing their activities in
order to achieve set goals and objectives in speculated period of time. Leader work is to guide
and help their team members so that they can attain their goals without any challenging situation.
Different types of motivational theory:
Herzberg's motivational theory: This theory is majorly classified into two elements
which are intrinsic and extrinsic motivation. It is used in order to maintain a linear relationship
between employees along with this, job satisfaction and dissatisfaction are included.
Maslow's Need Hierarchy theory: It is categorised as one of the basic theory that are
being adopted by most of the organisation. This includes human needs that are basic in nature
and it involves physiological, safety and security, social, esteem and self actualisation. Mainly it
is used for motivating employees. All the needs are in pyramid shape in which every phase has to
be attain by employees then only they will move to upper phase of needs.
Various kinds of leadership style:
According to current market scenario, there are different kinds of leadership styles that
have been incorporated by Hennes and Mauritz company. Mainly implementation of all these
styles are depends upon situations and circumstances. For example: while increasing productivity
level firm uses autocratic leadership style as it enable company in producing goods in ample
number in specific period of time. Apart from this, company prefer democratic style of
leadership which gives equal opportunity to every person in expressing their views and thoughts.
Leader work is to guide their managers and employees so that their work would be align to the
mission and vision of the company. If it is align then company would be able to achieve
competitive advantage in future.
4.3 Adequate use of different motivational theories for business activities
Leaders and managers plays a crucial role in motivating its employees so that task can be
accomplished in timely manner. Motivation is directly proportionate to the work performance of
employees. If employees motivation is high then they will perform with their maximum potential
which assist company to increase overall performance of company and vice versa. H&M
company is using Maslow's hierarchy for motivating its employees along with this firm is
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providing bonuses and rewards to individual who are doing good in their job. Enterprise is
considering all basic needs like safety and security. Self actualisation and esteemed are taken
into consideration which encourage workers in pushing their limits (Carayannis, Sindakis and
Walter, 2015).
4.4 Impact of various leadership styles on employees
Although autocratic leadership style is effective when company wants to increase its sales
and profitability but differences in clashes can create problem in maintaining mutual
understanding. During normal days for providing better environment at work place company
uses democratic style of leadership which helps workers in having proper interaction with other
individuals.
TASK 5
5.1 Different functions carried out by Human Resource department in business
Human resource department is one important department that plays a crucial role in terms
of hiring selecting eligible candidates in an organisation. Each task done by the HR department is
important for company as it directly affects their productivity. Entire procedure of recruitment
and selection process are conducted by Human resource department by considering the post that
are vacant and needs to be fulfilled. Basically companies in order to attract a large number of
suitable candidates they give advertisements on television, magazines, newspaper, commercial
channels etc. Providing job safety is a big concern of human resource department and HR
manager look out for terms related to health and safety in order to provide better services to its
workers and employees.
5.2 Key features of employment legislations
Employment legislations are followed for maintaining a standard of working at
workplace. These are formulated by regulatory bodies of a nation and under this certain rules
and regulations are made that are related to minimum wages at workplace, appropriate working
hours, norms related to leaves. Therefore, H&M has incorporated all these laws for maintaining a
peaceful environment at workplace (Bernstein, 2015). With the help of Equality Act of 2010, it is
enabling them in providing equal chances to every individual in giving views and thoughts for
making strategies and plan of action. Other than this, laws that are related to providing job safety
to every person who is working in an organisation so that employees may feel connected to the
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company. For example: H&M gives compensation to worker who faces any kind of serious
injury or death which is a great move by the firm so as to show gestures of goodwill about
workers.
Task 6
6.1 Impact of customer service on business success\
All organisations of private and public sectors concerns more on providing effective
services to customers as it impacts directly on their profitability. In Clothing sector, retention of
old customers is much necessary for its growth. Management of these companies are much
concern on delivering high services to customers according to their demand and need. This
would help in earning more and more profitability as well as success of business in high manner.
With this assistance, H & M has made various modifications in services which aid them to get
interest of customers easily.
6.2 Benefits of customer profiling to a business
Customer profiling is helpful in understanding needs and demands of them for company's
management. Therefore, for this process managers of H & M used to make good interaction with
its guests and make connection with them through various applications of social sites. Some
main benefits of customer profiling for business success of industries are:-
Effective communication:- When employees of a firm know profile of customers then they can
interact with such people easily (Charter, M. ed., 2017). As staff members will know how to deal with their demands by communicate with them
properly as well as complete needs on time.
 Decrease the competition :- Making good connection with old consumers, help managers
to retain them with services for long time. If a company has knowledge about needs and
demands of customers then they would modify their products accordingly which will help
them to become market leader in the competitive market.
CONCLUSION
From the above report it has been concluded that, a better business environment plays a
crucial role in operating business in an effective way. All departments do their part of work for
providing maximum benefits to companies. Customer profiling should be done by every
company as it ensures that customers are getting what they want to have to satisfy their needs. It
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helps company to beat competitors in the market and increase their profitability significantly.
Human resource department helps company in selecting suitable candidates for its company
along with this, they use various kinds of leadership and motivational theory. As a result it assist
companies in improving its sales and profitability.
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