Business Report: Analysis of Sainsbury's Operations and Environment

This report provides a comprehensive analysis of Sainsbury's business operations. It begins with an overview of organizational structures in public and private sectors, followed by an examination of how the local, national, and global economic environments impact Sainsbury's. The report then delves into the importance of accounting for business success, detailing key functions of the HR department and employee legislation. It includes an interpretation of a profit and loss account. Further, the report explores team development stages, motivational theories (including Maslow's model and a comparison to Alderfer's ERG model), and different leadership styles. Finally, it assesses the impact of customer service on business success and the benefits of customer profiling. The report aims to provide insights into Sainsbury's strategies and performance across various business functions.

How Business operate

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1 ...........................................................................................................................................3
1.1 Types of organisation in public and private sector ..............................................................3
1.2 Different organisation structures within the business and reason for variations..................4
1.3 Describe how the local, national and global economic environment impact Sainsbury's
business.......................................................................................................................................4
TASK2.............................................................................................................................................5
2.1 Importance of accounting for business success....................................................................5
5.1 Different function carried out by HR department in business..............................................6
5.2 Features of employee legislations.........................................................................................6
TASK3.............................................................................................................................................6
3.1 Interpret the information on profit and loss account ............................................................6
TASK4.............................................................................................................................................7
4.1 Stages of team development..................................................................................................7
4.2 Description of motivational theories....................................................................................8
4.3 Comparison of motivational theories....................................................................................8
4.4 Different leadership styles.....................................................................................................8
TASK5.............................................................................................................................................9
6.1 Impact of customer service on business success ..................................................................9
6.2 Benefits of customer profiling to a business........................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment consist of both macro and micro factors which need to be consider
at the time of running business effectively (Baden-Fuller and Morgan, 2010). Further, different
types of changes coming in external market in relation to choices, preferences and perception of
customers so it is important for all the businesses to make alteration in their organisation
structure so they easily grab all the market opportunities and remove threats coming in this
market. Therefore, for all the organisation it is important to scan all the external conditions and
make innovation in their products and services which satisfy the customer most. Under this
assignment the company which is pre-freed i.e. Sainsbury's that is UK based retail organisation
deals in grocery and clothing industries require to formulate such type of policies that help them
in gaining competitive advantages over competitors.
TASK1
1.1 Types of organisation in public and private sector
In every organisation department is divided into different sectors and area on the basis of
which they have to decide what type of policies and function has been conducted by
organisation. Company engaged in different goods and services formulate various strategies in
order to earning profits and fulfilling the objectives in appropriate manner. In corporate world
there are different types of sector the main is public and private sector who has their own
functioning and types which describe below:-
 Public company:- It includes all the governmental, public and other local authority who
formulate their own legal rules regulation for the conducting of business. Further, they set
the price of their product according to the purchasing power of customers. The main
objective of this company is to serve general public. Types of public company are:-
 Departmental undertakings:- This is one the oldest form of public organisation in which
all the decision are taken by top authority only.
 Statutory corporations:- these are those public sector organisation which are establish by
the act of parliament. They are owned by government with or without shareholders.
 Government company:- these are those public association which are covered under
companies act,1985 and 2006. For example British Railways are large sized corporation
provide railway service to large audiences.

Private company:- These type of organisation are owned, controlled and managed by general
rules regulation of private persons only (Carroll and Shabana, 2010). Further these company
have their own rules regulation and policies which are made according to the vision mission of
organisation. Different types of private companies are described below:-
 Sole proprietorship:- These type of organisation are owned and controlled by one
individual only. They come with their own capital and share profit losses and take risk for
earning more returns.
 Partnership:- Under this type of organisation more than two partners are coming in
partnership and all terms conditions are prescribed in partnership deed. In that deed all
the things include profit loss, capital ratio and working hours.
 Limited liability:- A new concept coming known as limited liability partnership in which
partners enjoy limited liability I.e. there are not liable for losses of business.
1.2 Different organisation structures within the business and reason for variations
In different organisation company have their own organisation structure according to
their working conditions and different source of medium. Further company have their own
organisation structure according to the vision and objectives. Sainsbury's which is UK based
retail sector dealing in clothing and luxury items. For effectiveness in both production and
manufacturing company has to arrange optimum funds for proper conducting of business.
From research and observation it has been concluded that Sainsbury's adopting flat
organisation structure because of less level of management and company has for better decision
making they have to communicate with strategic level only. Apart from it, it has seen that
company take initiative to induce employees for active participation that leads to rational
decision making.
1.3 Describe how the local, national and global economic environment impact Sainsbury's
business
Every organisation is affected by macro and micro elements of external environment so they
need to make adjustment in their organisation structure which leads to increase in profitability
and market share. Retail market is highly affected by changing conditions and dynamic situations
in the form of innovation and digitalisation in their products and services. Therefore, it is
essential for Sainbury's to make updation in their working conditions so they easily grab market
opportunity and reduce threats which lead to accomplishment of targets. Further Sainsbury's

expand their supermarket branches in various sectors that affected in local, national and global
level in context of Sainsbury's which described below:-
 Local level:- In local level there are different types of instability coming in local market
due to change in customer taste and preferences in respect to products services.
 National level:- Due to different crises coming at national level like inflation, deflation
and change in foreign exchange rate are hurdles in their development.
 Global level:- when the company is planning to expand in different countries they have
to compile with different legal rules regulation, taxation policy that affect their goodwill
also.
TASK2
2.1 Importance of accounting for business success
Company has to formulate different accounting principles in their organisation structure
which they have to follow in order to maintain all the data and accounting information that
facilitate good financial condition at global level (Casadesus-Masanell and Ricar, 2011). The
main benefit that can be earned from accounting is reduction of wastage losses, increase profits
and help in enhancing productivity and efficiency of business. The main function of accounting
are described below:-
 Planning:- It is first function of management in which management has to make proper
arrangement of cash, sales transactions and evaluate various strategies for implementing
various projects of organisation for increasing sales.
 Monitoring and controlling:- Second function of accounting is related to monitoring and
controlling of all business activities by comparing actual performance from standard
performance and if any deviation arises take corrective step for it.
 Budgeting:- Most important thing is forecasting of budget which will occur in future and
for which proper framework is prepared on the basis of which all the action plan has been
made for better results in future.
Therefore, Sainsbury's has to consider all the above points for more profitability and better
market share at global level.
5.1 Different function carried out by HR department in business
Their are different types of HR function which has been executed in every organisation
for better performance of employees are stated below:-

 Training development:- HR manager of Sainsbury's has to organise various programmes
related to training development in which guidance given in relation to improving the
performance of employees for effective results (Eccles and Krzus, 2010).
 Employee engagement:- It is utmost duty of HR manager to induce their employees for
active participation in decision making so that better and good ideas obtained from them.
 Conflict management:- It is an responsibility of HR manager to solve all the issues and
problems faced by workforce that help them to establish long term relationship and
retention with employees.
Therefore, Sainsbury's has to consider all the above points in order to regulate the business
effectively.
5.2 Features of employee legislations
Employee legislation means various types of legal regulation that help in protecting the
interest of employees from company exploitation. Description of legal laws are prescribed
below:-
 Minimum wages act:- This act states that employees in organisation must enjoy minimum
wages that satisfy the basic needs requirement of them. Further, if employee
discriminated in such thins then he or she has right to sue against company.
 Anti discrimination act:- This act states that no employee can be discriminated on the
basis of caste, creed, racism and gender inequality. Inequality arises in the form of
promotion, demotion and transfer of employee.
Therefore, Sainsbury's has to adhere with all legal laws and regulation that enforced by UK
government for the benefit of company.
TASK3
3.1 Interpret the information on profit and loss account
It is essential for every organisation to prepare systematic financial statement of company
that shows the true financial position I.e whether company is liable to pay all debts and maintain
solvent position to meet regular expenses arises in business. Following is Profit and loss account
of Sainsbury's in year 2017 are stated below:-
Profit and loss Account of Sainsbury's (2017)
Revenue 2017
Total Revenue 31907800

Cost of Revenue 29919000
Gross Profit 1988000
Operating Expenses
Research Development -
Selling General and Administrative 1207000
Operating Income or Loss 781000
Income from Continuing Operations
Total Other Income/Expenses Net 41000
Earnings Before Interest and Taxes 777000
Interest Expense 165000
Income Before Tax 612000
Income Tax Expense 153000
Net Income From Continuing Ops 414000
Non-recurring Events
Net Income
Net Income 500000
Preferred Stock And Other Adjustments -
Net Income Applicable To Common Shares 500000
Interpretation:-
From the following P&L account of Sainsbury's it has been evaluated that company total gross
profit is 1988000 and Income from continuing operations are 2162000 and net income is 500000
which state stable position of business. Although they need to make changes in their organisation
structure so they improve financial performance in future.
TASK4
4.1 Stages of team development
Their are different stages of team development stated below:-
 Forming stage:- It is first stage in which employee enter into company for first time and
not familiar with internal rules (Prno and Slocombe, 2012).
 Storming stage:- Under this stage individual feel excited and have joy because of
expierence in job at first time.

 Norming stage:- Employee is appreciated by team members in respect of their skills and
talent they had.
 Performing stage:- In this stage employee are familiar with legal rules regulation and
adopt that style and approach that improve their performance.
 Adjourning stage:- In this stage team members are separated from each other after
completing the particular project of company.
Therefore these stages helpful in knowing the theories applicable in organisation which
Sainsbury's need to apply in their working style.
4.2 Description of motivational theories
Mostly in every organisation various motivational theories are adopted according to their vision
and objectives of company but Sainsbury's adopt Maslow motivational theory in order to
motivate employee which described below:-
Maslow model:-
Under this theory first need related to physiological needs which consider as basic needs of
individual which must be accomplished (Welford, 2013). Second related to safety security where
security is related to job and safety from life which must fulfil by employee from their job only.
Third related to esteem needs in which individual want respect and recognition in respect of their
work that motivate him fully and last is self actualisation which means desire to achieve
something.
4.3 Comparison of motivational theories
Comparison between two motivational theories are described below:-
Maslow hierarchy model Alderfer's ERG model
It is basically interlinked with self actualisation
of person.
This model discuss about the particular growth
needs of person.
Discuss about the safety security of person Tell about the previous needs of employees.
4.4 Different leadership styles
Various leadership styles are adopted by organisation according to their suitability are describe
below:-

Strategic leadership style:- In this type of leadership style leader is consider as powerful person
of organisation who take all decision. Although he motivated employees for active participation
and fill the gaps in relation to their unsatisfying needs.
Transformational leadership style:- Under this type of leadership person who is consider as
leader take the initiate for the changes coming in organisation. Apart from it they guide
employees that modification are beneficial for their career growth and development.
So, Sainsbury's need to adopt these styles according to their suitability and outcome they get
from such style.
TASK5
6.1 Impact of customer service on business success
In today world customer is consider as king of market so before producing goods and service
company first scan the environment to know customer taste on the basis of which they can make
changes in their respective product segment. Different impact that can be drawn from customer
service in aspect of Sainsbury's are described below:-
 Better customer service help organisation to increase their brand image and goodwill in
external market.
 During the customer service if customer faces any problems and query then it is an duty
of manager to give solution in respect of goods and services.
 When customer firstly enter in retail stores then in such case staff members describe
about their products in better manner which help in increasing the expectation of
customer which help in enhancing profits.
Therefore, Sainsbury's has to adopt such measures and recruit such staff which satisfy the needs
of employees.
6.2 Benefits of customer profiling to a business
Customer profiling is very essential for company because it give different advantage to
target audiences. Profiling is very different for each clients and in case of retail sector face to
face interview are conducted and also telephonic interview to solve query. Benefits taken by
Sainsbury's are described below:-
 Effective communication must be maintain for better costumer profile.
 Adequate customer profiling help in establishing long term relation with their clients by
providing price, quality and features according to their choices.

CONCLUSION
It has been concluded from above report that business which are operate in large and
small scale required to operate all the conducting of business in such manner which help them in
accomplishing objectives of business. Further establish such strategies that help in gaining
competitive advantage over competitors.