Unit 1- Business at work Businesses exist to produce goods and services. If someone is thinking of starting up their own business or becoming part of an existing business, they would have to have the knowledge of what makes business work successfully and know how to how to apply that knowledge in the particular area of business. For this unit I will be entering and exploring the world of business. For this unit I will encounter and evaluate information provided by certain businesses and actually gather my own information from at least one business. The business I have chosen to study is J Sainsbury’s. There are many types businesses in this world; these include Sole trader, Plc, Ltd, Partnership, Co-op and franchise.
These types of businesses are all different from each other. Some of them need just one owner, some have hundreds. Sole Trader sole trader is a one man business. There is just one manager. Although they are the sole manager and owner they can employ staff to work for them.
They can employ as many as they want to work for them. A sole trader is self employed, this means they work for themselves, they employed themselves, they for nobody. Sole traders trade with others. They may trade expertise, an example of this would be a business consultant taking on a big job and needing an extra hand just for that job, so this person may employ a person with the expertise he / she needs. Because a sole trader is the sole owner he / she keeps all the profits, unless he / she has any employees. The owner of the business makes all the decisions, he / she will not have anyone telling them what to do.
... Sole trader A sole trader is an organisation, which is owned by one person. The assets and liabilities of the owner and those of the business ... the sole trader is self-employed, he is able to defer Income Tax and reduce his National Insurance contributions. The owner's personal ... or not, the profits are taxed as income. Self-employed national insurance entitlements have less benefits. Tax relief on ...
When one wants to set up a sole trader business it is relatively easy. There is little paper work involved because he / she does not need to work out how much of the profit to share out with a business partner. This person can work when they want, but if they don’t they wont earn any money! Wages to employees are usually low. Consultancy, Builders, Market traders, Window cleaners, Restaurant and corner shops are all examples of sole traders.
The disadvantages of sole traders are as follows: . If you don’t work, you don’t earn, so it would be wise to just work as much as possible and not take holidays all the time… There is more pressure if you are a sole trader compared to working in a corporate business like Bt Cell net… You wont be as well known because its harder to advertise a small sole trader company.
There are no free benefits like a company car… The owner of the sole trader company has to deal with all the problems for themselves… It is very hard to compete with large companies, but on the good side bigger companies usually charge more than a smaller sole trader company. Probably the disadvantage of a sole trader company is the fact that it will have ‘unlimited liability’.
This means the owner is personally responsible for anything that goes wrong. The owner could have their car or house taken away, this is why some businessmen with sole trader companies put there house in their wives name… If things are bad the company could get bought out or taken over. This is a bad thing because then the owner has little say in how the business is run… It may be difficult to cope with expansion because then you have to start paying people from the money you earn.
There will be a lack of capital and funds to run the company because you are the sole owner and sole capital producer The advantages of a sole trader are as follows: . The owner will keep all the profits. You will earn more than doing the same job but for a corporate company. The owner makes all the big decisions. Easy to set up. No one can tell you what to do.
... major types of business in Australia: sole traders, partnership, and company. A sole trader is owned by one individual. The basic advantage is the owner has the authority ... owner can purchase limited assets and material for operating their own business. Such as computer or any furniture. Unlike a sole trader or partnership, a company ...
Wages to employees are usually lowPartnershipA partnership can have from two to twenty owners by law. Usually someone would enter a partnership because they cannot run the business on their own or they do not have all the expertise or enough capital to run the business. A partnership is simple to establish. It involves two or more people running a business. They can choose to trade in the name of the owners or make something up which is relevant to the type business they run. The business is often known as a ‘firm’.
There is limited liability in the partnership. Most partnerships will operate according to the terms of a partnership. They will have some documents to say how much of the company each person owns and how much each person will get. The advantages of a partnership are as follows: . Because there are more people involved than in a sole trader, there are more funds for the company to run on. Because there are more people involved there is more potential for expertise and specialization.
There is more backup, they can cover for each other if someone falls ill or goes on holiday. A partnership does not have to make its accounts available to the public… The business is bigger and has more power than a sole trader The disadvantages of a partnership are as follows: . Again there is unlimited liability. There could be disagreements between the partners which would be hard to resolve because they all own the business. You don’t get all the profits like in a sole trader, you have to share the profits between you…
If someone does something wrong everyone suffers the consequences. Limited Company (Private limited company or Ltd) A limited company has to do three things to set itself up. It has to buy a name at ‘company’s house’ this costs around lb 180. It has to write up a ‘Memorandum of Association’ This includes writing on what they are trading in, how much capital has been put in, names of the share holders, directors and company secretary.
It also has to write up the ‘Article of Association’ this is about the internal procedure of the company, the AGM (Annual general meeting) and information on the shareholders. How much percent of the capital you put in is how much percent you own of the business. For example, a company starts up with lb 20, 000 shares at lb 1 each. Person A buys 10, 000 shares, Person B buys 5, 000 shares, Person C buys 2, 000 shares and person D buys 3, 000 shares. Person A owns 50% of the business and therefore has 50% of the votes at meetings. This company now has lb 20, 000 to use.
... held accountable for performance. (7). For this company, the strong centralized business controlled organization should be reduced. To further ... day to-day performance and operation of the business units. The business planning process should focus clearly identifying the ... focus on management of Japanese firms, where control is shared throughout functional areas rather than monopolized by finance; ...
The shareholders benefit in two ways. They can earn dividends on each share that they own, or they can sell their shares when the price rises. The shareholders are the owners of the business. The following is a diagram to show the way in which the business would be set out In a limited company the directors and managers are often the same people. This is because on the whole the company is not big but medium sized. In a limited company shares can only be sold to friends, family or acquaintances PLC (Public Limited Company) A Plc has a very similar structure to a limited company.
One difference is that shares can be sold to anyone. They are listed on the stock exchange. In a Plc the managers are different to the directors. A Plc must publish its accounts, whereas in a limited company they must register their accounts at ‘company’s house’.
Another difference is there must be an initial investment of lb 50, 000 in a Plc. It’s costly to become a Plc. A Plc is bigger than a limited company. The advantages of a limited company and a Plc are: . A Plc makes more money on the stock market. Limited company directors have more control.
If you are a rival company, you can see how well your enemy company is doing. There is limited liability for both of these. In a Plc the business is a separate entity from the owners. Plc and Ltd have more power The disadvantages of a limited and a Plc are: . A Plc needs more people to run it. A Plc has to make its accounts and shares public.
A Plc has lots of different owners. A Limited company has less potential to earn. A Limited company can only sell its shares to friend, family or acquaintances. A Limited company cannot sell shares on stock exchange, this makes it less competitive. Plc’s have to pay more staff and spread profits widely. It is very costly to become a Plc Co-operative In short terms a co-op is where everyone’s the same in the business.
... visibility into customers and products Meet the company goal to acquire new businesses and divest others CONCLUSION There are many ... run wild. To avoid this, companies should identify objectives for which its consulting partners must aim when training internal staff. Include ... limitations in this study. First, we focus on a limited number ...
Everyone is a partner. Everyone gets the same. In a co-op there are lots of hours work involved and it is very hard work to be in a co-op. An example of a Co-op is a current bike shop in Brixton. It started of with just three men agreeing that they want to set up there own bike shop. They all owned exactly the same amount of the shop and they all got the same pay.
As time went on they employed many more people and the new employees are new partners of the business, even though they employed lots of new people they all get the same pay, so the original three’s pay would go down every time they hire someone to be there partner. One way you could describe a Co-op is Communist like. The advantages of a co-op are: . Everyone is a partner, everyone owns the same amount of the business, there is no one director. Because everyone is a partner, everyone gets the same pay…
In a meeting your voice will get heard because you are an equal partner. You are effectively one of the managers The disadvantages of a co-op are: . There are lots of hours involved. It is very hard work to be in a co-op…
Everyone the business hires someone new theoretically your pay should go down a little. The more people there are the less you earn and also it would be harder to have your voice heard in meetingsFranchiseA franchise is where a company owns a name and a look, like McDonalds. The company then leases out this name and look for anyone who wants to build a McDonalds and copy. All the McDonalds aren’t part of one big business like Plc they are all separate with their own owners who borrow the name from McDonalds. If you borrow the name this means you have to sell the same food as what the franchiser says.
The advantages of a franchise are. If you are the owner of one of the McDonalds you still get well paid and you don’t have to keep on paying the franchiser. If you are the franchiser you get paid everyone time someone wants to set up a McDonalds. Its a lot easier to sort out than a Plc company The disadvantages of a franchise are: . There may become too many McDonalds. Pay to employees is usually very low Sainsbury ” the company I will be studying for this unit is J Sainsbury’s.
... adjusted to attract a larger range of customers. Projected income over the first five years is aimed at $550,000. Mission Statement ... items found in local smoke stores at prices affordable for everyone. The atmosphere of this business will be professional and high ... class furniture will be placed around the store. College students will be ...
This is where people go to get their food shopping. J Sainsbury’s is a Plc. As a company J Sainsbury’s isn’t doing to well at the moment, it is loosing a lot of money. I currently work at Sainsbury’s so I know how the company looses some of its money: . Every time something is dropped on the floor or broken or if something goes out of date and it still hasn’t been sold, then Sainsbury’s loose the price of that item. You can imagine how many things are broken a day in just one shop, but there are hundreds of Sainsbury’s! .
J Sainsbury’s loose money on the tills. If the cashier makes a little mistake and gives some extra change or gives the customer the wrong note then Sainsbury’s will loose out on that amount of money. E 2 Unit 1- Business at work All businesses have aims and objectives. There are many different types of aims and objectives.
All businesses have different aims and objectives, but some have similar types e. g. any charity will want to raise money to give to people who need it. The following are all the different types of objectives of a business. Most Plc’s want to maximis e profits. There objective is to sell their product and all the time they are thinking about how to maximis e profits even further.
Another objective of a business is to expand or grow bigger, for example a soul trader may get board and feel he / she could expand, do bigger things. They could move up from soul trader to plc. If your business is anything bigger than a soul trader then you are going to have employees, and you will want your employees to be skilled and well qualified, so that you have a good workforce. Some people with a lot of money aim to do a takeover of another business, they aim to find a business that is in trouble and take over it, buy it out. The business that is being taken over may not want to be, but they might have little say if they are struggling.
All big businesses will want to be recognised by the public and have a good reputation so they will get a popular brand name, this takes good promotion. Some businesses will look closely at environmental issues e. g. The Body Shop.
The kind of issues they will look at are recycling, non testing on animals, fair trading etc. Certain businesses just want to provide a service and help the public, e. g. the NHS. For smaller businesses they will concentrate on profit satisfying, this is where they just try to survive and enough to do so. Some businesses want to just break even e.
... relationship between business ethics and customer relations is a situation where a company falsely represents its products or services to its customers. A company that ... which the company treats any complaint from the consumers. A customer may notice a wet spot on the floor in a store and ... holiday, there is a day known as Black Friday when stores compete with each other to slash the prices of goods ...
g. Public corporations in the public sector braking away from being a government organisation. All businesses have mission statements. A mission statement is a public statement by the business setting out in general terms what the business does, what it aims to achieve, its values and standards. A vision statement is a more general statement of how the business sees itself developing in the future, a vision of what it wants to be. A business aim for a business is the overall direction in which the management wish it to develop over a period of time e.
g. “I want this company to be the biggest supplier of building materials in the area ” It is the job of management to identify a common aim and motivate the employees to work together to achieve that aim. J Sainsbury plc is leading UK and US food retailer with interests in financial services and property. The group comprises Sainsbury’s supermarkets and Sainsbury’s bank in the UK and Shaw’s supermarket in the US.
The group employed 172, 900 people at the end of the year. The groups objective is to meet its customers needs effectively, and thereby provide shareholders with good, sustainable financial returns. It aims to ensure all colleagues have opportunities to develop their abilities and are well rewarded for their contribution to the success of the business. Its policy is to work with all of its suppliers fairly, recognising the mutual benefit of satisfying customer needs. It also Aims to fulfil its responsibilities to the communities and environments in which it operates.
The following is Sainsbury’ current mission statement: Our mission is to be the consumer’s first choice for food, delivering products of outstanding quality and great service at a competitive cost through working ‘faster, simpler and together’. Sainsbury’s Supermarkets In the UK we have driven a step change in our sales performance resulting in five consecutive quarters of strong like-for-like sales growth. Quality food is a priority for our customers and a key component of the Sainsbury’s brand. We have invested in our food ranges and, during the year, have improved or developed over 3, 200 products. Our own-label sub brands are again amongst the best in the UK.
We are working to develop a stronger complementary non-food offer through Adam’s children’s clothes, Jeff & Co and a trial of a home enhancements range. We are working on developing our own health and beauty offer through up-grading our in-house capability. We have also been trial ling Boots health and beauty and pharmacy shops in six of our out-of-town stores and are now extending these by a further three stores. We rigorously monitor 10, 000 lines weekly to ensure that we remain competitive. We have reinvested some of our cost savings in price adjustments. Alongside this we continue to run a highly attractive, sustainable promotional programme.
Delivering great service is a key objective of our business transformation programme and during the year we made great strides in retraining our colleagues to serve our customers better. Our mystery shopper measure is now embedded in the Company; this and our customer satisfaction index demonstrates the progress we are making. We have achieved cost savings of lb 160 million in the year delivering a total of lb 250 million since we began the programme. These savings will be reinvested in enhancing the customer offer, building sales and in improving our operating margins. We are replacing our legacy systems with ‘best in class’ IT solutions to help us gain competitive advantage.
The Accenture relationship continues to go well and systems, which have already been implemented, are delivering substantial business benefits. During the year we our programme in light of new opportunities and have updated the original sequence of work. Our stated IT re platforming project retains its scope and is on target. We embarked on a major programme to modernise our supply chain by developing a network of new depots around the country. We have made good progress and three depots, Emerald Park, Haydock and Langland’s Park, are already operating. Our first fully automated fulfilment centre at Hams Hall, Birmingham, will open later this year.
Three additional fulfilment centres are under construction at Stoke, Rye Park (Hoddesdon) and Waltham Point; these will be operational by the end of 2003. We anticipate double running costs of lb 6 million in the 2002/03 financial year as we transition between old and new warehouses. The new depots will serve the majority of our stores within the period of the plan. We committed to upgrading our estate through the reinvigoration of our stores. During the year we reinvigorated 117 stores. We have also stepped up our new store opening programme, having opened 10 supermarkets and 15 Locals during the year, adding a further 422, 000 sq ft of new space.
Through our customer data warehouse we analyse data from our Reward Card to help us understand our customer needs and shopping missions better. Our programme of reinvigorating stores has evolved as we develop formats and trial them. We now have four trial ‘mixed mission’s stores and early results are encouraging. In March we opened our first ‘main plus’ average superstore (with 16, 000 new lines and 20 per cent of floor space focused on nonfood’s).
We are developing a new ‘broad appeal’ format under the Sainsbury’s sava centre brand, which will offer an attractive range of foods and non-foods at good value prices. The first store opened in Northfield, Birmingham on 30 May and the format, if successful, will extend our trading reach considerably. Sainsbury’s To You We are second in the UK on-line grocery market with current annualized sales of around lb 110 million and around 71 per cent coverage of UK households, with 25, 000 orders per week. Our current market share in London is 36 per cent. Improved volumes and better integration of our home delivery service into stores has reduced new customer acquisition costs by 60 per cent and fulfilment costs by 30 per cent in the second half as compared to the first half of the year.
During the year we launched the service into 20 stores bringing the total nationwide to 53 stores, including three refurbished stores in Manchester, through which we expect to replace the service provided by the Gorton picking centre. We expect this business to be profitable in the second half of 2003/04. Sainsbury’s Bank Operating profit grew by 66 per cent to lb 22 million including a one-off credit of lb 3 million relating to VAT. We have aligned our Bank business more closely with our supermarket customers. We have introduced permanent point-of-sale materials into 127 stores and this has helped deliver sales increases of 70 per cent per store. We have also driven down acquisition costs to below one third of industry averages, through making better use of existing store, colleague and communication channels.
We are building on the offer; insurance sales are up threefold and personal loans are up 100 per cent. We have a stronger partner in HBoS (since the merger of the Bank of Scotland with the Halifax), a new management team, and an increased capability and appetite for growth. We are currently considering some interesting choices about the rate at which we should grow this business in the future. Property and JS Developments We undertook to unlock value from our property portfolio and we are continuing to realise opportunities as they arise. Our priority is retail enhancement opportunities on existing sites. Currently we have 22 projects in development.
Planning consent was granted in September 2001 for the redevelopment of Stamford House and Drury House, our former head office sites in Stamford Street, for 375, 000 sq ft of offices and a 10, 000 sq ft Central store. We are working on plans for the redevelopment of further sites, Rennie House and Wakefield House. Shaw’s Supermarkets We are the 12 th largest food retailer in the US, and a strong regional player, with 185 stores. We are number two in revenue terms in the six states that make up the New England market. Shaw’s has produced another good performance. In the year, 50 of our 185 stores were improved.
We opened five new or replacement stores and completed two extensions and 15 refurbishments. We have integrated 17 stores purchased from Grand Union and re badged a further 11 Star Market stores to increase our presence in Vermont and Connecticut and to consolidate Shaw’s position in the New England market. We reviewed the supply chain process and have rationalized and streamlined our distribution system. Shaw’s has a successful track record and is a profitable growth opportunity for the Group.
We continue to look for suitable acquisition opportunities both in, and adjacent to, New England. We have stimulated the two-way flow of knowledge and ideas between Shaw’s and Sainsbury’s, a good example being the use, in the UK, of some fresh produce merchandising ideas from the US. Looking forward Profit and dividend growth have been restored. To deliver a successful business longer term we are looking for profit growth through a balance of strong sales growth, reducing our cost base further and continuing margin improvements.
The development of our formats presents a bigger sales growth opportunity than we originally anticipated. We are committed to achieving industry leading margins, but it is too early to be precise about when. The market is dynamic and competition very active. We have choices about the rate of sales growth against margin targets.
However, we are committed to delivering strong double digit underlying profit growth each year of our business transformation programme. Sir Peter Davis Group Chief Executive See the video of Sir Peter Davis’s statement Library | Legal | Search | Contact Us | (c) J Sainsbury plc 2003 Unit 1- Business at workE 3 How do functional areas help the business meet it objectives Research and development functional area or department This area deals with four different things. The first is Quality, what ever the company is making or producing they need to make sure that it is of high quality, research and development will make sure of this. If the final product is of high quality then the amount of customers will no doubt increase.
The second thing this area looks at is the production process. They have to reduce costs and improve efficiency. To do this they will have to closely check what the company spends money on and closely look at how the product is made to see whether they can cut costs of something e. g. the company maybe spending too much money on plastic. To improve efficiency they will have to check that the workers are not doing anything wrong e.
g. wasting products that cost money, and then make sure they don’t do it again. The third thing this area does is make sure the company is producing a cost effective product, this basically means they have to check that the company is producing a product that they are making a profit off, and that people are actually buying it. The last thing this area will be expected to do is research what the customers want, they can do this by a questionnaire or maybe e-mail. Then the company will know exactly what the customers want to buy. These four things will improve sales and profits, also it will keep them ahead of rivals.
Human Resources The Human resources area has a lot of things to do. They have to improve sales by training staff e. g. telling all the staff what the special offers are for that week so that they can pass that onto the customers, and hopefully that will improve sales. Human Resources will check everyone has the appropriate uniform, so that the company looks of high standard, they will also check whether the uniform needs to change. This section will sort out how much money people are owed.
They will motivate staff by telling them they are doing well and tell them they may get a pay rise. This will motivate the staff and also make them more efficient, ultimately increasing the profit. Administration This section is essential to keep the business running. They keep customers happy by good two way communication on how they feel and what they want.
This section uses a lot of technology, they use computers, fax, e-mail, printers, scanner etc. They basically organise and look after everything, like filing all paper work taking calls opening and distributing letters etc. Sales This section takes care of sales, they will improve sales by promoting their product or new special offers. They will go to the warehouses and check the products themselves to see if they are at the standard they should be, and if they are not then they inform production of the fault. This section deals with complaints, and enquiry, if a customer complaint is made on the service they got on a checkout then they will tell administration and they will put it on record and also inform the worker and even discipline them. They are slightly linked to marketing because they to deal with sales, they try to maximis e them.
Finance This section is quite important because it handles the company’s money and funding. They will actually distribute money and funding to the other functional areas, sometimes the other areas will argue that the finance section is not giving them enough money, and to settle this argument in the future the finance section sets budgets for the other functional areas and of course for themselves. If the company is a Plc then this section will also handle the shares, paying off dividends and selling shares that need to be sold. They will keep accounts of everything they buy or sell, this way if things go wrong they know who to blame so they have can see whether they gone over budget or not. They will distribute wages to workers and managers. They also find out what the financial situation is if the company wants to invest or improve.
Production/Quality This is where the goods are produced and testing, they will buy in the raw materials the company needs and make sure the speed of production is at its ultimate. To do this they will have to closely check that the workers are producing the product at a good speed and that if it falls below the average speed then tell the workers to speed up. They will try and have the best employment system so that they get the best workers for the job. All this will help the company produce quality of goods which will increase the popularity of the business, therefore increasing the profit margin.
Marketing This section needs to maximis e the sales, by good promotion from the sales department. They have to maintain good relationships with customers by listening to them. They will deal with promotions by working out whether they deserve one and whether they are eligible for one. They want satisfied customers and have to research what they want. Lots of profits are made from this section, and they will do promotions and discounts just to keep ahead of rivals.
They may even go and find out how their rivals are making the product. Business at workE 4 Different businesses have different structures and management styles according to how they operate. The following are the different structures that a business can have. Autocratic This is an environment where people are being given orders, this almost always consists of a manger giving orders to someone lower down, like a worker. Lots of supervision is used in this type of business because if it is autocratic this means the manager will be giving orders and to do so the manager will need to supervise what is happening with the workers.
Autocratic business environment means that the workers have little or no say in what happens to them, a and they will have hardly any control in what happens to them, or in what they want to see happen the business. An example of this is the army. Autocratic is very dictatorial, this is where someone rules everything. This also means that this management style does not involve being listened to, it is one way communication. Through this all employees know their place and know what to do.
Also your opinion is never heard. In any organisation some decisions are taking autocraticallyAdvantagesThis type of business involves quick decisions, and usually there are no misunderstandings. There is total control by the manager which means staff cant be blamed. Employees do not want responsibility because they do not have even have a say in what is going on. This management style is a lot more efficient than the others.
Disadvantages This management style has many disadvantages, for starters the managers don’t know how workers feel. Often wrong decisions are made because of the lack of feedback. There is much expertise because there is only one manager. There is high turn over of staff which I am sure will cost the business in time and money. Even if the wrong decision is made the blame can be passed down still. Low moral is often a factor of this management style.
Democratic (Persuasive) This is where the workers are persuaded by the managers to take an appropriate decision. The workers believe they are involved in the decision making process which means the manager gets what they want, but sometimes the manager will persuade some of the employees to give a certain decision. Workers will be a lot happier with this style because they think they are involved. Advantages Workers are more involved because they are part of the decision making. This means they will be happy workers, and this will motivate them. This will also in turn produce good team work and more production.
Disadvantages The wrong decision may be made compared to a single manager making an autocratic decision. There may be mis management involved with this type of management, including lying, mistrust etc This time the manager can blame the employees because they were involved in the decision. This doesn’t always work because the workers may make different decisions Democratic (Consultative) This management style includes the manager consulting the employees, therefore decisions are made collectively. People’s opinions get listened to and opinions actually get discussed Advantages Probably the biggest advantage is that the opinions get heard.
You can spread the decisions instead of one manager making all the big decisions. You can receive feed back from the workers instead of not knowing what they are thinking. It is more of a team type of management then a individual one. The managers can get a better idea of the problems and sort them out there and then if possible. All this put together will create a happier working environment. Disadvantages Everything takes longer with this management style and the wrong decision may be taken because the employees may lack expertise in the particular area.
Laissez-faire This gives workers complete freedom to do their work and do things themselves. There is very little supervision from management, so the worker has more responsibility. Advantages There is more responsibility on the worker, more freedom. This gives better job satisfaction. Disadvantages The worker could take advantage of the situation.
E 5 Communications Channels of Communication big PLC like Sainsbury’s need and will use many channels of communication. There are a number of different channels of communication. There is Internal, External, formal, informal, open and restricted. Within these channels the communication can move upwards, downwards or across ways. Depending on what type of business it is they will use certain types, for example Sainsbury’s will mostly communicate downwards, so the managers are telling workers what needs to be done. Internal Communication Much of the communication which takes place in an company is designed solely for use within the organisation itself.
This will include Information that is confidential such as payroll data or certain development plans. Also Information that is of no interest outside the organisation such as when departmental meetings are planned. Internal communications can be carried out in different ways. The ways in which Sainsbury’s do it are: Face to face, Memos, telephone calls, internal e-mail.
Also internal and external communications can be classified according to whether they are oral, paper based or electronically based. External Communication Usually external communications are used when an organisation needs to interact with other organisations or individuals. Examples of external communications that Sainsbury’s use are: a letter to a customer promoting a new product, a sales brochure, e-mails to customers of new deals. Vertical and lateral Communication Downwards Communication The most important role of downwards communication is that of management providing information and giving instructions about decisions that have already been made. The culture of the organisation will largely determine how this is done.
In an autocratic culture downwards communication will be orders, and in Sainsbury’s there is a lot of downwards orders from supervisors to checkout operators. Upwards Communication This type of communication is critical, because it is usually feedback, ideas and complaints from the workforce. These are needed and valued by management which has to monitor to what extent business objectives are being achieved. Being a current employee of Sainsbury’s I know there is no upward communication because I don’t get a say in anything that happens in the store. Lateral Communication Departments and functions within a business must communicate together and co-ordinate their activities to ensure that the business works effectively. When I interviewed Mr John Houghton, the current manager of the Wood hall Farm Sainsbury’s, he explained how the lateral communications are a vital aspect of the store existence.
He explained how the checkout supervisors will continuously need to communicate with the shop floor (Stacking) Managers, this may include communication on availability of the workers. For example if a checkout operator calls in sick then the checkout supervisor will need to borrow a shelf stacker to fill the gap on the tills. Another lateral communication in Sainsbury’s is when the human resources department provide the finance department with payroll details of a new employee. Communication technology Nowadays business rely more and more on modern technology to communicate. This is because new methods make communication: More reliable, more targeted, quicker, more convenient and more versatile.
Web technology and the Internet The Internet is a worldwide network of computer networks. Any computer connected to the Internet can communicate with any other. Businesses are making increasing use of the Internet for communicating messages and information. This worldwide concept has become possible because of the widespread availability of cheap computers and the global adoption of common standards. Computers may be connected to the Internet in a variety of ways. The connection can be a telephone dial-up connection such as many people have from their home computers.
To match the computer signals to the telephone system, a modem is required. This type of connection may be slow though. Another way that a computer could be connected to the Internet is that most businesses have their own internal computer networks that are connected by a router to the Internet. This sort of connection is usually a quick ISDN line (Integrated Services Digital Network) which is dial led up when needed. The last type of connection is for large organisations. They will usually have a dedicated line that is connected all the time and can be very fast indeed.
E-mailE-mail is very important to Sainsbury’s. They will use to send notice of new deals and promotions in the store to the frequent customers. E-mail is the sending and receiving of electronic messages by means of computer. All you need is a connected computer and an e-mail account. When someone wants to read his or her e-mails, it is necessary to log in.
A list of messages is displayed. The user can read them or delete them. It is easy to reply. Also if the message is of interest to someone else, it can be forwarded to some or all in your list of e-mail addresses. It is easy to send attachments.
These can be any computer files at all. So a spreadsheet can be sent, or a word-processed document or even music. In Sainsbury’s case they will attach a list of new deals to the e-mail. Advantages-mail is now the preferred method of business communication. Messages can be checked at any time.
E-mails can be more convenient than telephone calls because there is no waiting around for someone to be found. Replying to an e-mail is quick and efficient because information is sent to where it has to go straight away. Paper memos are slow and you have to put effort in to reply, so it’s easy to put off. There is also no guarantee that the person you have given the paper memo to is going to give it to the person you want, he or she may forget. E-mails are delivered cheaply all over the world and you know the person you sent it to will receive it. Time differences do not matter.
Disadvantages Some people cannot be reached by e-mail. Sometimes a misunderstanding can happen if a quick message is dashed off with little thought. Intranets Today many companies have their own private, internal websites. They behave exactly like Job production One or two people work at producing a single item. The items are individually made, and are usually to a high standard. An example of this would be a carpenter who makes and individual item, such as a cabinet.
Advantages The creator or creators of a product, would se first hand what they had produced. This would make the staff motivated and satisfied with their work. The goods would be made to good standard and be appealing to someone wanting something unique. The producer could see his faults and easily repair them. Members of the workforce would gain a lot of first hand experience in their trade department. The company can order only required goods and not and up with a high surplus of goods.
Disadvantages Not as many jobs done, because of the low number of staff. This means that the company is a lot less efficient. There is a smaller target audience, because of the price and nature of the product offered. Because the company isn’t buying in bulk, the price of goods is high. The product involves a lot of manual labour, because of the lack of machinery. Batch Production May be used when demand for a firms product or service is regular rather than a ‘one off’.
An example might be furniture where a batch of bread is made to a particular design. Production is divided into a number of operations. A particular operation is carried out on all products in a batch. The batch then moves to the next operation.
Advantages Employees can concentrate on one operation rather than the whole task. This reduces the need for costly, skilled employees. Even though larger quantities are produced than in job production, there is still flexibility. If a customer wants a batch can be changed.
It is particularly suitable for a wide range of similar products. The settings on machines can be changed to meet specifications, such as different ingredients in a cake. Disadvantages Careful planning and co-ordina tor are needed, or machines and workers may be idle, waiting for a whole batch to finish its previous operation. There is often a need to clean and adjust machinery before new batch can be produced. This leads to delays in production. Products wouldn’t be individual and wouldn’t appeal to more upper class people who could afford a private surface.
Sometimes there is a surplice of goods left over, which costs a lot. Cellular Manufacturing It adopts a different approach and involves dividing work place in to cells. Each cell occupies an area on the production of a product family. A product family is a group of products, which requires a sequence of similar events.
An example of this would be the metal body part of a machine might require operations like punching and cutting. This can be carried out in one cell. Inside a cell, machines are grouped together and a team of workers sees the production of a good from the start to finish. An example of this is a furniture manufacturer making parts for a kitchen range in a cell. The raw materials, such as wood, would be brought into the cell. Tasks such as turning on a lathe or shaping by routing would be carried out at workstations.
The part would be assembled and passed on to stock. The cell may be responsible for tasks such as designing, schedule planning, maintenance and problem solving, as well as the manufacturing tasks, which are shared by the team. Advantages An advantage of this is that floor space is related because cells use less space than a linear production line. The company’s product flexibility is improved and lead times are cut. Movement of resources and handling times are reduced making the company more efficient at completing an objective.
The workers would be encouraged and they would be strong team working. Flow Production With this type of production, production is organised so that different operations can be carried out, one after the other, in a continuous sequence. For example a car passes through on stage to another on a convey er belt. The main features of flow production are that large quantities are produced. A simplified or standardized product. A semi-skilled workforce, specializing in one operation only.
Large amounts of machinery and equipment, and large stocks of raw materials. This type of production is also called mass production, as it is used to make large numbers of goods. Advantages The prices are reduced as firms gain from economies of scale. In a many industries the process is highly automated. Production is controlled by computers.
Many of the operations are performed by robots and other types of machinery. Once the production line is set and running, products can flow off the end non stop for lengthy periods of time. This reduces the need for labour, as only machine workers are needed. Disadvantages The set up costs are very high. An enormous investment in equipment is needed Firms must therefore be confident that demand of product is sufficient over a period of time to make the investment pay. The product will be.
It is not possible to offer a wide product is sufficient over a period of time to make the investment pay. The product will be. It is not possible to offer a wide product product range and meet different customer needs. Worker motivation is a serious problem, most of the manual operations are boring and repetitive.
Workers are not very involved and may feel they are useless. The most important disadvantage is that if one part of the system brakes down the whole system will. Total Quality ManagementToltal quality management is the name given to a processs of structured good management practices which result in measurable continuous quality improvement. It is this ongoing of quality improvement.
It is this ongoing process of quality improvement which contribute to changes in production. Advantages Prevents errors Prevents poor quality products Features of TQM: Quality Chains Company policy and accountabilityControlMonitering the process. Monitoring the process. Quality Certification This is where the item being sold has been given a kite mark from the british standards institute for being at a certain standard of quality. Advantages: Marketing necessity Saving in cost Fewer problems and complaints Reduction of waste in internal process Disadvantages: Costly Lots of processes to go through Takes time Many take time to produced new products Lots of paperwork.