Analysis of a business - Philip Markham Ltd
Introduction
In this project I will investigate how a business works, my project will cover the following areas:
* Aims and objectives
* Functional Areas
* Equal opportunities
* Organisational structures
* Communication
* Customer services
For this project I will be focusing on one particular business, this is Philip Markham Ltd. It is a family run business supplying classic menswear since 1900.
The company has 20,000 private customers that order directly from the company and the company also supplies its goods to department stores and exclusive menswear retailers across the country. All business customers have private accounts with the company.
The main activities of Philip Markham are to make high quality clothing, and to sell clothing to its customers.
Aims and Objectives
What is an aim?
An aim is a long-term goal. All businesses have these targets to help them develop and progress.
What is an objective?
An objective is part of an aim that has been broken down into smaller steps. This makes the aim easier to achieve and can measure how near the business is to achieving this aim.
An Aim
Objectives
The purpose of aims and objectives
The purpose of aims and objectives is to provide the business with an overall goal to reach; the objectives break down the aims into easier, shorter-term, targets for the company to reach. All departments should work to reach these aims, as they are vital to the success of the business.
Business aims
All businesses have aims, here are some of the most used ones:
* Make a profit
* Provide goods or services to the community
* Provide goods or services to the wider community
* Survive as a business
* Expand
* Maximise sales
* Improve quality
* Provide a highly competitive service
* Provide a charitable or voluntary service
* Be environmentally friendly
All targets should be SMART
S = Specific
M = Measurable
A = Agreed/achievable
R = Realistic
T = Time constrained
These are the aims of Philip Markham:
* To make a profit
* To sell clothing at a fair, competitive prices
* To provide a rapid and responsive service to all its customers
Objectives of these aims
To make a profit- increase and maximise sales
To sell clothing at a fair, competitive prices- Sell more products to reduce prices
To provide a rapid and responsive service to all it's customers- Employ enough staff to respond quickly, train staff to deal with unhappy customers
Links between the activity and the aims and objectives
One of the activities is to sell clothing to its customers and one of the aims is to make a profit. They are linked because selling clothing will make money, resulting in a profit.
Functional Areas
All businesses have a purpose and so do the people who work there. Those purposes usually fall into five main areas:
Finance
Production
Marketing and Sales
Administration
Human Resources
The above areas make up the five main functional areas of any business. Each function operates to support all the other functions and contributes to the aims and objectives to the business concerned.
The interaction of one area with another is important in order for the business to be effective. For the business to be efficient the links between areas should be close and smooth running. It is to be remembered that the work of one area often depends upon and overlaps with the work of other areas.
Philip Markham only has four functional areas Human resources and administration are put together.
Finance
Finance keeps track of all money going in and out of the business.
Activities
These are the activities that finance is responsible for
* Prepare accounts
* Pay wages
* Budgeting
* Giving information
* Controlling debt levels
Preparing accounts
In this activity the finance department performs a range of activities related to the checking and recording of all amounts received and paid. These are entered into individual accounts of the customers.
Pay Wages
This involves totalling employees wages and bonuses, working all deductions such as tax and insurance. Then working out the N.E.T pay, which they take home.
Budgeting
This is allocating different areas a maximum amount of money they can spend in a year. Then keeping track of how much they are spending. This is important, so the company doesn't spend too much money.
Giving information
Another of finance's jobs is to give up to date information to Jack Markham and the directors on different money matters, such as: Income, expenditure, profits and bank balances.
Controlling debt levels
This is making sure that customers keep up to date with the money that they owe to the company within their credit level. Also finance set credit levels for new customers and adjust levels for clients who haven't kept up with the money they owe.
Job Examples
Financial manager: Overseas that all jobs are completed properly
Accounts staff: Keep track of transactions within the accounts.
Interaction
Finance controls all money matters within the business, so it is important to be in close contact with other areas. Finance ...
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Controlling debt levels
This is making sure that customers keep up to date with the money that they owe to the company within their credit level. Also finance set credit levels for new customers and adjust levels for clients who haven't kept up with the money they owe.
Job Examples
Financial manager: Overseas that all jobs are completed properly
Accounts staff: Keep track of transactions within the accounts.
Interaction
Finance controls all money matters within the business, so it is important to be in close contact with other areas. Finance supplies updated information to directors.
Contribution
Finance helps provide a bigger profit by budgeting spending. This will make more money.
Production
Production is responsible for the making of the products
Activities
Activities in production include:
* Cutting
* Tagging
* Finishers
* Packing
Cutting
The big roles of fabric are cut into shape using giant cutters. This is done on giant cutting tables by the stores.
Tagging
The shirts are clipped with a red or a blue coloured tag. The clothes with the red tags are customised orders. The clothes with the blue tags are standard.
Finishers
The finishers add all the finishing touches, such as the buttons and the labels. There are also separate finishers that carry out instructions on the red ticket items.
Packing
The packing department is now uses machines to help fold the shirts. After this the shirts are boxed and affixed with the right paperwork and are ready to be delivered.
Job Examples
Purchasing manager: is responsible for purchasing materials
Despatch Manager: is responsible for preparing products for delivery
Interaction
Production is linked with other areas because it creates the product of the company. If it did not exist then no profit would be made.
Contribution
Production makes the biggest source of income for the company, the garments, all the other areas rely on the money production is expected to make.
Marketing and Sales
Marketing and sales carry out a range of activities to find out what the customers' need/want and then give it to them.
Activities
The activities in marketing and sales include:
* Publications
* Advertising
* Refunding
Publications
Philip Markham produces two catalogues, the mail order catalogue and the trade catalogue. The mail order catalogue is sent to the customers with regular mailshots to encourage them to buy. The trade customers are contacted regularly by telephone.
Advertising
Marketing and sales places adverts in several publications. The mail order is promoted through several quality newspaper supplements and two women's magazines. They try to aim their advertisements at the typical Philip Markham customer. The advertisements aren't designed in Marketing and Sales; they are produced by an agency that works closely alongside them.
Refunding
The company offers a refund policy if the customer is not happy with the goods they receive. The customer returns the goods and a full refund is given.
Job examples:
Sales and advertising manager: Responsible for the achievement of sales targets and in charge of advertising campaigns
Order clerks: are responsible for the process of sales orders
Interaction
Marketing and sales has to work closely with production when they come to promote the product. Also links with finance are essential, as advertising cannot exceed the budget.
Contribution
Marketing and sales helps contribute to the aims and objectives by promoting the clothing, which will increase sales and taking the order off the customers.
Human Resources/Administration
Human resources is concerned with the employees that work for the organisation. Administration is concerned with the day-to-day efficiency of the company.
Activities
Activities include:
* Recruitment and dismissal of staff
* Health and safety
* Employee organisations and trade unions
* Clerical work
* Security
Recruitment and dismissal
The human resources department employs new staff. It is important they get the right person. Recruitment goes through several stages- advertising, applications, short listing, interviews and selection. Dismissal is also human resources job; it is usually the last resort after disciplinary procedures.
Health and safety
The law requires all companies to conform to health and safety legislation, it must be checked that the working areas are safe and hazard free to prevent any injuries. Checks are made to ensure that the grounds continue to be safe.
Trade unions
Information is provided to staff about employee organisations and trade unions. They are voluntary organisations and the individual employee can choose whether or not to join.
Clerical Work
This is the general running of the company, some of the tasks included under this heading could be: mail handling, organising meetings, record keeping, document production and responding to enquires. It is vital that these tasks are completed otherwise that company will not run as effectively and efficiently.
Security
Philip Markham employs its own security staff that are responsible for patrolling the premises and reporting any security risks and contacting the local police where necessary.
Job examples
Security officer- responsible for monitoring and maintaining security to the required standard
Recruitment and training manager- responsible for the recruitment and selection of staff and the training and staff development.
Interaction
Administration provides support services for all the other functional areas.
Human resources recruits and looks after the staff that work in all the other functional areas
Contribution
Human resources/Administration helps the company achieve its aims and objectives by looking after the staff so they can work hard to achieve the goals.
Equal Opportunities
Equal opportunities ensures that employers treat their staff equally and fairly.
These are employee's rights and responsibilities:
Rights
Responsiblies
To be provided with safe working conditions
To be ready and willing to work
To receive written particulars of employment within two months of starting work
To be given a personal service
To be paid a fair wage or salary in return for being ready to work
To be reasonably competent
To be provided with information concerning rights
To take reasonably care of employers property
In some cases, to be provided with work
To carry out reasonable and lawful instructions
To have any grievances properly dealt with
To act in good faith
Not to be discriminated against on grounds of gender, race or disability
To comply with the express terms of contract
To be allowed to choose whether or not to join a trade union
To comply with health and safety procedures
To be consulted over matters which will significantly affect terms and conditions of employment
To work towards the objectives of the organisation
To be treated reasonably
To behave responsibly towards other employees
The law backs up equal opportunities. These are the four main acts:
* The Employment Rights Act 1996
* The Sex Discrimination Act 1975
* The Race Relations Act 1976
* The Disability Discrimination Act 1995
The Employment Rights Act 1996
This act is about the main rights of employees, it states:
* Employees must receive written details of their employment terms at least two months before starting work
* Employees are allowed a itemised pay-slip
* Employees can get out of working on a Sunday
* Female employees are entitled to maternity leave
* Employees are allowed time of work for jury service
* Medical leave is to be paid for 26 weeks
* Employees have a right to a minimum period of notice (1 to 12 weeks)
* Employees dismissed through redundancy have the right to a redundancy pay
Example
A man received over £5,000 after he was dismissed after taking 40 days off work with a serious medical condition.
The Sex Discrimination Act 1975
This act makes it illegal for anyone to be discriminated against because of his or her gender in:
* Recruitment
* Selection of Jobs
* Promotion
* Training
This act is mainly used by women against men.
Example
A large engineering company paid a female employee £10,000 less than a male employee who was doing the exact same job. She received a large amount of money, more than the money she had lost, so it would have been cheaper for the firm to pay the women the same amount as the male employee.
The Race Relations Act 1976
This act makes it illegal for an employer to discriminate against someone due to their:
* Skin colour
* Race
* Nationality
* Ethnic Origin
This is mainly used by coloured people against white people.
Example
A coloured man was awarded money after he applied for a job and was rejected after a face-to-face interview. He was better qualified than the other interviewees were.
The Disability Discrimination Act 1995 (applies to businesses over 15 people)
This act is concerned with people with disabilities; the disability may be physical, sensory or metal. Employers must:
* Treat a disabled person the same as other employees
* Make adjustments to the workplace, if necessary, to make it easier for the disabled person to work there
Example
Tom McLauchlan was dismissed after he was diagnosed with throat cancer. He was awarded £79,708.
Communication
Communication Methods
Communication is how one party interacts with each other.
There are two main forms of communication and these are verbal and non-verbal.
Verbal
Non-Verbal
Telephone
One to one conversation
Video Conferencing
Two way radio
Audio tape (talking books)
Public Address
Group discussion
Debate
Radio
Television
E-mail
Newspapers
Books
Magazines
Websites
Pictures
Painting
Fax Machine
Letters
Brochure
Leaflets
Memos
Communication in Philip Markham
In Philip Markham every Monday morning there is a meeting between Jack Markham (Managing Director) and his board of directors. Each director holds a meekly briefing with his/her staff to update them on the latest developments. They are to keep people informed.
Production and Sales/Marketing have a meeting every Wednesday morning about sales and production targets.
Internal communications are usually by memo, e-mail and telephone. All senior staff have pagers so do people who are regularly away from their desks and need to be contacted.
In Human Resources there is a notice board, which contains information that staff may need. Staff all have an annual appraisal interview with their own line manager. As well as this face-to-face conversations are held within departments on staff performance and progress.
External communications are also important; these are made using letter, fax and telephone. Senior sales staff visit business customers in arranged meetings outside the site, so does Jack Markham. Private customers are sent regular mail by sales and marketing. Confirmation letters are sent to complaints.
These are the different forms of communication used in Philip Markham and what they are used for:
* Meeting
* Memoranda
* Electronic mail
* Telephone
* Pager
* Notice board
* Letter
* Fax
Meeting
This is a formal face-to-face way of communication usually used to discuss business matters. It is used in Philip Markham by the directors to update each other with what is going on in the business.
Memoranda (Memo)
A common way of communicating in organisations, usually in brief messages. It is used in Philip Markham to get a message to members of staff. It is effective because it is a written record and it can be read at the recipient's leisure.
Electronic Mail (e-mail)
Is used to send and receive messages electronically through a computer. It is used in Philip Markham to pass messages between staff. The advantages are that it is free and it is instantaneous.
Telephone
A common form of two-way verbal communication, speech is sent down a telephone line and to the other person's telephone. It is used both internally and externally in Philip Markham to contact both staff and customers. It is used because you can express emphasise, meaning and attitude and immediate feedback is possible.
Pager
Text is sent to a mobile device. Is used in Philip Markham by staff that are away from their desks often and need to be contacted. An advantage of using pagers is that you do not need to know where somebody is to contact them.
Notice board
A board or area where messages can be posted and them read by other members of staff. The notice board in Philip Markham is in the human resources area and all staff read the messages. This method is used because all staff see the notices and can do in their own time.
Letter
A form of written communication that can be sent from one person to another person or can be a blanket letter, which is sent out to a number of people. It is used externally in Philip Markham to contact customers. It is used because it is formal and is a permanent record.
Fax
Faxing other people is like writing but the letter is scanned electronically passed along a telephone line, at the other end the letter is printed off. It is used in Philip Markham to contact customers and suppliers because it is quick and can be retained for further reference.
How the communication will help the business achieve its aims and objectives
One of Philip Markham's aims is to provide a rapid and responsive service to all its customers. Good communications will help achieve this aim, as the staff need to contact the customers about orders and complaints.
Organisational structure
All Businesses have lots of different things they have to do. No matter what the size, businesses have to order stocks, keep the books up to date, make and/or sell products and deal with all the paperwork. In a small business one person may do all of the tasks. Whereas in a large business tasks would be shared out. In order to be efficient there is a need for organisation. The one-person business must organise by time, but larger businesses, more often, organise by department.
There are three types of structure:
* Hierarchical
* Flat
* Matrix
Hierarchical Structure
Philip Markham's follows the hierarchical structure (also known as the pyramid structure). This is a taller structure with several tiers underneath. The highest position is at the top and the lowest at the bottom. At the top are the managing directors and at the bottom the workers. This business uses a hierarchical structure because it is a big business with several levels of management.
Flat
This is another type of organisational structure. It is a wide structure that only has a few levels. There is still a structure from top to bottom but the layers of management in between are smaller.
Businesses with a flat structure tend to be relatively small and have good communications. However they find it hard to keep a flat structure as they expand and job roles can be indistinct.
Matrix
Matrix is an alternative structure that tends to be project, or job based. IT has support services, which interconnect with the different projects. They tend to be those that specialise in one-off jobs e.g. civil engineers.
On the next page is a copy of Philip Markham's organisational structure; it's in the hierarchical shape.
Differences between Philip Markham's hierarchical structure and the flat structure:
* The hierarchical structure is taller than the flat structure and has more levels.
* The hierarchical structure has several levels of managers, the flat will usually only has one.
* The flat structure is usually used by smaller businesses than the hierarchical.
* The flat structure has better communications because of less levels, in the hierarchical structure messages have to pass through more people to reach the bottom so they may become distorted.
Strengths of Philip Markham's structure
* Each member of staff has a clear job role
* There are more promotional prospects
* There is a large number of staff that can fill in for each other through illness etc.
* A human resources function that will guide staff
Weaknesses of Philip Markham's structure
* Tendency to departments to become isolated from the others
* Not much communication from staff at bottom on managers at top
* Slow decision-making because so many people have to be consulted
For the business to continue to be successful it will need to work on the weaknesses of its structure so it will need to:
* Work on links between departments
* Provide good communications between levels
* Speed up process of decision-making to react to changes and challenges
If the weaknesses are not worked on the business may loose efficiency, resulting in the response time to customers rising. One of the aims is to provide a rapid and responsive service to all its customers; this will not be achieved. Also because of the response time raising some customers may turn elsewhere, this loss of sales will lose profit. Making a profit is also an aim.
Customer Service
Customer service is that standard that customers expect from the business. In each individual business customers expect different things.
In Philips Markham the customers may expect some of the following:
High Quality Clothing
Helpful Staff
Fair and competitive prices
Range of styles and sizes
Delivery within 7 days
"No quibble" refunding
In the past customers expected the company to withhold their good reputation. They expected clothing to be of an excellent quality.
At the moment customers expect the company to withhold their good reputation for high quality and affordable menswear.
The business could improve by:
* Checking orders for right goods
* Always deliver on time
* Better staff training so they can handle a wider variety of customers
* Range of delivery times and weekends
* Clearer legal rights
This will benefit the company by:
* Happier customers that will return
* Better reputation
On the following pages are my PowerPoint Presentation slides with my speech.
Lawrence Kidd