Business report on J Sainsbury's.
CONTENTS
Introduction ....................................................Pg 2
Business Objectives ...........................................Pg 3
Types of business ..............................................Pg 14
Organisational Functions .....................................Pg 20
Organisational Structures .....................................Pg 31
Communication ................................................Pg 37
Product and Quality ...........................................Pg 41
Bibliography ....................................................Pg 46
Introduction
The business that I have decided to report on is J Sainsbury's.
As we all know this is a very well known and well-established organisation and this is why I decided to make a report on it and also because the branch I am going to focus on is about ten minutes away from where I live.
J Sainsbury's is a grocery store that has over 1 million branches across UK.
The registered address of the business is:
J Sainsbury's Supermarket
33 Holborn
London
EC1N 2HT
I am going to identify the different objectives of my chosen business and I am going to write this by focusing on the following points and explaining it thoroughly:
* Making a profit
* Surviving
* Increasing sales or market share
* Producing or offering high quality products or services
* Developing a skilled workforce
* Fulfilling charitable or non-profitable objectives such as caring for environment
I will also answer the following questions thoroughly:
. What are the principle objectives of the business?
2. What charitable and non-profit objectives does the business have?
Why they have those objectives?
3. How does the business maximise its profits?
4. Is "growth" one of the main objectives? Why growth is often risky for businesses organisations?
5. What sort of culture does the business have? How does the culture of the business affect its objectives?
At the end I am going to round up my report with whether or not I think the business is successful. Whatever my answer will be I will produce evidence to support my answer.
Business Objectives
First I would like to talk a bit about business objective in general and then I will move on to explaining about J Sainsbury's business objectives.
Businesses exist to provide goods and services. All businesses whatever their objectives have to make products and/or provide services that satisfy customers' wants or needs. Business sets themselves objectives that affect the way they operate. These objectives flow from its mission and are the criteria against which its performance needs to be judged.
J Sainsbury's objectives are:
* To provide shareholders with good financial returns by focusing on customers' needs, adding value through their expertise and innovation, and vesting for future growth.
* To provide unrivalled value to their customer in the quality of the goods they sell, in the competitiveness of their prices and in the range of choice they offer.
* To achieve efficiency of operation, convenience and customer service in their stores, thereby creating as attractive and friendly shopping environment as possible.
* To provide a working environment where there is a concern for the welfare of each member of staff, where all have opportunities to develop their abilities and where each is well rewarded for their contribution to the success of the business.
* To fulfil their responsibilities by acting with integrity, maintaining high environmental standards, and contributing to the quality of the life of the community.
Mission
Every business will have a mission statement, whether in the private or public sector, large or small, commercial or non-commercial. In every business statement you will find the answer to questions such as what the business is about? What is it that they are trying to achieve?
A mission statement is a written document setting out the organisation's purpose.
A good mission statement should:
* Be well written, simple and direct
* Define its purpose
* Identify the value s and culture of the organisation
* Set out its standards and the qualities that distinguishes it from its competitors
* Identify its customers
J Sainsbury's mission statement:
J Sainsbury's mission is to be consumer's first choice for food, delivering products of outstanding quality and great service at a competitive cost through working 'faster, simpler and together'.
Increasing shareholder returns
Short-run and Long-run objectives
Long-run objectives cover a three to five years time period. They usually define the organisation's primary or main aims, e.g. to increase profits by 10 per cent.
Short-run objectives, usually set up for up to a year ahead, are used to support the long-run objectives, e.g. to increase profits in the northeast by 15 per cent.
Mind you objectives can change over time depending on conditions in the external environment and on internal policies.
SMART objectives
To be effective objectives should be SMART. It is an acronym for:
* Specific - e.g. for a particular product in a particular area
* Measurable - such as percentage sales or profits
* Achievable - with extra effort
* Realistic
* Time constrained - within a set time period or deadline
Business objectives is necessary because:
* They act as management targets
* They are a standard against which performance can be measured
* They help to bring staff together
* When linked to pay or rewards they can encourage staff
* Making a profit
In general:
Traditionally it has been assumed that all firms attempt to make the most profit they can i.e. to maximise their profits. They therefore adopt pricing and production strategies that specifically aim to achieve this goal. However recently, it has been suggested that instead of maximising profits, businesses try to achieve satisfactory profits. Though this is lower than the maximum but still generally accepted by shareholders.
In Sainsbury's:
Looking at the financial records of J Sainsbury's, I can say that Sainsbury's had a massive increase on their profit right from 1998 up to 2002. If you look at the record of five years of financial records of Sainsbury's you will see that the group turnover increased exactly by £2,710 million.
In terms of making profit J Sainsbury's doesn't only operate as food retailers but as a property development that is called J Sainsbury's Developments Ltd. They are in logistical services, which are called J Sainsbury's Distribution Ltd. Finally J Sainsbury's Bank plc, which is a financial service.
The total turnover for J Sainsbury's in 2001 in the food retailers, financial services area and property development was £17,244 million and in 2002 it is £17,162 but the total gross profit was £1,162 million in 2001 and rose up to £1,257 by 2002 March.
J Sainsbury's also in 2001 made profit on ordinary activities before interest of £513 million and again by 2002 it had risen up to £620 million.
Looking at this I can say Sainsbury's' one of the objectives has been met. They wanted to provide their shareholders with good financial returns by focusing on their customers' needs. If you look at the figures above, I would say that they have accomplished that and the shareholders will get good financial returns.
* Survival
In general:
While businesses such as BT and BP think in £ billions, at the other extreme some businesses think of surviving. Survival is the main objective of every business. This is particularly relevant during a recession. Most new businesses have survival as the main aim of the first years of operating.
When managers are concerned with survival they tend to be very cautious and reluctant to take any risks, this can mean that profits stay very low and the policy is self-defeating.
In Sainsbury's:
As part of surviving, Sainsbury's rigorously monitor 10,000 lines weekly to ensure that they remain competitive. They also reinvested some of their cost savings in price adjustments. Alongside this they are continuously running a highly attractive, sustainable promotional programme.
J Sainsbury's has been making great strides in retaining their colleagues to serve their customers better.
The business has replaced their legacy system with 'best in class' IT solutions to help them gain competitive advantages. Their replatforming project retains its scope and is on target.
* Increasing sales/Market share
In general:
This is closely linked to the business's desire to achieve sales revenue. The market share is the fraction of the market that a business controls. A bigger share of the market gives more power and influence to a business. If the business abuses this power by acting against the public interest e.g. by charging high prices, the Competition Commission could investigate on it.
In Sainsbury's:
The financial highlights shows that between 2001 and 2002 the sales in the retailing sector changed by 7.4%. Underlying profit before tax changed by 14.2% and the profit before tax changed by 30.7%.
On February 2001 Sainsbury's supermarkets Ltd became the first major food retailer to achieve the corporate accreditation Investors in People. The Investors in People Standard is tried and tested flexible framework that helps UK companies succeed and compete through improved people performance. Sainsbury's also increased their sales by launching Sainsbury's own-label organic fruits and vegetables. Also the mobile phone service called Sainsbury's one.
With the figures from the ten-year financial record I can say that Sainsbury's have a big share in the market and each year it keeps on increasing by couple of percents. In 1990 the share was 409% and gradually, year-by-year it increased to 714% in 1999.
* Providing service for the community
In general:
Many non-profit making organisations exist only to provide a public service and their sole purpose for raising money is to help them carry out their activities, they are not interested in profit making but in providing a service to the community.
In Sainsbury's:
During 2000/01, J Sainsbury's plc invested £14.2 million directly in support of UK communities.
J Sainsbury's plc strives to deliver an imaginative programme of community involvement that reflects their strengths as a business and meets their customers and colleagues' expectations. The projects listed below are examples of the innovative, people-oriented charities that J Sainsbury's plc support.
* Crisis FareShare - provides nutritious meals for homeless people and re-directs Sainsbury's supermarkets wasted food away from landfill sites.
* Salvation Army - donate food that would otherwise be thrown away because it cannot be sold thus strengthening Sainsbury's donation network in areas outside the reach of Crisis FareShare.
* Express Link Up - supplies equipment for use by sick children in hospitals across the UK.
* Producing high quality product and/or services
In general:
Being able to provide permanently high quality goods or services is now a significant aim for most businesses. This allows them to differentiate from their competitors and can give a permanently sustainable competitive advantage.
In Sainsbury's:
Quality food is a priority for Sainsbury's customers and a key component of the Sainsbury's brand. During the year, they have invested in their food ranges and have improved/developed over 3,200 products. Sainsbury's has a reputation for quality. In addition, their own-label subbrands are amongst the best in UK. Sainsbury's have constant supply of fresh fruits and vegetables on shelves 24 hours. They have certain staff employed just to make sure that every product on shelves is up to date and, the out of date products are taken off the shelves as soon as it is necessary. Customer complaints to do with the products are dealt promptly and they always make sure that the customers go away satisfied.
Sainsbury's 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.
* Developing a skilled workforce
In general:
Most businesses would agree with the statement that 'our greatest asset is our people'. This means achieving its objectives through the motivation and development of its staff.
It is committed to providing all staff with:
a) The information they need to perform more effectively - all staff would be told what the business objective and aim is so that they can help the firm achieve it.
b) A regular performance appraisal - appraisal would help the business because if the staff has chance of talking about their needs and problems, then the managers should be able to help them. Once the problem is solved workers will be more motivated towards their work because they will feel wanted, then this will lead to them producing better work and service.
c) A personal training and development plan - new skills used from workers will produce better work, which will lead o satisfied customer's.
A complete and total commitment to training is vital if a business hopes to produce quality goods and services
In Sainsbury's:
Sainsbury's want everyone that works for them has the opportunity to develop their careers. They have a company-wide development programme based on a personnel management agenda where each manager has an individual training and career development programme. Colleagues in store have a 'how well am I doing?' meeting with their manger to assess their progress and training needs.
J Sainsbury's have been recognised by Investors In People because they have been successfully adopting and maintaining its four fundamental principles:
. Commitment to develop all employees to achieve business goals and targets;
2. Regularly reviewing training and development needs in the context of the business;
3. Taking relevant action to meet training and development needs throughout people's employment;
4. Evaluating outcomes of training and development for individuals and the organisation as a basis for continues improvement.
Retail staff have access to Learning@Sainsbury's, via the Sainsbury's intranet, which is helping to grow talent within the business, providing help and training when needed. It covers four faculties:
. Management capabilities;
2. Customer service and selling skills;
3. Operating standards;
4. Finance and business planning.
* Fulfilling charitable and non-profit objectives
In general:
A charity is an organisation whose key objective is to help people in need or work for the common good. A charitable trust is an organisation registered with the charity commissioners. Providing it obeys their rules it does not have to pay tax.
In addition to the dedicated charities many companies now include non-profit-making charitable objectives and activities as part of their mission in an attempt to improve their image with their stakeholders.
In Sainsbury's:
In 1999 Sainsbury's donated £3.8 million to charitable organisations and local community projects which included contributions of money and time to enterprise agencies, job creation, educational schemes, town centre management initiatives, community projects and the arts.
J Sainsbury's always receive request from charities and groups seeking to hold fundraising activities. Often store managers are in control of that because they know their customers' interests. National fundraising partners are chosen using the charity guidelines for the whole community programme and include staff in the store making every effort to impress in their fundraising efforts. Past partners have included Children in Need, National Meningitis Trust and Help the Hospices.
During 2000/01 Sainsbury's colleagues and customer raised a staggering £9 million through fundraising activities, including a record-breaking £4.5 million for Comic Relief.
The principle objectives of the business
The principal objectives of my chosen business are 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 customers' needs.
It also aims o fulfil its responsibilities to he communities and environments in which it operates.
The charitable and non-profit objectives of the business
The charitable and non-profit objectives of the business are to raise money for the poor and helpless people, also for those with disability and serious illness. Sainsbury's sell product that promote the charity or non-profit campaign and include a donation in their price.
Sainsbury's have those objectives because they believe this is one of the main ways that they can maintain their customers. Customers get very happy when they find out that large organisation are supporting non-profit activities. Moreover, are sponsoring charities for disadvantage people across the world.
Sainsbury's attract more customers during certain events then they do on a normal day, such as the Rode Nose Day, they sold twice as much as before when customers found out that every pound they spend 10p is going towards the red nose day.
True partnerships offer benefits to both parties and they are confident that their sponsorships provide a blend of community and corporate values and branding opportunities.
Maximising its profit
The business tries to maximise its profit by improving on the products that the customers least like. They give out questionnaires to customers to fill in answering questions about the company. They also ask the customers on how they can improve the service so that the customers are satisfied. Sainsbury's monitor what products customers most buy and what brands are most popular.
They also give discounts on occasions like Christmas, so customers would buy more.
Another way Sainsbury's maximise their profit is by going into partnership with existing businesses. For example in October 2000 the first opening on Sainsbury's Local store at a petrol station in Roehampton, London. In partnership with shell, Sainsbury's is planning a six-year trial of this concept.
Growth
Growth is one of the objectives for J Sainsbury's. Infact it is one of the main objectives because once the company takes over a competing company, it gains a greater share of the market and increases its overall strength and bargaining power.
Growth can often be risky for organisations because the business starts of as a flat structure, where it has a close connection to the customers. This might be one of the reasons why businesses attract more customers. However, once the business grows the structure has to change to hierarchal for which customers ...
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Growth
Growth is one of the objectives for J Sainsbury's. Infact it is one of the main objectives because once the company takes over a competing company, it gains a greater share of the market and increases its overall strength and bargaining power.
Growth can often be risky for organisations because the business starts of as a flat structure, where it has a close connection to the customers. This might be one of the reasons why businesses attract more customers. However, once the business grows the structure has to change to hierarchal for which customers are lost contact.
They are then left to deal with their query through sales assistants. The customers have to go through long procedures before they get their way and by that time, they feel neglected and they take their custom elsewhere. Therefore, if one too many customers start doing this the business looses out on profit and the growth of the business becomes ineffectual.
The sort of culture that I would say my business falls in to be role culture or bureaucracy.
This is because the characteristics of a role culture or bureaucracy are:
o Formal structure which is hierarchical
o The organisation chart defines the role of every individual
o The job or the role tends to be more important than a person
o Most jobs can be done by many people
o The limit of every job are strictly controlled
o Emphasis on rules, routine and procedures.
I think Sainsbury's falls in to all the categories above. Although the style can work well in large stable organisations where there is little change, decisions making can be hampered by unnecessary and over-enthusiastic official procedures.
The culture of the business could affect its objectives because staffs that are at the bottom level may feel they are not important, which might demodulate them towards their job. Because it is a large organisation and is in operation 24 hours and has to deal with many customers, some customers might even feel unwanted. The customers will be upset will start shopping elsewhere.
Once the staffs are upset then the work is never up to standard therefore if the customers are not happy with the service, they will go somewhere else and then the business will come to a halt.
Looking at the company's progress, market share and profit, I would say that the business is very successful.
J Sainsbury's plc is a leading UK food retailer with interests in financial service and property. The group comprises Sainsbury's Supermarkets and Sainsbury's Bank in the UK.
The group turnover in 2002 was £18.2 billion, underlying profit before tax was £627 million and underlying earnings per share was 21.5 pence.
The group employed 173,800 people at the end of the year.
Their share price is 268.5 (p)
The business is making continues progress. For example:
o Launching a mobile phone service;
o Launch of Sainsbury's Property Company;
o Initiative to safeguard the continued integrity of its organic products;
o UK's first Supermarket Bank to sell cars in a nationwide scheme;
o Launched a direct-to-consumer wine offer.
J Sainsbury's is now co-branding advertising and promotional activity and has moved their weekly promotional mailing to the end of the week in time for their customers' weekend shopping trips. This is one of the many changes that came out of the Customer First programme, which reviewed processes and systems across their business. This move had substantially improved availability and operating efficiency.
Types of business.
J Sainsbury's' is in the retail groceries business. They are a public limited company (PLC). Before looking at J Sainsbury's as a PLC, it is worth considering the benefits and constraints of other types of ownerships.
Sole traders- these types of businesses are relatively small businesses. A sole trader is a person who owns the business all on his own. He has no one to answer to and has total authority. These sorts of businesses are usually corner shops. Usually one person owns the business and employees only one or two employees to help. There are some advantages of being a sole trader; the main advantage is that all the profit, which is made, goes straight into the owner's pocket. It is very easy to set up a business as a sole trader. The owner would be able to respond to market change quickly. All of its financial details can be kept secret; the financial details do not have to be published. This is good, as the owner's competitors would not know how much profit he/she is making.
On the other hand, there are some disadvantages of being a sole trader. As there is only one person, who owns the business it would be hard for him/her to raise capital. Even the banks would think twice as it is a risky investment. There are few assets to support the application of a bank loan. Sole trader is an unlimited liability that means if the business goes bust then personal belongings can be taken to accumulate to the amount owed. The major disadvantage is that there will be no one to share your ideas with or to share the workload.
Partnership - in a partnership two or more people can be trading together. A maximum of 20 partners is allowed, except for partnerships in the professions such as law and accountancy.
Benefits
o Share resources and ideas
o Can cover for each other, e.g. during holidays
o More sources of finance than sole trader
o Partners can specialise, e.g. one may specialise in company law, another may focus on criminal law
Drawbacks
o Usually unlimited liability
o Limited sources of finance
o Profits must be shared between partners
o Slower decision making than sole trader
Partnership also involves deed of partnership that is a legal document that forms a contract between the partners. It covers issues such as the division of profits, the dissolution (closure) of the partnership; the rights of the partners; the rules of taking on new partners.
Partnership can also be between a person who is involved with the business in a day-to-day basis with a sleeping person who invests in partnership but does not take part in day-to-day business; has limited liability. At least one partner must have unlimited liability.
Private limited Company - many private limited company start as sole trader or partnerships and gradually expand to different ownership, mostly it is family members running the business.
Benefits
o Business can be kept small
o Because of the limited liability, the owners never can lose more then what they have invested.
Drawbacks
o Limited companies have to comply with more regulations than a sole trader
o A limited company is not allowed to trade under the name of an existing company
Public limited Company - these are the largest type of privately owned enterprise in the UK. Any person can buy shares in a public limited company.
Benefits
* The major benefit is vastly increased capital as many thousand of people may buy shares
* If company is successful, the shares will increase
Drawbacks
* Hard to make decisions, as every single shareholder needs to be informed and objections can raise with the decisions
* Shareholders will expect to receive a dividend in return for the investment
The shareholders may expect quick return of their investments, as they might be less interested in long term prospect.
Now I would like to talk about the implications of business ownership in terms:
Limited liability - this type of liability in which a shareholder of a private limited company or public limited company is only liable for the amount of money invested in the business. A limited company is owned by its shareholders. Companies can be set up with just one director. There is no legal maximum to the number of shareholders. In several very important respects a limited company is very different from the other forms of business organisation.
If someone wished to take either a sole trader or a partnership to court then they would be suing the owner of the businesses. A limited company on the other hand is a separate legal entity. That is, the company exists in law separately from the owners. The company itself is sued rather than the shareholders, so their personal assets are not at risk.
Unlike sole traders or partnerships, shareholders do not necessarily run the business instead, they elect a board of directors to run the company on their behalf.
Limited liability was introduced in the mid-nineteenth at a time of great industrial development when shareholding had a particularly bad press. Businesses often went bust and some people lost all their life savings and not only that but their homes as well. Limited liability was designed to protect shareholders from this unreasonable risk.
Incorporated - is a legal term which applies to private and public limited companies where the business and its owners, the shareholders, are regarded as separate, i.e. the shareholders have limited liability.
Unlimited liability - is the type is liability in which the owners of a business (usually sole trader or a partner) are responsible for all business loses.
If the company gets into financial difficulties and goes into liquidation the owners stand to lose all their money including their personal belongings. Unlimited liability is virtually the opposite of limited liability.
Unincorporated - is a legal term which applies to a sole trader or a partnership in which the actual business and its owner(s) are treated by the courts as if they were the same, i.e. have unlimited liability.
The main advantage of being a limited company is that the business only loses what was invested. Investors know the maximum extant of their losses. Without this sense of security investors would be less likely to invest and firms would struggle to raise the finance they need.
One of the reasons why J Sainsbury's is a "plcs" because the business will have:
o Access to more share finance (can sell shares to the greater public)
o Greater status (perceived as bigger and more successful than Ltds)
o Higher public profile (likely to get more media coverage)
o Can use shares to make takeover bid (paper offer)
Sainsbury's changed their ownership from what it starts with because they can get greater access to funds. The business becomes a limited liability so they do not have any risk of losing their personal belongings. If the business goes bust, no body will be chased up to forfeit.
A franchisor sells the right to use/sell a product or service to a franchisee in return for a fixed fee and /or percentage of the turnover.
The advantages for a franchisor:
o Quick simple, low risk route to expansion
o Little capital required for expansion
o Original idea
o High status (having distinctive name for the business)
o Feel honoured that people want to use their name
The advantages for a franchisee:
o Gets a well-known name and logo
o Gains from national advertising
o Gets an immediate business with national help and support
o Simple to set up and relatively cheap depending one the franchise name
Easy way to remember is:
Franchisor - Giver Franchisee - Taker
J Sainsbury's is a plc and to form plc you have to go through a certain procedure that the owner must complete. That is:
The disadvantage of J Sainsbury's being a plc is:
o There are number of legal requirements to fulfil is setting up a company
o Regulations mean that a company is more expensive to set up than a
sole trader or partnership, although the cost may be as little as £100, and some already registered companies can be bought off the peg
o The accounting of the company is less private than for other forms of organisation. Companies are governed by the Companies Acts which state that financial records must be audited and made available to the registrar of Companies at Companies House
o Directors need to report back to the shareholders at the annual general meeting (AGM) where unpopular decisions and poor results must be explained
Organisational functions.
All businesses, which are set up, are there to either make goods or provide a service for their customers. Along with this, they want to maximise their profits, meaning trying to make as much money as possible out of their goods or the service they provide. To this all firms need to use the factors of production. This is land, capital, labour and enterprise.
Land: Land is not just a 'plot of land' where business premises might be located. It also includes natural resources, such as coal, diamonds, forests, rivers, and fertile soil. The owners of land receive rent from those who use it.
Business activity uses both renewable and non-renewable resources. Renewable resources are those like fish, forests and water which nature replaces. Examples of non-renewable land resources are mineral deposits like coal and diamond, which once used are never replaced. There has been concern about recent years about the rate at which renewable resources are being used. For example, over-fishing has led to a decline in North Sea cod stocks from around 1 million tonnes in 1971 to around one third of this amount by the year 2000.
Capital: Capital is sometimes described as artificial resource because it is made by labour. Capital refers to the tools, machinery and equipment which businesses use. For example, JCB makes mechanical diggers, which are used by the construction industry. Capital also refers to the money, which the owners use to set up a business. Owners of capital receive interest if others borrow it.
Labour: Labour is the workforce of business. Manual workers, skilled workers and management are all members of the workforce. They are paid wages or salaries for their services. The quality of individual workers will vary considerably. Each worker is unique, possessing a different set of characteristics, skills, knowledge, intelligence and emotions. It is possible to improve the quality of human resources through training and education. Human resources become more productive if business or government in training and education invests money.
Enterprise: Enterprise has a special role in business activity. The entrepreneur or businessperson develops a business idea and then hires and organises the other three factors of production to carry out the activity. Entrepreneurs also take risks because they will often use some personal money to help set up the business. If the business does not succeed, the entrepreneur may lose some or all of that money. If the business is successful, any money left over will belong to the entrepreneur. This is called a profit.
In J Sainsbury's, when they have to make a decision they have a meeting this meeting is in between a formal and informal meeting. As its not compulsory to attend this meeting but would be help full if one did. The problem is talked about suggestions are put forward and taken into account. This is the formal part of the meeting when suggestions are written down. The meeting usually includes most of the senior workers of J Sainsbury's. In addition, they spread the word across J Sainsbury's staff of what the situation is and what are there suggestions. So J Sainsbury's has a consultative sort of management and sorts of drifts into the Democratic management style I would say a mixture of both but more of a consultative management style.
The culture of J Sainsbury's organisational structure is probably a customer driven culture and a positive culture. A customer driven culture means the organisation is dedicated at all levels to satisfy customers. Attention is focused on improving all aspects of the production process down to the minuets detail for the customer benefits. The positive culture is managers and workers alike are cooperatives and supportive of each other's contributions and efforts, and consider many issues as opportunities rather then threats. A positive culture is often a dynamic/innovative one. This is simply because Sainsbury's are very customer orientated company. Therefore, they most defiantly have a customer driven culture. And they do have a very friendly working environment so they would almost certainly have a positive culture to.
A person culture is when the manger and employee an in constant contact and are very supportive of each other's own developments.
A bureaucratic culture is one where everybody plays buy the boy, they communicate through the channels of communications. They also have clearly defined chains of command and authority.
A power culture is a centralised firm with overall power of what is going on in the firm usually controlled by senior managers.
Positive culture is when mangers and workers like working together along side enjoy working together they value each other's contributions and give advice when it is needed.
There are other types of cultures such as adaptive cultures this sort of business is where managers are able to introduce a culture that allows a business to adapt to change in its external environments. Such businesses are more likely to survive in changing environments.
The other type is inert cultures these are businesses where managers all accept the value and the norms of the business, which never change. Such cultures promote inertia. Decision-making is often centralized.
The problems with such structures is that managers cannot see problems if the environment changes.
Communicating corporate culture is one, which a business must be communicated to the employees and other stakeholders. Formal and informal methods can be used to do this. Formal methods are highly visible, consciously designed, regular events and activities. They provide opportunities for the employees to acquire the company values and beliefs.
To have a good organisation structure is very important for motivation. If the organisational structure is clear and everyone knows where every one stands. Having a clear structure is also good for motivation because everyone knows who to report to. The management could also use this as a motivation strategy this is because if a manger asks a worker to do something, which he usually does, the worker would then feel motivated and valued within the company. This is very important because if a worker feels motivated he would work harder and the manager would get more out of him/her. On the other hand this could cause rivalry because if one worker is asked to do something for the manager the other worker might feel as if his/her is being left behind. This could cause jealousy and unrest in the workplace. This is a very bad de-motivator.
In McGregor's theory X, it says that most workers are lazy and have to be forced to do worked. In J Sainsbury's, this is not the case as the working environment is very relaxed no one is forced or controlled. Everyone knows what their duties and tasks are and they do it. Moreover, in J Sainsbury's I have seen a very friendly environment. I have seen workers going out of there own way to help other struggling workers. I have seen experienced workers helping new trainee workers correcting their mistakes. Therefore, his theory does not match with Barclays. It has quit the opposite.
There have been many people who have written theories about the motivation of the workplace here are some of there views.
Getting motivated in the workplace could be a hard thing for some people as they do not enjoy there work, but for some its really easy as small things can encourage a person to do more in the work place. I mean little things like when the boss praises you or when
You know by doing this job, you will gain more skills, which would benefit you in the future. However, the theory in question is Maslow's Hierarchy of need.
Mazlow had this theory set in a pyramid about motivation in the work place.
The bottom being the one you needs most to move unto the next step. There is 5 steps top one being self-actualisation and the bottom one being Basic need i.e.: food/shelter (the one you need to have first).
Self
Actualisation
The diagram is the pyramid of Maslow's theory the bottom is needed to reach the next step i.e.: you need Basic need before you can think about Safety.
One of the questions is that do you need Belonging before Self Esteem. Or if it is the other way. I believe that Self Esteem should come before Belonging this is purely because if you get recognized in the work place then the work colleagues will make you feel welcome so then you would feel you belong at the work place which would keep you fresh and motivated. Nevertheless, this view could be argued the other excessively. You could also say that you would need Belonging before Self Esteem (as Mazlow has placed them). The point for that would be that you would need to be loved in the work place to show your full potential which would then help you to get recognized and would benefit you for a higher ranked place in the work place with more benefits and extra pay.
The next question would be could you actually reach the top. Well there are different views on this some people say that one can never be satisfied with what they have achieved or got. However, if you look at it in any point of view you would need to have the basic need meaning food and shelter. However, you could reach the top if you think in a religious point of view but still you would need food and shelter to survive. Just say you're a monk or a priest of any religion the next step being safety those kind of religious people would not need to worry about safety because they believe in good so much that they believe that there lives are in goods hand and he/she is looking out for them.
The next step being Belonging they already would be part of a religion and feel love in the group as all the people would be of similar faiths.
The next step being Self Esteem they Would get there self esteem from their god or their beliefs because they would believe that god is happy at what they are doing as they have dedicated the rest of their lives for god.
So then, they have moved to the top so some could argue it this way.
Taylor's Theory.
There was another person who wrote his version of what motivates a person at his workplace this was written in the 19 century. This time was when it was the industrial evolution when machines were being made to do the work instead of workers this was basically because you would get more output out of a machine and it would cost less money in place of a human.
His theory was to get more out of your workers and keep them happy pay them in piece rate so if they wanted to increase there earnings for the day they would work hard because the more they produce the more they earned and the more output the manager got. So Taylor believed that the biggest and probably the only motivation a person needs is money. At the time when he wrote his theory was when workers were given no value and the workers took all the abuse for the money. In those days, workers were regarded as machines all the workers were told what to do and when to do it. Therefore, Taylor is right but for only the period, which he wrote it in.
Douglas McGregor he had two different types of theories theory Y and theory X. Theory Y was about a set of people who wanted to gain skills from there workplace. There was the type of people, which wanted to confront challenges and to complete the task in hand. They did not see their reward as such as money. But gaining experience and skills.
But on the other hand you have a set of people which are the complete opposite of theory Y. these people were very lazy they would try to stay away from challenging work. They had absolute no ambitions there interest lies with there cash rewards. To get them to do there work they had to intimidated or punished. These set of people caused a lot of grief for managers as they could not be trusted they had to be watched at all times.
The next theorist is Abraham Mazlow this theorist had a theory based in a pyramid. His pyramid is split up in 6 sections.
With basic needs at the bottom and self actualisation so you would have to achieve the bottom first (Basic Needs) and then move up the sections the sections are basic needs, safety needs, love needs, self esteem and at the top self actualisation. So in order to reach the top, which is self-actualisation, you have to get pass the other steps like self-esteem and safety needs. I believe he set up his theory for the ideal world, as it would be very hard to reach self-actualisation as no one is ever satisfied with what they have achieved they always want more. And to feel loved and be safe which will motivate you would be very hard to get in a workplace there would always be constraints conflicts with fellow work mates professionally jealousy for various reasons weather its about your work colleagues getting paid more then you or it might be that he/she might be getting fringe benefits and doing less work then you, you will then feel de-motivated so there is always conflict in the work place for various reasons. So in his theory money was not even involved let alone thinking it could be a motive in the work place. He gave more value to other things such as self-esteem basic needs etc.
The next theorist is Frederick Herzberg his theory was based on hygiene in the workplace he believed that if a workplace were clean it would motivate the workers. He has also explored other areas such as shorter working weeks, fringe benefits and increase in wages. But the main point would be that is hygiene a motivator. Probably, as a person would not work in a dangerous environment for a lot of pay but then again some would. So I don't think that hygiene is one of the main motivators. But his theory would be considered as he only died 10 years ago. He believed that money was important but not a priority for most people secondly if a worker believed that the work he is doing is a very important piece of work then that would enhance his working performance. As he would then feel privileged and motivated. So money for him was not considered the top motive but it was up there at that region
The next theorist is Victor Vroom he believed that a person should be rewarded on what he perceived as being better for example a worker might think that promotion should be his reward some workers might think that a wage increase is beneficial for them. So this theorist does mention money but he does not think that money is the most important he believes a person should be rewarded on what he/she believes is important I think this is a very important point. As this favours the ordinary man this is also good as if this option was available to employees they could choose which one they preferred and if they got what they wanted that would then motivate them which would help the business as a whole.
What my conclusion is that many theorists don't believe that money is the top motivator.
But I wouldn't entirely agree on Vroom's theory because for how long will the employer agree to what the employees thinks they deserve because at some extent everybody is greedy the more you give them the more they want. If the employers carry on agreeing with them then he/she might just end being bankrupted by trying to fulfil their employees' needs. So his theory isn't a wise one to follow after all.
I believe to get more input out of your business and to get maximum out of your workers you should pay them by piece rate this means the amount they make or sale is the amount of money they would get paid. This would then motivate a worker to do a lot and work harder as he knows the more he does the more he would get paid.
I personally believe that money is the main motivator all above the others as you wont see many people working everyday without pay even charity volunteers would be reluctant t put in a 9-5 shift everyday.
But the question would be would you go to work from 9 a.m. to 5 p.m. 5 days a week not getting paid or not getting paid enough??????
I think you can reach the top in a religious way this is because if someone is religious and have dedicated all their lives to god they believe god is happy that he is looking out for them they would get there self esteem from thinking god is happy for what they are doing. They would feel loved as they would have there social life with people similar to them so in a religious way for a person I think you can be satisfied with life and reach to the top and say I have no regrets or that I need to do more.
The time at which Taylor wrote his theory were people only worked for the money and no other reason and that they would do practically anything for money so at the time he wrote his theory he was right in his way.
However, Maslow's theory still has value until today this is because you can still relate today's environment with Maslow's theory.
In relation to J Sainsbury's, my findings are that the money does not motivate the workers of J Sainsbury's. Just giving good customer care motivates them. For e.g.: in J Sainsbury's, workers pack bags for the customers they carry the shopping trolleys around for the old age pensioners. By doing this it gives the worker great satisfaction. And if one notices all the workers work well with each other in a very friendly environment going out of there own way to help others, jus so the job could be done properly.
How does the 6 functional areas help the business?
Production is to use materials to manufacture goods or supply a service. If this part fails the organization as a whole fails. This is basically because no business can survive if it does not produce enough goods or services to satisfy the needs of customers. In J Sainsbury's the production manager is responsible to make sure all his raw materials are processed into good quality finished goods. He must monitor everything in his department and to ensure everything is running smoothly. He is also referred as the operations manager.
Finance is the other part this is mainly to control the expenditure of the business and the income. This department must record all transactions. This department also has to produce all financial documents and reports and along with that deal with all incoming and outgoing payments. In J Sainsbury's the finance manager is responsible to ensure that his department is up to date with all the transactions J Sainsbury's has made and to make sure the figures are correct and that no blunders occur as this is a very sensitive department if there is a mistake here J Sainsbury's would not know how much profit or loss they are making.
The marketing function at J Sainsbury's is responsible for identifying, anticipating and satisfying customer requirements profitably. The marketing department in J Sainsbury's is there to find out the consumers likes and dislikes. This means they would have to carry out market research. This would help them, as they would find out what the consumer wants at what price. So that the particular good could be sold profitably.
Marketing is anticipating customer needs meaning what the customer would like in order to sell their products successfully. To do this the department goes through many things like market research, advertising, promotion, packaging, pricing and distribution. If all is well and lets say the advertising is done very poorly, this could have a great effect on the product.
Research & development this part is only mainly found in large organizations this is because they would try to maintain or increase their market share by introducing new products or improving existing ones. In a competitive market, companies try to stay a step ahead of their competitors and the job of research and development department is so they are able to do so. J Sainsbury's the research and development department has the responsibility to create better products without the consistency of new products coming in there is a chance that J Sainsbury's could end up boring and predictable.
Human resources are a section, which mainly deals with staff recruitment, selection and training of the workforce. This department is also responsible for the safety regulations.
They also look after the welfare of there staff. Their job is also to deal with conflicts between workers and complaints. The use of this department is so that everything is running smoothly and that they are all happy this is a very good motivating factor. In J Sainsbury's, the human and resources department tries its best to employ the best possible workers for there firm. The also have charge of
Discussing possible futures of current employees like promotion etc., they also have to sort out argument between employees. This is important as in J Sainsbury's its all about customer relationship and if you have conflict within the firm well I don't see customers wanting to buy from a firm which cannot control its own staff.
Administration this department is the communication with the workforce. This department also produces all necessary documentations. This department also keeps all records except for financial ones. This department also handles all enquiries. They also organize meetings. J Sainsbury's rely on there administrative department heavily this is because they have the responsibilities to get the message from the manager to the workers or the other way around. If this communication link is broken then the workers will find it difficult to provide the accurate service to the customers as the manager. There job is also to issue leaflets and documents to there employees for e.g. if a employee requires a reference for whatever reason it will be the administrative department to type up this document.
Judgments about how successfully the business is meeting its objectives
J Sainsbury's is meeting the objectives that are set. Starting with the first one survival.
Analysis of each objective.
Survival: in my judgment we can easily say that J Sainsbury's have passed this stage with flying colours. The survival part came into question when other large superstores starting catching up J Sainsbury's. Mainly Sainsbury's picked up pace in the market. They could of caused a possible threat to J Sainsbury's, but at the current situation, the market is very stable with J Sainsbury's comfortably ahead. Anyhow, their main rivals ASDA and Tesco are well behind J Sainsbury's and it would take something very drastic to put J Sainsbury's existence in doubt. The only possible thing that could happen to J Sainsbury's, which would wipe out its existence, would be a hostile takeover. This however would take a lot of capital.
I say this because J Sainsbury's is a PLC, and one of the disadvantages of being a PLC is that J Sainsbury's shares are being sold in the stock exchange. This could be bought by their rivals, which would then give them total authority over J Sainsbury's. They could change the name J Sainsbury's to their own. That is the nearest problem that could happen to J Sainsbury's, which could threaten their survival. This would still take a lot of capital.
Profit maximisation: in my judgement I can say that J Sainsbury's do try to maximise their profits. If you look at there accounts, J Sainsbury's are making over a billion pounds. This tells me that they are maximising their profits. This shows us that they are meeting this objective. They would be expected to meet this objective too, this is simply because they are the market leaders. They set the pace for the rest of the market. Therefore, they need to maximise their profits. This is also shown in their branches. This is shown by the technology being used in the stores. This shows me that they are making the profit and a, lot of it. This also shows me that they are re-investing the profit made back into the company. If you look at their branches, you can always see a lot of staff members around. This is probably because J Sainsbury's make so much profit that they can keep a large strong and efficient workforce. This is very important as a large and strong workforce helps keep the business moving and that the shelves would never be empty.
Growth: in my judgement they are meeting this objective quite easily. This is because they are growing rapidly. Not just in the UK but overseas as well. They have started in Hungary and in Bangkok. This shows us J Sainsbury's intentions. There intentions are to grow into one of the world's largest food retailers. That is why I think this objective is being met easily. If you just look at there market share which is comfortably over 15% it shows us that in a few more years they could reach up to 25%. This then means they would be a monopoly. They would have total control over the markets. We have to remember that this market is very competitive. I mean you only have to look at the big names in the market as ASDA, Tescos are considered as large firms. So having above 15% in this market is great for Sainsbury's. This also shows us that they are ahead of their competitors. Growth is based on expansion and market share. First of all, we can see that they are expanding nationwide. Better still, they have also started to expand overseas. About market share, they have the largest market share in their market. Therefore, this objective is about growth. So I could easily say that they are growing and therefore I can say they are meeting this objective.
Good customer service: this is the objective, which in my judgment they have met best. You only have to look at there slogan to see "every little helps". This shows us that they always put the customer first. When I went to visit my local branch. I was pacifically looking at the staff members and there attitude towards the customers. During my time in Sainsbury's I found out wherever and whenever there was a chance to help a customer they would of helped. It was like they were looking around to find people who needed help in anyway. I also saw an elderly person who wanted to the shopping. Shortly after the person had entered Sainsbury's to do the shopping, a worker came up to him and offered help. The worker took control of his basket and shopping list and took the elderly person around the store. The worker was practically shopping with the customer. That is why Sainsbury's get repeat customers. They know if the customer comes in Sainsbury's and feels wanted and happy he/she will come back again. So I have to say that they have accomplished this objective and in the future they would know how to carry on. I came to my conclusion as I used primary research and that is very accurate.
Quality staff: in my judgement Sainsbury's have a very strong and skilled workforce. Basically looking at their accounts, the way they treat the customers. I could say that they have the best workforce in the whole of the food retailing market. If there work force was not good enough Sainsbury's would not have more then 15% percent market share, they would not be expanding abroad if they had trouble at home at they would not be making a billion pounds plus profit. This shows us how heavily large organisations like Sainsbury's rely on there staff. That is why training is so important. If the worker were trained in the right way they would perform in the right way. Their work force is also a reflection on their training and development departments. This shows us that that department is functioning well as Sainsbury's are getting a lot of the best workers in their labour market. Having quality staff means that Sainsbury's would have a good customers service. This is because the workers would be trained to deal with customers in the right manner.
My conclusion is that Sainsbury's have already achieved all of these objectives. The next step would be to keep on achieving them. As in business anything can happen. In my view they have concurred all of the objectives, and they are going up and up. The future looks bright for Sainsbury's. I say this by looking at there performances so far.
Organisational structures.
Many businesses organise themselves using a hierarchical structure, in which the people at the top have more responsibility than those further down. At the very top one person who takes responsibility for the decisions that are made. There may also be assistants or deputies at the second level. The heads of department often come in the next level. In some organisations, the heads of big departments may have a more important role in decision making than heads of small departments. After that come in the next level of people like workers etc.
There are many different types of organisational structures. This is usually based on the size of the firm, as a large firm would have a lot of departments and the managers would have a large span of control.
What is meant by structure? Well in business term organisational structure, structure means the way in which a business is organised internally.
There are a many different types of organisational structures. The first structure would be the tall structure this has many levels. The communication for this structure can be both vertical and horizontal. A tall structure shows which jobs are specialized and each group of people have a designated supervisor. This is a formal structure. Looking at the structure a person could tell that every member of staff has a detailed job description, and knows exactly who is his or her manager. A company organised in this way usually has many official procedures and rules. The tall structure is sometimes called a pyramid structure this is basically because it looks like a pyramid. This is probably because at each level there are more and more employees just like a pyramid as it is larger in the bottom and smaller at the top. Just like the tall structure the top would be (in most cases) the director and right down to the bottom there would be hundreds of workers depending on the size of the company. The communication in this sort of structure is not fast. If information needs to be sent right down to the bottom it would need to go through the channels of communications. This would take a long time. So decisions would take longer to make.
Hierarchical structure:
The other structure would be the flat structure. This structure is one with only two or three levels. So this tells us that this sort of structure is often found in small organisations. In this type of structure there is less formality, fewer rules and procedures. There are some advantages of this sort of structure mainly that the staff know the management and the management know the staff. In the tall structure the people at the top most likely do not know the people who are right at the bottom but in the flat structure this is not the case. The communication in this sort of structure is very fast and effective as important information could travel through a company quickly. This is important because if a decision is to be made quickly it will be done so.
Flat structure:
The next structure would be the matrix this is a structure, which group is together workers from different areas for a specific project. In this sort of structure people with specialised knowledge and skills are put in project teams. This means that when a project is handed over to the leader. The leader then can pick the best people for the project. This helps the employees in lower positions to participate in large projects. In this sort of structure every worker is responsible for there work. The line manager is the person responsible for the current project. The matrix structure motivates the workers; this basically fits in with McGregor's theory Y. This is however costly because each project needs additional secretarial and administrative support. The other disadvantage would be to get all the people from different departments to work as a team.
Matrix structure:
A hierarchical structure is a system in which grades of authority are ranked one above the other. This relates to all kinds of structures tall or flat. If there is a clear path from the top management right down to the bottom. This can have many levels. In these sorts of structures, jobs are specialised and each person or a group of workers have a manager or a supervisor they have to report to who is in charge of them. These sorts of structures are very formal this is mainly because the lines of communication are clearly defined and arranged. Everybody has to pass the supervisor to reach to the top so I would say it is very formal. Since they are usually large and when the people at the top communicate low down the structure it is in a formal way i.e.: memo etc.
A firm, which is usually set up in this way, has often lots of official procedures and rules. Every member of staff has a detail job description; they know whom they have to report to.
A centralised structure is one, which the top manager makes all the decisions and has total control over the way in which the operational plans are carried out. Therefore a centralised system does not allow for delegation. But there are advantages of this sort of structure. Senior managers are more likely to take an overall view of the business and its needs.
Whereas their subordinates might be concerned only with their own part of the company. This then gives a lot of power to the senior managers. This sort of structure occurs where there is a complicated organisation where there are a lot of activities being under taken in various departments. This then requires a centralised structure so that the procedures and rules are carried out properly and efficiently. The most likely thing would be that a large firm would have a lot of different departments and divisions, almost all of the functions will stay at the central control to make sure that the they do not exceed the budget, to make sure that the waste are being disposed in the right way, and most of all stock is not being duplicated. This is very important because if the firm does not dispose its waste properly the environmental officer could impose a heavy fine or even shut down the firm. Not only this but it would give really bad publicity about the firm.
A decentralised structure is completely the opposite of a centralised structure. In this sort of structure delegating tasks are almost certain. Some delegation cannot be avoided, even in an organisation, which operates a centralised system. Simply because the senior managers cannot carry out all the tasks which they have to do. If a company has to delegate more duties and responsibilities then absolute necessary this would help motivate the staff in lower positions.
In my chosen business, which is J Sainsbury's, the type of structure they use is a tall structure basically they have 12 people at the top, which are the directors. Then come in the rest right down to the cleaners and shop floor assistants. Since J Sainsbury's is a large firm, this means the organisation structure is very tall and very wide as J Sainsbury's do employ a vast amount of workers through out Britain. The way this works is basically is right at the top the directors make big decisions such as mergers sponsors deals etc. and the rest of the people who are second after the directors in the organisation chart. Make the decisions of new branch opening etc but the directors have the finial say. The organisation chart works in a way all the minor enquiries do not go right to the top to the board of directors they are usually cleared up the branch managers. What I have seen in J Sainsbury's is that the branch managers have a lot of work in hand. My local J Sainsbury's branch manager actually interviews applicants himself. And decides him whether to employ or reject. So the point is small problems or enquiries are mainly dealt with branch managers. Since it is a tall structure only serious problems are reached to the top things like a lawsuit etc.
The market in which J Sainsbury's operate has a big influence on the organisational structure of J Sainsbury's. This is basically to gain the largest market share they have to make more profit then their competitors and have to expand smoothly and wisely. This means the more branches they open the more people they would employ more branch managers etc.
This means the more they expand in opening more branches the more their organisation chart would expand. In all departments as the market becomes more competitive there would be more people employed on the marketing department.
This is because they would need to advertise effectively to convince consumers to shop at their branches. So basically the more they expand so will there organisation structure grow taller and wider. So the market has a great effect on the organisational structure.
An autocratic management style is one like a dictatorial where one person has absolute power. In this sort of management the manager or managers make all the decisions without using consultants. The workers who are there employees have to obey all their instructions without instructions. Most often the workers are unhappy with this style of management as they feel they have no value in the company. This is mainly because there views are not heard, as the managers do not care at all of what they think. In some cases this sort of management is necessary for e.g. in the army if the soldiers did not obey the commands of there leaders there would be absolute danger. But there are advantages of this sort of management basically the one main advantage would be that the decisions are made quickly. So then there is no time wasting on decision so they are made quickly. This is important when it comes down to urgent decisions to be made.
A democratic way of leadership is a system based on equality of all members of a community. This sort of management is completely different from the autocratic management style. In this the workers are encouraged to participate in decision-making. This encourages the employees and makes them feel that they are a real stakeholder in the business. The advantages of this sort of management is that the workers are much more motivated. The other advantage would be there would be a wide range of ideas to think about. In order to implement this sort of management they would have to inform the employees of the company's current situation, its aims and its objectives, and along with that there plans.
A consultative management is a management style, which takes the democratic principle even further, with workers being asked for their opinions as a matter of course. In this sort of management, before any decision is taken the manager will consult with his/her team first and take their suggestions into consideration. Although in the end, it will be the manager who makes the finial decision. But the decision is based on a conclusion made by the group. This is a good motivator but in the same time its time consuming. But this is a good motivator for the workers as they feel part of the firm.
In J Sainsbury's I would say its consultative management style mainly because all workers do have a say but at the end the manager has the finial say but the workers do influence the decisions. This is very time consuming for J Sainsbury's but the out comes is good as everybody is happy. All the workers feel a part of J Sainsbury's and feel motivate along with valued.
Communication
Communication is the process by which information, e.g., instructions, warnings, request and orders; ideas, attitudes and emotions are exchanged between one person and another by the use of a common system of symbols, signs and behaviour. To make the definition clearer, it will be useful to look at some of the communication styles, which are explained below. There are many different types of communication starting with internal communication.
Internal communication is when information is sent within the business to various departments also receiving the information back. An example of this would be a manager sending information to the workers about new opening hours and so on.
External communication is the way in which a business communicates with other organisations, and individuals outside the business. For example, Sainsbury's could be in talks with ASDA about merger talks etc.
Formal communication is going through established channels, usually in written form. Formal communication could be addressed to the staff as a whole, to be selected groups of employees or to an individual in the company. Formal communication is when every thing is dealt with officially for example sacking someone or employing someone. On the other hand, asking a new employee about his bank account numbers his address and so on. This is all formal type of communication.
The managing director communicates directly with the four managers on a daily basis. They will have a formal team meeting once a week to discuss company policy. The managers have delegated authority to run their own departments.
They communicate with their staff through the supervisors. The supervisors who deal with the operatives. This process is called vertical downward communication and usually involves managers giving oral or written instruction/order to their subordinates.
Informal communication is communicating unofficially. For example, a boss meets an employee in a pub and starts talking about the business these are all informal. This is all outside the formal channels. Informal can also be over lunch when two employees are having lunch but discussing the firm in which they are working in. Suggestions in this sort of environment are not always concrete but in a formal communication, all information is kept in a record.
Downwards communication is when information is sent from the top of the organisation structure to the bottom. For example, when the board of directors are trying to communicate with the branch managers they would be sending information down the organisational structure.
Upwards communication is a system, which allows the workers to communicate effectively with their superiors. For example, a worker wants to make a suggestion on the working conditions to his branch manager. This is all upwards communication.
First, downwards communication uses to be the only channel used in most businesses. However, now it has all changed, as the workers suggestions are nearly as much importance as to the board of directors. Mainly because the workers are the actual people who have hands on experience, on what is it like to work in the shop floor. So their suggestions are very valuable.
Open communication is information placed in the public domain, to which everyone has access. Open channels can be traditional or electronic. Traditional meaning a message could be put on the notice board or as a newsletter. The electronic way could be sending e-mails to al the workers, MIS that can be adjusted to send information to all users.
Restricted communication is confidential information being passed to only a selected number of people. So for example if Sainsbury's are holding secret merger talks with ASDA they do not want this information to be known publicly for many reasons. One of them being they would not know how the stock market would react to such speculation.
Effective communication within Sainsbury's is very important this is mainly because communication keeps the business moving. Communication keeps the business in one piece it helps problems being solved.
When a worker tells the boss what is needed on the shelves to improve sales, he is communicating effectively which is helping the business. Effective communication therefore is very important in a business as it keeps the business moving. At a right pace. Slow communication will make Sainsbury's move slowly. Fast and effective communication will help the business fast.
Types of media communication available for businesses are telephone; e-mail; fax; mobile phones; word of mouths; letters and memorandums.
ICT means information communication technology this simply means computers, which are a source of communicating in a business. Not only that ICT can also be used to make transaction at the check out till in Sainsbury's'.
The introduction of ICT has helped a lot at Sainsbury's. First, they used to use price guns to check the prices at the counter but now through EPOS (Electronic Point of Sale) computerised tills are used to record information about the goods sold. In supermarkets, the laser beam scanning of bar codes is widely used. The scanners input data into the computer to process, improving speed of the throughput of customers, stock control and recording procedures.
ICT has also helped in communicating in Sainsbury's. Now the workers can communicate with their bosses via e-mail. The advantages of this are that it is private so if an employee wanted to discuss his salary he would do so in confidence. The other thing is conferencing on the Internet. Now a branch manager could hold a conference with the board of directors anywhere in the world all that is needed is to be on the Internet at the same time and that is fast and effective way to communicate. Therefore, if there was a problem and needed urgent attention it could be resolved very easily and quickly. Its also cost effective as the only cost, which is likely to occur, is the telephone bill.
ICT makes life easier for managers or the board of directors to communicate with other firms. Such as Sainsbury's talking to ASDA. They could communicate with other firms about various amounts of things for example, they could be holding an event together for charity. Alternatively, they could be talking about a new law being introduced that would affect all major supermarkets.
This sort of communication is known as external communication. ICT could be a valuable asset in this department. As ICT could improve relations between Sainsbury's' and its suppliers not only that but with their customer which is very important.
Nevertheless, technology touches every other part of Sainsbury's business too.
It has over 200 internal systems, links to hundreds of suppliers, communication across 700 sites, and more than 5000 office-based IT users to support.
Sainsbury's does not just view technology as hardware and software. It is about creating services and solutions that help make things better for customers and colleagues. Simply put, it is a business function with technical skills. Their strong team understands the commercial impact of their work and uses technology accordingly. This has enabled their online grocery business, Sainsbury's.co.uk to flourish, just as it will for B2B e-commerce and class-leading supply chain systems. The UK-based IT team mostly covers the domestic market, but with an eye to their global business as they work ever more closely with their International colleagues - some of their people are seconded abroad. (It says in the Sainsbury's web page). This shows us how important ICT is for Sainsbury's'. They value their ICT systems very highly the most obvious reason for this would be that it is efficient and reliable. The cost is high to install the systems but to run the system is not that expensive. So the advantages would be that communication would be improved which would help in moving the business forward at a good pace. Another reason for installing ICT systems would be for internal use. For the workers and for the customers. The workers would benefit with electronic sensors. They could also improve their security system by the introduction of technology. This system could be made aware to the public, this is simply because the customer shopping at Sainsbury's' would feel safe when doing so. The other reason for having a hi-tech security system would be that it would prevent shoplifters. This is good as large supermarkets lose a lot of money because of shoplifters so having a high security system would also help sales and prevent crime. This sort of ICT is known as internal communication.
ICT has helped J Sainsbury's to meets its objective because now customers do not have to wait in long queues and wait to be served. ICT saves a lot of time because the electronic tills scan the price and calculates the totals as soon as the last item is scanned. Customers are now satisfied because a lot of their time is saved.
Production and Quality
The Input and Output process, between the input and the output process is the production. This is where the value is added. When the product is actually being manufactured. In the input side there are raw materials, which go through the production, this is between the input and the output. The output is where goods or services are finally available for the consumer.
The term added value is when businesses are engaged in the process of buying raw materials, components, finished goods and services. All businesses depend on other businesses for the provision of the necessary goods and services. They are said to be interdependent and their relationship is sometimes described as the chain of production. Added value is when the value of a product increases as it is produced. Value is also added when a business advertises using correct pricing and when the quality is improved.
In a competitive market, it is not easy to increase your prices. As the customers would turn away towards your competitors. So therefore companies have to look at other ways to try to maximise there profits but still maintain the same quality in their products. This is done by improving efficiency and at the same time productivity. This is good as if a firm is able to increase its output by using the same amount of inputs they would then be getting more out of their inputs then they were before. This would then increase the added value of production.
Another way to add value to the product is using the JIT system (Just In Time) this is a system, which reduces storage space. Stock is often ordered when it is needed. This adds value because this sort of production is very efficient. A firm would need to have highly skilled employees to control this sort of production. Keeping stocks of material, components and work in progress at its minimum levels is how it has worked. This is however has to be very precised as the quality has to be perfect. If a supplier delivers, damage good to the firm the whole production has to be halted. Therefore, this tells us that this sort of production relies heavily on its suppliers. To operate this sort of system requires very careful planning.
Another way would be lean production. This is an economical and efficient way of production. This is basically trying to make the product with as minimum input as possible. These are designed to reduce waste, improve quality and increase profits at the same time.
In Sainsbury's' the term "added value" means a lot. This is simply because most of the input is used by the suppliers. By input, I mean raw materials or goods, which are ready for sales. The factors of production. When a product is produced, Sainsbury's then buys it, usually in bulk. Before Sainsbury's get the output, there is a middle section where the value is added.
Input Added Value Output
The middle section is the place where value is added. This is because of lots of reasons. Before a product is sold on to the consumer Sainsbury's, have to give the product storage space. They also sometimes have to have displays made to make the product look more attractive to the customer. Sometimes they even have to run their own promotions to get the product sold. Above all Sainsbury's own staff has to be there to assist any customer who needs to enquire about the product. All of this is adding value as all of this is costing Sainsbury's. There are lots of other things, which add value. These things are like rent, rates and maintenance.
The output for Sainsbury's would be the bread, groceries, everything that is put on the shelves and purchased by the customer. That is how a value is added in Sainsbury's. The products itself are not that expensive but collectively if you put everything together it all adds up. So to cover the cost and to make a profit Sainsbury's has to place the product higher then they bought it for. They still do not make too much profit per product. The profit comes in for Sainsbury's as lots of products are purchased. Moreover, if all of the profit on each product is added then it comes to a large sum.
Sainsbury's "add value" because they are a large supermarket that have high expenses, in order to cover the expenses they need to "add value" so the business does not go bust.
All businesses have to pay tax, so "added value" will have enough to cover the taxation and then be left with some profit.
Every business intends to stay in the market once it enters, in order to survive in the market they have to reinvest into the business. This is what Sainsbury's'' do. After the gross profit is calculated, half the money goes to reinvestment otherwise there would be no point of opening the business if they are not willing to spend more in it.
The main reason why value should be added is so that the owners get rewards (shareholders always await for their dividends).
Although quality has always been important, it is only the last 20 years that it has become a major factor in the drive for sustainable competitive advantage, which allows one organisation to gain a permanent position over its competitors. A Department of Trade survey found that nearly all businesses put quality as the main criteria needed for survival, placing it above cost and delivery time.
Many businesses use organisation-wide approaches to quality which make quality the responsibility of everyone at all stages of the production of the goods and services. This is quality assurance (QA).
Today, quality is built in from the design stage, through the choice of suppliers, at all points of the production process, to the finished product.
Sainsbury's' have to make sure they handle quality products from their suppliers. Sainsbury's' have to make sure:
* All customers, both internal and external, are properly looked after and have their problems solved
* Having systems in place to provide effective customer care and service
* Anticipating and fulfilling their needs
* Exceeding their expectations, by using market research to find out what they want
* Being responsive and listening to their views so that complaints are welcomed and seen as an opportunity for positive change and improvement
* Making sure that all service standards are met
* Most of all make continues improvements
Quality assurance in regards to Sainsbury's is very sharp. All of the staff has a responsibility to insure that there is no hazardous material or tools lying about. This is a system which has to make sure faults do not occur. In a case if they do, they are rectified. Although in Sainsbury's, there are inspectors who come and visit Sainsbury's branches regularly to ensure there is no problem with quality assurance. They visit a lot especially when there are constructions being undertaken if a new branch is opening. This is to ensure that no mistakes are made and that whatever is built is safe.
Quality control system also plays an important role in everyday Sainsbury's life. If a product is produced which is below the standards of the inspectors they will not be sold to the customers. No matter who much it costs.
This is because Sainsbury's has put their customers first and they do not want to give poor goods to their customers this would put them of Sainsbury's. This process could cost Sainsbury's a lot of money; but then again this would mean that they only sell good quality products. This is very important because if a customer recognises that Sainsbury's only sell quality products then they would feel confident in shopping from Sainsbury's.
ISO9000 is an internationally recognised standard applying to the management of quality and the quality of management. It has several parts, each applying to different organisations according to their scope of operations. For the purposes of this system ISO9000 is taken as a generic term applying to all these variants.
The standard is not by any means a description of how an organisation shoud be run - there is such an enormous variety of organisations, each with their special methods and customer requirements, that an attempt to prescribe the working practices for everybody would be irrelevant and futile. The standard is therefore more like a detailed management agenda. It lists a number of topics that any good organisation should address in its own way, and requires some means of ensuring that the working methods and monitoring system for each topic are efficient and effective.
In order to get this coveted certificate, it is necessary for the organisation to submit to examination by an external assessor. The assessor will visit the company, check through all the paperwork, check for evidence that the company does everything that it should, chat with selected staff to ensure they understand what part they play in achieving product or service quality, and finally prepare a report detailing where the organisation has missed something. It is unusual for an organisation to get through this without comment, but generally these comments are "minor", which means that the certificate can be awarded, subject to the problems being sorted out in an agreed period of time.
ISO9000 in regarding to Sainsbury's is very important. This mainly has to do with the suppliers. If the people they buy their products from have been approved by the international standard (ISO9000) then this means that the product they are buying are of good quality. Then they know that the products they are selling to the customers are of good quality. This is very important because if the product from the supplier were of poor quality shopping at Sainsbury's would put of then the customer.
Sainsbury being certified under ISO 9000 means a threat to suppliers because now they would want to buy their products from an ISO 9000 certified suppliers so they can sell their products clearly without any doubts. Not all businesses are certified under ISO 9000. so some suppliers may go out of business as more and more supermarket are being certified under ISO 9000.
There are numerous definitions of benchmarking, but essentially it involves learning, sharing information and adopting best practices to bring about step changes in performance. So, at its simplest, benchmarking means:
"Improving ourselves by learning from others".
Sainsburys have to benchmark their rivals if they want to stay in a good and solid position in the market. Benchmarking is a technique for comparing the performance of one organisation with another. If Sainsbury's is to improve, it must be able to set standards and monitor Sainsbury's. It needs a goal or target at which to aim at.
Now, Tesco's are doing well, so what Sainsbury's need to do is find out why they are doing the best and then try to do better then Tesco.
Quality circles are discussion groups that meet up regularly to identify quality problems, consider alternative solutions and recommend them to management.
Basically, they are a small group of workers who meet up voluntarily and appoint their own group leader.
They meet on a regular basis, often after work. This is mainly because they can collect ideas which have collectively have been made by the staff. They are usually from the same work area. This is simply because if there was a quality circle being formed for the production department there would be no point of another departments staff being there, unless they are directly involved. Their purpose is to identify problems then investigate and analyse after which try to solve the problem. After they have reached a conclusion within the group, they then present their solutions to the management.
This is a good idea, as this will give everyone a chance to voice their concerns or their contributions. This would also collect a wide range of ideas simply because you would have experienced and new young workers collecting ideas together. This would also help as it is held in a more relaxed environment, which would boosts, the ideas and have less pressure on the workers. This could also motivate the workers, as they would feel more valued in the work place if there ideas were being addressed to.
Training and development is a crucial part of the implementation of any quality programme. It will need to be introduced well in advance and will need to cover all staff. Particular emphasis will have to be given to customer care and service. Sainsbury's staff will be required to greet and respond positively to customers and generally be proactive.
Bibliography
Business Vocational A Level By Roger Lewis and Roger Trevitt
Internet site: www. Sainsbury's.co.uk
Vocational A Level Business By RG Bywaters
UNIT 1 BUSINESS AT WORK