Rice Bar is also in Private sector as it’s a sole trader, which means its owned by an only one person. Rice Bar is a Sole trader. The most common and easy to set up enterprise. Sole traders do not offer their share like Tesco PLC. Advantage of being a sole trader are owners control everything in their business, and they get the all the profit the business made. However, if the company goes to bankrupt owners will lose their money, in one word they’re risking their money, but No risk, No gain as we like to say.
a) Describe the different stakeholders of who influences the purpose of these contrasting organisations.
Stakeholders are the people who have an interest of that certain organisation.
All stakeholders have more or less influence throughout the organisation. Some of them can even control its performance and whether it will be on the market or not.
Tesco
I strongly believe that employees have the most priority within the company as they should keep them happy to keep the business run smooth and profitable. Keeping the employees happy means Tesco should provide them a good working condition, reasonable salary and offer them a paid holiday as well as promotions for the employees to make best possible organisation. Also, they should have same working standard as other supermarkets.
Suppliers are the one of the important stakeholders of Tesco as without the supply Tesco won’t be able to sell the product to their customers. Suppliers are more interested in Tesco’s regular orders and payments and they have to work towards to deliver the products on time then they’ll have a good relationship with each other.
Customers – in any organisation, they are the kings of all as businesses depends on their customers as well as their demand, because without them they won’t even exist. However, I believe in our current financial situation customers are affected by the economic crisis which means people are most likely to not spend money as they would have 2 years ago as everyone in the country is struggling. I mean I used to shop at Tesco, because they give me some points and everything but I cannot buy from Tesco as I’ve got to do my weekly shopping cheaper so I’d choose Aldi or Lidl. So this may lead to decreasing customers or losing them to other cheaper stores will affect its businesses performance. So to be in the competition they will have to lower their costs to attract its customers or even do some promotions to attract new customers.
Rice Bar
Customers- They has the main power of whether business will be successful or it will collapse. They have to understand the consumer needs and provide them with a good quality. So that they’ll spread mouth to mouth advertisement and this will bring more customers.
Owners- they have the most influence for the business as Rice is a sole trader. He is the one who is going to be most affected, because if the business do good he will be able to go public or franchiser. If they do bad he is the one who will pay the all debts and loans himself.
Employees- if the economical situation continues to bad, so the company might have to cut costs to survive. So the owner has to do redundant or lower their supplies.
Central/ Local Government- Simple they’re the bosses, I mean they can block or promote your business activity. They’re more concerned about its community and environment. They will close your business, if you’re not playing by the rules.
- Explain the points of view of different stakeholders seeking to influence the stragetic aims and objectives of these two organisation.
From my understanding an aims are the something company would like to achieve. For Private Sector Company like Tesco they will aim to make profit to keep shareholders satisfied, unlike Tesco Public Sector Company like BBC will work towards for the public. First of all I should introduce my two chosen organisations aims and objectives.
Tesco
The aims of the company:
- To maximise sale and increase their profit
- Reduce their prices to make them affordable
- Retain loyal customers and keep them satisfied
- To please the community
- Have more healthy foods in stores as well as for their online groceries
Objectives are goals they must be measurable and they must contribute to the business achieving its aims. I’ll write some objectives of Tesco in order to achieve these five aims.
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Maximising sale means they’ll be able maximise their profit at the same time. In order to do that they could do some promotions and cut back on their prices to bring customers.
- Low price is always the winner for the supermarket as who doesn’t like cheap product with good quality. To keep the price low Tesco would buy their stock from the manufacturers instead of the wholesaler who are selling the good a bit more than the manufacturers.
- I think they’re doing that with their loyalty card (point card), with this card people will try to shop at Tesco as they earn points and can use on goods without paying any money.
- Give money to charities is the best way to please the community in other words their customers and it’s a one way of earning loyalty from its customers. It shows that Tesco is a caring company look afters everyone in their surrounding area.
- Nowadays people starting to worry about what they put in their mouth and people trying to healthy foods if possible. Providing healthy food is Tesco is attracting those people to the company means money!
We all know Tesco opened a new store in China. I think it will have a huge impact on the company’s performance as well as China’s economy as opening a new store is providing a lots of vacancy for Chinese people. Also, considering China has a super huge amount of population I believe Tesco will make great money and new customers. So every little activity that organisation do is affecting their surrounding people or even a environment.
Rice Bar
Aims of the company:
- Earn customers loyalty and make them come back
- Expand their business and open a new branch
- Maximize the profit and sales
- Keep the staffs happy
Objectives of the company to achieve these aims:
- They’re spreading the loyalty card to the customers and it’ll give them a free food after 5 purchase. So they are earning its customers trust who are important stakeholders to hold on to achieve their aims and objectives.
- Making a profit and offer a promotion on the dishes which sales the best. To achieve this they will have to have a good employees who can persuade the customers to buy the dishes and also who have knowledge of the food and service they provide to introduce and to be the face of the company to introduce the brand to a new customers very well.
- As I said maximizing profit is connected to its sale so they’re offering their staffs a promotional card to give it to their families and friends. Behind the hundreds of staffs they’ll have a person who has never tried their food before which means new customer.
- By offering a staff discount and a free meal if they bring a new customer. It’s a good way of bringing the customer and they’ve got a competition between the staff, person who brought the certain amount of customer will have wage increase.
Rice Bar is opening new branch in Newcastle. To open new branch owner has to tighten the company’s budget to save some money for the new branch. To do that he is firing some of their staffs, for the owner it will save some money for him, on the other hand for remaining staff it will be difficult to run the restaurant with shortage of staff. For its customer it’ll take long time for them to be served. For managers they may have to deal with the complain about the waiting time and quality of service. As the owner did not pay the loan which he has to pay bank/ building society will not lend him any more money. Only one thing is making so many trouble for his business, that’s what we call sacrificing everything.
- influence that different stakeholders exert in one of the organisation
Rice Bar
Owner- he is the one who is most exerting to his company as it will affect him right away how the business is doing. It will sometimes depend on the owners to achieve the best possible performance. For example he has the sole authority to make decision towards the business.
Staff- they will have to make an effort in the business as they are the face of the business as they are communicating with the customers face to face every single days of trading.
Community/Society- as they have opened a new branch in Deansgate and they are opening till 2am in the morning on Fridays and Saturdays means they will have a huge increase in sale because in Deansgate area there will still be customers at this hour as people celebrate uncle Friday and Saturday’s birthday every night.
Environment- they use paper bag and paper noodle cups which are recyclable so it is good for the environment and it may even attract a new customers because nowadays people are caring so much about our environment.
Overall in my opinion every single stakeholders play an important role for a business to run successfuly. However for sole traders like Rice Bar, owners have to make the right decision to not to disappoint the stakeholders. For example if he is not offering same offer or match his competitors offer he might lose the customers and lose money, or possibly will not be able to pay his rent or bills so it might lead him to serious damage.
- Describe each organisational structure using an organisational chart.
All businesses have to be well organised to be ready for anything at anytime. Organisational structure is a map of that certain organisations structure, showing the staffs positions and their levels within the company and who they should respond to and what they should be responsible for. There’s a five way to structure a business: by its functions/departments, by products, by area, by customers, and by the process.
Tesco Supermarket’s Organisational Structure Chart
Chart from www.teachmebusiness.co.uk
From the chart above I would say Tesco has a tall structure, which means there is a lot of different levels and people.
Businesses like Tesco, they employ a lot of staff, and they broke them into so many functional areas like Finance, Administration, and HR etc. All employees in the company are controlled by the people above them. Problem they have in tall structure is information will move very slowly, it will go through all the way from the bottom to the top which means they have a very long chain of command. As they have lot of managers there will be a short span of control. Another problem they have is communication, they usually communicate in writing as if they communicate verbally by the time it gets to where it supposed to be the information will change along the way and there could be misunderstanding.
Rice Bar Organiastional Chart
Unlike Tesco there is only one person who is responsible for all the staffs. This means there is short chain of command and wide span of control. Advantage of having a wide span of control there will be less levels/layers people to pass the information so that communication will be fast and efficient.
Span of control- is the number of people who report to one manager. If there is a more people under the control of one manager span of control of this certain organization will be wider. There is a lot of people in one manager’s control the narrower will be the span of control.
Chain of command- is the line of people from the top to bottom the hierarchy.
- Explain how the style of the helps each on to fulfil their purpose
Functional areas within a business include Production, Human Resources, Finance, Administration, Sales and Marketing and Customer Services. All functional areas are designed to help, support each other to help business run smooth and effective. All departments have to communicate to work as a whole to make a great success.
Sales- this department’s aim is to increase the company’s sales to make profit and work with the marketing department to make sure they’re promoting the right product at the right time and know the product which are selling or not. I mean there is no point to sell some product if it’s not bringing any reward to the company.
Finance- this department has the company’s heart as they’re doing the very important job for the company as because they’ll handle all the money within the company. They keep all financial records of all of their payments and also the money paid to the company. They must work with the Production Department as they should inform the finance department how many units/product they have to purchase each month/week to have the right stock amount at right time. As well as production they should work close with the marketing department as they’ll have to get money from the finance too promote the product.
Customer service- this is a service for customers, they use the service after they purchase a product from the company (refund, exchange) or before they purchase any product. This is very important service for the company as it will provide the information about the product and information about its staffs. Simply they could be the face of the company. I think they work with the Administration Department who are responsible for company’s paperwork such as letter from customers/suppliers and deal with any enquiries customer/ external people may have. The reasons I think these two departments should work together as they make sure business don’t make any faults.
- Describe the influence of two contrasting economic environments within a selected organisation.
Economic Factor is there to provide information about the global economy. If people’s living standard arises, it will give the business opportunity to make a profit for its owners. But now we having a difficulties with our economy as because its crashing, because of that organisations doing the redundant for its employees as they cannot afford them. This means there will be more unemployed people in the country and people’s spending money is getting or it already is very low for some people.
For Tesco this factor has an impact on Tesco’s sales as we’re having a credit crunch at the moment. The reason why I think is people are saving their money for in case of something such as redundant or an emergency need. So that people are not really spending their money, also lots of people changing their supermarkets where they were used to shop. For example I used to collect my weekly shopping at Tesco or Sainsbury, but now I do not work I shop at ASDA or ALDI where the products are cheap.
For Rice Bar it might risen a great opportunity do well for themselves as economy is going down people are eventually cutting their luxuries and considering Rice Bar provides fast fresh food and most importantly cheap and healthy option for their customers it is most likely for them to win over the lunch time hours. I mean you can get a decent Jamaican Jerk Chicken for £5.99 which might be same cost as M&S sandwich and a water. However someone like who can’t afford to buy food from restaurants I might buy some sandwich bread and a lettuce to make my own from Tesco. Also, if the business is doing successfully owner might want to expand his business. In order to expand his business he might have to get a loan from bank. As the economical difficulties he might have to go through 2 times harder things to get a money from the bank whereas it might have been easier 2 years ago.
- Compare the challenges to selected business activities within a selected organisation in two different economical environments.
I think every business facing a new challenge every day, but economic challenge is the most dangerous and high risked challenge as because it could have a huge impact on business activities and very scarily you cannot control these sort of things as it is one of these external factors that businesses face. In the UK economy goes from growth to recession. Simply growth in economy means people/consumers have more money to spend and businesses will have to produce more goods/services to meet their customers demand. In recession that is when everything might go downhill, if everything falls continuously 6 months that is when recession starts, because customers will start to cut costs and they will start to save money rather than spend it. So it will have a huge impact on businesses and its activities. I’ve chosen two important people’s group whom will involve in business activity the most.
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Social Factor- this factor provide customer’s lifestyle, what they like, their views and beliefs. This influences the customers buying habit. For example people are trying to eat healthy food as possible and this will be the one of the habit people will have. What I mean by that is people will buy healthy food more than the junk food. As people’ life changing so is our buying habit.
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Technology Factor- this helps the business to reduce costs and develop new products. I think with technology businesses will save a lot of money and it will make the communication easier for the company (e-mail, telephone ). Organisations need to have the latest technologies for their business to stay competitive. For example businesses can store a huge amount of paperwork without the cost of papers.
- Examine how some of the external factors you have outlined have had a effect on the two organisations. Have they caused problems, or created opportunities?
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Social Factor- I think more people are coming to the UK from Western Europe and other countries. So Tesco and other supermarkets are providing Polish, Jamaican, Arabic food for their customers as the demand of it has increased. At some point having a new product is good thing for the company and Tesco’s understanding the consumer needs and providing the good possible services for them.
Technological Factor- technology is opening a wide door for Tesco. A good example of this is a www.tesco.com nowadays people buy their groceries online as well as other products clothes, furniture. I use Tesco’s website to order bulky things like mineral water, my baby’s pampers as because they’re so heavy and we don’t have a car. Since I’m a student I get my groceries for free sometimes if I search the internet well, this is the one way of using technology effectively as well.
Rice Bar
Politic Factor- in 2007 government banned smoking in public places this includes restaurants. I think this has opened opportunity for restaurant owners as there’ll be no smoking means families will come to the restaurants often to spend a weekend at least my family. I mean I would never have a meal with my child in an environment when there is a smell of cigarette.
- Evaluate how the external factors, over a specified period, may affect the specified business activities, their strategy, internal structures, functional activities and stakeholders.
External factors affect businesses as well as their stakeholders in many different ways for example employees can protect themselves from treated unfairly by from their employees, customers/public have the right to know certain organisations data, so that they can expect better products and service from the organisation. Online businesses Nowadays young children are likely to have obesity because of their eating habit. Obesity can be turned into some serious illness as the child gets older. So I think parents should provide their children with the healthy diet and more vegetables and dairy products. From this point supermarkets have offer on vegetables and some healthy foods. It’ll help the children as well as that business organisation.