How Business's Work.

Mrs Elliston

After careful consideration I have chosen to do my “Business at Work” coursework on a company called Scott Bader. I am very interested in this company because it has interesting morals and ethics. I am looking forward to see how these ethics help the business to become successful. Scott Bader headquarters is based in Northamptonshire, England – “it is a company with a unique position in the polymer industry”.

I have searched for some information on Scott Bader, which has helped me to have the background knowledge that could be helpful in my coursework. Scott Bader has been at the top of its industry in the “glass fibre composites” since the 1940’s when “Crystic” gained a huge reputation for its good quality and its reliability. This reputation has been kept on going through, investment in research, innovation and product developments. Markets where Crystic has gotten such a big reputation are markets such as; Marines, Land Transport, Building and Construction, Pipes and Pipe Lining, and Decorative Casting.

Scott Bader is an employee owned business this makes it able to compete with large international chemical companies in the resin market by being flexible and innovative. Scott Bader has an important advantage – since the employees own the company nobody is able to buy it out of business. Scott Bader provides better products and superb customer service, it also balance’s its business needs with social and environmental needs within the community which gives it responsibility for sustainability. To ensure the company retains its principled aims a requirement was laid out in its constitution that says that whatever amount of money employees give to themselves as a bonus, an equal or greater amount must be paid into charitable trusts or projects so to help those in a less fortunate position.

Business Ownership and Objectives.

Business objectives are vital, it is what a company will work for, a goal that needs to be achieved.

In order for objectives to be effective, they must:

Provide detail about what specifically needs to be achieved.
Have a time limit by when they need to have been achieved
Need to state the required resources that they need in order to meet them.

Setting clear and realistic objectives will allow many employees to understand exactly what their job entails and achieving clearly stated objectives may be linked to bonus payments - this can act as an incentive for employees.

All businesses aim to do a few simple, most of these are crucial if they want to survive in their industry.

Please see diagram below:

Ernest Bader – Scott Bader’s founder believed that a business should do more than just make a profit; he believed that is should be founded on ethical principles and organised democratically and contribute to the good of the wider community.

Scott Bader Company Ltd’s main strategic objective is "To be a successful and sustainably profitable international enterprise, with its unique ownership structure providing an example to others". Scott Bader has a set of principles in its constitution by which all of the Scott Bader Commonwealth (all Scott Bader companies around the world) and their workers must abide by.

Ernest Bader – the founder of Scott Bader, lay down most of these principles and objectives. When he at first founded the company for many years he sought after a different way of distributing the assets of the company in a less disruptive manner and tried to find a method by which all employees could have a 'real' say in the company. He believed that “labour should employ capital acknowledging the equality of everyone as individuals”, only his restructure of the way the industry was managed brought that about. In 1951 Scott Bader changed its structure of the company and shared out responsibility for its long-term future to its employees. He wanted to ensure that whenever staff benefited from advantages such as, profit and bonus’s they would share with those less fortunate. These principles state how Scott Bader works as a company across the world. Wherever their location, they all work to a common set of principles these are: -

Care
Equality [of opportunity]
Ethics
Involvement
No discrimination
Respect [Human Dignity]
Service

The intentions of the founders of Scott Bader, was to create an influential company, its will being entrusted to those who work in it. It must be able to encourage a will to cooperate and to help influence other people around the world to get rid of discrimination and waste – making the world a better place to live.

For Scott Bader to be sustainable they must maintain a reputation for honesty, integrity, service and quality in all their dealings. Each Scott Bader Company must work in a spirit of cooperation with colleagues, their local communities and with all the people that they do business with. They must ensure that they provide equality of opportunity by informing and training each other to help people meet their full potential and so to drive Scott Bader forward.

Taking responsibility; as individuals working at Scott Bader, they are supposed to accept their personal responsibility for their actions, recognising that all staff must be trusted – so to avoid conflicts and to constantly seek improved knowledge and skills. As an organisation as a whole, each company must behave in a caring and moral way and to try and work together to grow mutual long-term relationships based on honesty. The managers have a special responsibility to make the individuals work together and also ensure open discussion and reporting at all times.

Working for a better society. Scott Bader’s workers must influence and do themselves, must care about those who rely on them (such as charities and needy projects around the world in less fortunate places) and the dignity of all people. Any sort of discrimination, of race, age or religion is not at all tolerated. They proportion their profit so to benefit those less fortunate than them. As a sustainable and caring company they try to set an example to others and support staff in community activities.

Self-Governance; Scott Bader encourages personal responsibility and try to keep all staff informed and consulted on matters affecting their day-to-day working problems, and to commit to working in the best interests of the company.

These principles are an important matter for Scott Bader, they need to be used and abided by every working day. There are problems with these principles; Scott Bader can set an example to be less discriminative but you can’t change people views and cultures the influencing may not work but it does give the company a good and honest reputation which will help them in all aspects of their business.

I think these principles give a huge incentive to their employees to work hard, this is probably why the company is probably so sustainable, it makes them feel worthy and that their input does matter on all issues and affairs. Therefore I think these principles are a good set of principles to have if followed properly. People will think before acting and therefore the company and the people working for it produce a good yet honest image, to the outside world making it an influencing company.

The objective of every company is to profit maximise. Scott Bader need to profit maximise so that the money that they earn will come back into the business for research and development so to improve products and production with new innovation etc. Scott Bader would have to try and profit maximise to a very large extent for the reason that it uses its profits in a very different way to other companies; this is because of their objectives and principles to help those lees fortunate than them.

Only a maximum of 60% of all the profit made can be kept for the business used for research and development and innovation. (Although they have voted to change this to 95%, we could say well that’s not fair on the charities if thy only receive 5% but you can argue that at least they do give money to charity.)
Of the 40% left of the profit, a maximum 20% is allowed to be paid into the employees wags as bonuses, but an equal 20% or a greater amount is given to charity.

Using their profits in this way has meant that Scott Bader has given a huge amount of money over the years to charities and projects such as, the provision of water to rural villages in Africa and India, health care clinics in South America and many projects for the homeless in the UK. (Pictures: below)

Voluntary organisations can apply to Scott Bader for grants. Scott Bader’s areas of focus for this year are:

In the UK - child and youth projects
Overseas - any project that helps the most marginalised to become self sufficient

There are benefits and constraints to the proportional profit idea.

Another disadvantage is that if they need to downsize and get rid of workers it would be against their principles of help the well being of their employees and make a good example to others, to do so, therefore they could be in a bit of a muddle.

Another of Scott Bader’s objectives is that, “Scott Bader has been founded on the belief that a socially responsible undertaking cannot exist merely with its own interests. It is part of the whole national and international community and, as such, it has responsibilities, which extend far beyond the factory walls.” Scott Bader also states that, it is for each generation to understand these responsibilities in it’s own way, according to existing situations and changing needs.

On Scott Bader’s website they talk about the community activity that they get involved in (as before in the principles); they work within a mutually supporting community they believe that as individuals they have a responsibility to participate in their local communities to serve those who most need. Some examples of these involvements are below:

This is a preview of the whole essay

In the future Scott Bader want to use all of their technological developments as a part of their mission to find the most “environmentally acceptable solutions” for their customers. They want to produce products that are either water based or solid, or use significantly reduced levels of solvent. In all cases they want to produce products that are safer and more pleasant to work with.

Different businesses have different objectives but the main ones that most businesses aim to achieve are:

Making a profit (surplus)

Profit is important to companies because it affects a lot of people; shareholders and their return on investments also known as dividends, the owner of the company so he can improve his lifestyle/earnings, directors for bonus’s and fringe benefits, employees if the company is doing well not only does this mean they may receive a pay rise of a bonus it also means their job is secure. Profit is important to the government because it will mean businesses taxes will increase they will receive more income tax and would have too pay out less unemployment benefits paid. Consumers will like to know how a business is going they feel if a company is doing well they will have better quality, choice and price. Suppliers want to know because they need to know if the company can afford to pay them if they cant they can refuse to trade credit with that customer again. In economic terms if a company is doing well this can help regional economies and make business multipliers as people with jobs have money to spend elsewhere. This is important to Scott Bader, although they cannot compete on price as their company is smaller than other worldwide organisations they can compete on quality which has cost issues, they also need to make surplus to help their future investment this year Scott Bader has a huge investment program – they want to build an infrastructure that will help them to become more flexible and to have the ability to respond faster to a change in customer needs.

Increasing sales or market share

Linked to profitability this means the total market share in terms of sale and turnover. Larger market share enhances the company’s image promotions and branding. It gives them a stronger competitive position and attracts inward investment such as shareholders and the bank will feel more secure for lending loans. This is helped by making a profit above they must make a supernormal profit so that they can cover all of their costs and have money to invest in the business. High quality products and good customer relations help Scott Bader to increase their sales and increase market shares into other countries to become more globalised.

Surviving

Scott Bader survive well – they have moral and honourable principles which helps them to stick out in the market, customers feel as though they are helping others when buying their products also the high quality of the products means good customer satisfaction and consumer surplus they will keep coming back.

Providing services to the community

Scott Bader feel that they should work within a mutually supporting community they believe that as individuals they have a responsibility to participate in their local communities to serve those who most need. This is talked about more on page 5.

Offering charitable or non-profit services, such as caring for the environment

Scott Bader try to make their products as safe as possible to the environment by making products water-based. At the moment they are looking to improve productivity further their long-term eye is on environmental issues. Scott Bader gives a percent of it’s profits to charities using their profits in this way has meant that Scott Bader has given a huge amount of money over the years to charities and projects such as, the provision of water to rural villages in Africa and India, health care clinics in South America and many projects for the homeless in the UK.

Developing staff skills

It is important to Scott Bader to have their staff working at their optimum level so that all aspects of the business are done to the highest standard possible.

Producing high quality products and services.

This is fundamental for Scott Bader Ltd. They cannot compete by means of price for the reason that they are a small company within their industry, this means it is imperative that their quality of the products is up to its optimum level so that customers will take them seriously. They also need to get high customer satisfaction so to create relationships and make partnerships with other companies so that they can gain regular sales revenue.

Different departments would be involved in meeting these objectives and would probably have a few of their own.

The production department is vital as the products they make are technically in control of the whole businesses success; this keeps the customers coming back to a business. This means producing new innovative goods, good quality and a range of goods for consumer choice. Scott Bader’s passion for the industry has meant that they do constantly change and improve their range, including the introduction of two new resins that no company in Europe manufacturer.

The employees of Scott Bader are central to the delivery of their business objectives. It is the skills and enthusiasm of their people, which ensure success. This is seen to by total quality management they attempt to stop errors and waste from occurring at all levels within the organisation, and to try to encourage all employees to make ‘quality’ vital within their daily activities (whether in production, marketing or personnel). Internal relationships between workers and their managers are seen to be as important as the external relationships that exist between the business and its customers and suppliers. Total Quality Management must be seen to be a course of action that is followed by, and has the commitment of, all workers, from senior management to factory workers. The business must monitor all its activities and processes in order to identify any areas for improvement and to ensure that quality is being achieved. Team-working is important, since a group of people working together will develop a wider range of skills, co-operation, and higher motivation than if workers were performing repetitive tasks on their own. Regular market research must be undertaken to ensure that customers are happy with the level of service that they receive (any complaints can be used to improve the existing systems).

This is the ultimate objective for a business is, to produce every product with no defects, therefore eliminating waste and the time taken to correct mistakes. Zero defects can lead to an improved business and customer reputation, as well as increasing levels of both sales and profitability. In order for the objective of zero defects to be achieved, it requires the involvement of every employee in the business, making sure that they are all committed and suitably trained. Staff at Scott Bader needs to be specifically trained if the managers want them to do a good and efficient job. To make Scott Bader more efficient and successful they need to train and develop the staffs skills, improve their knowledge about the product and what happens to it when it has been made, this acts as an incentive as the employees feel as though they do an important and worthy job and it also improves consumer satisfaction because the employee will do his/her job well with the training in place.

How do businesses collate information so investigate how well they are doing and if they are meeting its objectives?

Regular market research must be undertaken to ensure that customers are happy with the level of service that they receive from a business (any complaints can be used to improve the existing systems).

Businesses can do a range of activities to see how well their business is doing for profitability purposes they could use profitability ratios as shown later on. They could use consumer surveys and questionnaires about products and what customers actually want, also are they pleased with the product ask them for advice and comments for improvements and use them. Scott Bader can use any of these methods to investigate success in the business they can also just work it out by using there profit and loss accounts, balance sheets and other financials.

Scott Bader collates information to see if their business is doing well and to see if they are meeting its objectives. They collate information by financials, customer surveys, employee surveys and other key performance indicators on profitability, Health & Safety, environment, and quality.

This is a table of Scott Bader’s financial results of continuing activities.

As you can see from the table Scott Bader are a very successful company with huge turnovers every year. They have a lot of capital and reserves and have very high total assets. In 2000 Scott Bader ended up in a loss of -281 but they obviously took a hold of themselves and did as much as they could to improve as they picked back up the year after. Scott Bader’s turnover gets higher every year yet the operations profit/loss gets lower every year with exception to the loss in 2000 this maybe because they have to give a percentage of their profit to places less fortunate, maybe they did not have enough cash flow to keep the going. Last year Scott Bader’s total assets has risen to a great amount of nearly 64 thousand they are improving their efficiency, though it must be hard because more technology means less employees and it would be hard for them to make people redundant and lose jobs as it is against there principles.

Scott Bader could use profitability ratios to assess how well they are doing. The Gross Profit ratio shows how much gross profit the business has made in relation to its sales figures. This would be very useful for Scott Bader as they could see their profit margin and they would be able to see how much would go into charities and how much will go back into the company.

Return on capital employed ratio, is one of the best measurements of profitability. It compares the profits to the amounts invested in the business by the owners. It is useful because it can be compared to the rate that would be obtained from other investments. Scott Bader could invest into something else or put their money in a savings account. Scott Bader of course has to take into account the amount given to staff and to charities.

What type of ownership is Scott Bader Ltd? Explain the benefits and constraints of this type of ownership.

There are various types of ownerships a company could have, the main types of ownership are; A Sole Trader, a Partnership, a Private Limited Companies, Public Limited Companies (PLC) and a Franchise.

These are some basic descriptions of each type of ownership.

A sole trader is a one-person business, usually found in trades where only small amounts of finance are required to set up and where there are very few advantages to the existence of larger organisations (e.g. hairdressing, newsagents, market traders). Sole traders usually employ waged employees, but they alone have to provide all the finance (often savings and bank loans) and bear all the risks of the business venture. In return, they have full control of the business and enjoy all the profits. A sole trader faces unlimited liability for his/her debts – this means that there is no legal difference between the business and the owner.

Partnership: To rise above many of the problems of a sole trader, a partnership may be formed. A partnership is a group of individuals and generally there will be between 2 and 20 partners. Each partner is responsible for the debts of the partnership and for that reason you would need to choose your partners carefully and draw up a contract on the responsibilities and rights of each partner. (Examples of a partnership are doctor’s surgeries, veterinarians, accountants, solicitors and dentists.) Most partners in a partnership face unlimited liability for their debts. The only exception is in a Limited Partnership. To overcome this problem, the partnership may take on as many sleeping partners as they want – these people offer money for the business to use, but they will not have any input on how the business is run. So really, they have purely put the money into the business as an investment. These Sleeping Partners face limited liability for the debts of the partnership.

Private Limited Company: This is a type of incorporated business – where the business has a separate legal identity from the owners. Often private limited companies are small, family run businesses, which are owned by shareholders. Each shareholder in a private limited company must be a part of the business and the shares can never be sold to members of the general public. Each share entitles the owner to 1 vote at the company’s Annual General Meeting (A.G.M.) and also to a share of the company’s profit at the end of the financial year (a dividend). Each shareholder has limited liability for the company’s debts and can, for that reason, only lose the value of they amount the put into the company. The company is run by a Board of Directors (who are elected by the shareholders) and a Chairman heads this. It can be very difficult for a shareholder in a private limited company to sell their shares, since a buyer must be found within the company.

Public Limited Company (P.L.C.): This is the other, much larger, type of joint-stock company and, just like a private limited company, a PLC is an incorporated business, is run by the Board of Directors on behalf of the shareholders and has an A.G.M. at which shareholders vote on certain key issues relating to the company. The main difference between a PLC and a private limited company is that a PLC can sell its shares on the Stock Exchange to members of the general public and can, therefore, raise significantly more finance than a private limited company. It is often the case with a PLC that the owners of the company (shareholders) will wish the PLC to make as much profit as possible, so that the shareholders will receive a very good dividend per share. However, the Board of Directors and the management will often wish to assign some of the PLC' s resources to growth and innovation – this will clash with the shareholders’ desire for maximum profits. This is known as the divorce of ownership and control. The PLC has to publish its annual accounts and is therefore extremely vulnerable to investor’s insight into its progress and success, a PLC is at risk from a takeover from an outside body, if they manage to accumulate over 50% of the shares in the PLC.

Scott Bader’s ownership is called common ownership. It has no external shareholders, which makes business relationships more sustainable because Scott Bader cannot be taken over - it is totally independent, partnerships can be made long term with customers and suppliers. Its shares are held in a charitable trust and so consequently employees are trustees-in-common of the company’s assets. This unusual structure provides significant further size to the business and employment relationships and our interaction with the wider community. Employees have a greater role to play in the company than just performing their day-to-day role this provides incentives to work harder and good give them a sense of well doing as they are helping others less fortunate than them world, while they are working. The charitable status brings responsibility to the wider community particularly to those less fortunate.

What is a common ownership? The word "common" is used in a similar way to its use in common land and commonwealth. Examples are various forms of national and public ownership, community property, and some forms of cooperative organisation, but it is in fact a wider and more fundamental concept.

Common ownership means that people may possess and manage property, but the community as a whole has the right, if it wishes, to rule on the use of that property, or to restructure it.

People are so therefore totally responsible to their fellow citizens for their actions. Common ownership underpins equality, and complements democracy. Democracy is where people can express their wants. Common ownership gives people the power to express these wants and at their own will.

Scott Bader received recognition for this type of ownership when an article was written on “Sharing success: Why Britain needs employee-owners” Andrew Gunn, Head of Finance at Scott Bader says: - ‘We seriously believe that and employee owned companies do not receive the recognition they deserve in the British economy. Instead they are often seen as quaint organisations to be given the occasional pat on the back. … Many trust and employee owned companies are successful durable organisations, which are leaders in their fields…’

There are disadvantages and advantages to a common ownership. The advantages are that, Scott Bader cannot be bought out like PLC’s because the shareholders are the employees and similar to a private limited company nobody outside the company may buy or be sold shares. This is a very big advantage, which gives it a huge benefit over other businesses in its industry because it is makes the company more sustainable and is able to compete with international companies in the resin market. A disadvantage of being in a common ownership is that sacking employees would be very against their principles not only would they not be looking out for the well-being of their employees but they would also lose their share and the bonuses given as a part of their proportional profit. The employees of Scott Bader know they own the business it may make them work harder as their share will increase but it may want the employees to be very involved with the running of the business, as Scott Bader uses a democratic leadership style this make it easier, but decisions will be slower and if employees are not happy in the way the company is run it could cause all sorts of problems. It is probably better to have team leaders to which the employees could share ideas.

Investigate and describe the management styles and culture of the business. Explain how these affect the performance of the business in day-to-day operations.

In a like Scott Bader there are many styles of management that could be used but there are three basic categories of leadership styles these are:

Autocratic, Consultative, or Democratic leadership.

The style Scott Bader Company Limited would most falls into is Democratic leadership, it can’t be solely categorised in this type because autocratic and consultative influences will occur and management will make some decisions without the ideas of employees.

Democratic leadership mainly involves managers and leaders taking into account the views of the workers before putting into action any new system. This can lead to higher levels of morale and motivation amongst the staff, but it can also result in far more time being taken to achieve the results since many people are involved in discussing the decision.

They are mainly democratic because they use lots of ways of communication. Scott Bader has strong principles and they like to “…encourage a spirit of cooperation and help eliminate social injustice and waste – making the world a better place to live.” They believe in equal opportunity and this would mean that they have to give their employees equal opportunity and help make decisions within the company. They have main principles in promoting care, equality (of opportunity), ethics, involvement, no discrimination and human dignity – with these they must use a democratic style of management to work well with their principles because managers should be involved and relate and work alongside employees and make good relationships. This makes people work better together.

Scott Bader’s governance structure is shown on the diagram see page … this shows how it is split. The part marked in purple is the part by the commonwealth ltd, which is a charitable trust. The orange is where day-to-day business and interactions are they make strategic decisions. The ownership of the company has been transferred to the common wealth

Business Functions, Organisational Structures and Culture.

Describe and show the functional areas that exist within the organisation.
Explain how these help the business to meet its objective.

All companies have split areas/departments where certain groups of people have a certain role in the business. These functions are important to a business as it helps with the every day-to-day running of it. These departments are: -

Human Resources
Finance
Research and Development
Marketing
ICT
Sales
Customer Service
Quality Control
Purchasing

I have a copy of the Global Scott Bader Group Structure (see diagram)

It is split into certain areas and functions of the business; finance, service, human resources, IT, Marketing R+D and Sales of composites, and marketing R+D and sales of speciality polymers.

All of these departments have very important roles within the business they help with the every day running of the business and help the business to keep to its objectives. These departments will probably have their own certain objectives that they have to keep track of, so the business works well.

The 'Finance Department' has a huge responsibility in the business I think it is probably one of the most important departments for a business and all the documents need to be correct and up to date so that the company can be efficient and in control of its transactions. It has the responsibility to see that the money coming into and out of the business is managed properly. If this is done efficiently then there should be enough sales revenue and profit to pay the bills that are owed. The revenue is the money made by the business by selling its products and services; it is used to pay for the things they had to buy in order to run the business. It is also used to pay the workers

People within the finance department who have big responsibility’s are people like the finance director for Scott Bader this is Keith Grace is in charge of: financial accounting, costing & budgeting, managing finance and payroll in all the Scott Bader companies for UK finance, French finance and Croatian finance there are probably people within these others companies that also control these but Keith Grace is the head of it all.

Financial Accounting deals with recording transactions, keeping accounts and preparing the reports for management so that it can help them make decisions using their knowledge of their revenue and profits.

Managers of Finance will deal with working out what resources are needed and raising funds and loans for the company to pay for these resources. Payroll in the finance department keeps track of the amount of hours worked by employees so that they can calculate the pay & deduct taxes.

Keeping records of all financial transactions is one of the main functions of the finance department. They must count all the figures of sales to calculate how much profit or loss the business has made. Once they come up with a total they can then see how much tax the business will have to pay. The department helps the managers to make the right decisions. This function is important to Scott Bader because if they don't calculate whether the business is making profit or not then they won't be able to set proper targets because they won't know the progress they have made they also need to see that they are making enough profit to make sure that only 60% of it covers all their costs and the rest going to staff bonuses and charity projects. Finance won't be able to advise the managers as effectively either if these transactions are not recorded properly.

There is an Accounts department inside the finance department. Every business has to prepare accounts to show its financial situation during a year. It has to prepare a Balance Sheet, which records what a business owns and owes (its debts). It also has to prepare a Profit & Loss Account. This states the income, expenses, profit or loss of the business in the whole year. This function is also very important because they can become useful to different people for different reasons. For example, the 'Inland Revenue' can make sure that Scott Bader has paid the correct amount of tax. Suppliers can also confirm that Scott Bader will be able to pay its debts.

As Scott Bader does not have external shareholders these accounts are not too dangerous for the outside world to see they cannot be bought out and this gives them an advantage they can compete more ferociously because they know if problems do occur at least the business is still in the hands of the employees. Scott Bader does have to budget though; this is where they would set financial targets (the money the company aims to make and spend in the year).

The finance department supports other functional areas of the business. It has to pays debts and place orders of other departments inside its business. It tells the other departments, how much money is available to them and also gives advice. Such as if the 'Marketing and Sales' department of Scott Bader are going to spend money on new machinery that will make productivity higher and more efficient, then they would tell the finance department. They must make sure that departments don't over-spend. All the senior managers receive help from the finance department when they are making major decisions on expenditure because the finance department don't want them to make a huge mistake.

Human Resources. Human Resources manage the people within the business, by recruiting, training and retaining employees with the necessary skills to perform their jobs effectively it covers:

Human Resource Planning (H.R.P).
The employment and selection of new employees.
Training and development of staff in the workforce.
Performance appraisal. (To keep staff motivated)
Disciplinary procedures. (So to make sure efficiency and high productivity is kept)
Grievance dealings.
Health and Safety issues.
Looking after the employees’ welfare (a principle at Scott Bader)
Dealing with the termination of contracts of employment.

Human Resource Planning is the procedure used in all companies and is used in Scott Bader (see diagram) it is used for forecasting for the business, for the future like workforce requirements. It looks at how many employees the business will need in the future, as well as the type of employee that will be necessary H.R.P. also ensures that the ‘right’ employee is in the ‘right’ job, to ensure maximum efficiency and effectiveness of the workforce. Efficiency is important when employing people in to a company like Scott Bader they are always looking to cut costs and be more productively efficient which means training or employing people with the right skills for the job entailed,

This means that the business must make estimates of the number of workers that it will need at all levels in the business in the future. This can be done by using past data (e.g. if the workforce has grown at 4% per year over the past 3 years, this may continue over the next 3 years if the business is growing). It could also be done by, analysing the levels of customer demand and sales expected because more employees may be needed to take customers orders or delivery and certain other jobs. Some of the workers may be near retirement age or they may have to take into account transfers the business would have to employee the right amount of people for the amount leaving. New technology or a new production technique may be used where more machinery is needed this would mean the company will not require these employees that the machinery has taken over. This would be a difficult issue for Scott Bader as getting rid of employees would be against the objectives and principles of their business (looking out for the welfare of their employees.) These employees have the advantage of already knowing about the systems and the routines of the business, but they would still require the relevant training and development in order to prepare them for their new, more senior positions.

Human resources have to train new employees so that they are up to scratch with the skills needed for the job. However, training is not limited to just the new employees of a business. Training courses could be targeted at all employees in the business at all stages in their career (e.g. management training courses, training on how to use new machinery and technology). They need to train their employees because training can improve employee productivity. They can create a multi-skilled, flexible workforce which makes them more desirable workers a disadvantage of this is that the workers my want a higher wage because new skills have been learnt and they could argue that other firms would pay them more for the new skills. Training can increase the levels of job satisfaction and motivation of the employees it increases the chance of promotion, which would make them, work harder.

The research and development and marketing departments are linked and have to work together in a business to advertise and create a product, which consumers want. The research and development is the department that tries to find new and/or better ways to improve the product or service they do this by asking customers questionnaires and taking surveys about certain areas of the product. Customer satisfaction is important to a business because it makes customers loyal which means they will stay with the business and become regular customers.

Scott Bader’s Health and Safety has an extra meaningful ethos, it doesn’t just keep the employees safe and up to date on the fire procedures etc but Scott Bader's health and safety targets in the UK are focused on through local objectives at departmental level and joint working between management, responsible care representatives, contractors and employees.

Scott Bader aim: -

“To be accident free within the company and in the use of our products
To ensure we do not adversely affect the health of any employee, neighbour, visitor or customer by our activities or products
To support the chemical industry's Responsible Care programme. “

Communications

Communication is always a problem with large businesses because information needs to be accessed by the receiver as soon as possible and put across to them in a clear, engaging and impacting way so that it has the effect it should have. Because of the size of Scott Bader and its international locations, the task of communicating with them all is a doubtful one.

There is also a problem with the continuing growth of Scott Bader as some forms of communications can become outdated.

Communications at Scott Bader is normally sent down through the hierarchy and chain of command although the employees have a lot of say in how the business is ran because of the democratic culture, management obviously have to know and make main decisions as using the employees for every decision would take too much time, they are used if they are important and will change the way in which everybody works as a company. The information can be sent and received both in the form of verbal communication and non-verbal communication.

The main objectives of communication are to provide information, give people instructions and to confirm arrangements, but this has to be achieved at the right time, place and sent to the right person. To be successful this all needs to be done at value for money. All these restrictions make this an almost impossible task to manage, but to manage this task Scott Bader could use the following channels of communication:

One Way Channel

This provides people with information or instructions however it requires no reply from the recipients. Examples of the use of a one-way-channel of communication at Scott Bader are:

Tannoy – where information is read out to the factory floor informing both staff and customers of a situation but it doesn’t require any feedback.
E-mail – this can require a response but it doesn’t always you could be sending someone instructions, or informing people of some information.
Bulletins – are used to let people know of information or to praise employees for reaching there intended objectives etc.
Minutes – to inform people the basic outcomes, and issues discussed at a meeting.
Memos – to inform people of meetings or situations.
Newsletters – they are published to let employees know about current events happening for Scott Bader these could be community events or within the company, it could also inform them of recent developments and other information that is available to the staff.
Television/Videos and Videoconferencing – video’s used to train staff (on fire procedures etc.) and inform them of information. Video conferencing s useful in Scott Bader because being a multi-national company not everybody can be in the same room but they can still all have a meeting.

Two-Way Channels

This is where information or instructions are passed back and forth between individuals or groups of people. Examples of this are:

Telephones
Mobile Telephones
Interviews
Face to Face
Videophones
Memorandums
E-mail
Pagers

Multi-Track Channels

This is where information is passed between several individuals, useful for international locations examples of the use of Multi-Track channels of communication at Scott Bader are:

Meetings
Reports
Face to Face
Telephones with hands free/loudspeakers
E-mail
Videoconferencing
Videophones

All these channels and types of communication can be used to express both confidential and open communication; Scott Bader will have to make sure they use the right form of communication to keep information confidential.

Scott Bader also has quality circles. Monthly meetings with senior managers within the technical division, where social responsible sourcing is a formal agenda item.

In Scott Bader the most often used forms of non-verbal communication are reports, memorandums, minutes and newsletters these will be used to get messages from one department to nother. The advantage of using mainly written communication is that there is always a record of the message and normally a back up copy.

Verbal communication is normally used to let people know of instructions and developments, such as telephones and face-to-face communication.

External Communication

E-mail and the Internet are used a lot as well as the postal service occasionally. Telephones and mobile telephones are also used a lot but these have their restrictions as no copy is made of the conversation and it relies on the recipient to understand all the information and to remember.

There are problems with Communication Breakdown:

There are a number of factors, which can cause communication breakdown:

Too much technical language (‘jargon’) being used
Poor presentation and use of grammar and spelling
Too much information being sent (information overload)
Geographical and time problems (e.g. communications between different countries in different time-zones) This is a big problem for Scott Bader although France is only one hour different, Spain hasn’t got much of a difference but countries like Scandinavia and South Africa and a few other European countries are not in similar times zones.
Length of the communication channel, for example post writing a letter would take along time to
Employees already being overworked and ignoring messages
Technology breakdown (e.g. computers crashing)

This last point has become a growing problem over the last 10 years and is likely to continue to grow, as an increasing number of businesses rely on computers and information technology systems for their communications (as well as for their financial, production and personnel records). Added to this is the increasing amount of business being conducted using e-mail and the Internet (it is estimated that by 2005, any businesses which are not using the Internet to trade and interact with customers are likely to lose any competitive edge that they may have) Scott Bader has a website where you can search all about its composites but I don’t know if you can buy offline.

So it is clear to see that the ‘information-age’ and the ‘digital-age’ are going to be a major influence on how business is conducted in the future. Any business, which does not employ computer-literate staff and does not use Internet-trading, is likely to suffer falling levels of sales and profits as a result.

However, there are many problems with using ‘the electronic office’ – that is, a work environment that is very computerised and relies on software and communications equipment. The main problems are listed below:

Much time is often required to train staff in the use of the new equipment and software
Computer fraud (e.g. ‘hacking’ into the computer-held information and changing the data or embezzling the business funds)
Huge initial capital outlay required in order to purchase the equipment and software
Equipment and software may become obsolete within a few years
Resistance from employees and from trade unions to the new working practices

Role of IT

Information technology is a key factor in the success of any business. At Scott Bader ICT is a tool to make services and transactions as fast as possible.

Production and Quality

Bibliography

Websites