The owners of Gap are the people who have bought shares that belong to Gap. Gaps shares are sold on the New York Stock Exchange (NYSE) for anyone that wants to buy them can do so as long as they are over 18 years old.
The advantages of becoming a PLC are:
- Huge amounts of money can be made from the sales of shares to people
- Production costs may be lower as firms get more sales
- PLC’s often dominate the market (Due to their size)
- It becomes easier to raise finance, as financial institutions are more willing to lend them money.
The disadvantages of becoming a PLC are:
- The setting up costs of the business are very expensive
- Since anyone can buy the shares, it is possible for an outside interest to take control of the company
- The public can see all of the company’s financial accounts, as PLC’s have to publish them. Competitors sometimes use some of this information to their advantage
- Because of their size, they are not able to deal with customers at a personal level
- The way the company operates is controlled by various Company Acts, which aim to protect shareholders
Gap has 11 different directors. Gap has a few people that are directors just of Gap and they have other people who are directors of different companies that can provide Gap with different products. For example there are 2 directors for Gap from Apple Computer who can provide Gap with the latest computer and software products. There is also a director from Vodaphone who can provide Gap with mobile communication and also give them special price plans or call costs if they agree only to use Vodaphone mobile communication. All of the directors of Gap have different jobs. Gap also has divisional officers who are responsible for different parts of Gap. For example Gap have one Executive Vice President who is in charge of Gap stores and then they have got another Vice President who is in charge of Marketing and it is all the same procedure all the way such as with the Senior Vice President and the President etc.
This table below shows Gaps financial status, what money they have spent on improving their stores and buying to build new stores, how much debt they are in, how many shares they have sold and how many shares they have issued and there capital and also there profit and loss.
Different forms of businesses are faced with different legal requirements. The more complex the legal requirement, the more the business will need to operate on a larger and more sophisticated basis. Large companies have the resources to employ specialist layer and legal departments. As a result of a law case (Saloman v. Saloman & Co, 1987), a company exists as a separate legal identity from that of its owners. Assets (such as property) as well as debts belong to the company and not to individual members. To set up a limited company it is necessary to go through a number of legal procedures in order to gain recognition. This mainly involves the presentation of various documents and records to the Registrar of Companies. These documents are open to scrutiny.
All limited companies must present a memorandum of association and articles of association in order to receive a certificate of incorporation. The memorandum spells out the nature of the company when viewed from the outside. Someone reading a memorandum would be able to obtain a general idea of what the company is and the business with which it is concerned. The memorandum sets out the companies:
- Name
- Registered address
- Objectives
- Capital
Most companies will produce a fairly vague list of objectives in their memorandum. This will give them the opportunity to altar their activities if the market opportunities arise.
The articles of association set out the rules that govern the inside working of a company. They include the following:
- The rights attaché to the holding of the various types of shares offered by the company.
- The rules and procedures for issuing and transferring shares
- The procedures and timing of company meetings
- The details of how accounts will be kept and recorded
- The powers and responsibilities of directors
- The details of how company officers will be appointed.
Once these documents have been accepted, the company will be granted a certificate of incorporation and can start to trade. The certificate of incorporation sets up the company, as a legal body in it own right. The company (not individual shareholders) enters into contracts and can sue or be sued in a court of law.
Gap has a number of objectives that it tries to achieve every year. Gap had a disappointing year in 2001 and now there main objective for 2002 is to get back being there best. Gaps other objectives are to be committed to delivering the quality, value, style and fashion to their customers that they expect from Gap. Gap are trying to put the right teams in place, making sure that they have the right talent and leadership in merchandising, marketing and design as well as in there stores. Gap is always tying to consistently deliver products with iconic style and balanced assortments with a strong point of view. It means that Gap has to make sure that it keeps updating customers favourite casual clothes with the right fabrics. Simple, classic style for everybody is another objective Gap aim for. Gap does not just have these aims for the company but it also sets all these aims for the stores that operate around the world, and the stores can set there own aims and objective as well as the ones that Gap give them.
Gap is trying to simplify the way they work at Gap brand. They have split the brand into domestic and international divisions. By making key areas of the business more manageable, these changes will sharpen Gaps focus and help them serve their customers better.
Gap also has three aims they try to stay with all the time and these are:
1) Offer the right products in the right assortments
2) Be consistent in everything you do
3) Always keep it simple
Gaps have 6 functional areas and they are Chief Operating Officer, Gap Adult, Marketing, Product Design and Development, Stores and Gap Body. In these functional areas Gap have an organisation system which has in it production, marketing, finance, human resources and research and development.
Each department is responsible for different things.
In finance the chief accountant is responsible for supervising the accounts and finance department. The accounts section must keep a detailed record of all money paid in and out and present the final balance sheet. On the balance sheet they must show sources and use of funds, profit and loss accounts and other financial records at regular intervals. Gaps accounts are stored on computer files, and accounting procedures are greatly simplified because they use specialised software. Within finance there is two main subdivisions.
The first is financial accounting function that is responsible for keeping records of financial events as they occur. Gaps accounts need to be kept of all money paid to or by the Gap, and records must be kept of all debtor and creditor transactions. The payment of wages also requires calculations involving deductions for national insurance, pensions and other factors.
As well as keeping day-to-day records, the financial accounting function will also be responsible for producing periodic records such as the annual accounts and figures for discussion at meeting of Gap directors.
The management accounting function has the responsibility for nudging Gap into certain directions, based on analysis of figures for the present and predictions for the future. Management accounts will break down figures, to extract information about Gaps present performance and what sorts of improvements can be made in the future. Using systems of budgetary control, Gap will set targets for achievement and limits for spending for various parts of the business.
In production the director of Gap is responsible for making sure raw materials are processed into finished goods effectively. The director must make sure that work is carried out to an appropriate standard, and must supervise procedures for enabling work to be carried out smoothly.
Production managements are often referred to as ‘operations management’. In Gap, as you can imagine it is a modern workplace, and many operations are no longer concerned with old-fashioned manufacturing. Many of Gaps modern operations are concerned with dealing with customers. For example greeting people as they enter the store and dealing with customer queries over the telephone etc.
In Gap’s industry, the production function involves organising resources efficiently to offer the best quality for the best value while Gap can still make a good profit. In Gap, the production function is split into five main sub functions:
- Production and Planning Department
- The Purchasing Department
- The Stores Department
- The Design and Technical Support Department
- The Works Department
The production and planning department will set standards and targets for each section of the production process. The quantity and quality of products coming of the production are closely monitored.
The human resources management covers a variety of activities. The term ‘human resource management’ has replaced the word ‘personnel’, which was used in the past. The types of work covered in the human resources function include:
- A policy-making role, which establishes major policies that cover the place and importance of people in the organisation.
- A welfare role, which is concerned with looking after people at work and their needs.
- A supporting role, which is concerned with helping other functional managers to develop their work. E.g., helping the manager to appoint and train new production line workers etc.
- A bargaining and negotiating role concerned with the payments of wages, the supervision and implementation of health and safety law etc.
The marketing function is responsible for identifying, anticipating and satisfying customer requirements profitably. Marketing and sales are combined in a single department, but there is an important distinction between the two. The marketing department, then, is primarily concerned with investigating consumer’s need and wants while the sales department is trying to sell the goods.
A person management style is the typical pattern of behaviour that he or she shows in a period of time. There are three different types of management styles.
Autocratic management style is where the manager is used to giving instructions- telling people what to do rather then asking them for their opinions. The manager is the only person contributing to the decision-making process. This style of management was more typical in the UK in the 1970’s and 1980’s although you are sure to find it today. A number of managers who have been bought up with this approach find it difficult or impossible to change their ways. They are used to holding on to power, and do not understand how the process of ‘empowerment’ might work.
Consultative managers are ones who seek to consult other people before making a decision. Alternatively, they will seek to consult people before implementing a decision. This type of manager who wants to draw on more sources of opinion then just him or herself. The consultative manager will have listening skills and also the ability to create the right sorts of channels to consult other people. In an organisation with a culture of consultation, there will be a series of mechanisms (e.g. newsletters, team briefings, suggestion boxes, etc) that makes it possible to get the feel of the concerns of other people involved in the decision-making process, as well as to draw on their expertise.
The third type of management style is the democratic management style, which evolves empowerment. Individuals and teams are given responsibility to make decisions, usually within a given framework. The team is then held accountable (responsible) for the decisions that it chooses to make. A manager with this style will feel comfortable allowing others to make decisions. The democratic manager will need to have a good overall understanding of the decisions that are being made, and will want regular feedback on results. However, they will be confident that empowered individuals and teams will use the responsibility given to them wisely.
Gap use the consultative manager style. I think this because the store manager does make the final decision of what happens to and in the store, but the manger does take all the employees suggestions into consideration before they make their final decision.
The ways that Gaps staff can make suggestions to their managers is that they can talk to them directly if they have any suggestions or problems with work, they also have a box where staff can put in a piece of paper saying if they also have any suggestions or problems and they can also talk to another member of staff, maybe one that is above them if the member of staff does not want to talk directly to the manager. The staff do not though decide how it is best to achieve the objective that they have been set.
The employees at Gap make most of there own designs what they are going to do when they work. Basically the manager tells them where they will be working and then they just do the work. Foe example at the beginning of the day the manager will tell the member of staff that they will be putting clothes on the shelves for a certain amount of time but it is up to the member of staff to choose what clothes that need to be put in what order that they do it.
Thee staff are told what is expected of them. For example they have to put the clothes on the shelves in a certain way, they have to serve customers in a certain way etc.
When staff want to extend there working hours for example, the manager does not make the decision for the staff when they want to work, they negotiate with the member of staff and see when the best time is to work.
Gap uses ICT (Information Communication Technology) several ways internally and externally.
Gap uses the following types of ICT:
- Teleconferencing
- Video conferencing
- Bibliographic Databases
- Electronic mail (E-Mail) services
- Electronic Data Interchange (EDI)
- Web Site
- Intranet and Extranet
- New generation mobile phones
- EFTPOS (Electronic funds transfer at point-of-sale)
- Faxmile Transmission (Fax)
Teleconferencing service allows users to support a discussion over the telephone with a shared computer application, such as word processor, spreadsheet or drawing package and a common whiteboard (an area of the display screen) visible to the conference users.
Gap uses ICT internally several ways. Internally Gap uses E-Mail in several ways. One example is when a certain product is running low on there shop floor a E-Mail is sent to the shop storage area where they keep all the stock, and they then bring out some more items of the certain product but if they are running low in storage then they send an E-Mail to the warehouse who then can deliver the certain product to the store.
The advantages of E-Mail is that it is free unlike making telephone calls or faxing and that it is fast so you don’t have to wait till the next day till the person you send the E-Mail to get it like letters that go in the post.
The disadvantages of E-Mail are that if it is important and people do not check it often then they will not get the E-Mail in time. Also the E-Mail might fail to send and you can only have up to a maximum size E-Mail that you can send.
Gap shop floor staff use handheld radio’s to communicate with each other. This is because it makes it easier to talk to each other, rather then going to have to find the member of staff and then talking to them. Also if there is something like a robbery, then the staff can warn each other through the radio’s rather then just shouting to each other.
The disadvantages of using handheld radio’s is that they are big, and also they run of rechargeable batteries so they have to keep being recharged.
Internally Gap also use databases, which they have all there information of the products stored on. For example when they scan the product when a customer is buying it, the till refers to the database to see what barcode matches the one that was scanned in and then the information such as the price is displayed onto the till.
