Task one

Vodafone Plc

Types of ownership

All businesses have been divided into private sector and public sector. Under the public sector business organisations are owned and controlled by the Government e.g. Post Office, Bank of England etc. However under the private sector businesses are categorised by the following types of ownership:

- Sole traders

- Partnerships

- Private Limited company

- Public Limited company

For this assignment, in seeing a real life business organisation at work I shall be looking closely at Vodafone Plc. Vodafone Plc is a large joint venture with the type of ownership, as a public limited company and a joint venture. A Joint venture means that two or more companies have joined together having said this Vodafone Plc is joint venture with Vizzivi. Being a public limited company also means Vodafone’s shares are openly traded on the stock exchange therefore people can easily buy and sell shares on the stock exchange. Vodafone’s shareholders also have limited liability this means all of its shareholders are liable for the debts of the company only up to their value of shareholding. To become a plc a memorandum of association and statutory declaration must be proved. Once it is approved it will be given a ‘Certificate Incorporation’.

Advantages of a Public Limited Company:

• Members (shareholders) have limited liability for the company’s debts

• Capitol can be raised more easily

• Expansion is made easier, because of the availability of finance

• Easier to attract extra shareholders to invest in the business

Disadvantages of a Public Limited Company:

• It is very expensive to set up a plc due to solicitor and accountant fees.

• To much paperwork

• Information of the company has to be given out to the general public. It is also costly as it costs over £100 000 to prepare reports.

• Some people are only interested in making short term profits rather then long term.

Advantages of a Joint Venture:

• The business can specialise in certain aspects of the venture which they are most suitable for.

• They are normally friendly. They give funds and share responsibilities for e.g. the ways in which they may help gain success in the venture

• Competition with other business can bring success into the business for e.g. one business can be more advanced that the other.

• Less likely to compete with each other because they contribute its individual expertise.

 

 

 

Disadvantages of a Joint Venture:

• They may struggle and may fail to achieve its aims for e.g. who should have the say in the 50:50

• disagreement of the management venture

• Some partners may have different opinions on which direction should a person take action

• A venture may regret of sharing the money because as one business may be doing exceptional well and the other is not doing well.

A Public limited company, which is directly or indirectly controlled by the government. The government owns and controls areas of activity for a number of different reasons. It provides goods and services for the community e.g. health, education, transport. The government controls, it because it is supervisory in nature.

Task two

The main objectives of Vodafone plc in terms of profit are:

• To maximise profit- i.e. as Vodafone is a public limited company it aims to achieve the highest possible gain from its selling of shares. This could only occur whilst Vodafone maximises most of its profits.

• To survive Vodafone must at least breakeven over a period of time this basically means that at a point on the breakeven chart the total sales revenue must equal total costs this is the point in the chart where the business makes neither a profit or loss.

• To increase its market share which means Vodafone should aim to sell as many variety of products to increase its market share.

• Vodafone provides a good working environment for its workers.

• Vodafone provides a service to its community

• Vodafone sells high quality products, to its suppliers which means customers of Vodafone could spread the word of its products which satisfies them.

• Vodafone provides extra after sales service, which means it aims to provide good help and assistance with its products after they have been sold.

Vodafone’s objectives have been met by:

• Vodafone, for it to maximise profits for example there turnover increased by 39% at the end of the year from £2,088million to £2,901million. It also has issued over millions of shares to people and also have opened more shops across the UK, which means there nearly a mobile phone shop wherever you go. For e.g. in harrow you will see a Vodafone shop which would be happy to help for an queries. Also as the market is highly competitive with other mobile phone tariffs such as 121, Orange, BT Cellnet its market with net new customers was 3,216,000 and at the end of the year its net new customers had risen to 8,791,000 which was a, extensive increase. It market share had risen by 32%.

• Vodafone has been running successfully for over 13 years as its shares first came out in 1988 for the price of 1.70p and today the price of these share are now over 11.00p. Also it has made a large sales in its service of pre paid tariffs. I.e. it has over 1,575,363145 of ordinary shares issued to its shareholders.

• Vodafone sells a wide range of products from mobile phones to sim cards and many other mobile phone accessories. It has many customers around the UK, which have either a line rental or prepaid tariffs. Vodafone has it own shops selling it own branded products and other Preferred brand name mobiles such as Nokia and Ericcsons and other mobile phone makes. Vodafone has over 32,33,000 net connections compared with 1,648,000 last year this is a total of 5,079,000 (58%) UKS Vodafone base.

• Vodafone provides a good working environment for its workers by maintaining a high employment standards wherever it operates and it is building an employment and Human rights code that will apply to all the group’s subsidiaries. The groups health and safety practice has been designed to provide the best working conditions for all its employees throughout the world. (Vodafone has employed over 40,700 people compared to last year, which was 13,300). When Vodafone built the new Headquarters building it was Environmental Initiatives which meant that it has energy savings which means there will be a reduction in 50% in energy consumption and 50% reduction in carbon dioxide emissions. They will also have Water saving by recycling water, it will also have integrated transport so around its local area (Berkshire) it will help achieve its aims and objectives. They will also plant 25,000 trees to help recreate former woodland areas.

• Vodafone provides a service to the community as they work as a group in widely differing communities. It is important to employees that their company contributes properly to local needs. The group is intent in fostering good community relations it also supports a wide range of community program around the world. This is using special skills that it has developed in the workforce particularly in a less developed country, where mobile communication can make a real difference. It also helps sport and physical recreation and assist a range of organisation including police and those caring for the historic building. Vodafone is also the largest company by capitalisation and the company recognises that size confers responsibilities as well as opportunity. As a global company, Vodafone duty of care extends care beyond its employees, its customers and the communities in which they live to standards of social responsibilities upon which relations depend to the natural environment.

• Vodafone sells a high quality standard of products to its suppliers. If the customer is not satisfied with the product then they have the right to return the product back with a full refund of exchange of the product. Vodafone do this in order to keep a good customer interaction which would mean Vodafone would have a good reputation and customers would be able to come back and they would spread the word by saying they give good customer service.

• Vodafone provide an extra after sales service which would mean if a for example if a child choked on a certain piece of the phone then Vodafone would be happy to help again Vodafone would be happy to give a full refund of exchange.

 

Task Three A

Culture: this is the way in which employees behave towards the companies aims and objectives. Culture comes in to the business as it defines how the business does things for e.g. how people communicate with each other and the ideal patterns of interactions that have grown over time

There are many types of culture which are:

- Power culture,

- Role culture,

- Task culture,

- Person culture,

- Backward - facing and forward - looking culture.

Power culture: in this type of organisation the importance is on individual people rather then group decision making. Also making it to make decisions quickly and to react well to prevent it from threat or danger. There is also problem in the size of Power culture because it tend to suffer from low morale and high staff turnover only in the middle management layers.

Role culture: it is also known as bureaucracies. A bureaucracy is normally split up into a number of functions that are then organised in a hierarchical way which the business is divided into various functions e.g. accounts, marketing production etc. Role culture is normally found in large organisation in which members of the organisation are pointed out there job role to carry out. Role culture works by logic and rationality.

Task culture: (strong emphasis in building a team). This is where people work together blending to complete tasks such as projects. They may work as a team for a short or long run. By working as a team the members have to share values and aspirations, they also need to find the organsiations values. By working as a team you may need to consider inputs by deterring how a certain job has / will have to be done.

Person culture: Theses type of culture is most likely to be found in many cooperatives and non profit organisations such as charities. This is where individual have control. The only way the organisation exists is the way in which the employees give a good interest within it. In this culture individuals may leave the organisation but people do not have the ability to evict any one out of the business. This basically means workers have freedom.

Backward - facing and forward - looking culture: the main importance of this culture is the emphasis on tradition. Backward - facing culture basically looks at what or how things where running before in the organisation. This is mainly controlled by mangers who have been working in the organisation for a very long time, traditional in there attitude i.e. the ways in which the business use to communicate with others to keep a good reputation and to avoid risks.

Forward - looking culture basically looks at the rapid change in the future within the organisation for example it will look at what its customer want in Vodafone’s case the new range or style of mobile phones of offers they may have. It will also look at what its competitors are doing for e.g. 121, Orange and BT Cellnet.

The style of leadership or management a manager adopts can affect the performance of those who there manager is responsible. Business organisation wants to achieve the best performance out of their workplace and allot of research has to be done into the effectiveness of different styles of management.

There are many management styles, that can be used to achieve the best performance out of an organisation’s employers. These are as follows;-

Autocratic: In this type of management style, power and authority is exercised by the mangers without reference to there’s, within his/her team or department. The Autocratic mangers plans and controls the activity of the team. This type of style is more concentrated with the completion of tasks rather then the welfare or motivation of employees.

Democratic: This is when the power and authority is all down to the mangers as he/she plans and makes decisions on future activities and the decision made is made by a team as a whole. This type of style tends to be more concentrated with its employees. This will mean employees are more motivated at work which mean sit allows better decisions making.

Laissez - Faire: This allows members of a team to carry out their function and tasks without any interference. The manger in this style supports and co-ordinates work of the team as members and represents them outside the team.

Organisation Functions

In order for a business to run you need land, labour, capitol and enterprise,. These are the four main factors of production. This means for a business it should carry out a range of functions successfully which are

- Finance

- Production

- Human resources

- Marketing

- Administration

- Research and development

The Finance department deals with accounts and finance. The accounts department must keep individual records of all money paid into the business and out. Once the reports have been finalised a balance sheet and a profit and loss account is Analysed at many times of the year. By doing this it shows the business how well they are performing in terms of income and expenditure and if they are keeping up with there budget. There also two other departments which are divided, which are called Financial accounting function and Management accounting function.

The Financial accounting function is responsible for keeping the records for e.g. money paid in to the business and gone out.( e.g. employees, payments etc).

The Management accounting function is the improvements which could be done to the business for e.g. once Vodafone has Analysed a balance sheet or profit or loss account it will notice where its weaknesses are therefore they will need to improve it for example selling a Vodafone’s own brand phone if no one buys it you may need to introduce a new product through research and development. or decreases the price of the phone.

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This department interrelate with the objectives. The 1st objective was ‘Maximise profits’ and the 2nd objective was ‘To survive’. These to objectives interrelate with the finance department because, in order to find out if they are maximising profits the finance department has to see how much money is coming in and out of the business. The finance accounting department deals with this function. To find out if Vodafone is surviving you have to produce a profit and loss account this will help decide weather Vodafone is surviving in the market for mobile phones. The management accounting function deals with this ...

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