- There isn't much paperwork in establishing this type of structure.
- If you use your own name, you don't have to register the business name. This will only be necessary if you have a trading name.
- There are less stringent reporting obligations compared with other structures.
- You may be able to deduct tax losses from personal income.
- You are entitled to profits and the ownership of assets.
- It's relatively straightforward to wind up.
Disadvantages of sole trader:
- You are personally liable for all debts.
- Personal property may be vulnerable for debts and other business liabilities.
- Large sums of capital are less likely to be available to a sole trader, and you may have to rely more on overdrafts and personal savings.
- You may require enormous investments of time without the normal employee recreation leave and other benefits.
- There may be issues of continuity of business in the event of death or illness.
2) Franchise
A form of business organization in which a firm which already has a successful product or service (the franchisor) enters into a continuing relationship with other businesses (franchisees) operating under the franchisor's trade name and usually with the franchisor's guidance, in exchange for a fee.
3) Partnership
A Business Partnership is an agreement between two or more individuals for the purpose of conducting a business. There are two basic types of partnerships:
1) The General partnership
2) Limited Partnership
The forms offered are for the purpose of a general partnership. Comprehensive partnership forms package will cover most situations that general partnerships will face with their document needs when forming their business partnership, adding a new partner, one partner buying out the interest of another partner, and dissolving a partnership.
2.2
WHSmith’s plc has its shares through the stock exchange market and the main advantage of selling shares through the stock exchange is that large amounts of capital can be raised very quickly. One advantage is that the original shareholders can loose control of its business if large quantities of shares are purchased as part of a take over bid and it’s also costly to have shares quoted on the stock exchange. To create public company the directors must apply to the stock exchange councils, which will carefully check the accounts. A business wanting to go public will then arrange for one of the merchant banks to handle the paperwork. The benefit of being plc is that you have limited liability and second of all it is easier to raise capital because you have more option opened to you.
Task 3
3.1 And 3.2
In this task I am going to investigate and describe the work of the functional areas in WHSmith’s e.g. Finance, Production, Personnel, etc. I will explain how each function helps WHSmith’s to achieve its objectives.
1) Human Resource
The human resource management or personnel function of an organisation covers a variety of activities. The term human resource management has largely replaced the old-fashioned word personnel, which was used in the past. The types of work staff cover in the human resource function for WHSmith’s include the following:
- Help to select and recruit staff
- Training e.g. induction training
- Supporting managers so they can get the best out of their staff, very much a H.R function
- Looking after the welfare of the staff
- Negotiation pay and conditions your obligations to the job and the company obligations
- Policy making asking and answering
Human resource staff do a lot for the company (WHSmith’s) for example it decides the amount of staff that will need to be working during a busy period i.e. Christmas holidays and any other holidays, and they will also be responsible for providing training for new staff and making sure that they get induction raining as well.
2) Marketing
The marketing function is responsible for identifying, anticipating, and satisfying customer requirements profitably. Marketing and sales are sometimes combined in a single department but there is an important distinction between the two.
Marketing: getting the company to produce what the customers want.
Sales: Getting the customer to want what the customer’s produces. The difference between the two is that the marketing department examines what the customers want and the spending, patterns and provide information that will help the company produce services to provide. And the sales job is to sell the product by using advertising, promotions, and general publicity. WHSmith’s has a lot of different ways in which it does its promotions and advertising for example on television, Bill boards and Internet.
David Magilano is the director of sales and marketing.
3) Administration
WHSmith’s as a large organisation depends on an administrative spine. Dealing with enquiries, communicating messages and producing documents for the workforce are all
Examples of administrative tasks. Administrators are very important because they make sure that the business admin side is all under control.
The work of the office manager in WHSmith’s will need to do the following:
- Take responsibility for and to organise training of administrative staff.
- Advice departments about the office equipment, working practices and staff development.
- Co-ordinate the supply of office equipment and stationery.
- Study and analyse administrative practice within the organisation in order to develop an overall strategy for administration.
- Ensure the standardisation of administrative work, layout of documents, letters etc.
- Provide and maintain a communications system within a company, including phones, maling systems, computer hardware and other data processing facilities.
- Report to; provide statistics for, the company board about the effectiveness of existing administrative practice.
WHSmith’s depends a lot on admin department to make sure that all the documents are presentable and that statistics are up to date for the companies’ board.
4) Finance and accounts
Records revenue and expenditure of the business and they also set budgets for the functions which means that finance also controls the expenditure. The financial officer is responsible for supervising the accounts and finance department. The accounts section in WHSmith’s always keep a detailed record of all money paid in and out and present the final balance sheet, sources and uses of funds, profit and loss account, and other financial records at regular intervals. Modern accounts are stored on computer files and accounting procedures are greatly simplified by the use of specialised software. There are two main subdivisions within the finance and accounts department. The financial accounting function in WHSmith’s is responsible for keeping records of financial events as they occur. Accounts need to be kept of all moneys.
5) Production
The production director of a company is responsible for making sure raw materials are processed into finished goods effectively. He/she must make sure work is carried out to an appropriate standard, and must supervise procedures for enabling work to be carried out. Production management is mostly preferred to as operations management.
Task 4
4.1
In this task I will be describing the management style of WHSmith’s and investigating the culture of the business.
Research and development
WHSmith’s as a well run company, Research and development has strictly commercial functions to the further the company’s business aims by creating new and better services, improving operational processes and developing new ones, and providing expert advice to the rest of the company and to passengers. Customers of WHSmith’s are very important to the business so WHSmith’s put a lot of work into making sure that their customers get the right information and are happy with the services that they are receiving.
Culture
WHSmith’ss culture is that all members have a defined job or role to carry out. This can help the success of the business because each person has to focus on the job and this makes it much easier for the staff to work to the best of their ability. This also means that the manager gets best from his staff.
The bureaucracy became increasingly common in the nineteenth century in government departments such as the civil service, as well as in such organisations as the army and, in some ways, the church. In this type of culture what people do at different levels is determined by the job description and defined communication procedures. In this culture the job description is just as important as the person who fills it, and performance over and above the role is not required.
Position is the main source of power, and rules and procedures are the main source of influence.
4.2
Management style
In WHSmith’s the managers use the autocratic management style. The autocratic management style is one where the manager is used to giving instructions- telling people what to do rather than asking them for their options. The manager is the only person contribution to the decision making process. This style of management is more typical of UK management in the 1970’s and 1980’s, although you do find it today.
I interviewed a member of staff in WHSmith’s and I asked them some relevant questions to do with my assignment. Some of the questions I asked were:
1) Where does WHSmith’s stock trade and under what ticker?
A: WHSmith’s is traded on the London Stock exchange under the ticker EZJ.
2) I am interested in your financial reports, company information, and anything relating to your marketing strategy. What can you send me?
A: As a paperless company office, we do not produce information packs. All available information can be found on our website (www.easyjet.com). For general information about WHSmith’s, its history, profiles of the executive team, and a host of other things, please
Refer to the WHSmith’s information pack. Financial reports can be found within this investor relations section. The website will help provide you with a strong insight into the company’s history and culture.
The member of staff I interviewed was Ray Webster manager of administration department. He was very helpful and answered all my questions with much detailed answers. I thought that the interview was very useful and helped me to do my research within the company.
WHSmith’s’s management style basically goes like this:
It describes how these objectives will be achieved by implementing the necessary activities, monitoring the results and then reviewing the objectives again to ensure that they remain correct..
Task 5
5.1
In this task I will be analysing the types of ICT used in WHSmith’s. And also discussing the internal, external communication, open, restricted channels, upwards and downwards communication with workforce, suppliers and customers.
Internal communication
Internal communication is the communication that takes place within the organisation. The three main ways of communicating information inside an organisation are verbal, written and electronic.
- Verbal communications is communicated in face to face interactions, through telephone messages or recorded messages using answering machines and voicemails. Although verbal information can be obtained quickly, it often needs backing up in written for. For example, when you communicate an important message to a work colleague he/she might also say could you e-mail me about that or please can I have it in writing.
- Written information will cover a range of paper documents that are exchanged within the organisation including memos, letters; brochures etc. written information takes time to process and often requires extensive filing and disruption systems.
- Electronic information is rapidly replacing other forms of communication. For example in WHSmith’s the tickets can be transferred electronically. Most large organisations use an internal networking system.
External communication
External communication takes place between the organisation of WHSmith’s and the outside world. These are all the different types of external communications used inside WHSmith’s.
-
Telephone: The most frequently used form of external verbal communication is the telephone. Its great benefits are that it is fast and allows people who would find it difficult to meet to converse.
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Interviews another form of external verbal communication is an interview with someone from the outside and the organisation who may be interested in something the organisation has done (e.g. press, radio or even television).
-
Business letters: The business letter is still the most widely used form external communication. It is used in WHSmith’s to:
Make arrangements without the need for parties to meet
Provide parties with a permanent record of such arrangements
Confirm verbal arrangements.
A well written business letter conveys its message while maintaining goodwill. The other different ways in which external communication is taken place in WHSmith’s is:
- Faxes
- E-mail
- Videos and Cd’s
- File transfers
- Electronic data interchange (EDI)
- Video conferencing
- Internet
5.2
Formal communication
Formal communication takes place through the recognized channels for example official meetings memos, news letters etc.
Informal communication
Informal communication is taken place in WHSmith’s when there are ones that are not part of the officially recognized networks of the organization.
Open channels
Open communication is used a lot in WHSmith’s its basically message put out on the notice board targeted at everyone within the organization and it’s also sent out as memos. Then the message is open for everyone to see or interpret.
Restricted channels
Restricted communication is when a message contains confidential materials; the likelihood is it will be targeted at only a few groups of users either within a particular department or at certain levels of seniority, so that its use is restricted.
Downward communication
In WHSmith’s the managers above tell the colleagues below the messages and make the rules and work programmers, communicate these in formations down the line to junior employees. For example in WHSmith’s the staff are told what to do by the managers and then the staff must carry out the tasks that has been set out to them, if they want to be recognized as hard working employees and also if they don’t carry out their tasks set then they will be given warnings and then if the worse comes to worse then the staff could be given a sack.
The advantage of being a manager is:
- Senior managers are able to set targets and objectives, and then give instructions to make sure they are carried out.
- Because there is a clear line of command, instructions can be clear and consistent.
- Operating with an efficient system in which fewer errors are made can cut costs.
Upward communication
Upward communication is when the managers in the business listen to employees and information is passed upwards to the manger. In WHSmith’s you would see staff discussing
With the manager about how the jobs should be done and what other alternatives are there.
This is important in WHSmith’s because:
- Good ideas can be bubbled up from people who deal with decisions on a day-to-day basis.
- Many people at the bottom of the organization in WHSmith’s are very talented and have a good idea that is worth listening to.
- Managers can be made aware of likely problems before they occur.
- It provides feedback on the decisions made by senior managers.
- People lower down organizations are more likely to know what is practical in a working setting than those higher up.
- Being asked to be involved in the communication process motivates those lower down in the organization.
5.3
How ICT has affected the external and internal communications
In the first decade of twenty-first century, we can see that ICT has totally transformed ways of communicating within businesses. WHSmith’s has a lot factors that have changed due to ICT:
- The use of e-mail to replace many communications that were previously carried out by letters, faxes and phone calls.
- The use of networked databases to replace organisations traditional systems of filing and storing information.
- The use of computers to replace a range of standardised operations involving the interface between an organisation and its customers e.g. registering an order, requesting tickets to be booked on the certain day u prefer, preparing invoices, controlling credit and recording payment.
- The use of digital to find out about the current development that is taking place in the field in which WHSmith’s is operating.
- The use of digital methods for much faster communications, involving a range of visual, sound, and other forms or communications that enable face-to-face contract between the organisation and people in the other places.
- The use of an internet web site to create a communication link between the organisation and its global market.
- Enabling the contracting out of work previously carried out within the
Organisation so that communications are now with the external contractor rather than an internal department of the organisation.
Organisations based on business process put a high premium on information and on sharing ICT facilities. ICT has a very important role in WHSmith’s because the internet plays a vital part in the WHSmith’ss business plan, and is critical to its ongoing success. As a low- cost operation, controlling the cost of doing business is crucial to the airlines ability to offer low fares. Because the internet provides the most cost-effective distribution
Channel, WHSmith’s has aggressively pursued its strategy of encouraging passengers to book their seats online.
Task 6
6.1
In this task I will be examining the quality assurance and control systems that exist in WHSmith’s. I will also be looking at the use of quality control by the way it helps add value to its service.
Quality assurance
In WHSmith’s quality assurance is concerned with trying to stop faults from happening in the first place. In WHSmith’s the employees who are working while on board are responsible for making sure that the services provided within that time is up to standards and not poor standards. Although staffs do the checks afterwards the manager or the supervisor will check to make sure that there are zero defects.
The reason in self checking is important is so that you can see your own performance before you are inspected. I believe that the reason why self-checking is working in WHSmith’s is because it helps improve the internal communication between managers and employees as well as external i.e. staff and customers. It also gives the staff a wider vision of what quality product or service is.
If they a customer bought a ticket online but then missed his/her flight WHSmith’s will help arrange them another booking preferably same day. This shows that quality assurance is very important to WHSmith’s.
Quality assurance (Q.A) means:
- Take pride in how you look, keep clean and tidy.
- Putting sign warnings of accident
- Avoiding potential accidents
- WHSmith’s make sure that staff are receiving customer service training
6.2
Quality control
In WHSmith’s quality control is concerned with detecting faulty products or poor service. Quality inspectors carry out this process. At WHSmith’s quality inspectors are responsible for checking the quality of services provided. They are employed specifically for maintaining quality control to a high standard.
Although quality checks are undertaken by the quality inspectors it is also the authority of the staff to check that the services are of company standards. Mistakes can happen and that is why two people do the quality check at one time. Questionnaires are used to monitor whether the customers are satisfied with WHSmith’s and the services provide from the company.
Quality control (Q.C) means checking:
- Sell by dates
- Appearance of products
- Health and safety
- Quality of service (financial services and customer service)
6.3
Total quality management (T.Q.M)
WHSmith’ss aim is to create quality culture. Always looking to improve the services provided this means better quality-same price- better value. The aim with total quality management is to exceed customer expectations. Once WHSmith’s has achieved that they will surely be increasing the advantages of repeating business. This is due to the fact that the customers will return when they get more than they expect from the company, in this case WHSmith’s.
Total quality management (T.Q.M) means:
- Withholding discussions/meetings to improve the product or service
- Introducing new ideas e.g. customers are given extra goods if they are old a damaged item (originally Tesco’s introduced idea)
Quality circles (Q.C)
In WHSmith’s working in a group is the quality circles. The aim is to identify and solve quality problems in the work placement, e.g. how to rehabilitate a product or service. This involves all the WHSmith’s management team who ask colleagues of any issues regarding quality in the workplace before negotiate and configure suitable solutions and or enhance quality that of which is concern. This held once a week but WHSmith’s have decided that twice a week would provide a better outcome as more ideas are invested by part-timers of the company, in overall company review.
Promotions
WHSmith’s advertises and promotes themselves on bill boards, Internet web sites, Television, Radio and etc.
Task 7
Conclusion
7.1
In this assignment I had to investigate on a well known company and write a detailed formal report. The business I chose is WHSmith’s I chose this business because it is very familiar and I checked out the website before I actually chose to do this company and the website was very helpful and it had a lot of relevant information which I could use to writ my report on.
7.2
WHSmith’s owes its existence to the development of ‘open skies’ in Europe. Before 1987 European air travel was effectively carved up by the national flag- carriers which considered the air own permanent fiefdoms. Under the old regime flying schedules fares and even the amount of passengers that each national airline negotiated between governments in hugely uncompetitive ‘bilateral’ agreements. Competition from other airlines was almost unheard of.
Having looked at the research I have done on WHSmith’s, WHSmith’s has won many tributes and awards voted by consumers. The airlines was named Winner of Best Value category. WHSmith’s also excelled in a consumer association survey, being the only low-cost airline to be ranked in the first division of a customer satisfaction table in a holiday. Because WHSmith’s sells one way fares, you can go and come back whenever you like this makes the customers feel happy and will enjoy their holiday knowing that they can come back earlier if they are not enjoying the holiday or maybe even stay longer because they are having a good time. WHSmith’s offers flexibility on all fares, unlike many other airlines. For an administrative fee of just £10 (16EUR) per leg of journey, plus any difference in fare, you can change your flight. Booking with WHSmith’s flights is fast, convenient, and secure.
You can easily purchase your seat online.
7.3
Having done all my research I found out that WHSmith’s is a well developed company and has been growing within the past year due to the September 11th attacks WHSmith’s is doing much better in their sales when compared to British airways. Because passengers don’t feel safe going aboard far they go to safer European countries.
WHSmith’s culture is to make sure that the employees provide all the facilities needed for the passengers and making sure that the passengers are very satisfied when having to go on WHSmith’s.
Bibliography
Appendix
In this assignment I gathered my information from the website , the sources of information I used from the web were the mission statement, annual report, company review on past, and I also telephoned the company and asked them if it would be appropriate for an interview with one of the staff members.
The websites I used were:
The books I used to gather my information were:
- AVCE business studies book
- Intermediate business book
I also used the business newspaper to help me see how WHSmith’s is doing overall.