Unit 3.23 How Businesses Operate 15 Credits Level 3


Business environment are the different factors which can affect the company in many ways. So hence it is important for company to research of new technologies and they can evaluate different factors which are present in environment (Alajoutsijärvi, Juusola, and Siltaoja, 2015). Through this they can make different changes in the organization so that they can create different and innovative processes for producing various goods and services. Assignment discusses about the Sainsbury company which is a retail firm. It was found in 1869. Report describes about the key functions of business environment and different functions of businesses. It further explains about accounting workshops which can improve accounting skills, theories of team, motivation,leadership, impact and benefits of customer services on business.

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1.1 Types of organizations in private and public sector

In different firms there are various business organizations which can perform all activities in effective manner so that they can achieve goals. All corporates whether it is private or public try to earn more revenues and increase the standard of living of all people. So hence it consists of two sectors that is private and public sector which are mentioned below:

Public company:

It's main motive is to provide services to public. They follow all rules and legislations which are created by government. Different types of public sector companies are-

Department undertakings:

It is a traditional form of company. Decisions are only taken under responsibility of government. It is a division of government. It do not have separate identity from government.

Statutory corporations: These are the companies which are created by passing a special act through parliament. For example national employment savings trust is scheme in U,.K. It pries various pension schemes to all people.

Government company: It is firm in which not less than 51% of share capital is owned by members of govt. It many be partially or fully controlled by govt. For example British railways is under state owned railway which can give services to audience.

Private company: They are owned and controlled by private people. They can create their structure so that they can easily adopt new trends in market (Aronoff and Ward, 2016). Types of private organisations are-

Sole proprietorship: They are the entity which is owned and managed by single person. Individual person only shares profits and losses.

Partnership: It is the organisation which is run by two or more person. Profits and losses are shared by all persons which are involved in partnership. For example ben and jerry run small business in partnership and thus they can earn huge profits.

Limited company: In this companies come together so that they can accomplish their targets and goals.

1.2 Different organizational structure in businesses and reasons of variation

It is important for company to create various organizational business structure so that they can achieve the mission and objectives. Sainsbury is a firm which consists of different employees as it is dealing with grocery and clothing products. They have to collect money so that they can increase their production.

There are two organization structure. So hence Sainsbury follows a flat organization structure in which there are less level of management so hence all employees can easily communicate with each other. Hence manager motivates and give all staff members so that they can take decisions and can perform well. So they can give good results. It results in improving the quality of product.

Firm also follow decentralized organization structure in which different responsibilities are given to all managers and they are given according to skills and specialities of every manager.

Sainsbury scams external environment and hence they adopt recent and latest technologies so that they can create good quality of goods and services.

There is Tesco company which is another retail firm. It's organization structure is described below:

Functional organizational structure:

In this responsibility for product is given to senior management group. This structure is required in case where effective knowledge is needed.

Divisional structure: There are different functions of a single department such as HR,finance, marketing etc. It is under departmental manager and are accountable to unit manager (Aronoff and Ward, 2016).

1.3 Describe how national,local and global economic environment impact Sainsbury business

There are different factors that are external and internal which can affect operation of Sainsbury (Bendell, J., 2017). Hence they have to scan environment so that they can adopt latest techniques and tools and thus they can create good quality of goods.

Sainsbury is affected by local, national and global level and it is done due to change in preferences and choices of consumers. Influence of local, national and global on Sainsbury are:

Local: There is a change that people want online transactions. Company has opened operations online but not at drastic level. So hence this can impact operations of firm.

National level: If local inflation and deflation can affect Sainsbury. For example if there is inflation then they can affect company in negative manner. People do not purchase goods and it leads to reduction in profits of firm. It leads to reduction in revenues of firm.

Global level: In this there are different laws and regulations which are created by different countries (Buhmann, K., 2016). They have to follow all changing laws and regulations and Sainsbury also have to evaluate changing needs and wants of users so that they can create policies according to user's demand.

Task 2

2.1 Importance of accounting for success of business

Accounting us important for every company. Importance of accounting for Sainsbury are:

Planning: Through maintaining of accounting records company can manage all activities related to sales and can create effective and efficient strategies to utilize resource in an optimum manner so that they can reduce extra expenses and hence they can increase their profits by receiving accounting data.

Monitoring and controlling: Through accounting information management can evaluate different information related to employee's performance. So hence they can compare the present performance with standard performance.

Budgeting: Accounting section can also give data regarding the budgets so they can create plans to reduce the expenses and they can increase their profits.

So Sainsbury has to monitor the factors so that they can run their business smoothly and successfully.

5.1 Different functions carried out by HR department in business

HR sections performs various duties and functions so that firm can run their operation in a better and effective manner (Charles Jr, O. H., Schmidheiny, S. and Watts, P., 2011). Duties performed by HR of Sainsbury are:

Training and development: HR section give training to all employees so that they can perform well. Through this they can increase their selling skills and can enhance their knowledge. Hence they can attract customers. It results in increasing the sales and revenues of firm.

Conflicts management: HR department of company tries to communicates with all employees and hence they solve issues and problems of staff members. It assist employees in working in a peaceful and successful manner..

5.2 Key features of employment legislations

HR manager have to follow rules and legislations which are created by the government. HR manager of Sainsbury firm have to create various policies and rules so that firm can run smoothly and successfully and it also gives different advantages to various staff members (Crane, A. and Matten, D., 2016). So hence legislations related to workers are:

Minimum wages act: In this act minimum wages must be paid to all workers and company cannot make any discrimination on basis of religion,,sex and other criteria. So hence as a result all workers get minimum wages and can increase their standard of living.

Anti discrimination act: Company cannot discriminate all workers on basis of creed,colour and religion. Hence all employees can get equal opportunities to perform job and in selection process. Through this company can follow all legal and ethical rules created by this act.

Task 3

3.1 Interpret data on profit and loss account

It is crucial that every company can create financial statements. Its crucial so that they can know the profits and losses for firm. Hence they can have knowledge of different expenses and revenues. Hence they can take steps to reduce extra expenses and they can increase their revenues. This also results in improving the performance of firm. It leads to growth and development of firm.

Interpretation of Profit and loss account:

It has been interpreted that in 2017 firm has earned revenues of around 32580000 and gross profit of 1880000. Income over continuous operations are 450000. and dividend at end of year is 450000.

Task 4

4.1 Stages of team development

Five stages in team which are created by Bruce Tuckman are mentioned below:

Forming stage: In this all employees of team are introduced with each other so that they can have knowledge of each other (Dalton, M., 2017).

Storming stage: In this more emphasis is given on weights and excitement and feeling of joy is given less importance.

Norming: In this manager motivate all team members so that they can work with full corporation and peace.

Performing stage: All ten members are enthusiasm and full of potential to perform their tasks in firm. Hence they do not require leader for monitoring their work (Demuijnck, G. and Fasterling, B., 2016).

Adjourning stage: In this project is completed and team members can go to their own work but they can be connected with each other.

Thus Sainsbury can apply this work style so that team members can perform well in firm.

4.2 Description of motivational theories

Different motivational theories used by Sainsbury are:

Maslow Hierarchy theory:

Through these theory it helps the manager to satisfy needs of all workers. In first strategy they fulfil physiological needs in which they fulfil basic needs such as water or shelter etc. Second is security in which all employees are protected from threat or harm. Third is love in which friendly environment is created for all workers. Fourth is esteem in which rewards are given to increase motivation of workers. Fifth is self esteem in which people can realize the self potential and sense of accomplishment.

Hawthorne theory: It is given by Henry A. Landsberger in 1950. Workers motivation level can be increased by putting more focus on them and they do not have to change themselves.

4.3 Comparison of motivational theories

All firms can use these motivational theories so that workers can improve their performance and they can achieve goals of firm (Dutt, N. and et. al., 2016). Difference between two motivational theories are:

Maslow hierarchy needs

Alderfer's ERG theory

It consists of psychological,self realization needs.

It describes about development needs of workers.

This theory consists of security and safety needs.

It explains the existence needs of workers

It describes passion and dreams of workers in step of self actualization.

It explains about relatedness of members..


4.4 Various leadership styles

Various leadership styles used by Sainsbury for guiding employees are-

Strategic leadership style:

In this leadership style, leader has a top authority and they set a vision for firm. Hence they motivate all employees to perform better and to accomplish the vision. So it results in improving the performance of all workers (Hall, N. and et. al., 2015).

Transformational leadership: In this there are changes in structure, policies and team members etc. Leaders are need to be explained that changes are crucial for them and through this it not only improves their performance but firm can also achieve objectives.

So, Sainsbury monitors the factors of environment and follows leadership styles which is suitable to firm and which can enhance performance of workers.

Task 5

6.1 Impact of user's service on success of business

It is crucial for firm to provide effective services to all users so that they can maintain good reputation in front of all customers and in market. If firm provide customer services to customers and maintains strong relationship with all users then it increases satisfaction level of users and thus increases the profits of firm. Impact of services service on success of business in Sainsbury are:

Increases profits: If Sainsbury provide effective services to all staff members then it can maintain good relationship with all employees (Laszlo, C. and Cescau, P., 2017). So hence it leads to increase in profits of firm. Thus they can also increases their market hare.

Increasing loyalty of customers: When company fulfil all needs and wants of customers and solve their all their issues and problems then it leads to increasing satisfaction level of customers. Hence they take services from Sainsbury only. Thus it results in increasing the loyalty of user in firm.

Internal benefits: By providing effective and efficient services to all members then it helps in improving the relationship among buyers and can improve internal system and procedures. As satisfied customers can give suggestions regarding improving products and services (Martins, L. L., Rindova, V. P. and Greenbaum, B. E., 2015). Through this firm can create innovative ideas to create different products and hence they can improve their performance.

6.2 Benefits of user profiling to business

Customer profiling is very crucial as it gives various benefits to business. Customer profiling is different process used by every company by calling them or by taking interviewing them. Different benefits to Sainsbury from user's profiling are:

Improves communication level: If there is customer profiling through interviews then it leads to interaction among all employees. Hence it increases communication level.

Increases reputation of brand: Through customer profiling it can increase the brand name through receiving of advices and suggestions from all users. Hence they can improve their system and procedures of creating products.

Strong relations: It helps in maintaining strong relationship with customers through profiling. As a result it leads to increasing of profits and market share.


It is concluded from above report that business environment is very crucial for every company. Through this firm can evaluate different factors and can make change in the business. Business functions which are performed by firm. Accounting workshops are organized to improve accounting skills. Working in team is crucial and customer services is crucial for success of business. visit our website:

You may also like to read: Unit 14 Business Report BTEC Level 5 HND

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