1. In this report I will be Outlining the features of my two contrasting businesses that I have chosen (Tesco and Oxfam). In this report I will be discussing the different types of ownership and liability for my two businesses. The features that I am going to is the aims and objectives I will then access the reasons for the success of these two business. Finally, my report will look at how the relationship between the external and the internal stakeholders compare.
2. Mission statements, vision statements and aim and objectives
Tesco mission statement is ‘to be the champion for customers, helping them to enjoy a better quality of life and an easier way of living. This hasn’t changed. Customers want great products at great value which they can buy easily and it’s our job to deliver this in the right way for them’ this shows that Tesco are believe that they are the best business and believe that they can create better products and make better products unlike any other shop.
Also, another mission statement of Tesco is that they want to ‘create value for customers, to earn their lifetime loyalty’ this is important to Tesco as it give them goals to try to aim for which helps to keep them determined to achieve better. It also ensures that customers get the best service available from staff.
Tesco’s vision statement states that they want ‘to be the most highly valued business: by the costumers we serve we serve the communities in which we operate our loyal and committed colleagues and of course our stakeholders.’ This shows that they are trying to expand even further by gaining a larger community of customers that are loyal and regularly come back to the shop.
Tesco aims are to try and improve their carbon footprint. This means that it is trying to be more environmentally considerate which would make the business more marketable to consumers as it shows they care unlike some other countries. This would help to increase the amount of customers and therefore profit that they would gain. to be the creator of high quality brands
Tesco’s main objective is ‘to maximise sales’ by achieving this they will gain more profit meaning that they can expand. If Tesco increase their sales, it will help to achieve another one of their aims ‘to increase their profits’
Another objective is to close down stores that are not as environmentally friendly (especially international stores) or stores that aren’t making as much profit as it needs to be. This would help to reduce their carbon footprint which would help them to achieve their aims.
• Oxfam’s mission statement tells us that they want to ‘Help create lasting solutions to the injustice of poverty. We are part of a global movement for change, empowering people to create a future that is secure, just, and free from poverty. We work to end poverty locally and globally, making this central to public and political life in Wales’. This shows the goals they want to work towards and also what they want to do in the future.
While researching, I also found out that Oxfam ‘Use a combination of rights-based sustainable development programmes, campaigns, advocacy and influencing to challenge the structural causes of poverty.’ This shows that their goals they set for them self are being met to become a bigger company and to gain a greater audience.
Oxfam’s vision statement says that ‘Our vision is a just world without poverty. We want a world where people are valued and treated equally, enjoy their rights as full citizens, and can influence decisions affecting their lives’ this shows the people involved in the organisation want to change and to help the people that are looking for their hep the most.
Oxfam’s aims- One of their aims is to try to help ‘save lives, now and in the future’ This means that it is trying to help the people in need which means that people who are donating to them know that the money is being spent on something that is useful. This makes people more likely to want to donate if the money is going to a good cause.
An objective for Oxfam to help achieve this is to ‘provide clean water, food, sanitation and other fundamental needs.’ This will mean that fewer men, women and children will die or suffer from diseases and illness
Features of Tesco
Tesco has vast amount of different activities that they run. This includes things like Petrol Stations, superstores, Tesco extra and Tesco express. There is a different way that each store is run but each one is owned and looked over by supervisors to make sure they are all doing a they should. An example of this is how ‘Tesco superstores are large supermarkets that sell groceries’. Although their main focus is groceries they also sell a wide range of things like clothing and electronics. Tesco extra also sell mostly food and have a very basic range of non-food items. All of the stores are branded as ‘Tesco’, but a new store in Liverpool was the first to use the format brand ‘Tesco Superstore’ above the door’. Tesco try to increase their revenue in a wide range of ways including the addition of extra activities such as Tesco’s optician’s, Tesco’s bank, Tesco’s travel money, club card, car insurance and their own pharmacy in recent years.
This helps to increase their market share as they appeal to a wider range of people. Tesco’s bank is used to allow customers to exchange their money into different currencies so they can spend the money while in a different country. Their clubcards allows regular customers to collect points each time and get rewarded for being a loyal customer this helps them to gain more regular customers and therefore more profit. Tesco Car insurance will get you cheap and reliable car insurances for the whole family. Tesco’s own pharmacy gives the costumers and quick and reliable way to pick up their prescription near home which is useful for more elderly costumers who struggle to get around.
Oxfam has a wide range of activities such as the Oxfam shop which is used to sell many different items including clothing such as vintage clothing and men’s accessories. They also contribute to helping many different LEDC countries and help the less fortunate children develop and get an education and better hygiene this is done through volunteer/ charity work. An example of this is that more than 480,000 Rohingya people have crossed over to Bangladesh. Oxfam is providing key essentials like clean water and other essential supplies’. Also ‘Anita will never forget the day her house fell down – the day a massive earthquake devastated Nepal. It caused extensive damage and affected more than 3.5 million people. Anita was sowing potato seeds onto her family’s land when her home was damaged by the earthquake that hit Nepal in April 2015. 17 days later the second quake hit and her house was destroyed. Oxfam reached over 445,000 people with your support and Anita was just one of them, we distributed over 54,000 emergency and improved shelter kits. Oxfam is staying in the affected areas in order to continue the relief and recovery work and link it to longer term reconstruction and development’ this shows how Oxfam are changing people lives for the best and any donation they are receiving is going to a good deed.
Sectors scope and size of Tesco and Oxfam
Sectors of business
A Primary scope where businesses extract raw materials from the earth and the sea for example fish form the sea, coal which is extracted from the earth and oil, farming-fruit vegetables.
A primary business is where business extract raw materials from the earth and the sea for example coal and oil. However, Tesco is not a primary sector but it does have links to trade and importing goods. If Tesco didn’t have the links to the primary sector business they would have to find a different primary sector and pay higher rates.
Oxfam is in all three sectors primary, secondary and tertiary, this is because they provide seeds and water (raw materials) for farmers in poverty stricken countries, they also make products to be sold in their shops like ‘merchandise’ products with Oxfam written on them) this could also relate to how Oxfam help other countries manufacture products or food. They also sell used products that people have donated in their shops like a supply chain and they were created to provide a service. Primary sector is the sector from which we directly get or drive something from nature. When we convert natural products into final goods it comes under secondary sector. when we provide service like selling the good it is tertiary sector.
Size of business
The different size of a business is 1-9 employees is Micro size business 10-49 employees are a Small business 50-249 employees is for a medium size business and 250+ employees this is a Large business.
Tesco is a large company which employ over 460,000 people a year. The business is currently a public limited company selling shares on the stock exchange for about 286.00p per share. It is located in the FTSE 100, and employs around 195,000 people in the UK, 41,000 in the rest of Europe, and 24,000 in the rest of the world. The company operates on an international basis and sells everything from food, to clothing, electrical goods, and even financial services such as loans and insurance.
Oxfam is a large company with over 5,300 and over 22,000 volunteers. From small farming co-operatives to large multinationals, we work with a variety of organisations to help fight poverty around the world. they know from decades of experience that by working with others – and pooling our expertise and resources – we can achieve much more than we ever could on our own. That might mean working with small, grassroots organisations that have a better understanding of the local context, or joining with other international non-governmental organisations (NGOs) to reach greater numbers of people with our campaign messages.
Scope of business
The scope of a business is where the business is operated from. The types of scope of a business are local which are based in one generally smaller area, national which is how many store there are in the whole of the UK and finally, international which is if the business has many stores/ operates in multiple countries.
Tesco is an international scope business. It has multiple stores all over the world including as the Malaysia, India, Poland, China and the UK. Tesco store are also national and local to UK region as they have over 6000 stores in the UK alone. The main reasons why the company decided to enter the international market was that the local UK market had reached saturation making it very difficult to grow without exploring oversea options. Saturation means “when the business provided in a market has been maximized in the current state of the marketplace.” This means if they had started to open even more stores in the UK it would be a waste of money as they may not make as much as they should. This would mean that it is their only plausible solution for Tesco to try to remain relevant for the economy in the future.
Oxfam is also an international scope company. Oxfam has over 700 stores throughout the UK in 2017. For UK residents Oxfam also is local as it has stores in many town centres which accepts donations and sell items such as clothing additionally it is also a national scope business. Oxfam is international because Oxfam works in an international group of around 20 organizations working together local communities in dozens of countries. On average one in every three people throughout the world live in poverty. All around the world, Oxfam find innovative and creative ways for people to improve their lives and thrive. They try to save as many lives as they can and campaign for people that have poor influence in the decisions that affect them.
The main different ownership types there are Sole traders, partnerships, private limited company’s (PLT) and public limited company’s (LTD). A sole trader runs the business independently and usually only have a small amount of staff. Some advantages of being a sole trader is that it is easier to set up. Also the small amount of employees means the wages payed will be lower than a private or public limited company be low. However, the disadvantages are that one person is responsible for the whole company and it will be hard to get time off when you become ill and want to go on holiday. Partnership is where the business is run by two or more people meaning the reasonability’s are split equally but also all debts are split between all of the partners. However, some disadvantages are that disagreements may occur when changes happen and some people dislike the idea. Also unlimited liability which means if the business fails and runs out of money your personal assets are at risk of being sized. A public limited company is generally a smaller business which has limited liability also makes it easier to gain finances through sales and shares. Some disadvantages are that is more expensive to set up and run. A public limited company is a larger well known business which usually have a chain of manufactures. Some advantages are that you have a better chance of gaining finance from the bank etc. but also the business created more of a prestigious profile. However, the disadvantages are they will have an external stakeholder once it had been listed on stock exchange.
Tesco is a public limited company. Which means it a well-known company. One advantage this gives Tesco is more of a prestige profile meaning the costumer that go to Tesco have high standard of Tesco, which will make people with a higher status and have a better disposable income meaning they will spend more money in the shop on things like luxury goods for example clothing and technology or simple thing like comfort foods. However, the Tesco has an advantage due to many stakeholders wanting to buy the company but also they have many manufactures due to how large the company is meaning they will never be low on goods.
Oxfam is a private limited company guarantee. This means that they get funding from the government due to the type of business they run. Oxfam use the funding they receive of the government and use it to improve LEDC and children’s education and sanitation. Oxfam being a private limited company means we are not able to see the company information which means the people that donate to the business they are not one hundred per cent knowing where every penny is going however, because Oxfam is such a trusting business we are able to see what they put on their website that all money is changed things in the world and that they are not scamming.
Stakeholders for Tesco and Oxfam.
There are two types. There internal stakeholders which are people within the business who are interested in what the business doe. Then there is external stakeholder which are people or a group of people that are interested in the business.
The Manager of Tesco will have an interest in the business because they can how much further the business can expand which could potentially mean they get more money. The manager will also be interested in the profits of business as it could make them more money. An example of this is when stock is broken it decreases their profit because they can sell the broken products. Also if the business has many owners just like Tesco they will have an interest in things like the prices that the shares are currently selling for. The share prices for the business increase or decrease due to external and internal factors such as Brexit. The workers at Tesco will be interested in becoming a stakeholder for Tesco as it gives them opportunities to try and get things like promotions and pay rises. Also things like minimum wage need to be paid to the employees so they are paid a fair and legal rate.
The Costumers of Tesco could potentially want to become a stakeholder for Tesco as it offers them more chances to give their feedback to Tesco on things they believe are good and other things that require improvements such as customer service. Another reason why they might do this is to gain a greater knowledge about their local supermarket like how the business functions on a day to day basis which includes things such as the opening times and they could give their feedback on how these times are either are useful or need to be adjusted to be more suitable for the customers and local community. Also as a customer who is looking for a potential job with Tesco it is an easier way to try and out the employees working conditions and how they are treated.
The Government will have an interest in things such as how much environmental pollution is being produced by the company. The pollution is produced in things like the warehouses and when the stock is being transported. Additionally, the service that they provide for their customers to have their shopping delivered to their house creates even more air pollution.
The Government will be interested in this as they need to insure the business isn’t exceeding the maximum limit for the amount of co2 they are allowed to create. The government might also be interested in things like if the business is being ethical and not selling illegal products but also to make sure that items that have age restrictions such as console games and alcohol are sold with ID.
The Local community will have an interest in being a stakeholder because of the increased amount of traffic in their area. Also if somebody in the local community wants to sell their house the value may have now decreased or increased due to the amount of traffic. Another reason that it could potentially decrease is due to the local supermarket potentially being within viewing distance which creates visual pollution. On the other hand, it could be a positive as the local community will now not have to travel as far to go shopping which could also increase the value of the house.
The local community might want to move house however the value of their current house has been reduced due to the area being made busier and traffic will increase around the area. Also the local community will have an interest as the government might build new roads make it easier for customers to access the shop which would create a lot of noise and more traffic. Also for people that are potentially looking for a job the working hours and the different job roles available would interest them.
The Employees of Oxfam will have an interest in becoming a stakeholder for Oxfam as the opportunities such as gaining a promotion which could mean that they get more freedom and responsibilities in their job. Additionally, they would want to be treated and paid fairly if they are in a paid position as they would expect to be paid at least the minimum wage.
The Government will have an interest in things such as how much environmental pollution they are producing in their warehouses and the transport of their products and goods etc. The government might be interested in these types of things to insure the business is not going over the amount of greenhouse gases and pollution they are producing. The government might also be interest in things like the business being ethical with the prices they pay and meaning if there selling illegal stuff but also to make sure that things alcohol and cigarettes are sold with ID.
A Financier will have an interest in Oxfam to try to get their return on their money that was put into the business. In this case it will expect to see an improvement in whatever the money is going towards. But also, if any loans were taken out they would also be expected to repay the loans by becoming a stakeholder.
Pressure groups will have an interest as they agree with what Oxfam are doing as a business and would like to help to try and help them grow and therefore help more people. Also, they could potentially want to get Involved with the business and help them.
Communication with stakeholders
Communication with stakeholders means how the company try to inform their stakeholders with messages that is relevant to them and will affect them. It generally means that some kind of change is happening for example it could be a special offer that is included in an advert etc.
Tesco communicate with their stakeholders using a wide range of ways as they have a lot of stakeholders they need to try to communicate with and inform of any information that is happening. One way that Tesco communicates with its suppliers is through order forms. They do this because it is much easier than oral communication also because it is easier not to get the orders and supplies they need next day mixed up. An order form is two-way communication with external suppliers. They also could communicate through emails, phone calls and oral communication between them. An order for is written communication meaning the response would take longer meaning they delivery would take longer to be processes
Another way that Tesco try to communicate with their investors is that they have to submit their annual report to them because it provides information on the company’s fiscal year and it also helps to break down to the investors how the business has been preforming by including things such as the balance sheet, income statement, financial summary and cash flow statement. These show how much money has gone in and out and helps to show where things need to be changed and improved.
Another form of communication that Tesco use is in the form of letters. Letters are among the most common for Tesco to use as they are direct and can be easily adapted to the issue that is being addressed as they will have a basic template that will be changed accordingly. Letters are written one-way forms of communication because they will not get an instant reply. Tesco use letters for a large range of reasons which include things such as replying to letters of complaint and addressing, changes to an employee regarding personal subjects like wages and being superfluous to requirements. This is because it makes it as professional as possible and helps to create a good reputation of the business.
Some ways Oxfam are able to communicate with the local community is through letter billboard and leaflets through the post. Oxfam use leaflets that post through people door because it’s a quick and simple way to let people know what they do and try get more donations. A leaflet is a form of one-way communication meaning the response they get from the local community could be slow. It is a written form of communication making it look more sophisticated. The local community are external to the business meaning it is external communication.
Some ways Oxfam communicate with the financier is through a letter. Oxfam might use a letter use business use to make it look more sophisticated when they are asking for more donations. They could also possible communicate with a financier through email or a phone call. However, using a letter, it makes Oxfam look more professional as a company. A letter is written communication making it more direct to who it may concern. A financier isn’t within the company meaning it would be external communication which is one- way communication.
Someway Oxfam could communicate with the government is through a phone call email or a meeting. Oxfam might have a meeting with the government simply to discuss what they are doing and how they are making a change but also so they can discuss the amount the government are giving to fund Oxfam. A meeting is two-way communication as they would get a response straight away as a meeting would use oral communication. The government are not within the company meaning the communication between Oxfam and the government would be external.
there are many ways Oxfam can communicate with the pressure group for example a phone call, presentation meeting or a letter. Oxfam might write a letter to the pressure group to discuss any disagreements or issues they might. A letter is a formal way of direct communication between Oxfam and the pressure groups. A letter is two-way communication meaning the response will take a while because they need to receive the letter first. Pressure group are external meaning the communication is external and it is written communication.
Tesco is a tall (hierarchical) organisational structure. A tall structure contains many different levels of management this is because the span of control is narrow. Due to so many levels of management means there are many opportunities for promotion. Communication within the organisation would be poor simply because the line of communication is long. this means that because there are so much management they would have to go through many different departments just to get approval on changes to the business. Some advantages of a hierarchical structure are employees are able to see the different levels of leadership within the organisation and different levels of responsibility also employees become loyal to their department meaning that the department will be stable. However, some disadvantages are arguments between each different section of the company (departments) as they choose ideas that befits their department mainly. Salaries for multiple layers of management increase an organisations cost and the budget will exceed the limit. Tesco has around 476,000+ employees in 2017 alone. As it is shown in Figure 1 below, Tesco organisational structure is constructed with five committees reporting to Tesco PLC Board. 11 members in Tesco Executive Committee are led by Group Chief Executive Dave Lewis. Tesco organizational structure chart is highly hierarchical showing its wide business scope. The figure 2 shows is an organisational structure chart example at store level. It’s often questioned that four layers of management within a store can generate annoying bureaucracy with a bad effect on coordination and collaboration among managers. So it’s suggested that reducing layers of management must be done as soon as possible to create more flexibility and faster flow of information.
Oxfam has a flat organisation structure. A flat organisational structure has a few or no management levels between management and staff. For employees this means there’s not many opportunities for promotion however, there is and increased amount on involvement within decision making. The span of control for Oxfam is wide meaning there’s not many managers or higher job roles available. The lines of communication are short meaning communication between staff and the small amount of management will be strong. Some advantages of a flat organisation are Less management meaning less salaries to pay reducing the organisations budget costs. On the other hand, Oxfam has a flatter structure because they don’t need as many employees as Tesco does. Because they don’t have as many paid staff, their costs would be much lower. It would also mean that there would be a smaller number of managers, so they would have the responsibility of a large number of workers for the charity, which means that the staff wouldn’t be supervised as much because the manager has a much wider span of control. This could make the workers feel that they have much more responsibility too which could make them more productive. However, because Oxfam has a flat structure, they could possibly have more than one boss of an area. In figure 3 it shows the many different departments that Oxfam have however Oxfam mainly have volunteers. And how many employees or volunteers they have across worldwide which shows where the jobs are needed and which jobs are employees that are payed or voluntary work, also that there is only 2 layers of management.
Some of the main functional areas are marketing, customer services, HR (human resources), security department and sales. The role of marketing is to promote the business in ways such advertisements on billboards. Within in a business such as Tesco they would look at things like conducting research and analysing data to identify and define audience to see which way they can promote the business to attract the attention to their primary audience. Also Oxfam marketing would maintain their social medias to see if it is attracting people and if they are helping. Marketing would promote evens they are happening soon to gain a bigger audience within the organisation. Another functional area is finance. Within in finance they look at the taxes investor relations and Treasury, UK Finance. Within in Tesco the finance department would look at thing like the delivery’s and where they are losing money and would compare it to different months to see if they are able to save money. However, in Oxfam they would look at things like the increase or decrease within donations which would help marketing to see if and where they need to promote the organisation. Within the functional area of customer service, some of the responsibilities they have is dealing with customer’s questions and refunds if they need one. Tesco would use a customer service department as most of their communication is verbal. Whereas Oxfam only has small shop in places like a high street so they couldn’t have a set department as such the staff they work at the checkout would help the customers with what they need. A functional area such as HR (human resources) in an organisation such as Tesco they would organize event to keep staff motivated such as staff appreciation week. Some advantage of this is that