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ASSIGNMENT A/C Cross

referencing

Contents
Introduction 7
Task 1 8
LO1 8
AC 1.1 8
AC 1.2 10
AC 1.3 11
Merit 13
Task 2 14
LO2 14
AC 2.1 14
AC 2.2 15
AC 2.3 16
LO3 18
AC 3.1 18
AC 3.2 19
LO4 20
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AC 4.1 20
AC 4.2 22
AC 4.3 23
Merit 24
Task 3 25
LO5 25
AC 5.1 25
AC 5.2 26
LO6 28
AC 6.1 28
Conclusion 29
Reference 30
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Introduction
The whole report is focused on the act of business operation which is considered for future changes of the
business organisation. The activities needed to be done on a daily basis in order to create value to earn
profit are considered as business operation. To have an effective business operations strategic planning,
design, business intelligence and an initiative execution is needed as it leads to a successful business. The
main purpose of this report is to analysing business environment with the help of the creative decisions
and business handbooks so that it can bring success to the business. The various functions of accounting
and how importance the term of customer services in a business and how to control the business systems
and functions properly will be analysed in this report. The Budgeting system and the variability between
different structures of the business will be discussed in this report with the analysis of the differences
between private, public and voluntary sectors. Importance’s of business planning and what are the steps
of business planning with stages will be figured out in this report.

Task 1

LO1

AC 1.1
The common functions and division of the organisation gives a proper working field and get an expected
achievement of the business objectives (Cram et al., 2020). These structures and division show the
direction of every step to control and align the workforce. There are some common function and division
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which are given below.

Common function and divisions in the business organisation
Production
The goods being produced by the method of turning raw materials that is, inputs into output which is
finished goods or products in a manufacturing process (Cornwell et al., 2019). Production varies
according to the service that a company provides.

Research and development (R&D)

The R&D helps a company to take attempt to introduce new products and services and make innovative
things (García de Soto et al., 2019). It works for the welfare of the organisations. With this process an
organisation can gather new knowledge which helps to establish innovative ideas, strategies, technologies
(Andreoni and Chang, 2019). It continuously researches for customer’s choices and helps to bring
products and services. Mc Donald’s are customers taste and tries to bring foods according to their
preferences (Andiola et al., 2020). It has more than 1270 restaurants in the UK.

Purchasing

Purchasing refers as buying goods and services. It gives the proper idea about equipment, materials,
supply of goods, production and sales process (Baur, 2020). It gives an organisation a proper
prediction in demand of supplies. It focuses on pricing, buying the right thing with good quality at the
right time. An effective purchasing helps to lower costs, maintains good quality and manage the
levels of risks to its supply chain (King et al., 2019). Chartered Institute of Purchasing and Supply
(CIPS) is providing training to improve the effectiveness of purchasing and supply.

·Marketing

Marketing is meeting the needs and wants of a customer. It is a process by which an

organisation can earn profit by fulfilling its customer’s needs. Advertising, market
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segmentation and product development all are included here which helps to manage the
workforce of the organisation. Marketing and advertising acts as a very powerful force that
provides information to people about products and its uses (Bashir et al., 2019). Marketing
and advertising can change people’s perception about any products. It also can engage
customers on such issues that are matter to them. An example can be given- “Dove”
Campaign for Real Beauty challenges current stereotypes about beauty.

·Accounting and finance

Accounting and Finance are necessary if an individual want to start a business. Cash Flows,
budgeting and others are tracked through these. Besides-

 Accounting and finance help to keep records and analyses business activities.
 Identifies from which sources cash is inflowing or outflowing.
 Helps to make better decisions and able to avoid failure.
 Avoids legal problems

Financial reporting helps the owner of the business to communicate with the internal stakeholders.

AC 1.2

Company structures are mandatory for evaluating working process to planning within an organisation
(Zaware et al., 2020). Organisational structures are considering with different types of function and
workforce. Briefly explain organisational structure with example:

Different Organisational Structures:

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Hierarchical Structure:

Employees are divided into a ranking system. The top management of organisation take decision, passing
to others and evaluating their performance. In this structure, the company director analysis current
situation and make a relevant decision and gives orders (Holden et al., 2019). On the contrary, employees
who are in low position make the implementation of the direction by following the director command.
For Example- Jonathon can make a hierarchical structure into his business to have the power of command
with the employee.

Functional Company Structure

This is the most common structure in modern business which is made by groups within the employees in
specific area. Employees are bound to do work under a supervisor or manager where managers take the
command from the CEO of the organisation (Barratt et al., 2020). Like Tool Box make implementation
by controlling their organisation structure. They divide the groups like marketing employee group,
finance group, accounting group.

Flat Structure

A flat structure limits the levels of administration in a way that all staff are in vicinity to a degree of
administration. In such a structure, there are exceptionally few levels of status, with a few indeed showing
no set levels. Representatives will be given their key obligations and create work in-line with their skill,
giving representatives the chance to gotten to be progressively included in all action and have an impact
over decision-making forms as a result (Bajard, 2020). For example: If the tool box wants to spread their
business they can use flat structure. Jonathon will control the business properly by dividing some
segmentation of his business with the help of flat structure.
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Figure 01- Flat structure

Source- (Coelho-Sampaio et al., 2020)

Matrix Structure:

Depending on situation all employee bound to report double relationship with bosses in this structure.
Regularly, this takes the shape of utilitarian announcing and product-based announcing. For example: An
employee works for one manager but when an unused extend emerges where they’re required, they’ll at
that point got to too report to that project’s director as well.

Differences among structures

Matrix structure is based on dual administrations systems and do not require flexibility in the
communication where in flat structure, communication is very easy and flexible. In functional structure,
people are placed well in the organisation but communication gap between departmental heads can bring
chaos but there is single administration system in this function which is different from matrix structure. In
matrix structure, the error can be reduced because of dual checking of every work where in flat structure,
error can be find.

AC 1.3
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There is noteworthy difference between public, private and voluntary sector of organisation for business
strategy. The key differences can be figure out by determining their business policy.

Public Sector:

This sector works for public security and ensures the peaceful life within a community. They are not
focusing the profit. Their main plan is taking care of the community. For example: CPS is a public sector
which is handling criminal cases. The Crown prosecution Service (CPS) prosecutes criminal with the help
of police and other institution (Wang et al., 2019). On the contrary, public limited company’s main
objective is gaining the profit from their shareholders. In rules and regulation, shares will distribute a least
amount of share capital to the shareholders.

i) Main objective: Public sector main purpose is ensuring a better life. CPS (PLC) main
objective is to secure community from the crime and serve a better security around
the society.
ii) Organisational Structure: There has diverse organisational structure in public sector.
Functional company structure is the most usable in this sector. Because, government
can take decision and give order to others.

Private sector

The private sector contributes a country’s wealth. Their main intension is making profit. Their main
objective is to lead market place and retain customer to get long term profit (Hansson et al., 2019). For
example, McDonalds make fast food and get attraction to the people in order to get more profit.

i) Main objective: Their main objective is getting a better position in the market place.
They prefer to get more popularity with their best effort and attract the new customer.
ii) Organisational Structure: Private limited company has used the matrix structure
which is different from functional and flat structure. They likely to communicate and
good relation between boss and employee.
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Voluntary Sector

Voluntary sector refers to the activities that money raised or earned by a company invested into the
community or the organisation itself. For example: Age UK hammersmith and Fulham works with older
people to take care of them.

i) Main objective: Their main objective is helping needy people with effective support.
Now a days, Age UK hammersmith and Fulham set the objective to provide the covid
vaccine to the oldest people.
iii) Organisational Structure: In this sector voluntary company made by some selective
trustee bodies are consider more voluntary fieldwork. So that those trustee members
can take decision and command it.

Merit

The advantages of functional organisational structure are employees are placed in an appropriate position
according to their skills. They are following a good chain of command and accountability. Specialism is
seen here and a group of employees focus on special area for task. The major disadvantages of this
structure are the willingness of the departmental heads that they work with their own formation which can
be contradicted in many areas. The advantages of matrix organisational structure is it elements the
percentages of wrong activities because one employees report more than one bosses and the work is over
checked. The major disadvantages are its dual administration system. As there is no middle management,
the decision making criteria and reporting system is very fast and flexible here in flat organisational
structure (Coelho-Sampaio et al., 2020). The department heads are focussing on their personal
departmental improvement rather than company’s objectives sometimes and there is seen lack of
coordination among departments too, which are the disadvantages of this structure.
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Task 2

LO2

AC 2.1

Key concept of accounting refers as a direction when the accounting situations occurs. Accounting
concept is useful for day to day life to know the term and condition within a business.

Range of Accounting Concepts

Turnover

It is a concept where the company knows how quickly a business runs. Turnover used for knowing
how fast the accounts collect cash receivable. With this accounting concepts, company who have high
turnover that means their operating technique rates are high.

Cash flow

It means a company’s net amount of cash going in and out. It evaluates the limit of cash divide into
stakeholders for investing in new project (Hörisch et al., 2020). For example, Jonathon controls the
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cash flow of Toolbox for investing new project and provide dividend fund to the stakeholders.

Benefit and Misfortune

The benefit and misfortune articulation could be a budgetary articulation that summarises the
incomes, costs, and costs caused amid an indicated period, ordinarily a financial quarter or year. The
benefit and misfortune articulation are synonymous with the wage articulation. For example: When
anyone evaluates the financial sector, he will see the company’s benefits and misfortune.

Break Evan Analysis

It determines that how many products must sell for no gain no loss situation. The break-even point is
considered a degree of the edge of security. For example, a company must know how much sell will
give them profit and avoid loss.

Assets

An asset could be an asset with financial esteem that a person, organisation, or nation owns or
controls with the desire that it will give a future advantage. Assets are the wealth of an organisation.
For example: Jonathan used their assets to get a further asset which is machineries, place and other
fixed things.

Liabilities

It is financial requirement of company which is company’s future economic benefits. The foremost
common liabilities are ordinarily the biggest like accounts payable and bonds payable (Christophers,
2019).
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AC 2.2

In a business, stakeholders are the most priority list of others if they maintain the business. They
properly control the whole organisation by evaluate profit and loss and suitable position in share
market. Briefly explain the interest of stakeholder in Toolbox business.

Stakeholders who have interest on organisation’s financial state

Owner of the business

Owner is the head stakeholder who has highest value in interest of the company. Jonathan owner of
the Toolbox can analyse his business profit and losses properly (Fitzgerald et al., 2019). It may help
to maintain good relationship with owner and stakeholders.

Trade creditors
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A trade creditor may be a provider that gives products and administrations to its clients on credit
terms. The sums owed are expressed on the adjust sheet of a client as a current risk, and on the adjust
sheet of the exchange lender as a current resource (George et al., 2019). In Toolbox, stakeholder who
are trade creditors managing market share, financial statement and provide decision for the next
work.

Investors

Investor are also involved in financial statement to receiving financial returns. Toolbox can have
investors to analyse previous records as well as recent market shares for financial investment to gain
profit (Morkunas et al., 2019).

AC 2.3

The business budget provides information about the company’s profit or loss. The structure of a company
comes from history of the business forum. The business budget of Jonathan’s Toolbox is:

Information provided by business budgets

Income Actual Budget Difference

Operating Income

1st Quarter Sales 45,400 46,000 -600

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Unit no: 3.23
Unit title: HOW BUSINESSES OPERATE
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