The Private Sector - Business Environment

...

Public Limited Company (plc) – The business must have a share capital of £50,000 and shares must be made available to the public to purchase via the Stock Exchange. It is therefore owned by the public but run by an elected Board of Directors. An example of a Public Limited Company is Tesco plc, a large and international food retailer. Founded in London in 1919 their main purpose is to retail food and other products to the public. “‘Serving Britain’s shoppers a little better every day’ ”. “As a business, serving customers is at the heart of everything we do – from colleagues in our stores to those of us in supporting roles in the UK, we serve some 66 shoppers every second, so it’s our goal to ensure every one of those customers experiences just a little better service on each visit”.[2]

Franchising is where an individual or group of people can set up a new independent business by buying the right to copy a known business format and set up in a particular location. Often this is less risky as it allows a person to run a business selling a known commodity with a proven popularity. An example of a franchise is Subway which is a high street sandwich shop with over 2000 stores in the UK and over 44,000 stores in 111 countries.

Co-operatives are businesses that are owned and controlled by their members who can be customers, employees, suppliers etc. The main purpose of this type of business is to promote values such as equity and solidarity as set out by the International Co-Operative Alliance. Members are able to purchase shares and as with any business the aim is to maximise profits but these profits, if not elected to be re-invested back into the business, are passed back to the members. However they must also “share internationally agreed principles and act together to build a better world through co-operation”. [3] An example of a Co-operative company is Smile (the trading name of the Co-operative Bank), an award winning online commercial bank, which quotes “Our unique Ethical Policy covers five key areas: Human Rights; International Development; Ecological Impact; Animal Welfare; and Social Enterprise” and “Committing to provide finance to those organisations making a positive community, social and environmental impact”[4]

The third and final sector, the Voluntary Sector: often referred to as the ‘not for profit’ sector, encompasses both voluntary organisations and registered charities. Both are similar in that their main purpose is to help the less fortunate by raising awareness, campaigning and fundraising in order to raise money by way of donations.

An example of an organisation within this sector is The Royal Society for the Prevention of Cruelty to Animals (RSPCA). An animal welfare company which introduced a law with the sole purpose to “protect animals and we work hard to ensure that all animals can live a life free from pain and suffering”[5]

All three of the above different types of business organisation can also be described as one of another three types which are:

Primary: businesses that fall into this category are involved in the growing or extraction of raw materials such as corn or oil.

Secondary: businesses that are involved in the transformation of what is produced by the primary sector.

Tertiary: businesses that are involved in the provision of services or selling of goods created in the primary and secondary sectors.

Example: A farmer grows corn (Primary Sector) and sells it to a cereal manufacturer who creates cornflakes (Secondary sector) who sells them to a supermarket for selling onto consumers (Tertiary sector)

There are two further and lesser known types. These are the Innovation Sector whereby products are invented, developed and licences sold to the secondary sector for production and sale to the Tertiary, the Quaternary sector that provides knowledge based services including business consulting, research and development and financial planning services for the public or other businesses.

Describe the extent to which an organisation meets the objectives of different stakeholders

A stakeholder is anything or anybody that has an interest in or is affected by a business. All organisations will have a number of different stakeholders some of which will have more interest and/or power than others and these are categorised as follows: primary and secondary or internal, external and connected.

As an example WM Morrison’s Supermarkets PLC (Morrison’s) is a public limited company with over 500 stores nationwide. Examples of WM Morrison’s stakeholders are:

- Shareholders – as a Public Limited Company the owners of this business are shareholders. To meet the objective of its shareholders Morrison’s must ensure profits are maximised and value of the shares does not decrease (expect under circumstances outside of the control of the company).

- Employees (at all levels from management to shop floor staff) - Morrison’s employ some 117,000 employees which they refer to as colleagues. Morrison’s meets the objective of its employees by offering highly competitive salaries, share save schemes, profit shares and a staff discount card.

- Customers – As with any business, Morrison’s needs its customers as much as customers need the products and services it provides. Morrison’s attempt to meet the objectives of its customers by having a written strategy listing 6 of its priorities which are: Being more competitive, serving their customers better, finding local solutions, introducing popular and useful services, simplifying and speeding up service and making the core supermarkets strong again by improving the shopping trip for customers.

- Suppliers – As with customers, a business needs its suppliers as much as the suppliers need a business. Morrison’s need to be able to purchase goods and services to sell on to its customers and suppliers need Morrison’s to sell their goods enabling them to earn a living and produce more goods for sale. Morrison’s attempt to meet the objectives of its suppliers especially in the UK by sourcing 100% of branded and fresh counter meat and as much as possible of their fruit and veg from UK farmers.

- Local community –As a supermarket Morrison’s meets the objectives of the local community by providing jobs often to those living locally. These employees will, in turn, spend some of their wages locally thus adding to the economic prosperity of a community. Some of the produce sold will be locally sourced as per Morrison’s