In this assignment I will explore the features of different businesses and analyse what makes them successful. The two businesses I have chosen are Coca Cola and the non-profit business Oxfam. I will also be investigating how businesses are organised.
Coca Cola is a public limited company meaning that the company’s shares are placed on the stock exchange meaning anyone is able to buy them. This means that Coca Cola are owned by all the different shareholders which can be thousands of people. Also investors will own part of the company. Coca-Cola is a public limited company with its shares being sold on the stock market. In 2010 Coca-Cola was record as having the largest stock on the market being sold.
The advantages of Coca-Cola being a public limited company is that the company is able to exploit opportunities in the market as soon as they arise. This means Coca-Cola are able to change their products for the customers’ needs and wants. In addition to this the business is allowed greater freedom and flexibility to finance their growth and development. For Coca-Cola this means that they can invest into what they want with how much they want. Another advantage is that Coca-Cola can produce more capital as being a PLC it means they can sell their shares through the stock market. Coca-Cola can have more investors and more money put into the company to develop more products due to their capability to sell shares on the stock market. Also the increased capital means that Coca-Cola is able to grow and diversify. This is a benefit as they can increase their brand awareness and consumer loyalty. Another positive is that Coca-Cola has limited liability as a PLC and this means on a set amount of things can be taken if Coca-Cola were to go into debt. This is due to the thousands of shareholders they have.
Even though there are many advantages of owning a PLC there are also alongside this disadvantages. These are that the formation and running costs can be expensive as there are many roles within the company and the shareholders will also get a take of the money earn by the company each month. The reason there are many roles is that due to the nature of the business they need different sectors of the business to be separate for example the deign team and the manufacturing team won’t work in the same office as one would be in a factory. Another con of owning a PLC is that decisions are made slow as they have to go through many departments before the decision is finalised. A major disadvantage is that if something goes wrong in the company the whole public knows about it and this could damage reputation and customer loyalty this is because they If someone goes on the stock market and buys the majority of the shares they can take over the company and it could be theirs this is a disadvantage for the owners of coca cola as their position can be taken and them become redundant. An overall disadvantage is that the shareholders only want to make money and in doing this is causes the company to lose track of its other objectives as the company will focus on ensuring the shareholders are satisfied to keep their money being injected into the company. This could run the company and reduce the profit made depending on the objectives. For example, if an objective is to increase customer loyalty and satisfaction this could be failed if the shareholders decide to raise the prices of the product which would reduce consumers.
Limited liability is where if a company goes into debt, to pay off the debt only things the company owns can be taken away to repay the debt. This is a safer option as your personal belongings cannot be taken.
Unlimited liability is where if a company goes into debt, to repay the debt anything can be taken not just things the company owns, your personal belongings can be taken away to make sure the debt is paid.
Coca-Cola have limited liability meaning a set amount of things can be taken if the company goes into debt as the company is public. This means as Coca-Cola is a public limited company it is owned by shareholders. This gives Coca-Cola the ability to sell its shares on the stock market for anyone to buy, this creates many potential opportunities for greater finance to be raised.
The advantages of having limited liability is that if your company gets sued you’re bank accounts, real estate and personal belongings will be safe and only items the company owns can get taken away. This means at most you can only use money you put into the business. Another advantage is that the revenue the company makes is classed as personal income on tax laws and the money will not have to go through government taxes which LTD have to.
On the other hand, there are disadvantages of having limited liability. One of these disadvantages is that the company will have higher fees compared to that of a company which doesn’t have limited liability. This includes an annual fee each year that needs to be paid. Also even though you can avoid government taxes on the revenue your profit has to go through the countries income taxes which could end up being more than if the revenue was to go to the business.
The purpose of Coca-Cola is to refresh the consumer with low health complications. Coca-Cola try to keep customers loyalty with a sweet taste. They sell different drinks for different purposes. For example, their smart water drink, which has the purpose of rehydrating the brain ready for learning. However, their coca cola drink is to refresh and taste sweet on a day out or in the house.
Coca-Cola work in the private sector as they do not receive funding from the government. As they are a PLC this means they will receive their funding from stakeholders and shareholders and foreign investment. Coca-Cola will operate in the secondary sector as they manufacture their own product. Coca-Cola is also in the tertiary sector as they provide a service as they sell their product, which is a soft carbonated drink.
Scope of activities
Coca-Cola sell soft drinks along with carbonated drinks. Also, they have many different drinks they sell as they own many companies. They have many different brands of drink that they sell worldwide. They sell them in shops everywhere in smaller cans or bigger bottles and almost every corner shop will sell the coca cola drinks. Coca-Cola only sell refreshments however they own most brands such as Fanta, sprite, coke and smart water.
Coca-Cola is a worldwide business with the Coca-Cola Company being the world’s leading soft beverage company, with over 500 sparkling and still options. Coca cola currently has the strongest portfolio of all the non-alcoholic beverage brands- as they have 21 brands that generate over US$1 billion in revenue per annum. Coca-Cola across the whole world have 71,000 employees.
Organisational structure of the Coca-Cola Company has separate international division structure as their international staff operates separately and in isolation from the head office. They have various divisions in various continents around the world with presidents that control each continental division. In the company Coca-Cola they have 5 different international divisions that work separately they’re; Eurasia and Africa group, Europe group, Latin America group, North America group and Pacific group. Within Coca-Cola they also have 6 functional departments and these are; marketing, finance, packaging, sales, research and development and finally administration.
Coca Cola has 3 company mission and they are; “To refresh the world in mind, body and spirit.” “To inspire moments of optimism and happiness through our brands and actions.” “To create value and make a difference.” Theses missions is what they try to accomplish all year round.
Coca Cola also have many visions that that want people to inspire each other to be the best that they can be. Coca-Cola have aims for profit as they want to maximise long-term return to shareholders while being mindful of our overall responsibilities. Productivity is to be a highly effective, lean and fast moving organisation.
Values- leadership, integrity, accountability, passion, diversity and quality. These values mean a lot to Coca-Cola and they want everyone within the company to follow and exceed these values.
Aims and objectives
Objectives for Coca-Cola are to be globally known as a business that conducts business responsibility and ethically to accelerate sustainable growth. Coca-Cola have aims for profit as they want to maximise long-term return to shareholders while being mindful of our overall responsibilities. Productivity is to be a highly effective, lean and fast moving organisation.
Reason for success
Reasons for Coca-Cola’s success is that their marketing campaigns are strong and attract many consumers and they have also always been successful in the way their brand gets promoted and what the brand stands for. For example, one of the marketing campaigns they use is that they put large vending machines in three London stations that will dispense free t-shirts and bottles of free coke. To get the two items consumers will have to tweet Coca-Cola’s previous slogan of #choose happiness. Even though it is costing Coca-Cola a lot of money for this promotion, people enjoyed it and a positive image of the Coca-Cola brand grew.
Oxfam are a non-profitable charity which tries to help countries in aid after a natural disaster strikes. They will go out to the country and supply the locals with the basics things so they can survive and get through the aftermath of the disaster.
Oxfam is an international organisation, which consists of 14 organisations working in over 100 countries. In the charity Oxfam, there are 12 trustees who are made responsible in the eyes of the law of charities as they have many experiences and skills that enable them to undertake the responsibilities of a large complex charity.
Oxfam is a charity and this is important to remember when it comes to liability, as there are not a public company, nevertheless there are still responsibilities and rules that need to be followed by the board of employees and trustees. Members/donors make the responsibility.
Oxfam’s purpose is to help and be working with thousands of local partner organisations, to help people living in poverty, and to exercise their human rights. Oxfam as a whole is purpose driven results and focussed approach means they take full responsibility for their actions and hold themselves accountable. Also they believe that others should also be accountable for their actions as well.
Oxfam work in the private sector this means they find their funding privately they work to increase the investment to ensure that can do what is needed of them. They want to do this to enable and ensure that the economic growth of the charity is increasing so they can evenly distribute money where needed. They work in the tertiary sector as they offer as service. They help developing countries worldwide come back from natural disasters that occur.
Scope of activities
Oxfam have many charity shops where they receive donations of clothes, housing items and many other things to then be sold to raise money so they can then provide the countries in need with the basic requirements for survival. They will also go out to the country in need and help the locals by giving them shelters to stay in until their houses can be rebuilt.
Oxfam is a large charity with over 250 employees meaning they’re on the international stage of companies as they help places in need of aid but can’t afford to do it themselves. All workers for the charity are volunteers to ensure the charity can put more money towards the countries in need of aid. Oxfam mainly operate in developing countries that are in need of help soon after a natural disaster happens.
Oxfam has a complex organisational structure, as they are a global organisation. It splits into central, north, east and west. This shows the range that the charity has and that they do not stick to one area they try to help all areas. It also shows that the span of Oxfam is too big for the chart, even though this is beneficial for Oxfam as most of their employees are volunteers so it will not cost Oxfam a big amount of money.
The functional areas of Oxfam are a good way for the charity to be organised, as employees will be able to see whom they can report to in their department. Oxfam believes in empowerment as their approach means that everyone who is involved with the charity Oxfam from their staff and supporters to people living in poverty, have the right that they should feel that they can make a difference and change their lives.
They strive to be open to everyone and embrace diversity. Oxfam believe everyone has a right to contribute to make the world better, regardless of visible and invisible differences.
Stakeholders are people who take an interest in the company. There are two different types of stakeholders, internal and external. The types of stakeholders you can get are:
• Staff and employees
These can be broken down in internal and external stakeholders. Internal stakeholders are people who are within the business. External stakeholders are people who are outside of the business but still take an interest in it.
Coca Cola’s shareholders will have their main interests in making profit and the growth of the share price. They have power within the business as the main shareholders will have a vote and elect the board of directors. This will influence how the company is run and the aims and objectives. This will intern effect the overall profit of the company. Shareholders are an internal type of stakeholder. The shareholders will communicate with the managers and directors, as they are the people who pick who they employ as the board. They would use emails too communicate. For example, when employing new manager/directors they will email the candidate an email of conformation of them getting the job. Shareholders will also communicate through yearly meetings. These are appropriate methods of communication as they are a good way of shareholders finding out how the company they are putting money into has done over the year.
The banks main interest would be to get paid back and maintain their credit rating. The power they can have will influence the financial side of the company as they can withdraw their financial backing, which would affect the company, as they will have less money to invest in the properties and machinery. Furthermore, the bank can enforce bank loan covenants, which means they have the right to call for you to pay the loan back when they choose. This will influence Coca Cola as if they have a loan they are budgeting to be paid back every month. This means they would have to make some cuts to ensure the loan is repaid when the bank would like it to be. If this happened, it would set back Coca Colas profit for the coming months until they can get back to the input and output they need to make a substantial amount of profit to ensure shareholders happiness. Banks are an external type of a stakeholder. The banks will communicate with Coca Cola through meetings and emails. Through meetings, Coca Cola can discus mortgages and leases on properties for storage of their supplies and product. This is appropriate, as face-to-face interaction is more effective at times, as a person is more inclined to accept rather than decline. In addition, they can communicate quicker and reduce the time consuming emails.
Directors and managers
The directors and managers main interest would be their own salary as they work in this job to make a living and ensure a good quality of life. This would affect Coca Coals output, as a person such as a director will want a high wage for his/her job. They would also hold a main interest in job satisfaction, which means they want to be happy at work and enjoy it when something good happens to the company. For example, if they meet the aims and objectives for the year it will make the directors and managers feel good within their job role and with the job, they have done throughout the year. Finally, they would keep a main interest in their job status, as they would like to keep their high role within the company as they have a massive influence over what goes on through the company. This would affect coca cola in the main path the company shall take for that annum. Directors and managers for coca cola will have an influence over the business in the fact that they will make all the decisions for the business and this will intern determine the outcome for the near future. Managers will also communicate with shareholders through annual meetings where they will address problems and successes throughout the year. Managers and directors will also communicate through emails to the employees to let them know what they should be doing.
The employees’ main interest would lie with their salaries, as they want to make a living. In addition, they would have an interest in their job security. This would be because they would not like to lose their job and if they did, the employee would have no source of income. They would have an influence on the coca cola company as they have control of the service quality and the industrial action. This would influence coca cola as if the employees were doing a bad job their sales would go down and the company would lose profit. The employees will communicate with the directors and managers via phone and email to discuss issues they run into when manufacturing the drinks and cans. This is effective as employees can also inform the managers and directors about the amount of drinks they have produced with a day’s work. This makes it appropriate as the managers and directors can tell the shareholders how the company is doing on production.
The suppliers will have their main interest in gaining long term contracts to ensure more profit is generated over the annum. In addition, they will be interested in the growth of the purchasing of their products from the company to gain added amounts of revenue per year. Suppliers have within the company as they decide on the quality of products given to the company. This could influence Coca Cola’s profit for that year as if the quality of the product given by the suppliers is poor it will reflect that onto Coca Cola’s product and they could lose customer loyalty. The suppliers will communicate with the directors through emails to discuss payment and timings of delivery. This is appropriate as the managers can have proof of the transaction and what is being said through the emails. So if anything was to go bad and they ended up in court Coca-Cola would have proof of everything that happened via emails.
The customer’s main interest would be in the service and product they are receiving from Coca Cola. This would then influence Coca Cola’s profit as if their customers are happy with the product it would increase customer loyalty and they would come back and buy Coca Cola’s product again. The customer would also care about the value for money on the product as the customer would not be happy and would not pay £1 for a 550ml can. If this was the pricing for Coca Cola cans the company would lose customer loyalty, as the price would be too high as other cans, the same size cost £0.55, which is good value for money. The influence customers will have over the company Coca Cola is the revenue and the word of mouth recommendation. This would influence Coca Cola, for example if they got a bad review through word of mouth, it would reduce their sales and thus their profit. However, if the review is good it would increase the sales and then their profit. Customers would communicate with employees on the quality of the product through word of mouth and making a review on the Coca Cola website. This is an appropriate was of communication as the coca cola company can make improvements to their product or service if it is needed. This will help Coca Cola as they can see if they are gaining customer loyalty or new customers.
The coca cola headquarters is located in Atlanta, Georgia and is part of a large complex. The community would have their main interest in the creation of jobs. As coca cola is a large company they would have many roles within their business and high skilled graduates would be looking to get a job within the company. The community would have an influence on the company with regarding the opinion on the business and this would affect Coca Cola’s reputation and then their profits. The community will communicate with Coca Cola through social media and press releases. They would communicate through social media as they can go onto Coca Colas website or pages on different platforms and address their issues or gratitude towards the company. In addition, press releases can be a way for the community to express their feeling about Coca Cola. This is appropriate as Coca Cola can have an employee attend the press release to take down notes and bring it back to the directors for it is be analysed. Also, Coca Cola will have a social media sector and they can feedback the comments to the boards.
The government would have a main interest in receiving taxes from the company and they determine the taxes meaning Coca Cola will have to pay the price they set. Also the government will have an influence in the funding they give to the company could differ depending on what state they based themselves in. For example, the tax laws could be higher in the state of California compared to the tax laws of Atlanta. The government will communicate with Coca Cola through the annual reports, as Coca Cola are required by law to send the government their annual reports to see if they are making the amount of money they say they are. This is too ensure that Coca Cola are paying the required tax towards the government.
Oxfam’s shareholders will have their main interests in making profit and the growth of the share price. They have power within the business as the main shareholders will have a vote and elect the board of directors. This will influence how the company is run and the aims and objectives. This will intern influence the overall respectability of the company. Shareholders are an internal type of stakeholder. The shareholders will communicate with the directors and managers as they elect the board of directors. This is important, as it will determine how the charity is run while they remain in power. In addition to this, communication with the directors is essential as the shareholders can decide on whom is employed in what sector of the directors.
The banks main interest would be to get paid back and maintain their credit rating. The power they can have will influence the financial side of the company as they can withdraw their financial backing, which would affect the company, as they will have less money to invest in the properties and machinery. Furthermore, the bank can enforce bank loan covenants, which means they have the right to call for you to pay the loan back when they choose. This will affect Oxfam as if they have a loan they are budgeting to be paid back every month. This means they would have to make some cuts to ensure the loan is repaid when the bank would like it to be. If this happened, it would set back Oxfam profit for the coming months until they can get back to the input and output they need to make a substantial amount of profit to ensure shareholders happiness and satisfaction with the work they complete in the countries in need of aid. As all their profit made is put into the next country in need of aid. Banks are an external type of a stakeholder. The bank will communicate with Oxfam through emails and word of mouth, as the bank can issue meetings to when loans will be paid back. However as Oxfam is a charity, it is unlikely that they will have loans taken out as they receive most of their income from government grants and fundraising.
Managers and directors
The directors and managers main interest would be their own salary as they work in this job to make a living and ensure a good quality of life. This would affect Oxfam output, as a person such as a director will want a high wage for his/her job. They would also hold a main interest in job satisfaction, which means they want to be happy at work and enjoy it when something good happens to the company. For example, if they meet the aims and objectives for the year it will make the directors and managers feel good within their job role and with the job, they have done throughout the year. Finally, they would keep a main interest in their job status, as they would like to keep their high role within the company as they have a massive influence over what goes on through the company. This would affect Oxfam’s in the main path the company shall take for that annum. Communication for managers and directors is highly important as they end of every year they hold meetings with the shareholders on how the charity has done over the past year. This is essential as the shareholders decide at the end of every year whether the directors will keep their jobs. In addition to this, directors and managers will need to communicate with the employees and volunteers regularly through phone calls, emails and meetings. Managers and directors will need to do this to inform them on where they will be station at for the upcoming year and if they are needed. On most occasions, it will be random as natural disasters are hard to predict, as some can be unexpected. Therefore, the employees and volunteers need to be free to be able to aid Oxfam in completing their promises.
The employees’ main interest would lie with their salaries, as they want to make a living. In addition, they would have an interest in their job security. This would be because they would not like to lose their job and if they did, the employee would have no source of income. They would have an impact on the Oxfam Company as they have control of the service quality and the industrial action. This would influence Oxfam as if the employees were doing a bad job their opportunities to help countries in aid would go down, the company would lose profit and trust within the communities, and they would not seek help from Oxfam in the future. Oxfam also have volunteers and their main interest would be to help the country in aid. In addition to this, the volunteers would not like their time to be wasted, as they are not being paid for their service. This would influence Oxfam as if they did not treat the volunteers correctly people would be reluctant to volunteer and help Oxfam out by giving them a service for free. Employees and volunteers would communicate through phone call, emails and word of mouth as the directors can inform the employees and volunteers they are needed and in what part of the world and for the duration they are needed.
The suppliers will have their main interest in gaining long term contracts to ensure more profit is generated over the annum. In addition, they will be interested in the growth of the purchasing of their products from the company to gain added amounts of revenue per year. Suppliers have an influence within the company as they decide on the quality of products given to the company. This could affect Oxfam’s quality of aid given to the country in if need if the products given by the suppliers is poor it will reflect that onto Oxfam’s product and they could lose customer loyalty. Oxfam will have suppliers, as they need donations for their stores to be able to sell and make money to give to countries in need of aid. They also have suppliers for the products they use to aid countries. The suppliers will communicate with Oxfam through emails as they can let Oxfam know when they have the product they need in stock. This is appropriate for Oxfam as they can have the knowledge to know who they will get their products from.
The main interest for Oxfam’s customers would be to get a cheap second hand item with a good quality behind it. Their main interest would be the quality as it is second hand and would be at a good and reasonable price. In addition to this the money would all be going to a good cause. The customer would have a massive influence on Oxfam, as without these sales and donations they would not be able to do the work they do for the countries in need of aid from them. The customers would communicate through social media and word of mouth, as they would interact with the volunteers in the store when buying products. Also through social media as they can make reviews on the service and the quality of the product they bought.
The community would have a main interest in the work Oxfam are trying to do is environmentally friendly and will help them get back to the state they need to be in after a natural disaster hits. In addition to this the community would like to feel like they are still in control and not getting overrun by the company. The community has power in the business in that they can reject the aid offered which would damage Oxfam’s reputation and could then mean Oxfam won’t be asked to help the aiding countries next time. Oxfam also has a shop and the community has control over their sales as Oxfam ask for donations so they can sell these items to generate money, which would then be spent on the countries in need of it. The community would communicate with Oxfam through social media, as their stores will have an effect on the local area. The community can write reviews on Oxfam through Facebook this could either have a positive or negative impact on Oxfam. This could affect Oxfam’s reputation as if the review is bad, they would have to move their store to another location. However if it was a good review Oxfam would be able to expand their stores and have more in more locations.
Due to Oxfam being a charity they do not need to pay taxes as the money they get they give to others in need of the financial backing. Every charity is a non-profit company. This affects Oxfam as every drop of money they earn and that gets donated they get to keep so they can build useful resources such as water fountains and shelters. The government would communicate with Oxfam through emails. As they would let Oxfam know where they can build water fountains and shelters. This is an appropriate way of communication as they can have include attachments of data and other important information that are put into documents. It helps Oxfam justify what they are doing and ensures the government knows what is happening.
Oxfam has a tall organisational structure. A tall structure is where there are many levels that include managers and supervisors. In addition, more jobs roles include more rules and less creativity. In a tall organisational structure, where they have multiple managers due to the hierarchy, each manger has a small span of control where they are only the boss of a small group of employees.
The communication in a tall structure is clear. However, this makes it very slow to make decisions, as the message has to go through everyone before reaching the director who can finalise the decision. This is due to the decisions needing many employees approval before reaching the director. In addition to this, communication is usually moved upwards in a chain of commands through the management chain, which is where the message will go through managers and employees first then to other departments. This will affect the communication between the different departments that could possibly cause issues for Oxfam as some vital information could take a while to get to the person it needs to for the issue to be resolved.
The advantages of having a tall organisational structure is that the company will have a clear management structure. This is good for Oxfam as their employees and volunteers know whom they need to address to when something happens in the company good or bad. In addition, another advantage is that there is a clear progression and promotion ladder. That is great to have, as employees know how they can be promoted and to what position. This will cause no confusion as employees have a clear view on the roles they can grasp. Finally, in this organisational structure there are very clear responsibilities. This is good for the company, as everyone in their roles knows exactly what to do. This is also good as it means employees can have no excuse as it is clear what they have to do in their roles.
The disadvantages of having a tall organisational structure is that they are more rules which means everybody’s role is fixed and the employee can’t go above and beyond as they only thing they can do is their job. This is a disadvantage as employees cannot do anything more than they are allowed and the way they do their job is determined by the rules. This means they cannot do their job any other way. In addition to this, another disadvantage is the company will have less creativity, which reduces the flexibility of the company reducing their target market. As Oxfam only help developing countries in aid, due to the little creativity they are restricted to whom they can help. This is a disadvantage as they could receive a poor reputation even though they help countries in aid. They don’t help every country in aid which could be an influence if they were to gain a poor reputation.
Fundraising is an area Oxfam work in as they are a charity and don’t get much government funding. They need to fundraise, as they need to buy the supplies they need to help the country in aid. Oxfam run many different events to raise money. They run events like a run, a concert, and cycling and trail walker events. These go on all year round and in many different locations across the country. To get involved you have to pay to an entry fee in case you do not raise any money, which is highly unlikely but could happen in a rare case.
The advantages of fundraising is that is it there main source of income. In addition to this, a fundraiser is an event so it is could for publicity and increase the awareness of what Oxfam do and who they are. This is an advantage as Oxfam as a charity are able to gain funds and expand due to the money given. This means they will be able to aid more countries in need.
The disadvantages of fundraising is that all the participants are representing Oxfam so if anything wrong were to happen it would look bad on Oxfam, as they are the people holding the event. This means that Oxfam could lose some of their regular donators and this could influence how they are able to help the countries in aid.
Marketing is also a functional area of Oxfam, as they will have TV adverts where they try to gain donations. In addition, Oxfam will have flyers and adverts on the internet to increase the chance of someone donating. They adverts will try to guilt trip people into donating due to the nature of the advert being quite upsetting. Furthermore, in their flyers they will also have disheartening images and information to try increase the likelihood of someone donating.
The advantages of Oxfam’s marketing is that it does increase the amount of donations given to them. This means they can use that money to increase the quality of service they provide. Their products will also benefit from the marketing as Oxfam can show what products they use to improve the quality of life. The increase in donations can mean Oxfam are able to buy better quality products.
The disadvantages of Oxfam’s marketing is that it would be quite expensive and if they do not cover the cost of the advert by the donations given they will be at a loss and this will prevent them from helping countries who are in need of the help. In addition to this, it can damage Oxfam’s reputation and intern reduce the likelihood of countries asking for their help, and the countries could look elsewhere for the help needed.
Another functional area of Oxfam is