Merits Of Being A Sole Trader Business Essay
Organization is social unit of people systemically structure and managed to meet a need or purse a collective goals on a continues basic. Organization can be categorized in to two groups they are private sector organization and public sector organization.
Firstly private sector organization is usually owned and controlled by the private parties.eg, sole trader, partnership, joint venture organizations.
Sole trader organization
Sole trader is owned and controlled by one person. He bears all the risk of running and managing the business. This is a small scale retailer which is founded in most of the countries.
Merits of being a sole trader
Can keep direct contact with the customer, which leads to create a strong relationship between the owner and the customers.
Can easy and quickly react to the changes of the market.
Retain all profit to the owner
Can be easily form and simple to run
Business can be close down at any moment as the wish of the owner.
Demerits of being a sole trader
sometime it might leads inability to take correct decision
difficult to enjoy economics of scale
mismanagement of recourses in the absence of proper accounting
losses can’t be shared
A partnership is an agreement between two or more parties to finance and operate a business. In partnership unlike sole trader entities legally is separated from the partners themselves and each partners has equal responsibility and authority to run the business. Each partner should be involved in the day to day running of the business.
Advantage of being a partnership organization
Ability for raise more fund
Partners will be benefited from the contribution of complimentary skill of two more partners
Losses can be shared among the partners
Wide pool of knowledge skill and contacts
Can easily expend the business
Disadvantages of being a partnership organization
disagreement between the partners may leads to shut down the business
Unable to take the decision without consent of other partners
There is no legal personality
They can’t quickly react to the changes of the market as the absents of quick decision making.
Joint venture is a short term association of few people in order to accomplish a specific task. Joint venture helps the organization to expend quickly by borrowing other company resources. This helps to get their loyal customers and their good image towards joint venture organization.
Advantages of forming joint venture organization
Can access to great pool of resources including specialized staff and technology
can share the risk between the venture parties
can get royal customers of venture parties
Disadvantages of forming joint venture organization
it take time and effort to form right relationship
In balance in the share of capital, expertise and investments may cause friction between partners
Differences between culture and style will lead to poor corporation
Secondly public sector organization is a compose of organization that is owned and controlled by the government. Their main aim is to provide services to general public. Public organization is financed by the government.
Advantages of forming public sector organization
Services are duplicated and recourses are not wasted
Any profit made by the public organization benefit the tax payers as it reduces the level of taxation
Disadvantages of forming public sector organization
They are very large which might leads to insufficient
The running of public organization might be politically influenced
If he organization make loss tax payers has to pay higher tax
It is difficult to motivate the employees in an impersonal organization such as this.
Public sector business is:
Owned by the country
Financed by the government
Controlled by the government
Aimed to give services
Stake holders of the Tesco
Tesco is the UK largest retailer dealing with food items and grocery’s items. They have 6200 stores in 14 counties, employing almost 520000 people and serving millions of customers every week.
Each company has a pool of stakeholders who are interest in business activities. Each group has their own interest in the business. Stakeholders can affect or be affected by the organizational actions, objectives and policies. Tesco identify some of their stakeholders in the scope of its corporate responsibilities.
The CEO is the person behind all the success that the Tesco have achieved through its decades of success and goodwill of the people. In 3rd November 2011 Sir Richard Brodbent was appointed as the chairman of Tesco as Sir David Reids retire his position after serving 16 years.
Tesco has 9 directors which are the key who take decision. Directors have responsibility for ensuring that the company keeps accounting records which discover with reasonable accuracy the financial position of the company. Which enables them to ensure that the financial statement compete with company act at 2006. In Tesco directors take responsibility for preparing financial statement for each year. Most importantly directors take responsibility of the company in audience with it rules, and in the best interest of the company itself.
Tesco believes that their customers are to be engaged in continues communication in order to enables Tesco to identify areas where improvement can be made. Specially in store forums and meetings are held with the customers for the singular purpose of acquiring information from customers about any areas that can use any form of improvement. Staff and management keep direct contact with the customers in order to get feedback and to reassure that steps will be taken to bring about improvement in identified areas.
Tesco gives its employees concerns by making sure that it provides it employees with stables and interesting jobs that are secure and gives their needs fairly. Tesco realize the need to ensure activates guidance to its employees undeniable and therefore encourage it employees to take advantages of its tanning in order to encourage leadership. In addition Tesco take special care to continuously monitor its employees with regard to their work experience at Tesco. Tesco employees become key component of the equation of their success.
Tesco engages its investors by making use of structed programs. The programs consist of meetings in which investors are given detailed update and briefing about key areas of Tesco function. Furthermore Tesco has made a separate section of its website for the purpose of facilitating its investors .In addition Tesco continues to communicate with the investors through special briefing that are published for them
Mission of Tesco
Mission statement set out the general purpose of a business.it helps the employees to works towards a common goal.
Tesco mission statement is to create value for customers to earn their life time royalty. To make sure Tesco achieve their mission they need to know who their royal customers are. That’s why Tesco has got a club card service, through which they can award people by giving them special vouchers and extra points. While Tesco seller partners benefit from their volume of online traffic and expertise.(tesco,2012)
Vision can be defined as the desired or intended future state of an organization or enterprise in terms of its fundamental objective or strategic direction. Vision is long term view. Sometimes describing how the organization would like the world in it operates to be. Tesco vision reflects in their slogan every little helps a lot. As a fast growing company it has gone from simply selling groceries to providing anything from loans to mobile phone. By setting out in all these new direction Tesco endeavors be close to the customers.(tesco,2012)
Aims and Objectives of Tesco
Objectives are goals that firm set out it for the next 3 or 5 years. They have time scale. They must measurable, and must contribute to the business achieving it aims. Most common objectives of Tesco are:
To maximize scale
To grow and maintain number one retail company in uk
To out shine the competitors and remain in the market leader
Maximize the profit
To provide good and services that is cheap and affordable to customers
To create high value brand
To be outstanding international retailer in store and online
Market share and growth of Tesco
Market share is market total sale that is earned by a particular company over a specific period of time. UK largest retailer Tesco continues to lag market at 2.7% causing a drop in market share to 30.7% from 30.9% in the comparable of last year. Market share gives general idea of the size of a company to its market and competitors. Tesco recently moved to increasing its focus on their performances in the market. At the end of February Tesco said it was making a significant investment in improving customer’s services and product range. Market share increase can allow company to achieves greater scale in its operation and improve probability. Most of the company increases their market share through lowering price or through advertising.(tesco,2012)
INCOME SATEMENT OF TESCO AT 25 FEBRUARY 2012
Cost of Sale
Profit/Loss arising on property related items
Share of post-tax profit of joint ventures and association
PROFIT BEFORE TAX
Profit for the year from continuing operation
PROFIT FOR THE YEAR
Task Two (LO2/M2)
2.1 Economic systems
Economic system is an organized way in which a state or nation allocates its resources and apportions goods and services in the national community. All economic systems are run differently with different beliefs on what would best help the economy be successful. Some of the common economic systems are capitalism, communism, and mixed economy.
Economic system in which individuals own and operate different faction of production with only minimal government involvement. Capitalism is also known as free market economy or free enterprise. Capitalism is the world dominant economic system including United States, Canada, Mexico and all of 27 countries of Europe union. In capitalism individual seek to maximize satisfaction or profit through own decisions.
Determined by consumer preference’s
What to produces
How to produces
Socialism is a economic system where the means of production such as money and other forms of capital are owned by the state or public. In socialism everyone work for wealth that is in turn distributed to everyone. In socialist economy government undertake the complete responsibility of operating education and health care system. It is misconception that people do not pay for these services. In this economic system government own most of the business firm and produces according to the government direction, and most importantly central plan board determines production goals and specific resources to be located to each enterprise. Some of the socialist countries are china since 1 October 1949, Cuba since 1may 1961.
Determined by government preference’s
What to produces
How to produces
Determined by government preferences
Under mixed economic system the private sector controls many resources of production but government has a role in influencing the direction of the economy. Government plays important role in resolving economic problems faced by the society. Perhaps under mixed economic system government take control of services such as education, health, military, defenses, legal infrastructure to society. Most importantly mixed economy doesn’t allow any single step to monopoly as both government and private enterprises enter every sector of the business. Some of the mixed economic countries are Australia, Germany, and India.
Determined partly by consumer preferences and partly by government
What to produces
How to produces
Determined partly by purchasing power of consumers and partly by government
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