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Mr gichuhiCompany address
Table of Contents
TOC o “1-3” h z u Summary PAGEREF _Toc504029563 h 1Introduction PAGEREF _Toc504029564 h 3Explain the features of two contrasting businesses (A. P1) PAGEREF _Toc504029565 h 4The BT group PAGEREF _Toc504029566 h 4Cancer Research UK PAGEREF _Toc504029567 h 8Relationship and communication with Stakeholders (A.M1) PAGEREF _Toc504029568 h 11How the structure helps to achieve aims and objectives (B. M2) PAGEREF _Toc504029569 h 12BT Group PAGEREF _Toc504029570 h 12Appendices PAGEREF _Toc504029571 h 14
IntroductionI have recently been accepted into a work placement in the economic development unit and have been asked to carry out research and gather information of two contrasting businesses of different ownership and liability. I will be investigating the BT Group PLC and the charity Cancer research UK. Businesses are owned in one of three different ways, they are either Private, public or not-for-profit. Public companies identify as belonging as belonging in the public sector that is owned by the Government this means that the government is liable for the success or failure of the business. Private businesses are owned by citizens; this means that they are liable for all aspects of the business. Private companies are in the market to make a profit. Not-for-profit businesses are most often charitable organisations which do not aim to make a profit, they share many of the same features of a public and private company and have paid workers but only attempt to make enough money to cover running costs. I have learnt lots about the two companies, looking into what their aims and objectives are how they are structured and their relationship with their stakeholders. The two companies are both large companies as they both employ over 250 people.
Explain the features of two contrasting businesses (A. P1)The BT groupOwnership and Liability
The BT group is the company, which owns British Telecommunication. It was founded in 1969 it is currently the Largest provider of fixed-line, mobile and broadband services across the UK, also providing subscription television and even IT services. The BT Group is a for profit public limited company meaning shares are available to be purchased by the public this also means that the organisation has limited liability, which is the condition by which shareholders are the ones legally responsible for the debts of a company. The BT Group is a holding company meaning that most of its businesses and assets are held by its subsidiary British Telecommunications plc.
Size and scope
As an organisation, the BT Group has a presence in 180 countries making them international and due to having strong communicational abilities BT are able to maintain their international size very well. As of 2017 BT had 106,000 employees this makes them a large business. The BT Group states ‘BT is one of the world’s leading communications services companies. We serve the needs of customers in the UK and in 180 countries worldwide. Our main activities are the provision of fixed-line services, broadband, mobile and TV products and services as well as networked IT services.’
BT state that their purpose is to ‘To use the power of communications to make a better world.’ Due to it being a for-profit company the business it in the Market to make a personal gain and a positive turnover at the end of the year. BT also offer both a product and a service due to the fact they offer to install any products that they sell. When founded the business owner would’ve been motivated by multiple reasons
they wish to provide people with their products, this means that the BT Group is in both the secondary and Tertiary production sectors as they manufacture the goods they are offering and sell them. BT also offer installations of the products to their customers’ homes or any other places they may be installing a broadband.
Due to it being a public limited company, this means that anyone can buy shares of this organisation. Some of BTs stakeholders are internal to the business such as employees and some are external such as their customers. BT attempt to maintain close relationships with their major shareholders and sees them as partners. BT reward their shareholder by giving them a percentage of their profits, which is called a dividend. BT pay this twice a year BT also offer their shareholders a free BT credit card, which receives discounts on new products. BT also hold an Annual general meeting every year, which all shareholders are, invited to attend shareholders are given a chance to meet the chairman and board of directors to give shareholders the opportunity to ask any questions and receive a performance report. A focus on customers on one of the most important things to BT and they must always be making continuous investments in new services for them to offer to stop their customers from changing provider. BT also must try to offer more environmentally friendly ways of working their latest wireless broadband BT home hub router uses almost 40%less energy and uses 25% less plastic then previous models. When working with their suppliers they apply their GS13 Environment Impact Risk assessment questionnaire to make sure they are not doing lots of damage to the environment.
The BT Group is organised into several separate divisions, under the structure there are six lines of business, two serve as consumers, two focus on the business and public sector and two provide wholesale services to other companies in the industry each division has its own CEO. The lines of business are:
Consumer: The main retail division in the BT Group this division provides retail telecom services to customers throughout the UK and is currently the largest provider. The division offers several products (See appendix 2) Its CEO is currently Marc AlleraEE- A mobile network operator which provides mobile and fixed communications services to consumers in the UK, it was purchased by the BT Group in February 2015 for £12.5 billion combining the customers of the two companies. EE also has the contract to provide 4G data services and applications to the emergency services. Its CEO is also Marc Allera.
Business and public sector- This division provides retail telecommunications and IT services to businesses of any size along with the public sector throughout the UK and Ireland it will be made from existing BT business consumers alongside EEs business division offering a large number of products (see appendix 2) Its CEO is currently Mark Sutherland.
Global- this provides telecoms and IT services to nationals it will focus on serving major public and private sector customers outside the UK. In 2006 Global services agreed to a £!00 million worldwide deal to provide communication and IT services to PepsiCo. The CEO is currently Bas Burger.
Wholesale and Ventures- this division provides products and services to other communications providers currently suppling more than 1,400. The current CEO is Gerry McQuadeOpenreach- The Openreach division develops and maintains the UK’s main telecommunications network which is used by many telephone and broadband providers such as Sky, TalkTalk and Vodaphone. Due to it being a legally separate organisation within the BT Group Open reach has the ability to consult with customers such as TalkTalk and Sky regarding large-scale investments without having to disclose details to the BT Group. The CEO of Openreach is Clive Selley.
The organogram (see appendix 4) shows a flat structure with the BT Group being at the top, the several divisions are shown underneath branching downwards with Openreach being on its own due to being a separate part of the business and are able to operate without any instruction from the Chief board.
Aims and objectives
BT state that their most important goal is to deliver sustainable and profitable revenue growth and in addition drive shareholder value.BT to fulfil their purpose ‘Our purpose is to use the power of communications to make a better world’ BT has a set of six main ambitions for 2020:
‘Give nine out of ten people in the UK access to high-speed broadband’ so far as of March 2017 they reached 8.8/10 people meaning by 2020 they have a high chance of this being accomplished.
‘Help 10 million people overcome social disadvantage through the benefits our products and services’ Since 2014/2015 they have stated they have currently helped 3.9 million meaning reaching 10 million by 2020 is possible but may be difficult.
‘Help 5 million children receive better teaching in computing and tech skills’ Since 2014/ they have helped 1.1 million I feel that if it continues at the same rate they will not reach that goal by 2020
‘Use our skills and technology to generate more than £1bn for good causes’ Since 2012/2013 they have raised £422 million I feel that they will not be able to reach £1 billion by 2020
‘Inspire 66% (two-thirds) of our people to volunteer their time and skills’ in 2015/2016 31% of their employees meaning that nearly a third are already volunteering I feel this goal could be accomplished by 2020.
‘Help our customers reduce carbon emissions by at least three times the end-to-end carbon impact of our business’ as of 2016/2017 they had decreased their carbon emissions by 1.8:1 which is close to their 3:1 goal so I feel they can easily achieve their goal
I feel that these are reasonable set of aims for the BT Group, you can see from this they are trying to their bolster their public image by helping out others, this may attract more stakeholders to the business. From the report, I feel that they may not reach several of these goals, they have missed to targets in their past with one being having no successful health prosecutions throughout the year however they had to relating to incidents in 2011 and 2010. They had stated to run 600 workshops during 2015/2016 however they only successfully delivered 527 however they did not miss 600 by a large amount is this is not seen as a complete failure. One of BTs most important objectives is to reduce its current large net debt that they have suffered from for many years.
Cancer Research UKOwnership and Liability
Cancer research was founded in February 2002 by the merging of two Cancer research charities. Its headquarters are based in London. The organisation is not for profit and a registered charity, this means that the company has unlimited liability this means that if the organisation was unable to meet and financial requirements then the owner’s personal assets can be acquired to satisfy any debts the liability of a charity is different to any other business as it its liability is known as guaranteed limited liability this when the trustees have guaranteed that the charity will not fall into debt as the trustees of a charity are often financially stable as they would have been purposely chosen by the members of the charity.
Size and Scope
Cancer research UK is one of the UK’s most well-known and supported Charities. Cancer research currently employees around 4,000 people, this makes them a large company and they currently have 40,000 volunteers. They have 594 shops throughout the UK but have no international operations making them a national company. Cancer Research Raised a total of £647 throughout 2016/2017 which was a 2% rise compared to last year. Cancer research UK also have 13 centres, 5 institutes, 18 experimental Cancer Medicine centres, 8 clinical trial unis and 5 Drug discovery units throughout the UK including their latest multi-million pound Francis Crick institute.
The charity primary purpose is to bring down mortality rates in the UK and hopefully throughout the entire world. Cancer research’s slogan is ‘Together we will beat cancer’ and that is the reason that the organisation was founded in the first place they host many of events every year to draw attention to the cause and bring in as many donations as possible.
As cancer research are using materials they purchase and then distribute anything discovered to hospitals they fall in the secondary sector. In addition to this due to them performing research they also fall in the quaternary sector. As a charity they provide both a good and a service.
Due to it being a not for profit charity any person who donates money towards it are seen as stakeholders to the company in 2012 received its largest ever single donation of £10 million from an anonymous donor. Cancer Research have implemented a ‘members’ system and are seen as the shareholders there are currently 90 of these members. They state ‘Together the Members embody a broad range of relevant skills, experience and backgrounds, from business and the arts, finance, science and health care. They are chosen not to represent particular fields, but as individuals who are supportive of the aims and objects of the charity’. It is also said that the most important job is the election of trustees as some of these members have been in the charity for many years so have been in the charity for years. Trustees are the people of the main board of Cancer research and are often given large amounts of control. Members are invited to attend all general meetings of Cancer Research UK and they hold an annual general meeting to update its biggest donators and members on how the charity is doing. They also, like almost every business, provide an online annual report, which can be read by anyone. Cancer research also have a large group of corporate partners including Scottish Power, Tesco, TK Maxx, Ultra White Collar Boxing, Wilko, Warburton’s and Slimming World, who raised £21 million throughout 2017/2018. All these organisations reached large milestones, demonstrating their incredible commitment to our work over a number of years
A council of trustees, headed by Professor Sir Leszek Borysiewicz, governs the charity. The council sets strategic direction and ensures that the charity achieves its objectives, it oversees all matters and makes sure the charity is upholding their values. The council is supported by a group of different committees to which it delegates certain authorities these include the:
Audit committee- The Audit Committee oversees preparation of the Annual Report and Accounts including accounting policies and judgements. This Committee monitors the effectiveness of the Charity’s risk management and internal control systems and provides a report of risk processes and policies to the Council.
Finance Committee- the Finance Committee reviews and approves for recommendation to Council the investment policy and the reserves policy and oversees management of the investment portfolio. It reviews the Charity’s operating plan and budget and the current five-year plan and monitors performance to ensure proper financial stability. It also reviews and approves the Charity’s insurance arrangements.
The fundraising and Marketing committee- This Committee oversees management of the Charity’s fundraising and marketing practices and implementation of the Fundraising and Marketing, Philanthropy and Partnerships, Legacy and Trading strategies.
Nomination, Governance and Remuneration Committee- the committee is responsible for reviewing and making recommendations to Council with regard to the management policies and procedures of the Charity. It oversees retirement and admission of Members and oversees the search and selection process for new Trustees and senior leadership of the Charity. It also determines with the council on policies for the employees and council members of the charity.
Research Strategy committee- The Research Strategy Committee considers progress against the Charity’s Research Strategy and looks into future opportunities and challenges in cancer research. It also considers new initiatives and funding schemes.
The responsibility of the day-to-day running of the charity comes down to the Executive board there are currently 10 Executive directors. The CEO (Chief Executive officer) of the organisation is Sir Harpal Kumar he is at the top of the Executive board and deals with the most important matters and will take care of the company on a day to day a business he was appointed as chairman in April 2007. The executive board proposes to the council where the charity should invest its time and money. The executive board will also present an annual operating budget to the financial committee. There are also two separate groups working just beneath the Executive board:
Scientific Executive board- The Scientific Executive Board is responsible for the implementation of science policy and strategy after its approval by the Research Strategy Committee and Council. It works closely with the Research Strategy Committee, and reports to the Executive Board
Public policy group- The Public Policy Group provides advice on Cancer Research UK’s public policy agenda and outreach strategies, they will suggest different events to host.
The organogram (See appendix 5) has a tall hierarchical structure and shows the council of trustees of the company at the top, under that there are the five separate specialized committees who all report to the council. Beneath the five council committees there is the executive board who will report and take instructions from the separate committees and will run the everyday parts of the charity making sure any goals are achieved just beneath that are the public policy group and scientific Executive Board who are separate groups that will work individually and report to the executive board.
Aims and Objectives
A not-for-profit charities most important thing is to cover its running costs so it may continue running and in many cases, saving lives. Cancer researchs biggest ambition is to make it so that 3 in 4 people survive Cancer by 2034 and by the current amounts that the charity has been raising they may have a good chance at reaching this, they havefour objectives so they can reach this ambition:
Prevent -Reducing people’s risk of developing cancer
Diagnose – Diagnosing cancer early
Treat – Developing new cancer treatments
Optimise – Making cancer treatments more effective for each patient
They have also set several ‘Enablers, which are the ways that they are going to achieve their objectives:
Fundraising- Providing the finance for everything they do and achieve Cancer research raised £442 Million in 2016/2017 from just voluntary income alone through Donations, Events and things left in peoples Wills.
Research Network- Cancer Research are creating an environment which supports very high tech research. The new Francis Crick centre is a big step into achieving a large research network
People- Cancer Research Could have never been successful without its Volunteers they currently have around 40,000 volunteers and it would have costed a fortune to employ and pay that many people.
Engagement- They attempt to communicate and engage with anyone suffering from cancer to try and help them they also try and engage with the public through advertisements. They answered 12,000 queries about cancer in 2017.
Relationship and communication with Stakeholders (A.M1)Businesses must always communicate with their stakeholders to make sure that they are happy due to the fact that a business cannot run without stakeholders. Suppliers help to keep the business competitive, shareholders bring investment and customers contribute to profits
BT are very dedicated to hold a good relationship with their stakeholders. They care very much about their employees; BT runs programmes to improve the skills of its employees School leavers can join BT on an apprenticeship scheme and specialise in customer service, information technology or telecommunications engineering. Apprentices learn transferable skills which set them on the route to a valuable and fulfilling career and can gain a job-related qualification in a single year. To gain their commitment, BT aims to provide its employees with attractive rewards and good career prospects They also allow different working arrangements at the moment 9,000 BT employees work from home. BT also maintains an environmental focus to its relationships with suppliers when the company buys low cost products from abroad they check that the low cost is balanced against the environment. A potential clash results from BT’s pricing policy. Customers naturally want low prices, but shareholders may feel that higher prices would generate greater profits Directors and managers at BT must try to manage these conflicts in a way that keeps the stakeholders happy. This often involves finding a solution that finds a balance between different interests. On occasion, it will not be possible to satisfy everyone. At least one of the stakeholder groups will feel that they are losing out. However, good decision-making involves keeping all parties happy with the outcome. As a company The BT group have overall reasonable god reviews from ex or current employees and average a 3.8/5.0 however several reviews on the page are very poor stating that they were set ‘unrealistic goals’ and ‘treated like a number’ one review stated ‘Having this job led me to serve depression and anxiety I was never given any proper training until it was too late then they basically made out that it was my fault the stress and the job led me to being very very ill. A lot of them have worked their all their lives and know no different they expect you to know everything they do on your first day. I got in trouble for not noting mileage and safety checks which I didn’t even know existed yet it was on me to know these things. The buildings are disgustingly dirty dead flies etc everywhere. Honestly I wouldn’t recommend working there to my worst enemy.’ Which would contradict anything they have stated about their conditions however a review like this can be easily exaggerated. In addition, BT’s dividends also keep the shareholders in the company happy and interested, they stated that during 2017 10.55p per share will be given to shareholders. In addition, BT helped the Forensic science service to come up with a crime scene laboratory Van which will reduce the time needed to link a DNA sample to a suspect or witness and perform many other tasks, this will greatly improve BT’s social standing and relations with the government.
During 2017, one million people donated towards the charity, the best way that Cancer research can show their donators they are doing well is to show how many lives they are changing and hit the targets they are setting they must also always be looking to develop new innovative ways to fundraise to recognise the many ways people choose to support the charity. In their annual report cancer research state, ‘We continue to look for ways to mutually grow our relationships with our valued corporate partners, as well as creating new partnerships’ and they should attempt to maintain their relationships Cancer research’s most useful relationship comes through Tesco they have donated over £9 million towards their research and have held multiple events to raise more funds. The organisation is held together by its volunteers and would not have had anywhere near its success without them, this means they must keep a good relationship with them. The best way that they currently keep their relationship strong is though their general meetings where they give all shareholders an update allowing them to improve their relationships, as they are able to ask any questions. You can tell they have a good relationship with their stakeholders, as they are one of the most highly supported charities throughout the UK, they do not receive any funding from the government meaning they must rely on their stakeholders. Cancer research also has very good reviews from both its volunteers and employees however many employees have complained about very low pay however this should be expected due to it being a charitable organisation and pay will always be on the lower side. Cancer research also created a partnership with Imperial college London, king’s college London, the medical research council, university college London and the welcome trust. The Institute plans to have 1,500 staff members including 1,250 experienced scientists and also a £100 million annual budget this will be very beneficial to cancer research and all partners included and has caused a good relationship boost for them.
How the structure helps to achieve aims and objectives (B. M2)BT GroupBT being separated into separate divisions it means that they are usually able to work reasonably effective. Due to all having their own CEO the divisions they are able to make decisions themselves and are barely affected by the senior board and are only set objectives to hit. Each chief executive’s role is to: lead the divisions performance and management propose strategies, business plans and policies to the Board; implement Board decisions, policies and strategies; develop and promote compliance with BT’s policies on conducting business around the world, maintain an effective framework for internal controls and risk management, lead the division in the day-to-day running of every part of the business and lead as well as overseeing succession planning for roles in the division. It is known that BT have struggled as a company over the last few years due to the fact that it has some major debts at its last financial update BT’s net debt was £8.9 billion alongside a crippling deficit in their pension scheme however they are attempting to implement many ways to fix this major issue their separate divisions allow them to work together but at the same time in their own ways to reach any objectives set. Due to having a flat organisational structure this means that are able to work with less bureaucracy meaning decision making is much quicker as the BT separate divisions can work on their own accords with objectives set by the board and are able to be set the main ambitions for each division to complete.
Cancer research UK
A good structure is crucial for a charity to be successful is a company is not organised and does not have a good structure it will not be able to function successfully and due to in many cases no government funding it could fail quickly. With a tall hierarchical structure there is one person with overall responsibility or in cancer research’s case the chairman’s board the chairman has overall authority and the most important decisions must be made by him. Hierarchical structures allow employees to recognise the different levels of leadership within the organisation. having the separate different committees is extremely effective for cancer research. The research part of the company will specialise on dedicating their skill, time and the companies’ available funds to work towards reaching their most important objectives which is decreasing the amount of people diagnosed with cancer and increasing the amount of people surviving the cancer, which was the reason the charity was originally formed. The charity spent £432 on Cancer research throughout 2016/2017. The Finance committee ensures that the organisation does not overspend and will keep the all the financial records. Each of the different companies will work in its own ways to reach the companies ambitions, while taking orders from the executive board. The Nomination, Governance and remuneration committee. I feel that they will be able to reach their ambitions if they continue to receive the current amounts of support they are getting
Compare the success of the two businesses (D1)
As a business BT has been very successful throughout many years , having influence is over 180 countries is incredible alongside a £24.062 billion total revenue from 2017 with £1.908 billion which is however a large compared to last year’s £3 billion It has been found that BT has significant market power in some market by Ofcom ( the UK government-approved regulatory and competition authority for the broadcasting, telecommunications and postal industries of the United Kingdom) they must be set guidelines such as reasonable requests to supply services and other requests so there cannot be a monopoly in the industry as they have previously been abusing their control of openreach and charging very high prices while providing poor service this has led to the openreach service receiving lots of scrutiny and Openreach’s services receive hundreds of thousands of complaints every year. Openreach’s mistakes have caused BT to get some rather bad criticism as a business. In 2016 allegations of ‘inappropriate behaviour’ at BTs Italian operations began. BT found evidence of improper accounting practices and “a complex set of improper sales, purchases, factoring and leasing transaction” and these actions led to BT thinking they made more money in Italy then they actually did for many years. The head of BT Europe Corrado Sciolla lost his job due to the scandal alongside the BT Italy chief Gianluca Cimini. The scandal costed BT a £225 million pay out to two shareholders of BT, Deutsche Telekom and Orange. In addition to that BT’s stock market value dropped by almost £8 billion in January after they revealed the full extent of a £530 million accounting scandal.
Cancer research is one of the UK’s largest and most donated to charities bringing in £634.81 million and have continued to make higher and higher incomes every year. in a year and is the world’s largest independent cancer research charity this makes them an extremely successful charity. They are working very hard to reach their ambitions as that is their purpose for being a charity. To reach their ambition of having three in four people survive cancer they must do extremely large amounts of research and have recently completed the construction of the Francis Crick research institute which is a multi-million-pound project and will be their biggest research institute to date The Francis Crick Institute scientists will help unravel the mysteries behind cancer and other diseases with very large funding, ultimately improving the lives of patients across the world and bring them closer to their purpose. Cancer research also found great success with its £1 shops with its first store generating sales of more than £87,000 and they already have plans to open more. Cancer research’s only issue came from being the target of an anti-animal testing charity due to the charities testing on animals when finding new drugs which has been a very controversial issue for many years and will most likely always be debated.
The two organisations measure their success in very different ways as BT being a for profit company seek to make a personal gain and profit from the business whereas Cancer research only wish to make enough money to stay running and work towards their goals. BT and cancer research are both successful companies in their own ways Cancer research however has a much better public imagine than BT as BT has come under fire for multiple issues throughout the years which have costed the business lots of money. It is clear that Cancer research has a much better relationship with its stakeholders and values its employees and volunteers much more highly than BT. The fact that over 40,000 people volunteer for Cancer research makes it so they are able to save much more money when it comes down to running costs. BT have had numerous times where they have contributed towards good causes so also have some good intentions alike cancer research.
BTEC national in business student book Unit 1
61912460960000666750609600002865755390525The BT Group
00The BT Group
right172085Wholesale and ventures
00Wholesale and ventures
1428750143510Business and public sector
00Business and public sector