Assignment 5

INTRODUCTION TO BUSINESS FUNCTIONS

Task – 1 Word Portfolio

Organization: Proctor and Gamble (P&G)

1. Resources that are required for organization effectively.

Following are the resources to run the organization effectively.

Financial resources: P&G views its company's financial resources as its most valuable property.
Because an organization like P&G can purchase all of the resources it needs through the
effective management of its financial resources, this is the resource that is the single most
important factor in the company's success.

Human resource: P&G's second most valuable resource is its people, making human resource
the second most significant resource overall. P&G recognizes the significance of this resource
due to the fact that the people working within an organization are the ones who play an essential
part in each and every business unit activity. Additionally, modern organizations place a strong
emphasis on the education and growth of their staff members in order to better equip them to
meet the challenges and opportunities that lie ahead (pgcareers.com, 2020).

Education resource: Education is the single most essential component of today's society's
requirements. P&G should employ those individuals who have all of the necessary skills and
knowledge in order for them to be able to perform the tasks and responsibilities that are required
of them by the organization.

Physical resource: An organization's other significant assets are its physical resources, which
include its buildings and its equipment. P&G should center its attention on the fact that it
provides sufficient resources for its staff members and that it has a suitable location for its
laborer and staff members (StudyMoose, 2016).

2. Sectors of the economy

Following are the three sectors of the economy.

1) Raw material extraction

2) Manufacturing
3) Service
Raw material extraction: This part of the economy is typically concerned with the production
of basic materials, which are then put to use by other parts of the economy in the form of
finished products.

Manufacturing: It is concerned with the manufacturing of goods, and it uses unprocessed

materials as its input. After carrying out a series of operations on those materials, it generates
output, which is also referred to as completed goods.

Service: It is also an essential part of the economy because the service sector contains businesses
that don't sell physical goods; for example, banking, teaching, and consulting are all examples of
organizations that fall under the umbrella of the services sector.

The majority of P&G's business is focused on the production and service sectors of the industry.
P&G's primary business activity is the production of consumer goods, including those used for
personal care, housekeeping, and sanitation. There are a number of factories run by the business
all over the globe, where goods are made using a blend of mechanized and hand-crafted
techniques.

3. Legal structures

Following are the common legal structures used by organization.

1) Sole Proprietorship: A sole proprietorship is a company organization in which the firm

owner and operator are one and the same person. This is the most basic type of business
structure, with the proprietor having full say over the company's operations and financial
outcomes. Due to the lack of red tape and procedures associated with forming a sole
proprietorship, starting and running one is a breeze and won't break the bank. As an
added bonus, the company proprietor enjoys a high degree of autonomy in making
decisions and implementing innovations (Balouziyeh, 2013).
2) Partnership: There can be anywhere from two to twenty participants in a partnership,
and each partner shares equally in the profits and losses of the company. A high level of
productivity is typical for businesses with a big number of owners.
3) Limited liability company: This particular kind of limited liability company (LLC) has
a private organization that combines the pass-through taxation of a partnership or single
proprietorship with the LLC.
 4) Corporation: It refers to a sort of organization that is formed by an individual or
collection of individuals with the intention of functioning as an independent and distinct
entity. In addition to that, it is acknowledged legally. Earlier on, the charter was
responsible for the formation of these. In addition to this, there is a specific procedure for
registering a corporation.

Additionally, P&G possesses a corporation legal system.

4. Objective of business

To "Be and be recognized as the best consumer products and services company in the world" is
P&G's primary corporate goal. P&G's mission is to improve people's lives through the use of
their trademarked products and services, and to be the greatest provider of such products and
services in the world. Customers will recognize this, and they will repay us with market-leading
sales, profits, and wealth development that will benefit all of us.

P&G's employees and the principles we uphold give the company its intrinsic worth. We have a
knack for luring and enticing only the most talented individuals. People are promoted and
rewarded based solely on their achievement, regardless of their background or personal
characteristics. As a company, we operate on the belief that the people who make up Procter &
Gamble are, and always will be, our greatest strength.

Following are the key business terms.

 Revenue: A sales revenue is the sum of all of the money it makes from its sales and other
business activities during a specific time period.
 Profit: Profit is the remaining sum of money that is left over after all of a company's
operating costs have been subtracted from its earnings.
 Market share: A company's share of the total sales in a particular industry or market
expressed as a proportion of the total sales for that industry or market.
 Return On investment (ROI): A ratio that is determined by dividing the net profit by
the total expenditure and serves as a measure of the profitability of an investment.
 Assets: The resources that are owned by or under the authority of a company, including
concrete assets such as real estate and machinery, financial assets such as securities and
bonds, and intellectual assets such as copyrights and patents.
  Liabilities: A company's financial responsibilities to third parties, such as loans, accounts
receivable, and other bills, are referred to as the company's debts.
 Equity: After deducting the company's obligations from its assets, the remaining amount
is the proportion of the company's assets that belongs to the stockholders.
 Cash flow: The total quantity of currency that enters and exits a company during a
specified time period, considering cash generated from business activities such as
operations, acquisitions, and financial activities.
 Gross margin: The differential between revenue and the cost of products sold,
represented as a proportion of revenue. Also known as the gross profit.
 Supply chain: The network of companies and organizations that are involved in the
production and distribution of a commodity or service, beginning with the basic
ingredients and ending with the completed product.
5. Table showing main stakeholders of P&G, expectations, and accountabilities.

Stakeholder Expectations Accountabilities

Customers High-quality, affordable P&G must provide products that
products that meet their needs are safe, effective, and meet
and expectations. customer needs. P&G should
also respond to customer
feedback and concerns in a
timely and transparent manner.
Employees Fair compensation, safe and P&G must provide a safe and
respectful workplace, respectful workplace, fair
opportunities for career growth compensation, and
and development. opportunities for career growth
and development. P&G should
also communicate clearly with
employees and involve them in
decision-making where
appropriate.
Shareholders Consistent financial returns, P&G must deliver consistent
transparency, and responsible financial returns and
 management. communicate transparently
with shareholders. P&G should
also prioritize responsible
management practices that
align with shareholder values
and expectations.
Suppliers Fair and ethical business P&G must treat suppliers fairly
practices, timely payments, and and ethically, paying them on
strong partnerships. time and fostering strong
partnerships that benefit both
parties. P&G should also
prioritize sustainable and
responsible sourcing practices.
Communities Environmental responsibility, P&G must operate in an
social responsibility, and environmentally responsible
positive impact. manner, prioritize social
responsibility initiatives, and
make a positive impact in the
communities where it operates.
P&G should also engage with
and listen to community
feedback and concerns.
Governments and regulators Compliance with laws and P&G must comply with
regulations, transparency, and applicable laws and regulations,
responsible corporate communicate transparently
citizenship. with government and
regulatory bodies, and prioritize
responsible corporate
citizenship that aligns with
government and regulatory
expectations.
6. Mind map for resources required for P&G.
 7. “Assets = Liabilities + Equity”

The balance sheet formula, also known as the balance sheet equation, looks like this. According
to this method, a company's assets are either a debt owed by the company's owners or a capital
investment made by the company's shareholders. A production equipment is required if a
company plans on producing a bicycle component. Costs associated with the machine's use are
covered by a loan from an individual or financial institution, or by the owner's own currency
reserves, if any exist.

Budget: A company's budget is a projection of its expected revenues and expenditures for a
given time frame.

8. 3 ways of financing a business with advantages and disadvantages

Consider factoring Get a bank loan Use a credit card

One method of obtaining A bank loan is a form of Putting money into a
funding is known as funding in which an company with a credit card is
"factoring," and it involves individual or company takes a high-risk move. If you are
the sale of assets at a price to money from a financial late with a payment, it will
an independent financial institution with the have a negative impact on
services provider. Once this expectation of repaying that your credit report. If you're
agreement is made, the factor debt plus interest at some only making the minimal
is in charge of gathering point in the future (Patnaik payment each month, you
money from the business's and Pasumarti, 2020). could dig yourself into a
clients. Some banks are strict in financial pit you can't get out
Advantages and funding such as Lending of. When used sensibly, a
disadvantages standards but banks such as credit card can help you get
By selling its assets to a J.P Morgan Chase bank out of a bind and even help
factor, a business receives embark loan to small business your business's cash flow by
instant cash that can be put also. extending the payment terms
towards daily operations, for accounts receivable
source payments, or (Blanchflower and Evans,
strategic development 2009).
investments.
Because factoring is an
unregulated type of
funding, the business
doesn't have to put up any
assets as security.
Companies that have a poor
credit background or don't
have many assets may be
able to get a factoring loan
and get the funding they
need.
The factor's reduction price
will be determined by the
payment terms and the
solvency of the business's
clients. When compared to
the interest rate on a bank
loan or credit account, this
charge may be prohibitive.
When a component takes
over collections, it can mean
losing influence in the
procedure and risking harm to
the connection with the
clientele (Badriyah et al.,
2017).

Task 2 - Factors affecting Production and Workforce Planning

1. Diagram: Concept of economy and diseconomy scales

 2. Factors that motivate the selection of location for a business.

Successful businesses know that picking the correct location is crucial to their continued
operation. Organizations would do well to give serious thought to the following when choosing a

location:
3. Efficiency and effectiveness of production process
Motivation:

Motivated workers have a lower attrition rate because they enjoy working for the business.
Creating a positive work atmosphere that values and honors employees, as well as giving
employee appreciation programmes and chances for growth, can all be effective motivational
tactics.

Workforce planning:

The purpose of workforce planning is to identify and prepare for future talent requirements
within an organization and to place qualified workers in open positions. In order to fulfil their
needs, companies can cut down on employee attrition by strategically organizing their staff.

5. Motivation theories
Source: (Bögenhold, 2009) (Abdulkhamidova, 2021) (Legault, 2017).
6. Contemporary approaches for motivation
Following are the 3 approaches for motivation.

1. Stick approach: This method is sometimes referred to as an autocratic one. This shows
how the use of danger and sanctions can motivate workers to perform better. Might
makes right, at least in the context of this idea. The manager wields a rod over his
subordinates.
 2. Carrot approach: According to this theory, a manager's relationship with his or her
subordinates should mirror that of a parent with his or her kid. Staff morale can be
maintained through the provision of unconditional incentives. The phrase "carrot and no
rod" accurately describes the situation. This method is implemented in an effort to
maintain worker loyalty and enthusiasm (PHYS.ORG, 2009).
3. Exchange approach: Managers often take a hybrid of the two approaches, using both
reprimand and reward mechanisms. A combination of the "carrot" and the "stick" is used
in this strategy. Managers need to use both incentive and danger to motivate their teams
to meet their targets. Another term for this strategy is the "Penalty-reward" strategy. The
labor will be punished if his output is below standard, and rewarded if it is above
standard.

Task 3 – Presentation
References
1) ABDULKHAMIDOVA, F. 2021. Herzberg's Two-Factor Theory.
2) BADRIYAH, S. M., HUM, M., MAHMUDAH, S. & SUSILOWATI, D. I. 2017.
Factoring as a financing alternative of business development for small and medium
enterprises. International Journal of Mechanical Engineering and Technology, 8, 918-
931.
3) BALOUZIYEH, J. 2013. Sole Proprietorships.
4) BLANCHFLOWER, D. & EVANS, D. 2009. The Role of Credit Cards in Providing
Financing for Small Businesses. LSN: Empirical Studies (Topic).
5) BÖGENHOLD, D. 2009. Maslow’s Hierarchy of Needs.
6) LEGAULT, L. 2017. Self-Determination Theory.
7) PATNAIK, A. & PASUMARTI, S. 2020. Bank Loan as a Source of Finance for Start-
up's: A Study. Strad, 7, 107-115.
8) PGCAREERS.COM. 2020. HUMAN RESOURCES: CHAMPION OUR PEOPLE
AROUND THE GLOBE [Online]. Available: https://www.pgcareers.com/human-
resources [Accessed 13 2023].
9) PHYS.ORG. 2009. How the carrot approach facilitates learning [Online]. Available:
https://phys.org/news/2009-07-carrot-approach.html [Accessed 14 2023].
10) STUDYMOOSE. 2016. Procter & Gamble Resources, Capabilities and Competitive
Advantage [Online]. Available: https://studymoose.com/procter-gamble-resources-
capabilities-and-competitive-advantage-essay [Accessed 13 2023].