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The custody officer can carry out a non-intimate search if it is thought necessary for a person being held at a police station. The custody officer has the duty of recording all that a person ahs with them when they are brought to a police station.

Strip searches are defined in Code C and searches which require the removal of more than the outer clothing. A strip search cannot be done where it can be seen by anyone who does not need to be present. No member of the opposite sex can be present in a strip search. Suspects should not be required to remove all their clothing at the same time; at least half of them must be covered.

An intimate search is a search of any body orifice other than the mouth and must be carried out by a reasonably qualified person (doctor or nurse for example). This can only be authorised by a senior officer and only because the person is suspected of possessing an item that could cause injury or of Class A drugs.

Fingerprints:

They can be taken prior to arrest out of the police station because they can now be checked with the National Automated Fingerprint Identification System. This is only done when the officer reasonably suspects that the person is committing or has committed an offence, and / or, to check doubt about the name of person given. The police will ask for the detainee’s permission, but if they do not consent, it can be taken by force. Records of fingerprints can be kept on police databases even if the suspect is not charged with an offence.

Non-intimate samples, such as hair, can also be taken by force.

Intimate samples can only be taken by a medically qualified person.

Citizens with complaints against the police can make it to the IPCC, the Independent Police Complaints Commission, which was set up in April 2004 to handle complaints against the Police.

 

A citizen’s arrest can be made only on indictable offences. The arrest can be made if someone is in the act of or the citizen has good reason to suspect that they are committing or have committed an indictable offence.

This can only be done if it possible for a constable to perform the arrest and the citizen must have reasonable grounds for arresting the suspect, such as preventing:

  • Injury or harm being caused to the suspect or others
  • The suspect being injured by others
  • Loss of or damage to property
  • Disappearance of the suspect after committing a crime

Nov 072011
 

 

Marketing Objectives

Marketing is the management process involved in identifying, anticipating, and satisfying consumer requirements profitably.

Business is about providing something that someone wants to buy. Marketing assists businesses in achieving their objectives because in identifying customer demand, the business will understand its customers and market better. They will then be able to meet customer needs. JKL is a childcare centre and so marketing is important in terms of meeting the customer needs because it allows JKL to know what parents want in relation to the care of their child/children, more so because JKL wants to be the best childcare centre on the market. This will give JKL a competitive edge, especially now they are facing increased competition from TotsAtPlay.

Market Analysis

Customer v Product Orientation

Customer orientation is where a firm considers what the market wants before trying to produce it.

Product orientation is where a firm produces a product in the hope they can encourage customers to buy and then tries to convince the public that they need it.

JKL could be said to be market-orientated because it was Harriet’s demand for the service that started the business. This is also suggested from the fact that JKL has contracted a marketing  firm to carry out market research (Appendix 1).

Market Segmentation

Market segmentation is breaking down a large market into subgroups or sections that are likely to respond to products in different ways.

Segmentation is important because it allows a firm to target its marketing effort towards those customers who have similar interests. The need to identify and target is crucial in reducing costs and making marketing more effective. It makes it easier to find gaps in the market and niche markets.

Market segmentation can be:

  • Geographical
  • Lifestyle
  • Age (JKL has done this dividing it into 0 to 2  and 2-5)
  • Gender
  • Social Class
  • Residence
  • Behaviour

Market Share and Growth

Market share is the proportion or percentage of the total market sales accounted for by an individual firm. As a day-care, what JKL is selling is places, and according to the information in Appendix 1, UK day nurseries provided 604,500 places in January 2011. As JKL has a maximum of 100 places at each of its 3 centres, that’s 300 places. 300/604,500 * 100 = 0.05% market share.

Since nursery groups (with three or more centres) account for 11% of all available places, that’s 66495. JKL has 300/66495 *100 = 0.45% share.

Market share allows a firm to assess its performance. Problems may arise from the definition of a market. Market share is only useful if the overall market can be determined and measured. It is often more useful to measure the share of a smaller section of the market instead of an entire market.

Marketing Strategy

Marketing Objectives are usually in relation to the 4 brand 20 mg P’s, the marketing mix, and should support the organisations’ main objectives.

  • Prices
    • Consumers  often have pre-conceived ideas about how much they should be paying for something and so if the price is charged too high, it may be viewed as extortionate and is likely to receive few sales. However if prices are too low,  parents would question the quality of the service being offered by JKL.
    • From table 1, it can be seen that JKL and TotsAtPlay charge pretty similar prices with  the main differences being JKL charging £20 less for children’s parties, £4 more for day-care services and £1 extra for after-school club. Since all of JKL’s centres are operating at full capacity of 100 places,  that extra £4 is an extra  £400 weekly over TotsAtPlay if they had the same maximum capacity. If TotsAtPlay did have the same maximum capacity, they would be able to make this  money by having 20 children’s parties as they charge £20 more than JKL for this.
    • Products
      • It  is said all products go through the product life cycle of introduction, growth, maturity and decline. Extension strategies can modify the length of each one.
        • JKL’s products  are: Day care, After School Club, Babysitting, Children’s Party, and evening classes.
  • The Boston matrix also helps in classifying products.
  • Place
    • This is about how the business sells to the consumer
    • Promotion
      • JKL does not seem to need much promotion now as it is operating at full capacity but JKL has a wealth of below  the line methods it can use as it has regular contact with parents and children.

Accounting and Finance

Budgeting

A budget is a management tool and it is for the  purpose of allocating,  controlling and  monitoring resources, especially income and expenditure. There is little mention of a budget in the JKL case study.

Cash-flow forecasting

A cash-flow statement is a documentation of what has happened in the past, while a cash-flow forecast is a prediction of what may happen.

Looking at JKL’s cash flow in Appendix 2,  they appear to have an oscillating net cash flow.

 

Overlook

BPL is currently set in over 200 hectares. To buy the 25 hectare land being discussed will increase BPL’s land by at around 12.5%. Belvoir is a premier sporting country estate which means their target market will primarily be those who wish to take a sporting holiday. Aside from the hotel, BPL seems to have a lot of sporting facilities such as a golf club, a leisure centre which contains a health club and gym and clay pigeon shooting is also mentioned.

As BPL aim to be a top international luxury destination, it will most likely need to be easy to get there and will need to somehow promote itself abroad.

BPL is an Ltd and most of the shareholders seem to be members of the golf club, whose main interest, according to lines 121-122, is to be able to continue playing golf and for this reason invest in BPL. This suggests therefore that Wilhelm Deboos-Parker is likely to have a lot of control over the company. His fastidious attention to detail can be inferred to mean he would like to be involved in everything which is going on, being very hands on, and would most likely then be an autocratic leader. This is further seen from lines 9-10 which states that staff have found he is someone not to argue with, line 89 says that Wilhelm made the decision concerning how tips should be distributed, how this was decided is unknown because Sue and Beatrice outnumbered Chris.

Price Discrimination means that BPL offers different people, the same service at different prices, this is likely to involve time-based price discrimination such as charging people who check-in after 10pm for example more than those who check-in at 4pm, but this may also be charging married and single people differently for the same room. This is most likely because the service BPL offers is price elastic and so they change prices accordingly.  An advantage of this is that BPL will be able to increase revenue by convincing guests to stay who might not have stayed at a higher price. A disadvantage is that there may be administration costs in separating the market to determine who gets what price.

Membership of the golf club is limited, so BPL could make a lot more money if the cap was raised. What is the ethos that BPL is trying to portray by limiting membership?

If the land BPL has been offered is 20% over typical local agriculture land values, then that’s £60,000 BPL could save.

Other factors which BPL will need to consider before deciding if they should buy the land or not include if they can raise the required finance. BPL has current assets of £252,000 which is not enough to purchase the land, although they have £3,952,000 of shareholder’s funds.

AOB stands for Any Other Business.  The picture of Jack James is may have been against privacy legislation, but in the UK, taking photographs in public, however isn’t an issue. If other people can see what you see, then it’s probably ok. Other people more than likely could have seen Jack James’ conduct.

A Maitre’d is the headwaiter of a dining establishment, responsible for ensuring that the connection between kitchen and dining room runs smoothly. Duties include keeping wait staff organized, smoothly dealing with customer complaints and issues, and to serve as the liaison between the kitchen and the dining floor. The Maitre d’ is usually the first person guests of the restaurant interact with and also when reservations are made.

A sommelier is a wine expert trained in wine tasting, pairing wine with foods, wine purchasing, wine storage, and the creation of wine lists. They are to help guests find a wine within their budget that fits their tastes and complements their food.

Objectives and Strategy

Objectives

The corporate aims of a business are its overall purpose, what the business is trying to achieve in the longer term.

In BPL’s case:

Strategic:

  • The business aims to be a top international luxury leisure destination with guests attracted from all over the world. (Corporate Strategy as concerns position of business) (Not SMART)
    • Figure 1, a bar chart depiction of the percentage of their guests from differing nationalities, shows that they are making progress in achieving this. Whilst the proportions of their guests from the UK and USA have dropped when comparing 2009 and 2010, other nationalities have increased.
    • This is an example of a strategic level decision because it affects the direction of the entire organisation.
    • For the par 72 Golf Course to contribute to the surrounding landscape and not detract from it (Business Level Strategy as it’s a plan to gain competitive advantage by obtaining goodwill) (Not SMART)

Tactical:

  • To  reverse the decline in revenue and net profit margin in 2011 for BPL (Not SMART)
  • To get room occupancy up to 75% by the end of 2013 (May be Smart)
    • One of the SMART criteria is that objectives must be achievable, and this is questioned by Sue on line 127

Tactics are short-term and strategies are long-term and far-reaching.

BPL’s objectives are determined by:

  • Size and Status of Business
    • BPL can pursue a goal of growth to be a top luxury leisure destination because it’s an established business as opposed to being concerned about survival.
    • The power of stakeholders
      • The most powerful stakeholders in BPL will affect the direction of objectives. In BPL, these are not shareholders because lines 121-122 says most of the shareholders’ investments represent a lifestyle choice and they wish to keep BPL open so they can continue playing golf.
      • This may be the guests (customers) for BPL because lines 7 – 8 say the main focus is on the guest’s perspective and lines 45-47 mention that BPL’s services must reflect guests’ needs and managers are encouraged to listen to suggestions from guests. Guests can therefore greatly influence objectives.
      • Ownership
        • BPL is an Ltd meaning shareholders are the owners and would have the most power but shareholders don’t appear to be that way inclined.
        • External and internal pressures
          • External pressures such as changing market trends can influence objectives for example increasing demand for products may encourage growth objectives.
          • Internal pressures can affect objectives such as the appointment of a new chairperson may completely alter the objectives.
          • Risk
            • Depending on how risk-averse BPL is, they may pursue objectives not as risky as others, seeking stability rather than risk. If the reward outweighs the risk then a risker option may be more tempting.
            • Corporate and business culture
              • BPL’s culture will affect the direction of its objectives. For example, a business that has a caring culture is likely to have different objectives to a business with a competitive culture. BPL appears to be guest (customer) orientated and so will have a culture of satisfying the guest.

Mission statements are descriptions of the overall aims of the business. BPL’s is unknown but can be inferred from lines 2-3. They tend to be aimed at stakeholders in the business and they may:

  • Help a business focus
    • A summary of what the business is trying to do may aid decision making when different options are available and direct objectives.
    • Provide a plan for the future of the business
      • Can be used as a blueprint of the path the business should take as the mission statement is their destination.
      • Make clear to all stakeholders what the business is trying to achieve
        • This should help reduce conflicts and attempt to prevent stakeholders from obstructing the business.

But the problems are that:

  • Mission statements have been suggested as being publicity stunts
  • Staff may not remember the mission statement and a business may not be committed to it rendering it redundant.

Corporate plans are where a business publishes what they plan to do and is similar to mission statements in what it may do and the problems it carries.

Decisions with greater risks usually carry greater rewards. Few methods of reducing risks include:

  • Market Research
  • Situational Analysis
    • This is a marketing term, and involves evaluating the situation and trends in a particular company’s market. Situation analysis is often called the “three c’s”, which refers to the three major elements that must be studied (Customers, companies, competitors)

Stakeholder Objectives

Owners: Generally, owners have an interest in the success of their business, but for BPL’s shareholders, success means survival.

Employees: Some of BPL’s employees have expressed that they wish to maintain if not improve their earning potential.

Customers: They want to have a quality experience obtaining value for money.

Government (Local Council): Job creation

There are potential stakeholder conflicts between Owners and the Government,  and more jobs will result in greater wage costs thereby eating into profits.

The stakeholders who triumph will be the ones who have the most power over the business, but differing stakeholder objectives may cause tension and is likely to reduce efficiency and more.

Planning

SWOT

Strengths:

  • Ostlers’ (the Michelin listed fine dining restaurant)
  • Excellent and imaginative food
  • Golf Club (Have a waiting list)
  • Attracts guests from all over the world
  • Guests find Managing Director, Wilhelm, charming
  • The integrity of BPL’s image

Weaknesses:

  • Reliance of peripheral income streams on the hotel.
  • Tension at monthly meetings and disputes over tips.

Opportunities:

  • £300,000 25 hectare land
    • Off-road driving
    • Shooting

Threats:

  • Change in the law regarding tips
  • Decline in revenue and net profit margins

 

The SWOT analysis  can be used to:

  • Set objectives – defining what the organization is going to do
  • Environmental scanning
    • Internal appraisals of the organization’s SWOT, this needs to include an assessment of the present situation as well as a portfolio of products/services and an analysis of the product/service life cycle
    • Analysis of existing strategies, this should determine relevance from the results of an internal/external appraisal. This may include gap analysis which will look at environmental factors
    • Strategic Issues defined – key factors in the development of a corporate plan which needs to be addressed by the organization
    • Develop new/revised strategies – revised analysis of strategic issues may mean the objectives need to change
    • Establish critical success factors – the achievement of objectives and strategy implementation
    • Preparation of operational, resource, projects plans for strategy implementation
    • Monitoring results – mapping against plans, taking corrective action which may mean amending objectives/strategies.

PESTLE (PEST-G) Analysis

Political: Obtaining planning permission from local council. Any immigration control or caps may affect the achievement of their objectives to attract guests from all over the world.

Economic: Difficult trading year (maybe recession – line 119)

Social:

Technological:

Legal:

  • Change of law on tips.
    • Businesses can no longer use tips to “top-up” staff pay to meet minimum wage
    • Game Act 1831 may affect plans to use land for shooting.
      • The act established a close season in which game birds cannot be killed or taken and this includes all Sundays and Christmas Days

Environmental:

A business analysis might assist in the formulation of strategy because then a business will be able to exploit what it does well, diminish its weaknesses, make use of opportunities and protect against threats.

Business Analysis

Market Analysis

The different market structures are:

  • Perfect Competition – This is a market structure with perfect knowledge, many buyers and sellers, freedom of entry and exit and a homogenous product. Firms usually price takers.
  • Monopolistic Competition – Market with freedom of entry and exit, differentiated products and a large number of small firms competing.
  • Oligopoly – Small number of dominant firms, producing heavily branded products with some barriers to entry.
  • Monopoly – Only one firm supplied the entire output, there is not competition and barriers to entry exist.

The degree of competition in a market will affect how prices are determined. The type of market a business operates in reflects the uniqueness of its product and the presence or otherwise of barriers to entry. This is why business work hard to establish and maintain scarcity, and to develop a USP.

Porter’s Five Forces

Michael Porter suggested that in certain circumstances business can influence the market in which they operate, outlining five forces which determine the extent to which businesses are able manage competition in their market.

  • Rivalry among competitors
  • The  threat of new entrants
  • The threat of substitute products
  • The bargaining power of customers
  • The bargaining power of suppliers

Forecasting

Anything a business can predict accurately will reduce their uncertainty and allow them to plan. Most forecasts are based on back data.

Time series analysis involves predicting future levels from past data. The assumption is that past data are a useful indicator of the future.

When identifying the trend, a moving average can be used. If the time period used is even, then centring needs to be used. For example, if a 4 year period is used, the 8 year moving total would also need to be found to find a mid point.

4 Period Time-series analysis for GDP Percentage Change

Year Quarter Percentage change GDP 4 Month Total 8 month Total 4 Period Moving Average
2006 Q2 0.4
Q3 0.5 2.40
Q4 0.8 2.60 5.00 0.63
2007 Q1 0.7 2.60 5.20 0.65
Q2 0.6 2.30 4.90 0.61
Q3 0.5 2.30 4.60 0.58
Q4 0.5 1.60 3.90 0.49
2008 Q1 0.7 0.40 2.00 0.25
Q2 -0.1 -1.90 -1.50 -0.19
Q3 -0.7 -5.10 -7.00 -0.88
Q4 -1.8 -5.60 -10.70 -1.34
2009 Q1 -2.5 -5.30 -10.90 -1.36
Q2 -0.6 -3.40 -8.70 -1.09
Q3 -0.4 -0.60 -4.00 -0.50
Q4 0.1 1.10 0.50 0.06
2010 Q1 0.3 2.30 3.40 0.43
Q2 1.1 2.60 4.90 0.61
Q3 0.8
Q4 0.4

4 Period Time-series analysis for Room Occupancy percentages

Year Quarter Percentage Occupancy 4 Month Total 8 month Total 4 Period Moving Average
2006 Q2 78
Q3 81 321.00
Q4 82 318.00 639.00 79.88
2007 Q1 80 309.00 627.00 78.38
Q2 75 297.00 606.00 75.75
Q3 72 285.00 582.00 72.75
Q4 70 281.00 566.00 70.75
2008 Q1 68 277.00 558.00 69.75
Q2 71 271.00 548.00 68.50
Q3 68 265.00 536.00 67.00
Q4 64 255.00 520.00 65.00
2009 Q1 62 247.00 502.00 62.75
Q2 61 241.00 488.00 61.00
Q3 60 237.00 478.00 59.75
Q4 58 231.00 468.00 58.50
2010 Q1 58 226.00 457.00 57.13
Q2 55 224.00 450.00 56.25
Q3 55
Q4 56

4 Period Time-series analysis for Golf Club Membership

Year Quarter Golf Club Membership 4 Month Total 8 month Total 4 Period Moving Average
2006 Q2 250
Q3 250 1000.00
Q4 250 1000.00 2000.00 250.00
2007 Q1 250 1000.00 2000.00 250.00
Q2 250 1000.00 2000.00 250.00
Q3 250 1000.00 2000.00 250.00
Q4 250 1000.00 2000.00 250.00
2008 Q1 250 1000.00 2000.00 250.00
Q2 250 1000.00 2000.00 250.00
Q3 250 1050.00 2050.00 256.25
Q4 250 1100.00 2150.00 268.75
2009 Q1 300 1150.00 2250.00 281.25
Q2 300 1200.00 2350.00 293.75
Q3 300 1200.00 2400.00 300.00
Q4 300 1200.00 2400.00 300.00
2010 Q1 300 1200.00 2400.00 300.00
Q2 300 1200.00 2400.00 300.00
Q3 300
Q4 300

4 Period Time-series analysis for Golf Club Waiting List

Year Quarter Golf Club Waiting List 4 Month Total 8 month Total 4 Period Moving Average
2006 Q2 315
Q3 301 1218.00
Q4 288 1224.00 2442.00 305.25
2007 Q1 314 1241.00 2465.00 308.13
Q2 321 1251.00 2492.00 311.50
Q3 318 1242.00 2493.00 311.63
Q4 298 1235.00 2477.00 309.63
2008 Q1 305 1204.00 2439.00 304.88
Q2 314 1151.00 2355.00 294.38
Q3 287 1044.00 2195.00 274.38
Q4 245 904.00 1948.00 243.50
2009 Q1 198 780.00 1684.00 210.50
Q2 174 695.00 1475.00 184.38
Q3 163 655.00 1350.00 168.75
Q4 160 626.00 1281.00 160.13
2010 Q1 158 593.00 1219.00 152.38
Q2 145 564.00 1157.00 144.63
Q3 130
Q4 131

Decision Making

Ansoff’s Matrix

This is an analytical tool based on products and markets.

Existing Products New Products
Existing Markets Market Penetration

  • Getting more International guests
  • Increasing room occupancy rates
Product Development

  • Adding shooting to services offered to guests (if given planning permission)
  • Off-road Driving course
New Markets Market Development Diversification

Ansoff’s matrix might assist in decision making because by classifying movements from the existing position the degree of risk can be identified. It is useful for a business aiming for growth.

Diversification is the most risky strategy because a business is moving into a market in which it has little or no experience. Market penetration is the least risky option as it seeks to increase usage. The other two are of middle risk. Increased risk should be accompanied by increased reward.

Decision Trees

A decision tree is a method of tracing alternative outcomes so as to compare them and the business will then be able to choose the most profitable. It can be used when a business is faced with a decision to make.

Decision trees are best used:

- For tactical decision-making

- In familiar situations

- Where the data is reliable

The branch probabilities leading into a single event node must sum to 1.

EMV stands for expected monetary values.

The decision tree in Appendix 1 shows that there are 5 decision points in total. With a decision usually comes a cost, but we only have the costs for the initial decision point.

Advantages of Decision Trees are:

  • Creating the tree diagram may show possible courses of action not previously considered. It can be dangerous to make spur-of-the-moment decisions without considering the range of consequences. A decision tree can help you weigh the likely consequences of one decision against another.
  • Decision trees only consider quantifiable criteria; results usually improve from placing numerical values on decisions.
  • They force management to take account of the risks involved in decisions and help to separate important from unimportant risks.

Disadvantages are:

  • The information obtained from a decision tree is not always accurate. Much of it is based on probabilities which are often estimated. When actual decisions are made, the payoffs and resulting decisions may not be the same as those planned for.
  • Decisions are not always concerned with quantities and probabilities. They often involved people are influenced by legal constraints, PESTLE.
  • Business owners and managers may need to have a certain level of quantitative or statistical experience for the decision tree to be fairly accurate.
  • Time lags may occur which may mean some of the data used may be out of date by the time the decision is made
  • The process can be quite time consuming using up valuable business resources
  • Any change in any data can alter the decision indicated. Decision makers may, in an attempt to encourage a particular decision, manipulate data.
  • Does not take into account the dynamic nature of businesses

ICT Decision Making and MIS

A Management Information System (MIS) uses data from internal and external sources combined into and easy to read format in tables or graphs to help managers make effective decisions and plan appropriately making them essential to decision making.

MIS software can be generic, commercially acquired or bespoke. MIS is a tool for data handling, analysis and interpretation.

Advantages:

  • Helps automate the managerial process
  • Creates a competitive advantage
  • Improves personal efficiency by handling large amounts of data

MIS can highlight progress to achieving corporate objectives.

With the information in Fig. 2, an MIS might assist decision making because using past data, it can show trends in the information and make predictions, such as reservation forecasts for example.

As BPL operates profit centres, it can be used to show revenue generated per day/week/month by profit centre.

Possible Implications of Decisions

BPL’s decisions are holistic and can impact on the business at local, national and international level.

BPL is faced with the decisions of:

  • Invest
    • Internal
      • Refurbish restaurant/kitchen
        • Lines 20-31 suggest restaurant and kitchen is already doing very well
        • Upgrade leisure club
          • The waiting list and asymmetric arrangement suggest that the golf club is doing better than the leisure club. So investment might be necessary if leisure club not doing so well.
          • Still not spreading financial risk
          • Untouched departments might be resentful
          • Risk of wasted investment as the changes might not be necessary
  • External
    • Buy shares
      • If in other hotel groups, will provide source of finance which may help their performance and increase competition with BPL, but may be able to exert some influence on the organisation.
      • Will be subject to the successes and failures of the other companies.
      • Will be able to lessen the effects of inflation
      • Place in Bank
        • Opportunity cost – not using money for anything
        • Risk bank closure (Northern Rock)
        • Money loses value due to inflation
  • Opportunity cost – loss of the potential return in the range of £700,000 – £400,000 if the land had been purchased and they had been able to obtain planning permission.
  • Will be unable to extend the list of services offered to guests.
  • May result in unhappy managers
  • May reduce financial risk of BPL being dependant on a single venture.
  • May slow achievement of its corporate aim (to be top leisure destination) by not developing its services, current facilities don’t seem to be  posing a problem.
  • Would still have the problem of complaints from neighbours about clay pigeon shooting. (line 56)
  • The investing options considered are still in the UK, so they would still be vulnerable to the performance of the UK economy. (line 70)
  • May then not be able to create jobs (line 59)
  • Buying the £300,000 Land
    • If able to obtain planning permission
      • Use it for shooting
        • Ethical consequences and activists/animal rights groups
        • Will increase costs to ensure safety here and increase wage bill and staff will be needed to rear and care for game birds.
        • Will be able to reduce complaints by moving clay pigeon shooting facility away from village.
        • Use it for off-road driving
          • More people drive
          • Will need to provide support if cars break down and other things
  • If unable to obtain planning permission
    • Agricultural Use
      • Loss of some of the investment money
        • May offer walks
        • Growing Kitchen ingredients

[----------------------------------------------------

Key:

  • A decision option
    • Related to the above decision option (either other options resulting from it or consequences of it)
      • About the result above (More options and consequences dependent on above).

----------------------------------------------------]

Measures of Business Performance

Employee Contribution

Measuring the contribution of employees towards objectives is important because it allows decisions to be made as to how many employees to get and allows the business to set itself realistic targets as it knows what it’s workforce is capable of. Employee contribution can act as a source of competitive advantage.

Budgets

A budget is a plan of incoming and outgoing monies, expense and income.  It provides target spending levels and profit estimation by allocating particular sums of money for various things.

Budgets help a business achieve their objectives (reverse decline) because:

  • Budgets provide a way of regulating the spending of money and draw attention to waste, losses and inefficiency.
  • They act as a review for a business allowing time for corrective action.

However, budgets might:

  • Lead to resentment because of budgeted figures or lack of their involvement which may result in lack of motivation and targets being missed
  • Cause the business to suffer if it is too inflexible. For example BPL might not be able to…
  • Lose their importance if actual business results are repeatedly very different from the budgeted ones.

The Business Cycle

The business cycle is the upward and downward fluctuations in business activity through the states of

  • Boom (spending, investment and confidence high with profits and wages usually rising)
    • BPL is likely to have a lot of guests at this point as people have more disposable income
    • Recession (where incomes and output start to fall as there is a fall in demand and therefore profits)
      • Guests will start to reconsider leisure holidays and BPL may be making staff redundant.
      • Slump (bottom of the cycle with unemployment high, confidence, spending, investment and profits low)
        • Very few people will be visiting BPL now but BPL will still need to pay its overheads. BPL’s main concern will probably be survival
        • Recovery (where incomes, output, confidence and spending start to rise again)
          • Guests will start coming again and profits should rise.
          • Change of law on tips.
            • Businesses can no longer use tips to “top-up” staff pay to meet minimum wage
            • This will have little effect on BPL if they were already compliant
            • Game Act 1831 may affect plans to use land for shooting.
              • The act established a close season in which game birds cannot be killed or taken and this includes all Sundays and Christmas Days
              • If planning permission is obtained and the land used for shooting, it will be idle on close seasons, Sundays and Christmas Days.
              • Planning permission is legally required and thus, BPL’s actions are restricted unless it can gain planning permission.

Legal Issues

It is in BPL’s best interests to comply with the law so as not to be fined (or even closed) or have key individuals arrested which may affect business survival.

Change

Businesses operate in a dynamic environment and as such they have to accept that changes will occur. Change is caused by:

  • Developments in technology
  • Changes in the economy
  • Changes in consumer tastes
  • Legislation
    • Change of law on tips

BPL has changed its remuneration policy and Wilhelm believes the change was not effectively managed. It is important that businesses respond to change else they are likely to go out of business.

Businesses are likely to face some resistance to change from parts of the workforce and this can be seen in BP through the unhappy comments from staff as they were informed of the changes and the fruitless investigation into the two chambermaids accused of keeping tips.

Some consequences  of this change are that:

  • Some staff may become unmotivated

Resistance to change  is likely to exist because:

  • Workers sometimes fear the unknown. As staff at BPL no longer keep their tips, they have a lot less control over how much they can earn and it is now left to someone else to decide their wage, with any bonus coming from tips unrelated to their hard work.
  • They feared a fall in earnings (lines 92-93).

If change is to be carried out effectively, BPL must take these fears into account and only if employees  feel they can cope with the changes will BPL be operating to its full potential.

In order to remove resistance to change:

  • BPL’s employees should have been kept informed about all changes before they were finalised.
  • As one of the options was giving the tips to all members of staff, then everyone should have been consulted about the changes being considered as this will give them a feeling that they are involved in shaping change and have a stake in its outcome.
  • BPL should have attempted to prevent misinformation and rumours as they would decide their stance in relation to the change based on the erroneous information without knowing the truth.
  • BPL should  try and ensure its organisation culture fits in with its new operations.

BPL has used a total imposed package to implement the change on tips as the managers made the decision without any consultation with the employees.

BPL could have considered an imposed piecemeal initiative perhaps where pooled tips were only for those who worked in the front of house, then maybe everyone. This would have allowed staff to slowly get used to the change and any teething problems can be resolved.

A negotiated piecemeal initiative would perhaps have worked better for BPL because employees would have been consulted, either through representatives or individually. Not only would this have allowed them to get used to it slowly and adjust over time, but they would have known of the coming changes before hand, due to their involvement.

A negotiated total package may also have worked well for BPL because even though employees are consulted, for efficiency’s sake, the change is implemented as a whole.

As it affects earnings, this is a change that possibly should have been anticipated, controllable, and incremental.

Possible Questions

  • Q1(a)         13 Marks (Calculation)
    • Calculate the Net Expected Values for BPL if they bought the land?
    • Calculate the time series analysis of percentage change in UK GDP?
    • Calculate the time series analysis of percentage occupancy for BPL rooms?
    • Calculate the time series analysis of the golf club waiting list?
    • Calculate four ratios using the balance sheet (Current Ratio, Acid Test, Gearing, Debtor days, Creditor days, Stock turnover, Working Capital, Net profit margin, Return on equity)
    • Q1(b)         18 Marks (With Reference to Calculation)
      • Recommend whether BPL should go ahead with any of the options being considered in the decision tree? Justify your view.
      • Recommend a strategy for BPL to continue reducing the golf club waiting list?
      • Evaluate Sue’s objective of a 75% room occupancy rate?
      • Discuss how changes in the UK’s GDP will affect BPL?
      • Recommend a strategy for BPL to reverse the decline the revenue and net profit margin?
      • Q1(b)                   Other 18-23 Marks (Use figures available in case study)
        • How does price discrimination assist BPL in achieving its objectives?
        • How does purchasing the land offered to BPL reflect the needs of BPL’s guests?
        • Should BPL purchase the land? Justify your view?
        • Should the land BPL is purchasing be used for shooting or for an off-road driving course?
        • What should BPL use the £300,000 for?
        • How should the change of BPL’s remuneration policy have been handled?
        • Evaluate how BPL should handle Jack James’ breaches of the conditions of his employment?
        • Recommend what BPL should do about the reliance of the peripheral income streams on the hotel?
        • How can Sue boost the success of her department?

 

1930’s: ‘The wasted years’, ‘The devil’s decade’,

Unemployment was such a big problem and seen as scandalous because it was against the backdrop of rising living standards for the majority.

Coal Industry:

Cotton Industry:

Shipbuilding:

Iron and Steel Industry:

 

Unemployed as a percentage of insured workers in regions of Great Britain

  1929 1932 1937
London and S.E. England 5.6 13.7 6.4
S.W. England 8.1 17.1 7.8
Midlands 9.3 20.1 7.2
Northern England 13.5 17.1 13.8
Wales 19.3 36.5 22.3
Scotland 12.1 27.7 15.9
Northern Ireland 15.1 27.2 23.6

According to J Stevenson and Chris Cook in – The Slump: Society and Politics during the Depression

 

Unemployed Numbers (Those claiming unemployment benefit – registered as unemployed)

1929 1 216 000 1934 2 159 000
1930 1 917 000 1935 2 036 000
1931 2 630 000 1936 1 755 000
1932 2 745 000 1937 1 484 000
1933 2 521 000 1938 1 791 000
    1939 1 514 000

 

Percentage of Insured Workers unemployed by industry (Highest and Lowest)

  1929 1930 1931 1932 1933
Highest Shipbuilding (25.3) Iron and Steel (28.2) Shipbuilding (51.9) Shipbuilding (62.0) Shipbuilding (61.7)
Lowest Electrical Engineering (4.6) Electrical Engineering (6.6) National Government Service (10.3) National Government Service (12.4) Distributive Trades (12.4)
  1934 1935 1936 1937 1938 1939
Highest Shipbuilding Shipbuilding Shipbuilding Shipbuilding Cotton Textiles Shipbuilding
Lowest Electrical Engineering Electrical Engineering Electrical Engineering Electrical Engineering Electrical Engineering Electrical Engineering

 

General elections were held in 1929, 1931, and 1935. From a Labour government (second) to two National Governments (the first labour dominated and the second Conservative dominated).

Concentrated unemployment, especially worse in South Wales, North England and Scotland, where the older staple industries were located. William Beveridge calculated that 84.9% of long-term unemployment was to be found in these areas.

The underlying issue was structural unemployment which results from a mismatch between the sufficiently skilled workers seeking employment and demand in the labour market. The number of vacancies may be equal to, or greater than, the number of the unemployed, the unemployed workers may lack the skills needed for the jobs — or may not live in the part of the country where the jobs are available.

It is hard to be precise with extent of unemployment because most statistics refer to those covered by the National Insurance Scheme.

One effect of the slump was therefore to accentuate and to sharpen the differences between the prosperous Midlands and South and the rest of the country.

By the end of 1930 unemployment had more than doubled from 1 million to 2.5 million (20% of the insured workforce), and exports had fallen in value by 50%. In 1933, 30% of people in Glasgow, largest city in Scotland were unemployed due to the severe decline in heavy industry. In some towns and cities in the north east, unemployment reached as high as 70% as ship production fell 90%. The National Hunger March of September–October 1932 was the  largest of a series of hunger marches in Britain in the 1920s and 1930s. About 200,000 unemployed men were sent to the work camps, which continued in operation until 1939.

The debt that many European countries had accumulated to pay for their involvement in the First World War destabilised many European economies as they tried to rebuild during the 1920s.

J.B Priestley’s three England’s:

1. ‘Old England’, a place of picturesque countryside, inns and historic cathedral cities.

2. Smoky, depressed world of 19th century heavy industry, typified by slum housing, mills, railway stations and Victorian Town halls – made up the larger part of the Midlands and the North – but it was not being added to and has no new life poured into it.

3. Vibrant suburban world of arterial and bypass roads, halls and cafes. A consumer culture had developed.

J.B’s view of the dole:

‘…It is all wrong. Nobody is getting any substantial benefit, any reasonable satisfaction out of it. Nothing is encouraged by it except a shambling dull-eyed, poor imitation of life. The labour exchanges stink of defeated humanity. The whole thing is unworthy of a great country that has in its time given the world some nobly creative ideas. We ought to be ashamed of ourselves. ‘

It should not be suggested that the 1930’s were not a time or hardships but there was never less than three quarters of the population in work.

FPTP (First Past The post) is the system when the “winner takes all”. This system rewards only winners.  It also produces strong single party governments. The winner in each constituency  (seat) is the candidate with the most votes; the number of seats gained  is the most important factor. Thus, the party with the  most seats (or MPs) in parliament becomes the government.

Proportional representation would however  produce permanent coalitions, because the percentage of votes obtained is the percentage of seats allocated. It rewards the 2nd, 3rd … placed candidates.

J.B Priestly said in 1923, about the unemployed, “They looked like prisoners of war”

1/5th of the working population was unemployed in 1933.

The Depression caused a collapse in demand for ships, and the closure of Palmers shipyard in Jarrow, leading to 80% unemployment in the town. Jarvis, High Sherriff of Surrey launched an appeal named the “Surrey Fund” sending food and buying materials enabling men in Jarrow to continue working, buying the decommissioned liner RMS Olympic (a sistership of the Titanic), and Berengaria to be broken up in the new Jarrow Shipbreaking Company (based on the former Palmers shipyard), while the metal was to be used in Jarvis’s  new metal industries in the area, which employed several hundred people.

With the competition from Japan, China and other nations, dole queues grew longer. There was nothing to do, nothing to spend.

Starting with the fall of Lloyd George as Prime Minister in 1922, the years that followed up to 1940, were describe by Charles Mowat in his book ‘Britain Between the wars’ published in 1955 as ‘the rule of the pygmies, of the “second-class brains”’ who allowed the country to ‘sink in the hopeless morass of depression and unemployment’, the ‘lesser men’ who had ’frittered  away Britain’s power in the world’. The National Government which had governed Britain in the 1930s had been ‘one long diminuendo’ which ‘from its triumph in 1931 shambled it’s unimaginative way to its fall in 1940’.

Some think the Conservative party had achieved political dominance largely through trickery. The Labour party had been kept out of office by this and by the failings of its own leaders, most notably the treacherous Ramsay MacDonald.

 

Monarch – King George VI
Prime Minister – Neville Chamberlain, national coalition

 

16 January – Irish Republican Army bombs explode in London, Birmingham, Manchester, and Alnwick, opening its ‘S-Plan’ campaign.

27 April – Military Training Act (coming into force 3 June) introduces conscription; men aged 20 and 21 must undertake six months military training

30 August – Evacuation of children from major UK cities begins. Royal Navy proceeds to war stations

1 September – Blackout imposed across Britain.The Army is officially mobilised.

3 September – World War II. The UK declares war on Germany following the German invasion of Poland on September 1.[2] Shortly after 11.00, Chamberlain announces this news on BBC Radio, speaking from 10 Downing Street. Twenty minutes later, air raid sirens sound in London (a false alarm). Chamberlain creates a small War Cabinet which includes Winston Churchill as First Lord of the Admiralty. General mobilisation of the armed services begins. National Service (Armed Forces) Act passed by Parliament introduces National Service for all men aged 18 to 41. British liner SS Athenia becomes the first civilian casualty of the war when she is torpedoed and sunk by German submarine U-30 between Rockall and Tory Island. Of the 1,418 aboard, 98 passengers and 19 crew are killed.

 

Monarch – King George VI
Prime Minister – Neville Chamberlain, national coalition

February: Foreign Secretary, Anthony Eden, resigns and is replaced by Lord Halifax.

April: Agreement signed between Britain and Eire.

May: Rent Act decontrols rents on a small slice (450,000) of the upper sector of middle range houses (i.e. those worth more than £2O – £135 in London), but retained it on those below.

July: The Coal Act brings the nationalisation of the coal industry nearer by nationalising coal royalties. Compensation given to owners. The Holidays with Pay Act extends paid holidays (usually one week) to an additional 11 million workers. The Hire-Purchase Act introduced to protect customers using credit against unscrupulous seizure of goods.

 

Monarch – King George VI
Prime Minister – Stanley Baldwin, national coalition (until 28 May), Neville Chamberlain, national coalition

May: Stanley Baldwin resigns as Prime Minister. Neville Chamberlain assumes the Premiership.

June: Imperial Conference in London.

July: Proposed march by the BUF through the East End prohibited under the Public Order Act. March through Bermondsey leads to 113 arrests and 28 injured. Factory Act stipulates that young persons under 18 were not to work more than 44 hours in a week (9 hours a day maximum, other than in exceptional cases, i.e sudden pressure of work); those between 16 and 18 (and women) were to work no more than 48 hours a week (with not more than 6 hours overtime per week, and a limit of 100 hours per year). Further regulations governed lighting, ventilation and cleaning. Matrimonial Causes Act made desertion, cruelty, drunkenness, rape, sodomy, insanity, non-consummation, bestiality and VD (in addition to adultery) grounds for divorce, to the benefit of women. Ministers of the Crown Act makes the Leader of the Opposition a paid official post, recognised the office of Prime Minister, increased ministers’ salaries and pensions and raised M.P.s salaries.

December: The Irish Free State adopts the Gaelic name of Eire, but does not yet formally contract out of the Commonwealth.

Unemployment appeared to be receding, losing the ground it had hitherto conquered in the economic struggle.

© 2012 Obolynx Educator Suffusion theme by Sayontan Sinha