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The HRM strategy is a strategy for recruiting, training and motivating the employees of the company for achieving goals and FM strategy is related to procuring finance for company. The report will base on the Body Shop Company. The report will state the HRM strategy of recruiting, training and development and employee benefits and FM strategy like evaluating profit and loss and preparing balance sheet. The report will highlight strengths and weaknesses of both the strategy of Company. The purpose of report to evaluates the better strategy of the company. The Body Shop Company is a cosmetics company established by Dame Anita Roddick, founded in 1976. The company offers variety of 1000 products through its 3000 stores. The company offers skincare, beauty, hair types and bath & body products.
Human Resource Management is the department responsible for hiring, employing and managing the employees in the organization. It focuses on organizing and coordinating employees in the company so that the goals or objectives of the business are achieved effectively and efficiently. The role of Human Resource Management in business is that it is responsible for recruiting and hiring the best employees for the company, training employees and better communication at the workplace (Zardasht, Omed and Taha, 2020). The HRM strategy includes recruitment, training and development strategy and employee benefits and reward strategy.
Recruitment strategy
Training and Development Strategy
Employee benefits, rewards and incentives
Strengths
The HRM strategy of the Body Shop Company with its effective training and development program improves the skill and proficiency of employees it lead to increase revenue of the company. Its HRM strategy also give emphasis on the development of existing employees, it increases their morale and aids to achieve goals of company.
Weakness
The weakness of recruitment strategy of the Body Shop Company is that it is not able to find right person for the right person for right job. The company recruits on the basis of first- come- first-served format. Because of this the company is unable to find best employee.
Financial management is a process of doing planning and controlling activities of the company related to finance like procurement and usage of finance in the company. The role of financial management in the business is that it is responsible for allocating finance for different business activities, for introducing new product in the business (Eun, Resnick and Chuluun, 2021). It is important for the company to increase market value and helps in achieving goals in long term.
Financial Management Strategy
The financial management strategy emphasis on financial resources, estimates profit potential and cost structure and so more (Mihajlovi?, Tadin and Gordi?, 2020). It is important for doing financial planning, raising funds, maintaining cash flows and deciding capital structure of the company. Financial management strategy are-
Particulars | Formulas | Financial year 2022 | Financial year 2021 |
---|---|---|---|
Gross Profit ratio | Gross Profit/ Net Sales * 100 | 212/408*100 = 51.96% | 291/487*100 =59.75% |
Net profit Ratio | Net Profit/ Net Sales *100 | 60/408*100 = (14.70%) | 16/487*100 = 3.28% |
Inventory Turnover Ratio | Cost of goods sold/ Average inventory | 196/109 = 1.79 | 196/124 = 1.58 |
By evaluating the profit and loss account, it is analyzed that the gross profit of the company in financial year 2022 is 51.96% which was in financial year 2021 was 59.75%. There is increase in the value of cost of goods sold, therefore the gross profit of the company decreases, it means company need more funds to deal with operating expenses (THE BODY SHOP INTERNATIONAL LIMITED, 2024).
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The Net Profit ratio of the company in financial year 2022, the company has net loss of 14.70 %. In financial year 2021 there was net profit of 3.28%.
The inventory turnover ratio increase in financial year 2022 as 1.79 as compared to financial year 2021 was 1.58 it means that company products are sell on time, it means the company have good sales of its products. The company give emphasis constantly on replenish inventory, as company need more stock so that there is no problem of lack of stock.
Strength
The strength of financial management strategy is that company sales is increase as compared to previous year, it means there is better planning of finance.
Weakness
The weakness of financial management strategy is that the company`s budgetary control is not sound because company`s expenses is increases due to which company suffer net loss.
By evaluating the Human Resource Management and financial management strategy of the Body Shop Company it is analyses that the HRM strategy is better than FM strategy. It is because of that the company has good training and development strategy for its new recruiting employees, the company provides on the job training to its employee in which the employee trained while performing job (Robinson, 2020). For this, step by step instruction given to employees. The company also provides training to its existing employee, it increases skill, knowledge that helps to increase the performance as well as achieve organizational goal. For the motivation and employee engagement company take some initiatives and reward employees for better performance in monetary and non- monetary form. The financial management strategy of the company is not efficiently sound because the profit and loss accounts of the company show loss in the financial year. For this, the company has to take some corrective measures to correct its financial position by improving financial strategy.
5. Conclusion
To sum up, it is concluded that for achievement of company goals HRM and FM strategies plays an essential role. The Body Shop company HRM strategy included open recruiting, internal mobility for training and development and some initiatives to motivate employee. The report stated FM strategy like evaluating profit and loss account and preparing balance sheet. The report highlighted the strengths and weakness of both strategies. Thus, it is concluded the Body shop need to improve is financial management strategy.
6. References
Books and Journals
Online
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