Contrasting Differences Between “the Cooperative” and “Hsbc Plc”

The purpose of this essay is to explain and analyze contrasting differences between “The Cooperative” and “HSBC plc”, and to explain its stakeholders.

At the end I will explain and evaluate their mission aims, objectives and impact of their companies. The simplest form of ownership and possibly the most common too, is sole-trading, which is owned by one individual. Possibly this individual opened his company by using his savings or quite commonly by means of a bank loan. He is capable of running every aspect of his business and is solely responsible for is business.Most multinationals generating billions of pounds per year of our days started as sole-trading companies. Partnerships are the next evolutionary step. They are owned by two or more individuals, usually specialists who join venture.

As sole-trading all parties contribute privately towards the business’ capital through savings or bank loans, usually profits are shared depending on how much capital was invested by each party. There can be partners who usually do not take part in the running of the company called sleeping or dormant partners they mainly invest and share the profits.Private Limited Companies (Ltd) are companies whose ownership is divided into equal parts called shares, who own these shares in turn are called shareholder, only by consent of all shareholders can shares be sold to a particular buyer and usually who owns more shares ultimately has majority of the decision making. This type of company is considered to be an entity of its own, the owners only run it. Public Limited Companies (Plc) follow the same principle has Ltd companies but they must first of all, raise sufficient capital, minimum of ? 50,000. 0 by selling its shares in the stock market . A minimum of two directors, two members and a qualified secretary are needed to trade as a Plc and its directors must provide statutory documentation to the companies house.

Cooperative Companies are raised through an association between individuals united usually by socio-economical factors. Capital is raised privately and no matter how much one shareholder invests in contrast with others, shareholders he or she has only one vote, meaning this every shareholder has the same power. Democracy is the cornerstone of this type of company.Shared responsibilities towards decision planning policy making and aims of this company are done by every member, capital is owned in common property of the cooperative. Main advantages are equally shared ownership, equally shared profits depending on how much invested social and economic awareness services and products, environmental awareness. Main disadvantages can be financial control, management effectiveness poor planning, `and longer decision making less trust in the cooperative ideology. Franchises are defined as trading under the name of a third party company.

The franchiser gives a license to the franchisee to trade under its name. Its main characteristic is how the business is ran, the franchisee owns and operates the business but the franchiser maintains control over the products or services sold, its marketing, quality and standards of the entire business. The two companies I will talking will be The Cooperative which falls into the cooperative type of company and HSBC Holdings which is under the public limited company category. HSBC Holdings exist to provide financial services worldwide.The Co-operative are democratically run by members to meet their common needs and aspirations Their main reason is not chasing profits like other types of ownership businesses, but the ability to steer their products and services in a more responsible direction. The Cooperative provides food and retail products, financial, funeral care, legal, pharmacy and travel services. HSBC Holdings provide a range of financial services, personal, commercial, corporate investment and private banking customers.

The Co-operative is run by over two-and a-half-million of members who share on how the businesses are run.HSBC Holdings is run by a board of directors but the owners are the investors and shareholders who have bought the company’s various types of shares. HSBC Holdings is an entity of its own, meaning it has legal rights and responsibilities and is used in such way to conduct business totally in the interests of its shareholders who invest their capital and the employees who contribute towards the company with their labour. The Co-operative is defined as being an association of individuals who voluntarily unified to meet common cultural, social and economic needs.They come to be a democratically owned and controlled business. Its members have a say in how the business is run, by attending meetings, voting for their representatives, this way members influence policies, both at ethical and operational levels. The level of influence is irrespective of how much a member invests, it can be one pound or one hundred thousand pounds.

Stakeholders are individuals or groups who contribute voluntarily or involuntarily with their wealth to create profitable businesses. They are the potential beneficiaries or risk bearers of their business.They can be active or non-active representatives members in their companies. Commonly these days stakeholder term is used to represent individuals or organizations who have legitimate interests in projects or entities. The concept of stakeholder can be more widely used to include other forms of individuals or organizations that may not take part in benefit or profit sharing but still have a “stake in the business involved, this can be employees, pressure groups, customers, suppliers, communities, governmental bodies.HSBC Holdings, and The Co-operative have various types of stakeholders and the ones with a direct influence over the company are the internal stakeholders. In the case of HSBC Holdings these are the owners, board of directors, and employees.

In the case of The Co-operative these are the owners, board of directors, employees’ and its members who actively are encouraged by the company to take part in the running of the business. The mportance of stakeholder is to support its organization in achieving its strategic objectives, by interpreting and influencing the external and internal environments and creating positive relationships, the stakeholders through correct management of their expectations and agreed objectives. This management is a process that must be planned and guided by the principles stipulated by the stakeholders. In the case of the Co-operative we can see their entire business in managed in accordance of all their members.Has the business was created to help and support communities all their stakeholders from directors to staff members have the same influence on how the business is run. Most importantly all its shareholders agree the main factor of the company is to provide goods and services at reasonable prices, ethically viable and do not look for profit margins with the exception to stay in business and grow. HSBC Holdings believe their success is the only outcome required by their shareholders if not their stakeholders would not invest, good employees would not want to work for them and the customers would not want to bank with them.

They want to be the largest international financial institution, have a cosmopolitan customer base and to have considerable financial strength. Except for The Co-operative whose stakeholders do not necessarily look for profits, like HSBC Holdings, both cases owners and senior staff look for performance and direct their business according to their aims and objectives they want to get a good return on their investment, non-managerial staff mainly look for quality and security of jobs, good pay of rates, job satisfaction, good benefits promotion prospectus.Their main external stakeholders even if not necessary for this essay I feel it is important to explain their importance too, governments look for low employment risks and ability to gain profits through taxation, trade unions look for working conditions, wages and legal requirements, customers for quality, value and more recently for ethical services or products and local communities who want to be involved in their business and expect job security, expect environmental and social issues best interests to be answered.Both companies have been around for more than a century, both believe their stakeholders internal or external have a fundamental importance in their companies both have different objectives and aims but, similarly both believe in managing their business in a sustainable way and taking responsible attention in their decisions to be successful in the long term. They have taken very different routes simply because the aims and objectives expected by their stakeholders are not just that.Creating aims and objectives is no easy task especially when both terms have vague distinctions and imprecise definitions. All business has a hierarchy which usually starts from their mission statement to their aims and finally to their objectives.

Objectives give the business clear defined targets it is a detailed picture of the business and plans must then be setup to achieve the objective in question, they are stated into measurable targets using “S. M. A. R. T. ” definition-. ”-Specific; Measurable; Achievable; Realistic and Time.

Objectives can then be considered medium to long term goals required by a business to maintain its path these are the strategic objectives, the day -to-day or short-term objectives are called tactical objectives they help the strategic objectives being accomplished. Aim is the goal or general statement a business wants to achieve. They are important in developing implement and evaluate a business future. Aims are long term plans necessary for a business and where businesses objectives derive.Usually businesses may have several aims and objectives, all simply depend of the nature of the business. The most common can be to make profit, survive, expand, break even, improve quality, competitive value, and more recently, more and more business aim to be environmentally friendly. All of these help any business to be able to stay, in business.

Objectives and aims provide a clear structure for all of the various activities that an organization carries out.Measuring how well an objective have or not been achieved, managers can make necessary arrangements to their activities to ensure progress and achievements of the stated mission statements, aims and objectives are followed. Aims and objectives within an organization are established at a number of levels from top level corporate objectives, all the way down to team objectives and individual objectives that create a framework for operational activities.An example could be the customer service department of HSBC Holdings which aims to satisfy customers, and the marketing department which aims to identify customer’s needs. HSBC Holdings mission statement is “We are the world’s local bank” meaning they want to be the largest international emerging markets bank, widespread international network focus on a unique international customer base and have unquestioned financial strength. To achieve this their aim is to run a sustainable usiness in long terms, to do this they want to give their stakeholders sustainable profits, have and build long-lasting relationships with their customers, value their employee, respecting environmental boundaries and investing in communities. The Co-operative mission statement is “From community projects to a share of the profits, we’re good for everyone”.

They believe in providing ethical services and goods from banking travel, pharmacy, legal services, funeral care, food and on-line shopping only in the United Kingdom.They are a group who base their aims on their ethical values, influencing this way the way they do business. Their aim in this way is to show good quality products and services do not have to come at the expense of honesty and social responsibility. We can see HSBC Holdings and The Co-operative mission statements, aims and objectives focus their business in maintaining their purpose. Both businesses believe in sustainability of their employees, communities and environmental values but differ on how their profits are shared and who runs the business.The Co-operative by being managed in a democratically way focus its aims and objectives in ethical issues, in the interests of all their internal and external shareholders. HSBC Holdings most important aim and objective are actually to produce profits for their internal shareholders and expanding worldwide.

Bibliography: www. hsbc. co. uk -Accessed more than once www. thecooperative. coop -Accessed more than once Tutor Handouts: http://go. guildford.

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