Studied by 10 people
Leader
A business leader is an individual who is responsible for guiding and directing a company or organization towards its goals and objectives. They are typically in charge of making important decisions, managing resources, and overseeing the work of employees. A successful business leader is able to inspire and motivate their team, while also being strategic and forward-thinking in their approach to managing the business.
Formal leader
people with positions of power in a business. this is a job that they have therefore have authority over others e.g CEO
Informal leaders
possesses leadership qualities that people want to follow without having authority over others
Managers
always have people working for them. their job is to be incharge of someone and for people to follow their instructions
Managers do what
set expectations, motivate staffm train staff, use business resources in a way that gets the most output for the business
communication
having the ability to communicate clearly when they speak and write as they are usually passing compex information so that it can be understood by everyone
4 Functions of management
planning, organising, leading and controlling
hierarchy
A hierarchy is a system or organization in which people or groups are ranked one above the other according to status or authority. It is commonly used to establish a chain of command and ensure efficient decision-making.
autocratic leadership
very strict, one person makes all the decisions
advantages to autocratic leadership
gets decisions made quickly and expectations are clear
disadvantages to autocratic leadership
staff may feel micromanaged which leads to less motivation and less productivity
Democratic leadership
Democratic leadership is a style of leadership where the leader involves the team members in the decision-making process. This style of leadership promotes open communication, collaboration, and participation from all members of the group.
advantages to democratic leadership
staff feel like their opinion is valued which means that they may feel obliged to be hard working
disadvantages to democratic leadership
can take a long time to reach a decision and this can slow the business down
Laissez-faire
hands off leadership approach allows group members to make their own decisions
Advantages to laissez fare
staff feel trusted therefore likely to feel motivated as they have autonomy over their own decisions
disadvantages to laissez-faire
not motivating for people who need to interact with their managers as there is less care the safety risks may be higher and may be a decrease in productivity
Tall structure
there are long chains and usually a narrow span of control as there are only a few direct reports to each manager
centralised decision making
when decisions are made at the top of the hierarchy
examples of when a centralised decision-making would be efficient
when a business needs to follow a set way of doing things
when employees/staff don’t have experience
Flat structure
wide span of control. each manager has a lots of direct reports
de-centralised decision making
decisions are made at the lower levels of the hierarchy
examples when de-centralised decision making is most efficient
its a good use of managers time as they can delegate responsibilities
more viewpoints
greater motivation as employees feel valued
Matrix structure
teams made up of different departments work together and report to more then one manager
A matrix structure is used when
launch of a new product
a specific big task needs to be done
Shamrock organisation structure
business employees core workers (permanent staff), freelance workers (brought in to do a specific task) and flexible (part time and temporary workers)
inputs
resources a business puts into the production process
human resources
peoples time, knowledge and effort
capital resources
buildings or machinery
natural resources
natural materials to support peoples lives and meet needs such as animals, vegetables, minerals
job production
final product is produced from start to finish by the same person
Advantages to job production
Customer requirements and changes can be handled
Because the costs can be made higher as it is easily customised
Associated with higher quality
motivation — increase in productivity (flexible production method), increased quality and increase in efficiency
disadvantages to job production
Individual costs one unit may be high as it costs more to make one unit
Often labour intensive = high labour costs
Humans cost money, robots don’t = labour intensive requires more money
Requires close consultation with the client
batch production
products are made in batches in stages with changes between batches allowing some flexibility
advantages to batch production
Cost saving can be achieved by buying in bulk
Still allows some choice
Products can be worked on by specialist staff or equipment at each stage
Allows a firm to handle unexpected orders
disadvantages to batch production
Takes time to switch production of one batch to another
takes time and employees to do quality check and switch the production
Requires the business to maintain higher stock of raw materials and work in process
Tasks may become boring/repetitive - reducing motivation
decrease in productivity, decreased quality and decrease in efficiency
Size of batch dependent on capacity allocated
Flow production
the products are produced in a continuous flow ready to be dispatched
advantages to flow production
Costs per unit of production reduced through improved work and material flow
Suitable for manufacturing of large quantities
Capital intensive which means it can work constantly
Less need for training and skills
disadvantages to flow production
Very long setup time and reliant on high quality machinery
High raw materials and finished stocks unless lean production used
Goods are mass produced - less differentiation for the consumers
Production is shut down if flow is stopped
productivity can be improved by
training
greater motivation
installing better equipment
better organisation or production
over and under utilisation of a plant
for a plant to be successful a business needs to run at the right capacity
economies of scale
Economies of scale refer to the cost advantages that a business can achieve by increasing its production output. As production increases, the cost per unit of output decreases, allowing the business to lower its prices and/or increase its profit margins. This is often achieved through the use of specialized equipment, increased bargaining power with suppliers, and improved efficiency in production processes.
diseconomies of scale
Diseconomies of scale refer to the situation where a company's costs per unit increase as the company grows beyond a certain size. This can be due to factors such as increased bureaucracy, communication difficulties, and decreased motivation among employees.
Lean production
maximising outputs while minimising inputs which reduces waste
TIMWOOD
transportation, inventory, motion, waiting, overprocessing, overproduction, defects
why is it important to keep financial information
a way to measure past performance and plan for future financial sustainability
balance sheet
current balance of assets (owned), liabilities (owed) and equity (assets-liabilities)
profit and loss statement
revenue (money coming in) expenses (money going out) and determines whether the business is in surplus or deficit
cashflow statement
shows where the money coming in is coming from and where the money going out is going towards. shows the business their net cashflow
budget
a plan of estimated income and expenses for a given timeframe
benefits of using a budget
expenditure can be tracked
encourages quick financial decision making
able to demonstrate tangible results
contingency plans can be made
plan for company growth
variance analysis
the difference between budgeted figures verses the actual financial statement figures for a given time. expressed in a percentage that is either favourable or unfavourable
policy
a set of ideas or a plan of what to do in particular situations
why are policies important
explain what is important to a business
makes operation clear and transparent
makes it clear to customers what their rights are
helps managers make good decisions that align with business vision/putake
procedure
the way or instruction/method on how to follow a policy
why are procedures important
sets out the right way to do things
protects health and safety of customers and staff
mistakes and wastes are minimised
the businesses will comply with legislation
protects business from fraudulent behavior
corporate social responsibility
businesses acting in a positive way to ‘build a better world’
advantages for businesses performing CSR
good brand image
positive publicity
increases staff morale when they have shared interests
disadvantages to businesses performing CSR
costs money
makes shareholders frustrated
Note
Flashcard