BUSINESS STUDIES TOPIC 2

Manager

Someone who coordinates the businesses limited resources in order to achieve specific goals.

Effective Management Features

Working with and through others, getting the most from limited resources, coping with a changing environment, balancing efficiency with effectiveness, achieving goals.

Goal

A target to work towards in the long-term.

Examples of Goals

Profitability, sales, market share, growth, environmental management, community involvement, share value.

Effectiveness

Measures the degree to which a goal has been achieved.

Efficiency

Compares resources needed to what was actually achieved without wasting resources.

Adapt

Coping with a changing environment.

Planning

Preparation of a predetermined course of action.

Organising

The process of structuring the organisation to translate plans and goals into actions.

Leading

Setting a standard to work towards and motivating employees to work hard to reach goals.

Controlling

Evaluating performance and taking corrective action to ensure set objectives are being achieved.

Skills of Management

Interpersonal, communication, strategic thinking, vision, problem solving, decision making, flexibility, adaptability to change, reconciling controlling interests.

Interpersonal Skills

Motivating and inspiring, showing trust and providing support, encouraging team effort.

Communication Skills

Talking and presenting, non-verbal communication, listening and hearing, understanding.

Strategic Thinking Skills

Thinking of long term success, considering the big picture, flexibility and change.

Vision Skills

The clear shared sense of direction that allows people to attain a common goal.

Problem Solving

Requires systematic problem-solving process when confronted with difficult situations.

Decision Making Skills

The process of identifying the options available and then choosing a specific course of action to solve the issue.

Adaptability to Change

Being proactive and anticipating and adjusting to change.

Reconciling Controlling Interests

Managers need to navigate the differing interests of stakeholders and compromise.

Business Goals

A desired outcome or target that an individual or business intends to achieve within a certain time frame.

Financial Goals

Maximise profit, increase market share, maximise growth, improve share market price.

Social Goals

Responsibility to people and society in general as they can impact quality of life.

Environmental Goals

Interdependent by focusing on a mix of goals, increased growth, sustainability.

Staff Involvement

Staff innovation, mentoring, motivating, training.

Labour Productivity

Process of recruiting and selecting appropriate employees to maximise involvement for greater output.

Achieving Goals

Serve as targets, measuring sticks, motivation, commitment.

SMART Goals

Specific, Measurable, Achievable, Realistic, Timebound.

Management Approaches

The way in which managers organise and allocate tasks to staff, determine business priorities and structure.

Classical approach

Efficiency; Managers dominate the decision making process; Rigid, hierarchical, inflexible structure; Employees are grouped together to perform specialised tasks; Autocratic; 'Scientific management'; Strict line of authority extending through pyramid.

Division of labour

The separation of a production process into distinct, specialized tasks assigned to different individuals, organizations, or regions to increase efficiency.

Chain of command

Stresses how best to manage and organise workers so as to improve productivity.

Advantages of Classical approach

Shorter time to make decisions; Improved efficiency and productivity; Clear chain of command.

Disadvantages of Classical approach

Specialisation leads to boredom; Less job satisfaction - increased turnover; Discourages creativity and innovation; Inflexible and not adaptable; Makes all decisions, dictates work methods and limits worker knowledge.

Behavioural approach

An approach that stresses that employees should be the main focus and the way in which the business is designed.

Democratic

A style of management that involves employees in decision making.

Delegate

Hand over certain tasks or responsibilities to an employee who is suitable and capable.

Self-motivation

The ability to motivate oneself to take action.

Two-way communication

Communication that allows for feedback and interaction between parties.

Advantages of Behavioural approach

Increased empowerment of employees; Flow of ideas; Worker recognition and appreciation; Improved relationships.

Disadvantages of Behavioural approach

Lack of control; Powerful people can disrupt the process; Confusion; Cannot accurately predict employee behaviour.

Contingency approach

Stresses the need for flexibility and adaptation to suit changing circumstances.

Flexibility in Contingency approach

The ability to adapt to changing circumstances, such as live streamed classes during a lockdown.

Advantages of Contingency approach

Acknowledges the impact at changes in business environment and reacts to change; Flexibility + vision; Opportunity rather than threat.

Disadvantages of Contingency approach

Costly in terms of time and moves; Employees must cope with change; May view management as inconsistent; Complex problem solving.

Outsourcing

A business gets another business to perform one of its functions, e.g., advertising.

Interdependence

The mutual dependence that the key functions have on one another.

Operations

The business process that involves transformation or production.

Quality management

Ensuring that the final products meet customer expectations by minimizing faulty products.

Quality control

Using inspections at different points during the production process to check for faulty products.

Quality assurance

Using a recognised system to achieve certain standards.

Quality improvement

Using total quality management, continually focusing on improving business functions.

Continuous improvement

Ongoing commitment to achieving perfect results through constant evaluation and higher standards.

Tangible goods

Goods that can be stored before they are sent out and have little customer involvement.

Intangible services

Services that involve customer participation and are tailored to individual customers.

Marketing

A total system of interacting activities designed to plan, price, promote and distribute products to customers.

Mass marketing approach

Must produce mass products, mass distribution, targets a range of customers, little variation.

Market segmentation

When the market is subdivided into groups who share common characteristics.

Niche market approach

A very small or narrowly selected target market segment.

Marketing mix (7P's)

Product, Price, Place, Promotion, People, Process, Physical evidence.

Price

Cost-based method: calculating the total cost of producing or purchasing a product and then adding a mark-up for profit.

Promotion

To inform, persuade and remind customers about a business' products.

Promotion aims

Attract new customers, increase brand loyalty + image, encourage existing customers to increase expenditure.

Personal selling and relationship marketing

Activities of a sales representative directed to a customer in attempts to make a sale.

Sales promotion

The activities or materials used in the business to attract interest and support for goods and services.

Publicity

Free news stories about products aimed at maintaining favourable relations with customers and the business.

Advertising

Print or electronic mass media used to communicate messages about products and create demand.

Place

Make products available to customers when and wherever they want to purchase them.

Distribution channels

Producer to consumer, producer to retailer to customer, producer to wholesaler to retailer to customer.

People

Refers to the interaction between customer and business.

Customer focus culture

Recruit and train staff that will execute excellent customer service.

Processes

Refers to the flow of activities that a business will follow in delivering its services.

Total experience

Processes involve the consumers total experience of buying the product from the research.

Customer friendly processes

Businesses need to ensure that their processes and procedures are customer friendly.

Physical evidence

Refers to the environment in which the service will be delivered.

Human resources

The human resource cycle includes acquisition, development, and maintenance.

Acquisition

Planning: Identifying staff needs through job analysis.

Job analysis

Systematic study of each employee's duties, tasks and work environment.

Job description

A written statement describing the employees duties, tasks and responsibilities.

Job specification

A list of key qualifications required to perform a particular job.

Recruitment

The process of locating and attracting the right quantity and quality of staff.

Selection

Gathering information about each applicant and using this information to choose the most appropriate applicant.

Internal recruitment

Filling job vacancies with present employees.

External recruitment

Filling job vacancies with people from outside the business.

Maintenance

Providing the working conditions and work environment that motivate staff.

Training

The process of teaching staff how to perform their job more effectively.

Development

Activities that prepare staff to take greater responsibilities in the future.

Off-the-job training

Employees are trained away from the workplace at a specialised training institution.

On-the-job training

Employees learn specific skills in the workplace.

Expectations

The anticipated conditions and responsibilities of a job.

Job position

The specific role or title held by an employee.

Start date

The date on which an employee begins their job.

Specific duties

The tasks and responsibilities assigned to an employee.

Hours of work

The number of hours an employee is expected to work.

Rates of pay

The compensation an employee receives for their work.

Leave and superannuation

Employee benefits related to time off and retirement savings.

Employer obligation

Responsibilities that an employer has towards their employees.

To provide work

An employer's duty to ensure there is work available for employees.

Payment of income

The obligation of an employer to pay employees for their work.

Reasonable care for safety

An employer's responsibility to maintain a safe working environment.