Business management - Preliminary Business studies

Key Business Functions

Operations, Marketing, Finance, Human Resources.

Management Process

Coordinating the four key business functions and resources of the business.

Interdependence

Mutual dependence that key business functions have on each other; they function best when working together harmoniously.

Synergy

The outcome when key business functions work together cohesively or to their optimum potential.

Operations

The business process that involves transformation or production of goods and services.

Types of Employment Contracts

Modern Award, Enterprise Agreement, Common Law Contract.

Role of Finance

Involves how a business funds its activities, including where it gets the money to trade and the costs, risks, and benefits of different types of borrowings.

Liquidity

The amount of cash a business has access to and how readily it can convert its assets into cash to pay off debts.

Human Resources Management

The effective management of formal relationships between the employer and employees, including recruitment, development, and separation.

Good

Tangible can be touched e.g. car, handbag

Human Resources Cycle Stages

Acquisition, Development, Maintenance, and Separation.

Service

Intangible cannot touched e.g. Haircut, nail appointment

Corporate Social Responsibility (CSR)

Open and accountable business actions based on respect for people, community/society, and the broader environment.

Business Ethics

The application of moral standards in business behavior, including fairness, honesty, respect for people, and truthful communication.

Marketing

is a total system of interacting activities designed to plan, price, promote and distribute products to present and potential customers

Target market

Where business clearly establishes who the consumers of their product will be

Mass Market Approach

Large groups of consumers who are not able divide into smaller, identifiable groups e.g. Woolworths, Amazon, Coca Cola

Market segmentation Approach

Dividing the mass market (everyone) into groups based on common characteristics: demographic, geographic, psychographic and behavioural

Niche market

a really small market segment with very specific needs and wants 

Marketing mix 

the combination of the seven elements of marketing the seven Ps - product, price, promotion and place, people, physical evidence and process that make up the  marketing strategy

Promotion

The methods used by a business to inform, persuade and remind a market about its products. Four main forms of promotion include 

Place

activities that make the products available to customers when and where they want to purchase them. 

Gross profit

 Revenue - Cost of goods sold (COGS)

COGS

Opening stock + purchases - closing stock

Net Profit

Gross profit - Expenses 

Balance sheets

Represent a business’s assets and liabilities at a particular point in time, expressed in money terms and represents the net worth of the business

Assets

Items of value owned by the business can be given a monetary value 

Liabilities

items of debt owed to other organisations (e.g. suppliers, banks) and include loans, accounts to be paid by the business, mortgages, credit card debt and accumulated expenses

Owner’s equity

 the funds contributed by the owner(s) to establish and build the business. It is also called ‘capital’.

Employment contracts 

A legally binding formal agreement between an employer and an employee.

Award

a legally binding agreement that sets out the minimum wages and conditions for a group of employees

Enterprise agreements

Collective agreements made at a workplace between an employer and employer and a union acting on behalf of its employees

Redundancy

When a person’s job no longer exists, usually due to technological changes, an organisational restructure or a merger or acquisition e.g. replaced by technology

Retrenchment

When there isn’t enough work to justify paying the employee anymore

Management consultants

Hiring a specialist in management to get guidance and help through business issues which can include managing change