Business Management (2)

Management

• The process of co-ordinating a business resources to achieve its goals

Contemporary Management

• Working with people

Features of effective management

• Planning: Setting goals and objectives

• Organising: Structuring the organisation

• Leading: Motivating employees

• Controlling: Evaluating peformance

Skills Of Management

• Interpersonal

• Communication

• Strategic Thinking

• Vision

• Problem Solving

• Decision Making

• Flexibility

• Adaptibility to change

• Reconciling the conflicting interests of stakeholders

1. Interpersonal

• Refers to the management’s ability to deal wuth people and build positive relationships

• Clear communication, understanding their needs

2. Communication

• The exchange of information between people, sending of messages

3. Strategic Thinking

• Allows a manager to see the business as a whole, and take the broad long term view

• Thinking a business future goals and direction

• 12 months or less- Short Term

• 12 months +- Long term

4. Vision

•  Vision provides a clear sense of direction by outlining the business’s long‑term purpose and desired future position. Managers use vision to inspire employees, align their efforts, guide decision-making,

5. Problem Solving

• A broad set of activities involved in searching for, identifying and then implementing a course of action to correct an unworkable situation

• 6 steps:

- Identify problem

- Gather information

- Develop alternative solutions

- Analyse the alternatives

- Implement alternative

- Evaluate situation

6. Decision Making Skills

• The process of identifying the options available and choosing a course of action to solve a problem

• Effective descison making leads to great future in the business

7. Flexibility and adapatability to change

• Succesful managers must anticipate and adjust to changing circumstances

• Being responsive to change, while being proactive that incorporates action

8. Reconciling the conflicting interest of stakeholders

• The ability of managers to balance and resolve competing stakeholder needs (Employee, Customer, Management), through decsion making

Employee and Shareholders:

• Employees require safe working and wage, but may reduce business profits and dividents to shareholders

Management and Customers

• Managers could attempt to maintain profit by raising prices but will upset customers

2 Strategies Managers use to reconcile the conflicting interest of stake holder

1. Training and Development of Employees

2. Flexibility in the workplace

1. Training and development of employee

• Managers can invest in the training and development of employees by funding courses, workshops, or on-the-job learning programs.

• Employees perspective: This helps reconcile conflict because employees feel valued and supported

• Shareholders' perspective: A better-skilled workforce leads to higher productivity and efficiency, which ultimately increases profitability and returns.

Flexibility in the workplace

• Managers can introduce flexible working arrangements such as remote work, flexible hours, or part-time options.

• EMPLOYEE: Employees can manage work life balance, being able to spend time for further commitments such as family

• SHAREHOLDER: Flexibility can reduce absenteeism and staff turnover, lowering recruitment and training costs for the business something shareholders benefit from as it protects profitability.

8. Strategies for (8)

• Triple Bottom Line:  The triple bottom line measures a business’s performance across economic, social and environmental outcomes. It is important because society increasingly expects businesses to operate sustainably, protect communities and minimise environmental harm.

• Align with stakeholders decisions

Business Goals

• Describes what a busines expects to acclompish over a set period

Common Buisness Goals

• Profit

• Market Share

• Growth

• Share Price

• Social

• Environmental

Profit

• The financial return a business earns after expenses

• Increase revenue, reduce costs and improve effiency to maximise profits

Market Share

• Refers to the business proportion of total sales in its industry

• For example, in Australia’s supermarket industry:

  • Coles might have about 30% market share

  • Woolworths might have about 35% market share

  👉 This means Woolworths sells a larger portion of all groceries compared to Coles.

• Increasing market share strenthens brand recogniton

Growth

• Refers to expanding the size and scale of a business

• Internal Growth: Higher employment, High revenue, new products

• External Growth: Merging or acquiring with another business

Share Price

• Increasing the share price, builds trust with investors, as they are more likely to invest shares in your business

• Reflects investor confidence, financial health

• Achieved through consistent profits and good management

• A share price (or stock price) is the current market value of a single unit of a company's equity,

Social Goals

• Focus on improving the community and society

3 main goals

• Community service: Businesses support society through actions like donations, programs, or sponsorships to achieve social goals

• Proivsion of Employment: Look towards people who need employment

• Social Justice: Everyone has the right to be treated fairly

Environmental Goals

• Aim to reduce negative impacts on the planet

• Reducing waste, lowering emissions and using sustainable materials

• Appeals to environmentally conscious customers

Sustainable development

Using resources in a way that meets our needs today without damaging the ability of future generations to meet theirs.

Woolworths reducing plastic bags and using recyclable packaging

👉 This helps the environment (less waste), while still running a profitable business and serving customers.

Achieving a mix of goals

• Business tries to balance different goals at the same time, rather than focusing on just one

Must balance

• Short term vs long term goals

• Stakeholder expectations ( Employee and Customer)

• Financial vs environmental goals

• Effective management means balancing and combining economic, social, and environmental goals to ensure long-term success.

EG: Woolworths makes profit, reduces plastic use, and supports communities at the same time

Staff Involvement

• Involves the employees in the desicion making process and giving them the neccessary skills and rewards

Types of staff involvement

• Innovation

• Motivation

• Mentoring

• Training

Innovation

• Encouraging new ideas for products

• Improves competitiveness and supports growth

• Rewards given to employees with innovative profitable ideas

Innovation “ Intraprenaur”

• Individual who takes the entrepreunar role WITHIN a business

Motivation

• Refers to drive that makes someone want to work hard and achieve goals.

• Leads to higher productivity, better customer service and higher profits

• Tips for motivating staff

- Recognition

- Clear expectations

- Safe work environment

Mentoring

• Refers to the pass down of knowledge of experienced employees to newer employees

• Builds skills from experienced workers

• Higher level of confidence

• Reduces staff turnover

Training

• Refers to the prcess of teaching staff how to peform their job more efficiently and effectively by boosting knowledge and skills

• Aim of developing multiskilled employees

Management Approaches

1. Classical Approach

2. Behavioural Approach

3. Contingency Approach

1. Classical Approach ( Everything below is classical until next heading)

• A management theory that emphasies effiency and structure, through clear organisation and control

2 types of classical approach

1. Classical Scientific Approach + 4 principles

2. Classical Bureacratical Approach

1. Classical Scientific Approach

• Focus on how the work is done and effiency

• Developed by Fredrick W Taylor

4 Principles of Scientifc management

1. Scientifically examine each part of a task to determine most efficient method

2. Select suitable workers and train them

3. Co-operate with workers to guarantee they use the methods

4. Divide work and responsibility

Eg

In a fast food kitchen, one worker only cooks burgers, another only fries chips, and another only packs the food. Each person does one job repeatedly to work faster and more efficiently.

Time and Motion Studies

• They are used to study how people work and then make the job more efficient.

2. Classical Bureacratic Approach

• Way of organising a business or organisation using clear rules, hierarchy, and formal procedures.

• Developed by Max Weber and Henri Fayol

• Bureacracy: The set of rules and regulations

Features

• Strict Hierachial organisational structure

• Rules and Procedures

Managament as Planning

Planning: The preperation of a predetermined course of action for a business

Levels of Planning

1. Strategic Planning (Long term)

• Planning for 3-5 years

• Focus on where the business wants to be in the future

• Done by top managers

2. Tactical Planning ( Medium Term)

• Flexible/ adaptable planning for 1-2 years

• Allows the business to respond quickly to change

• Turning big strategic goals into clear practical actions

EG Business strategic goal is to increase market share by 20 percent in 3 years

Tactical Plan: Hire more staff, new ads campaign

3. Operational Planning ( Short Term)

• How the business will operate in short term

• Operates daily, weekly, monthly

• Shifts and daily tasks

Management as Organising

• Organising: Allocating resources, assigining tasks and establishing a structure in a business

The organisation process

1. Determining the work activities

• Figure out what tasks need be to done to achieve the goal

• Break big goals into smaller, managable steps

2. Classifying and grouping activities

• Group similar tasks together

• Improves effiency by enabling the most appropriate allocation of resources

3. Assiging work and delegating authority

• Deciding who does each task

• Give them responsibility to do it

Managament as Controlling

• The process management goes through when it attempts to evaluate peformance and take action

Control Process

1. Establish standards

• Set targets

2. Measure peformance

• Check results and compare

3. Take action

• Fix any problems if peformance does not match standard

Hierachical Organisational Structure

• Rigid communication as employees have limited freedom to communicate across levels, needing to go through specific managers

• Longer chain of command

• Narrow span of control

Flatter organisational structure

• Easier communication

• Shorter chain of command ( Lower amount of management levels)

• Wider span of control

Management Hierachy

• A management hierarchy is the structure that shows the different levels of authority and responsibility in a business, from the highest managers to the lowest-level employees.

Demonstrated in a pyramid

Specialisation of Labour

• The degree to which tasks are divided into seperate jobs

Chain of Command

• An organisational structure, shows how each memeber of a company reports to one another

Autocratic Leadership Style

• Make all decisions, dictates work methods, frequently checks employees giving cruel feedback

• Can be effective in a time of crisis, when immediate compliance with rules is needed

2. Behavioural Approach

• An approach that stresses that employees should be the main focus of the way in which the business is organised

Major Contributer

• Elton Mayo

- Famous for the Hawthorne Studies, which showed workers peform better when they feel values and recognised

Advantages and Disadvantaes of Behavioural Approach

Advantages

• Increased empowerment of employees, can take ownership of their own work

• Increased motivation

• Improved relationships

Disadvantages

• Lack of control

• Senior employees can disrupt the process

• Difficult to predict employee behaviour

Managament as Leading

• Leading is the management function that involves directing and influencing employees to achieve the organisation's goals.

Leadership qualities

• Delegates tasks

• Confidence

• Shares recognition

• Builds a clear vision

• Sets an example, earning respect

Managament as Motivating

• To encourage employees to work willingly and effectively towards business goals

• Elton Mayo Hawthorne Studies showed that human factors improved employee productivity

• Recognition, Self Worth, Positive reinforcement

Managament as communicating

• Managers focus on sharing information clearly and effectively

• Effective communication is key towards business success

Teams

• Teamwork is when people interact regularly and co-ordinate their work towards a common goal

• It is important that managers foster a sense of cohesion

Teams- Flatter Organisatioal structure

• Fewer levels of managament, resulting in shorter chain of commands and a wider sense of control

• Fewer bosses

• Faster descion making

Participative Democratic Leadership style

• When managers consult with employees to aks their suggestions and ideas, after considering it through decision making.

Advantages and Disadvantages of a Democratic

Advantages

• Employee- relations are strengthed and positive

• Employees have a greater opportunity to gain skill

• High level of trust

Disadvantages

• Time consuming

• Internal conflct, as more involvement leads to disagreement

• Not all employees want to contribute

We skipped a fair few topics due to Zoo Excursion

• MANAGEMENT PROCESS

Managamenent Process: Marketing (again skipped ahead so wont be in order)

Marketing

• Marketing is the set of activities a company uses to identify customer needs and satisfy them profitably.

Identification of the Target Market

Target Market: A specific group of people a businesses aim to sell its products to

Benefits of a target market

• No wasted money on people who wont buy

• Learn consumer buying behaviour

• Collect better data

2 types of target markets

• Primary Target Market: Main focus, most money and marketing goes here

• Secondary Target Market: A smaller and less important market segment

3 approaches to choosing a target market

• Mass Marketing

• Market segmentation

• Niche Marketing Approach

1. Mass Marketing Approach

• Seller mass produces, mass distributes and mass promotes one prouduct to all buyers

• Seeks a large range of customers

• Dettol, as it is used in every household

2. Market segmentation approach

• When the total market is divided into groups of people who share similar characteristics based on 4 elements

- Demographic

- Geographic

- Psychographic

- Behavioural

A table of the 4 elements (read and understand)

Aim of market segmentation

• To increase sales by better understanding and responding to the desires of the target customers

Purpose of markey segmentation

• The purpose of market segmentation is to divide a broad target market into smaller, manageable groups of consumers with shared characteristics, needs, or behaviors. This allows businesses to tailor marketing strategies, optimize resource allocation, enhance customer satisfaction.

What happens after market has been segmented?

The business selects one of the segments to become the target market

• Rural Supply PTY LTD: Male, 25-60 yrs old, middle to high income , example

3. Niche Market

• A narowly defined group of customers with specific needs

• Gluten-free bakery products – for people with coeliac disease or gluten intolerance

• Vegan skincare products – for consumers who avoid animal products

• Luxury pet accessories (like designer dog collars) – for pet owners who want premium items

Marketing Mix

• The combination of the 4 elements of marketing, the 4ps , Product, Place, Price, Promotion

• Also can include

- People

- Physical evidence

- Process

7p’s

1. Product

• The actual good or service

• Product packaging

• Product Branding

Product Packaging

• Involves the development of a container and graphic design for a product

• Well desgined packaging gives people a good first impression

• Packaging helps people judge a product

Product Branding

• Process of creating a name, logo, desgin and identity so people remember and recognise

• Making a product stand out due to its brand logo

2. Price

• Correct price is important as being to low, customers judge as dodgy, and to high most customers cannot afford

Methods to calculate price

1. Cost based: Adding a mark up from total cost

2. Market based: Interactions between levels of supply and demand

3. Competitor based: Against competitors

3. Promotion

• This method used by a business to inform, persuade and remind a market about its products

Main forms of promotions

1. Personal selling

2. Relationship Marketing

3. Sales promotion

4. Publicity

5. Public relations

6. Advertisements

7. Technology

Personal selling

• A salesperson directly communicates with a potential customer to persuade them to buy a product or service.

Relationship Marketing

Focus on building long term customer loyalty and ongoing engagement

Sales promotion

• Activities or materials used to gain attention

• Coupons, free samples

Publicity

• The attention the business gets through media and articles

Public relations

• What a business does to create and maintain a good image

• press conferences

Advertising

• Advertising is when a business pays to promote a product or service to a large audience using different media

Technology

• SMA- Social Media Advertising

4. Place ( Distribution)

• Refers to how and where a product is made available to customers so they can easily buy

Distribution channel

• Ways of getting product to customers

3 forms of distribution channels

Direct channel (Producer → Customer)

• No middleman involved

• The business sells directly to the customer

• Example: buying from a farmer’s market or a brand’s website (like Apple Online Store)

2. One-level channel (Producer → Retailer → Customer)

• One middleman (the retailer)

• The retailer buys from the producer and sells to the customer

• Example: Nike selling shoes to Foot Locker, then Foot Locker sells to you

3. Two-level channel (Producer → Wholesaler → Retailer → Customer)

• Two middlemen involved

• Wholesaler buys in bulk, sells to retailers, then retailers sell to customers

• Example: food products like Coca-Cola going through wholesalers before reaching supermarkets

People

• Everyone in the business affects customer experience

• Staff attitute, skills, behaviour

Processes

• The systems and steps a business uses

• Smooth process= better customer satisfaction

Physical Evidence

• What customers can see

• Influences their perception on the business

Management Approach: Contingency Approach

Contingency Approach: Managers change their strategies and leadership style to suit different circumstances

Contingency Approach ( Brief Idea)

• A business can either use a behavioural or classical approach depending on the scenario

Example of Contingency Approach: McDonalds

1. Classical Approach: During a busy lunch rush

- Strict rules

- Clear division of tasks

- Effiency and speed

2. Behavioural Approach: Staff are stressed

• Encouraging teamwork

• Motivating Staff

This shows the “contingency approach” as the manager changes their management style depending on the situation