Studied by 1 person
mission statement
firm’s qualitative intention e.g. values, purpose
corporate objective
long term strategy e.g. SMART profit, growth etc.
functional objectives
department objectives e.g. HR, operations
why’s profit important?
source of finance, reward for risk taking, not for profit, motivation, security, success
P, R, TC, VC = ?
R-TC, sales x price, FC+VC, VC/unit x quantity
factors of production?
land- natural resources, labour, capital- machinery, entrepreneurship
incorporated?
different legal identity, personal assets are safe
unlimited liability?
risk for all debts
sole traders
unincorporated, unlimited liability, 1 shareholder
adv of sole trader
simple set up, no publish accounts, retain all profits, 100% control and decision making
cons of sole trader
fewer sources of finance, multi-skills needed, possible long hours
Ltd
incorporated, limited liability, shareholders choose a director
Ltd pros
lots of sources of finance, control of shareholders
Ltd cons
no stock exchange, shared profits, publish accounts, more admin
Plc
on the stock exchange (flotation), minimum of 50k share capital
flotation pros
external finance, high reputation, limited liability, growth
flotation cons
expensive, anyone can buy, legal requirements
public sector
by government e.g. NHS, schools, BBC
private sector
by entrepreneurs
market capitalisation
number of shares x price of 1 share
share capital
number of shares x initial price of 1 share
not for profit organisations
objectives to benefit society e.g. UNICEF
external influences
competition, market conditions, incomes, interest rates, demographic factors, environmental issues
PESTLE
political, economic, social, technological, legislation, environmental
bad revenue (good revenue opposite)
one time, diminishes in recession, price taker, low value added, no customer loyalty
increase / (decrease opposite) in interest rates
Consumers= increase savings, fall ion spending, less borrowing, existing debts cost more. Producers= existing debts would increase, higher borrowing costs, less revenue
HR objectives
employee engagement, employee mix, training, talent development, diversity
delegation
managers give authority to subordinates
delegation pros
empowered- motivated, productive and efficiency. Internal recruitment, less stress for manager
delegation cons
demotivated through higher workload
centralised / (decentralised opposite)
when control is made my higher levels of management
centralised pros
quick decision making, consistency and motivation through clear jobs
centralised cons
less ideas in decision making, lack of authority can demotivate
tall organisational structure
many layers and managers, smaller span of control, opportunity for promotion, better supervision, long chains of command
flat organisational structure
less layers, larger span of control, two way communication, lots of delegation, less promotion
autocratic leadership
one way communication, good in emergencies, demotivating to lower staff
paternalistic leadership
employees are consulted, makes them feel more involved, long term issues
democratic leadership
two way communication, motivation, slow decision making and ideas may be bad
laissez faire leadership
full decision making with employees, highly skilled lower staff, managers could get bad rep
part time workers vs full time
cheaper, flexible, range in potential vs loyalty, staff retention, lower training costs
why recruit internally?
cheaper in recruitment costs, more informed process, faster process
why recruit externally?
larger pool of workers, fresh ideas, don’t have to replace a worker
recruitment process
job analysis, job description and specification, job advert, selection process
on the job training pros vs off the job training pros
cheaper, hands on, build relationships vs full supervision, mentor is an expert, learn new skills
on the job training cons vs off the job training cons
mentor’s ability, mentor’s time, friction vs expensive, not bespoke
types of contract
permanent- guaranteed to work for the employer unless redundancy etc. temporary- agreed period of time. freelance- they work with the business
financial motivation
bonuses, commission, promotions, fringe benefits
non financial motivation
job rotation, job enrichment, autonomy
why increase motivation?
increase productivity- output and quality, increase staff retention- increase experience and skills, low turnover and recruitment costs
Taylor- Scientific Management
1- monitor workers 2- develop best procedures 3- training to increase efficiency 4- create realistic output target 5- introduce the piece-rate. Cons- may be seen as too just, can lack innovation
Maslow- Hierarchy of Needs
1- physiological e.g. shelter 2- safety needs e.g. security 3- social needs e.g. teamwork 4- esteem needs e.g. recognition 5- self actualisation e.g. potential. Cons- order can be different for everyone
Herzberg- Two Factor Theory
Hygiene factors ( prevents dissatisfaction)- basic pay, working conditions. Motivating factors- training, development and are set after hygiene factors
factors of suppliers
price, quality, speed, reliability
what is procurement?
the process of selecting a supplier, agreeing on payment terms and contract details
what is logistics?
process of getting goods or services to a different stage of the supply chain
what’s job production?
‘one-off’ production to meet customer needs
job production pros
higher quality, unique to customer, workers feel motivated
job production cons
unit costs can be higher, takes time, may need a higher amount of labour
what is batch production?
producing a small quantity of goods e.g. cakes
what is flow production?
continuous production of identical products usually for a mass market
flow production pros
produce to meet higher demand, specialised workers, economies of scale
flow production cons
high initial costs, workers are less motivated, hard to change final product
what is lean production?
reducing waste to increase efficiency, productivity and revenue
what is Kaizen?
the continuous improvement in the production process
consequences of good quality
repeat purchases, charge higher prices, likely to be highly stocked by a retailer
how do you measure quality?
random sampling, customer surveys, amount of products returned
what is total quality management (TQM)?
where all employees seek to constantly improve production
what is just in time (JIT)?
limited inventory that arrives just in time for the sale
JIT pros
reduces waste in storage costs and stock, greater productivity
JIT cons
possible higher average cost per unit, needs a reliable supplier, risk of not meeting demand
what is quality control?
checking the final product to see if it meets the standard of quality
what is quality assurance?
a process that prevents defects from happening in production
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Flashcard (94)