Learn: Business Management Units 3/4 2023 Exam Revision

Sole trader

A business structure that is owned and operated by one person

Partnerships

A business structure that is owned and operated by 2-20 people

Private Limited Companies

A business structure that is a separate legal entity and is owned by 1-50 shareholders

Public Listed Companies

An incorporated company that is a separate legal entity owned by unlimited shareholders, with shares sold on the ASX

GBE

A type of business owned by the government that aims to make a profit while providing a service

Social Enterprise

A type of business with the primary aim of benefiting the community or the environment

To make a profit

Maximising revenue and minimising expenses

To increase market share

Increasing a business' total proportion of sales in a market or industry compared to competitors

To improve efficiency

improving how well a business uses its resources such as time, labour and materials to reduce waste.

To improve effectiveness

improving the extent to which a business achieves their stated objectives

To fulfil a market need

Producing products/services that help close a gap in the market to meet a customer need that is not currently being satisfied

To meet shareholder expectations

Shareholders expect to make a return on their investment through profit or capital gain

To fulfil a social need

Helping the community and/or environment in some way that is not being adequately addressed.

Stakeholder

Any person or group who has a vested interest in a business and can affect or be affected by that business.

Autocratic style

A style in which complete power and authority lies with management, featuring one-way communication and centralised decision-making.

Persuasive style

A style where the manager attempts to convince employees that management's way is the correct way or explains the reasoning behind decisions

Consultative style

A style in which the manager values employee relationships and seeks their input before making decisions alone

Participative style

A style where the manager not only consults with employees, but also shares decision-making authority with them

Laissez-faire style

A style where employees are responsible for workplace operations. Management has no central role or decision-making power

Delegation

the transfer of authority and responsibility from a manager to an employee to carry out specific activities

Planning

the systematic process of establishing a business' direction or goals for the future and strategies to achieve them

Decision-making

the process of identifying the options available and choosing a specific course of action in a fair and timely manner

Interpersonal

Skills used when interacting with others to be able to build relationships

Corporate culture

The shared values and beliefs of the people within a business

Real corporate culture

The unofficial, unwritten, or actual shared values and beliefs of those within the business

Official corporate culture

A business' shared values and beliefs formally expressed in its written statements created by senior managers

Human Resource Management

The effective management of relationships between the employer and employees within a business, from recruitment to termination

Business Objectives

a desired outcome or specific result that a business intends to achieve

Motivation

Any factor that drives an employee to achieve an objective

Maslow's Hierarchy of Needs

All people have five levels of needs that need to be satisfied: Physiological, Safety, Love/belonging, Esteem, Self-actualisation

Locke and Latham's Goal Setting Theory

The setting of objectives leads to increased effort and task focus through five key components: Clarity, Challenge, Commitment, Feedback and Task Complexity

Clarity (GST)

Goals should be specific, simple and clear so that employees understand what they are working towards

Challenge (GST)

Goals should stretch employees. If it is too easy, this may demotivate employees

Commitment

Employees participate in goal setting, taking ownership

Feedback

Allows for recognition of progress and identifies any changes to be made

Task Complexity

Deadlines and tasks should be appropriate and not overwhelming

Lawrence and Nohria's Four Drive Theory

There are four basic human drives that determine all human behaviour

The drive to acquire

Motivated by tangible goods, status and power

The drive to bond

Motivated through making connections with others

The drive to comprehend (learn)

Motivated to learn new things

The drive to defend

Motivated by the desire to protect themselves and those they care about

Performance-related pay - (short term)

A financial reward to employees whose work has reached or exceeded a set standard

Career advancement - (long term)

Appointing employees to positions that include more responsibility or authority

Investment in training - (short and long term)

Allocating financial resources to assisting employees in developing their knowledge and skills in their role

Support - (short and long term)

The manager encouraging employees when they've done well and mentoring them when they need to improve

Sanction - (short term)

A penalty or punishment given to an employee when they do not meet a particular business objective or task

Performance management

the processes that set expectations, measures and feedback processes to help drive the performance of employees and align their actions with business objectives

Performance appraisal

The formal assessment by the manager of how effectively and efficiently an employee is performing in their role after a set period

Management by Objectives

A process by which management and employees agree on a set of goals for each employee, with these goals all contributing to the objectives of the business as a whole

Self-Evaluation

An employee assessing both their performance related to predetermined objectives and their contribution to their business team

Employee Observation

Monitoring and recording an employee's performance with or without their knowledge

Termination

The voluntary or involuntary ending of the relationship between an employer and employee

Resignation

The voluntary ending of the employment relationship for various reasons

Retirement

The voluntary ending of the employment relationship when an employee decides to leave the workforce

Redundancy (voluntary and involuntary)

When the job a person does is no longer necessary

Dismissal

The involuntary ending of the employment relationship by the manager when the behaviour of an employee is unacceptable and an organisation terminates their employment

Summary Dismissal

The involuntary ending of the employment relationship by the manager when an employee commits a serious breach of their employment contract

Dismissal on notice

The involuntary ending of the employment relationship by the manager when an employee is not performing the job satisfactorily

Entitlement considerations

What is owed to the employee at the conclusion of the employment relationship, such as accrued wages not paid

Transition Considerations

Services provided to employees who are retiring or to assist employees who have been made redundant to gain new work

Unions

Organisations formed to represent and protect the rights of employees in a particular industry

Employer associations

Groups of employers who unite to promote a common interest in workplace relations issues

Fair Work Commission

Australia's national workplace relations tribunal that has responsibilities under the Fair Work Act 2009

Awards

A written document that sets out minimum wages and conditions for employees in an entire industry by the fair work commission

Agreements

A written document on terms and conditions of employment between an employer and a group of employees at the workplace level

Mediation

When an independent third party helps the parties work toward their own agreement, without offering solutions themselves

Arbitration

When a individual party listens to both sides of a dispute and then makes a decision based on the arguments which is legally binding on both parties

On-the-job training

Learning from existing employees at the workplace on an employee's current job as to perform this job more efficiently and effectively

Off-the-job training

Learning from professional instructors, often away from the business, as to perform their job more efficiently and effectively

Training

Teaching staff how to do their current role more efficiently and effectively by boosting their knowledge and skills.

Physiological

the need for employment and a wage

Safety

the need for job security and injury free jobs

Social

the need for relationships with colleagues and managers

Esteem

the need for promotions, power and responsibility

Self-Actualisation

the need for personal growth and advancement

Processes

the actions taken to transform inputs into outputs

Inputs

resources that are used to produce the business' goods or services, such as raw materials, equipment and labour.

Effectiveness

the extent to which a business achieves objectives

Efficiency

how well a business uses its resources

Operations management

Controlling resources and activities to produce a product as efficiently and effectively as possible.

Artificial intelligence

Involves using computerised systems to simulate human intelligence and mimic human behaviour.

Outputs

the finished product (good/service) that is sold to the consumer

Technological development

the improvement of machinery and devices developed from scientific knowledge to assist a business to function and create products

Automated production lines

Machinery and equipment arranged in a sequence, controlled by computers with components added as it proceeds through each step.

Robotics

Programmable machines that are capable of performing specified tasks with high levels of precision and accuracy.

Computer-Aided Design

The use of computers and software to prepare 3D product designs, which can then be reviewed, examined, evaluated and changed without the need for a physical prototype being built

Online services

the provision of services that are provided via the internet, such as allowing consumers to review products

Materials Management

manages the use, storage and delivery of materials to ensure the right amount of inputs are available when required in the operations system.

Forecasting

A materials planning tool that uses factors such as historical data and seasonal fluctuations to try and predict demand for a business' products.

Master Production Schedule (MPS)

A plan that shows the quantity and type of each product line the business will produce and when

Materials Requirement Planning (MRP)

A document that sets out the exact resources needed to fulfil the scheduling set out in the Master Production Schedule

Just-In-Time (JIT)

ensuring materials arrive just as they are required in the production process

Quality Management

the management of the production process to ensure outputs are consistently reliable, durable and free from defect

Quality

the degree of excellence of a good or service and its fitness for a stated purpose

Quality Control (QC)

a process where products/services are randomly inspected and evaluated during production to ensure they meet acceptable internal standards

Quality Assurance (QA)

an external business certifying that a business' systems and processes meet accepted quality standards

Total Quality Management (TQM)

a holistic and preventative approach to achieving and maintaining quality at every stage of the production process through continuous improvement, employee involvement and a customer focus.

Waste minimisation

a process involving the reduction of the amount of unwanted or unusable resources produced by a business to improve the efficiency and effectiveness of operations.

Reduce

to decrease the amount of products, raw materials, resources, labour, or time discarded during production

Reuse

utilise items/resources multiple times that would otherwise have been discarded