Unit 3/4 Business Management

List the types of businesses

- Sole trader

- Partnership

- Private limited company

- Public listed company

- Social enterprise

- Government business enterprise

Social Enterprise

aims to fulfil a community or environmental need by selling goods or services.

Advantages of a Social Enterprise

The community benefits from the business’s activities.

• The business can develop a positive reputation as they are helping and contributing to society.

Disadvantages of a Social Enterprise

• Difficult to balance the achievement of financial objectives with social objectives.

• May be difficult to obtain a bank loan as the business does not solely focus on financial objectives.

Government Business Enterprise

a business that is owned and operated by the government

Advantages of a Government Business Enterprise

• Delivers goods and services that help the community and the community’s needs

• GBEs can rely on the government for the initial investment.

Disadvantages of a Government Business Enterprise

• Governments and politicians can interfere and change the strategic direction of the business.

List business objectives

To make a profit, increase market share, improve efficiency, improve effectiveness, fulfil a market need, fulfil a social need, meet shareholder expectations

Make a profit

Earning more revenue than expenses.

Increase market share

Gaining a larger percentage of total sales in a market.

Improve efficiency

Using fewer resources to produce goods or services

Improve effectiveness

Achieving business goals successfully.

Fulfil a market need

Providing goods or services customers want.

Fulfil a social need

Operating to benefit society.

Meet shareholder expectations

Providing returns or performance shareholders expect.

List business stakeholders

Owners, managers, employees, customers, suppliers, general community

Owners

People who own the business and want a return on investment.

Managers

Responsible for running the business and achieving objectives.

Employees

individuals who are hired by a business to complete work tasks and support the achievement of its objectives

Customers

individuals or groups who interact with a business by purchasing and utilising its goods and services

Suppliers

source raw materials, component parts, and processed materials and sell them to a business

General Community

the wider society affected by a business's actions and expecting it to act responsibly

Owners vs Employees

Owners want lower costs; employees want higher wages and better conditions.

Managers vs Customers

Managers may cut costs; customers want high‑quality goods.

Employees vs Shareholders

Employees want higher wages; shareholders want higher profits.

Managers vs Suppliers

Managers want lower prices; suppliers want higher prices.

List the 5 Management Styles

autocratic, persuasive, consultative, participative, laissez-faire

Autocratic management style

involves a manager making decisions and directing employees without any input from them.

Persuasive management style

involves a manager making decisions and communicating the reasons for those decisions to employees without their input.

Consultative management style

involves a manager seeking input from employees on business decisions but making the final decision themselves.

Participative management style

involves a manager sharing information with employees so that employees can participate in decision-making.

Laissez‑faire management style

involves a manager communicating business objectives to employees and giving them freedom to make decisions independently.

List Management Skills

communication, delegation, planning, leading, decision making, interpersonal

Communication

The transfer of information from one person to another.

Delegation

The manager transfers authority and responsibility for a task to an employee.

Planning

Setting objectives and detailing the methods or strategies to achieve them.

Decision‑making

Choosing the best course of action from a range of alternatives.

Leadership

The ability to inspire and motivate others to achieve business objectives.

Interpersonal

The ability to build positive relationships with others in a professional context.

Operational planning

Short term (daily/weekly).

Tactical planning

Medium term (1-2 years).

Strategic planning

Long term (2-5 years).

Relationship between styles and skills

Management skills influence how effectively a management style is used.

Different Types of Corporate culture

Real and Official

Official corporate culture

The shared values and beleifs a business aims to achieve, often expressed in written formats.

Real corporate culture

The shared values and beliefs expressed by the business, in employee behavoiur and day to day operations

Indicators of official culture

Policies, objectives, mission statements.

Indicators of real culture

Physical environment, dress code, behaviour.

Benefits of positive corporate culture

Reduced staff turnover, improved productivity, employees enjoy their work.

Corporate culture & performance

Performance improves when official and real culture align.

Human resource Management

The organistion of employees roles, pay and working conditions

Maslow’s Hierarchy of Needs

A theory categorising human needs into five levels, from basic physiological needs to self-actualisation.

Advantages of Maslow

- Understands employee needs are dynamic

- Provides structure

- Highlights the importance of non- financial motivators

Disadvantages of Maslow

- Hard to identify each employee's level

- Employees may be motivated by multiple needs; costly to satisfy all needs

- not all employees value the same things.

Founders Of Four Drive Theory

Lawrence and Nohria

Four Drive Theory

A motivation theory stating employees are driven by four universal drives: acquire, bond, learn, defend.

Drive to Acquire

The desire to gain rewards and status.

Drive to Acquire - Disadvantage

Can be expensive; employees may constantly want more rewards.

Drive to Bond

Desire to interact with others and develop relationships

Drive to Bond - Disadvantage

- Not all employees enjoy social interaction or group activities.

Drive to Learn

Desire to gain skills, knowledge, and experience; managers use training, mentoring, job rotation.

Drive to Learn - Disadvantage

Training can be costly and time‑consuming.

Drive to Defend

Desire to protect job security and the business's values

Drive to Defend - Disadvantage

Often triggered only when employees feel threatened.

Advantages of Four Drive Theory

- Identifies there are non-financial motivators

- Satisfied employees create a good work environment

- Drives can be managed simultaneously

Disadvantages of Four Drive Theory

- Hard to satisfy all drives equally

- drive to acquire can be expensive

- drive to defend is reactive.

Who are the founders of Goal Setting Theory?

Locke and Latham.

What is Locke and Latham's Goal Setting Theory?

A motivation theory stating employees are motivated by clear, specific goals that follow five key principles.

What are the five principles of Goal Setting Theory?

Clarity; Challenge; Commitment; Feedback; Task Complexity.

Clarity

Goals must be clear and specific so employees understand exactly what is required.

Challenge

Goals should be difficult enough to motivate effort but not overwhelming.

Commitment

Employees must be committed to the goal; involvement in setting goals increases motivation.

Feedback

Employees need regular, constructive feedback to stay on track and improve performance.

Complexity

Goals should consider the difficulty of the task and allow enough time, training, and resources.

What are the advantages of Goal Setting Theory?

- The goals are aligned with the business objectives

- Employees are likely to continue to develop their skills and knowledge

- Goals are clear and employees know what the objective is

What are the disadvantages of Goal Setting Theory?

- Time consuming to set goals

- Failure to achieve goal can hurt employee self-esteem

- Focusing on specific goals can make it difficult to focus on other areas of the business when needed

Motivation strategies

Methods used by managers to increase employee motivation, productivity and achievement of business objectives.

Identify the 5 Motivation Strategies

Performance-related pay, career advancement, investment in training, support strategies, and sanction strategies.

Performance-related pay

Financial rewards given to employees for achieving business objectives

Advantages of performance-related pay

Increases motivation and productivity; rewards high-performing employees; aligns employee goals with business goals.

Disadvantages of performance-related pay

Can create unhealthy competition; may reduce teamwork; motivation may decrease once rewards stop.

Career advancement

The upwards progression of an employee's job position.

Advantages of career advancement

Increases motivation and job satisfaction; encourages employees to work harder; helps retain skilled employees.

Disadvantages of career advancement

Limited promotion opportunities; employees may compete against each other; not all employees want extra responsibility.

Investment in training

Investment in training is allocating resources to improve employee skills and knowledge.

Advantages of investment in training

Improves employee skills and productivity; increases job satisfaction; benefits the business long term.

Disadvantages of investment in training

Expensive for the business; employees may leave after receiving training; takes time to see results.

Support strategies

Providing employees with any assistance hat improves their satisfaction at work.

Advantages of support strategies

Builds strong relationships; increases job satisfaction; improves long-term motivation and corporate culture.

Disadvantages of support strategies

Can take time to implement; managers must invest time and effort; may not quickly fix performance issues.

Sanction strategies

Punishments or disciplinary actions used by managers to correct poor employee behaviour or performance.

Advantages of sanction strategies

Quickly corrects poor behaviour; ensures rules and standards are followed; can increase short-term performance.

Disadvantages of sanction strategies

Can reduce morale and job satisfaction; may create fear or resentment; can harm workplace relationships.

Short-term employee motivation

Motivation strategies that increase employee effort quickly but usually for a limited period of time.

Long-term employee motivation

Sustained motivation over time, usually achieved through job satisfaction, support and development opportunities.

Employee Training

Training is the process of developing an employees skills, knowledge and abilities.

Why is employee training important

So that they can perform their role more effectively

On-the-job training

The process of developing an employees skills and knowledge within the workplace

Advantages of on-the-job training

- Cost Effective

- Employees learn on equipment they will use daily

- Employees can be productive while working

Disadvantages of on-the-job training

- Quality of trainer may vary

- Potential to pass on bad habits

- Workplace distraction can interrupt the learning