Theme 1

Describe the paternalistic leadership style

Leader consults other staff members but they make the final decision. Creates loyalty and morale, limits empowerment for employees

Describe the democratic leadership style

Leader involves the team in decision making. Good for motivation and creative ideas, however slow decision making and risk of disagreement

Describe the autocratic leadership style

They give orders without consultation. Quick decision making but low motivation

Describe laissez-faire leadership style

-leader allows the group members to make decisions

-this is utilized when group members are productive

-work output by staff is usually low in this situation.

-this style is to be used when group members are trusted and confident in the task at hand

What is the difference between a manager and a leader?

Leaders focus on motivation, achieving the business' aims; managers control day-to-day operations

What does a centralised and decentralised structure mean?

Centralised - decision making is done by the top management

Decentralised - decision making delegated to lower down staff

What is the chain of command in a business?

The reporting system from the top to the bottom --> tall structures have a long chain of command

Name some methods of recruitment

Media advertising

Job centres

Firm's own website

Recruitment agencies

Give pros and cons of internal recruitment

Pros:

Quicker and cheaper than external

Promotion opportunities can motivate employees

Less induction costs

Cons:

Less innovation

Could de-motivate workers who didnt get the role

What is a person specification?

The required skills, qualifications and personality for a vacant job

Define recruitment (selection)

Filling job vacancies by defining a job, advertising the job and selecting the best applicants to fill it

What are 2 ways of empowering employees?

Delegation - passing down authority to a lower "ranking" staff member

Consultation - asking for views of colleagues and taking them into your decision making process

What some financial reward systems?

Piecework - getting paid how by how many units are produced

Commission - earning extra income based on the sales you make

Profit share - sharing profits among employees

Performance related pay(PRP) - targets are set, those who exceed get bonuses

What did Herzberg believe about motivation?

Hygiene factors - minimum requirements (pay, job security etc)

Motivators - motivating staff (promotion, achievements)

What are Maslow's heirachy of needs?

What did Mayo believe about motivation?

Workers are motivated by social needs, such as good relationships with bosses and feeling valued

What did Taylor believe about motivation?

Workers are primarily motivated by money. Work should be broken down into small more managable tasks to increase productivity. Workers should get payed by piece rate, not a fixed wage

Describe the "matrix" organisational structure for a business

Employees have multiple bosses, as they are involved in different departments. Can improve communication between departments but can lead to slow decisiin making

Describe the "flat" organisational structure for a business

Large span of control allows for speedy vertical communication

Describe the "tall" organisational structure for a business

Lots of layers of management, each managing few people. Narrow span of control, good motivation

What is a trade union?

An organisation employees pay to join in order to gain more power and security at work

How can a firm have a flexible workforce?

Multi skilled workers - workers can carry out a variety of tasks

Part time / temporary workers

Working from home

What is public relations (PR)?

An attempt to better the consumer's image of a product without media advertising

What are the "below the line" methods of promotion?

Sales promotion

Direct mail

Personal selling

Sponsorships

Public relations

What is the "above the line" method of promotion?

Advertising

What is emotional branding?

When companies develop strong emotional connections with customers by appealing to values or beliefs

What is the Boston Matrix?

A model that shows a firm its products' market share and the growth of the markets in order to aid marketing strategies

What are the 4 groups in the Boston Matrix?

Problem child (?) - low market share in a fast growing market

Star - high market share in a fast growing market

Cash cow - high market share in a slow growing market

Dogs - low market share in a slow/stable growing market

What is an extension strategy?

The actions a business does to prevent a product entering the decline stage

Why are product life cycles important?

They help businesses plan their marketing activities for a product

What are the stages of the product life cycle

Research and development

Introduction

Growth

Maturity

Decline

What are the types of distribution channels? Explain them

2 stage (Direct) = producer --> consumer

3 stage (Retailing) = producer --> retailer --> consumer

4 stage (Wholesaling) = producer --> wholesaler --> retailer --> consumer

What is distribution (place)?

The movement of goods from producer to consumer

What is an opportunity cost?

The cost of missing out on something when making a decision

What is a social enterprise?

A business thats main objective is to benefit society or the environment

What are the pros and cons of forming a limited company?

Pros:

• Limited liability

• Wider range of borrowing options

Cons:

• Have to make financial information publicly available

• Limited companies have to follow more expensive rules than unlimited liability

Describe what is meant by a partnership

When 2 or more people start a business without forming a comapany (like a sole trader). Unlimited liability and split 50/50 even if owners put in different effort

Describe what is meant by a sole trader

A business that only has one individual owner. Has unlimited liability and cannot use share capital. Hard to finance

Name 3 common business objectives

Survival

Profit maximisation

Sales maximisation

Market share

Minimise costs

Employee welfare

Social objectives

What is a business objective?

A target set by business owners for the business to achieve by a specified date

What are the factors that determine the appropriate pricing strategy?

Product differentiation

Strength of the brand

Amount of competition

PED

Stage in product life cycle

Costs

What are the pricing strategies for existing products?

Competitive

Predatory

Cost-plus

Phycological

Discrimination

What is cost-plus pricing?

A business calculates the production cost for a product then adds a desired markup to make a profit

What are the 2 types of pricing strategies for new products? Explain them

Penetration = Pricing much lower than existing similar products to gain market share

Skimming = At the start price is set high, price is lowered to find the optimal demand

Name 2 types of promotion for short term sales

Buy one get one free (BOGOF)

Seasonal price promotion

What are some ways to build a brand?

USPs

Advertising

Sponsorship

Digital media

What is promotion?

Part of the marketing mix that focuses on persuading people to buy the product

What does ethical sourcing mean?

When a business only buys products that are produced with fair working conditions and workers pay

What are some changes in the design mix that reflect social trends?

Concern over resource depletion

Designing for re-use and waste minimisation

Recycling

What does sustainability mean?

The purchase you make will not affect long term supplies of a product, because it has been automatically replenished

What are the 3 parts of the design mix?

Function

Aesthetics

Costs

What is the significance of income elasticity to businesses?

Used for sales forecasting

Financial planning

What are the 3 categories products can be placed in for YED?

Normal good - +0.5-+1.5

Luxury good - +1.5 or more

Inferior good - negative YED

What is income elasticity of demand?

The amount a change in a person's income changes the demand for a product

What does it mean for a product to have price-inelastic demand?

The product has a PED of below 1 - % change in price is greater than % change in demand

Addictive goods like alcohol and cigarettes are inelastic

What does it mean for a product to have price-elastic demand?

The product has a PED of above 1 - % change in demand is greater than % change in price

What are the main determinants of PED?

Degree of product differentiation from rivals

Availability of substitutes

Branding and brand loyalty

What is the formula for price elasticity of demand?

What is price elasticity of demand?

The extend demand changes for a product when price changes

What is equilibrium?

The point where there is a balance between supply and demand, this makes the price stable

What are the factors affecting supply?

Changes in cost of production

Introduction of new technology

Indirect taxes

Government subsidies

External shocks

Physical constraints

What are the two risks linked to demand?

Undiversified demand (not varied)

Overtrading - demand exceeds cash in the business

What is an entrepreneur?

A business owner that takes risks in order to profit financially

What is the purpose of product differentiation?

To insulate the product from competition#

To enable the business to increase its prices if costs go up

What is the main method of market positioning?

Market mapping

What is market positioning?

How a company/its products are positioned next to competitors by customers

What are the limitations to market research?

Expensive

Time consuming

Small / unrepresentative samples

Researcher bias

What is a product orientated business?

A business that focuses on what they do best before thinking about consumer preference

What is a market orientated business?

A business that takes the needs of customers before any other decision e.g. making products for a segment of a market

What is branding used for?

Product differentiation

Create customer loyalty

Help product recognition

Develop a brand image

Define market share

The proportion of a particular market that is held by a business/products

What are the advantages and disadvantages of niche marketing?

Advantages:

• Little competition

• Larger profit margins than mass marketing

Disadvantages:

• Low amount of volume sold

• If a large company enters niche market, it is hard to compete

What are the advantages and disadvantages of mass marketing?

Advantages:

• High volume sold

• Greater economies of scale

Disadvantages:

• Lots of competition

What does economies of scale mean?

The benefits that occur from increasing the size of a business e.g. buying in bulk for cheaper if a larger company

What is a niche marketing

Identifying needs of customers that make up a niche market (a small segment of a large market) and producing products and services for those customers

What is mass marketing?

Creating products or services that target the whole market not specific people

What are the characteristics of effective marketing?

Identifying the target market - focus market research and advertisement

Segment your markets
Good brand image through good market mix

What are the 4 types of marketing mix?

Product

Price

Place

Promotion

Define marketing

The department tasked with targeting the right product at the right target market using a combination of price, promotion and place

Name the categories of goods sold in consumer markets

Fast Moving consumer goods - high volume, low unit value e.g. newspapers

Consumer durables - low volume but high unit value e.g. dishwashers
Soft goods - similar to consumer durables but dont last as long e.g clothes
Services e.g. hairdressing

Induction training

Initial training provided to new employees joining the business

On-the-job training

Employees gain skills directly at their workplace whilst working

Off-the-job training

Employees learn new skills away from their workplace