Business weaker topics

which business structures have unlimited liability

sole trader

partnerships and some types of partnerships

uncorporated businesses

which business structures have limited liability

private limited companies, public limited companies

what is the Tannenbaum and Schmidt order

tell - sell - suggest - consult - join - delegate - abdicate

high power and low interest - stakeholder mapping

keep satisfied

low power and low interest - stakeholder mapping

monitor them

high power and high interest - stakeholder mapping

manage closely

low power and high interest

keep informed

whats market mapping

placing a product on a scale of price to quality to identify competitive positioning and market opportunities

eg bounty is low price low quality whilst lindt high price high quality - is there a demand for middle price

what PED of 1+

elastic

luxury goods

demand is sensitive to price change

what is PED below 1

inelastic

necessities

demand is not very responsive to price change

what are the 7Ps in the marketing mix

people - staff, deliverers

process - customer journey

physical environment - store layout

product - design, life cycle

place - distribution (online is cheaper - marketed as cost saving)

price - choice of pricing strategy

promotion - advertising, sales promotions

what are the characteristics of the introduction phase - product life cycle

low sales due to low product awareness and high marketing costs

what can be done to prolong the growth and maturity/reduce decline phase of the product life cycle

expand their distribution channel

continue promotion

consider a price reductions

whats price penetration

offering a low initial price to quickly gain market share

what is price discrimination

charging different prices to different customer segments for the same product/service based on factors like location, time, demographic

eg student discounts

what is bundle pricing

offering multiple products/services together at a reduced price which is cheaper then purchasing them individually to encourage customers to buy more items

what is economy pricing

setting a low price to attract budget conscious consumers

what is geographical pricing

charging different prices based on the geographic location of the customer (considering factors like transportation costs, local market conditions)

what is quality assurance

a process of carrying out quality checks at specific stages during the production process

what is Kaizen

staff taking continuous steps throughout the production process to improve the quality of the product

what can happen to businesses with cash flow/liquidity problems

they can go bankrupt due their lack of ability to pay short term debt

what can a business do to improve cash flow

reduce trade credit periods to increase the speed at which they receive the receivables

what is the advantage of asking for longer trade credit

it can reduce how quickly a business must pay debtors which may improve short term cash flow

what does it mean if a business gives another trade credit

when a business allows another to pay them at a later date

what does hire purchasing allow a business to do

buy things (eg machinery) for the businesses that they wouldn't otherwise be able to afford

what are government grants

money given to businesses to research things the government is interested in

eg to Tesla to support clean energy

where do PLCs issue shares

the stock market

who can LTDs sell share equity to

family, friends or private equity companies

whats a current liability

something a business owes expected to be settled within 1 year or its operating cycle

give examples of current liabilities

account payables, short term loans, wages, taxes

give examples of non current liabilities

• long term loans

• long term lease agreements

• pension obligations

• bonds payables

what is solvency

the company’s ability to meet its long term obligation

(how much they rely on debt vs equity)

what does high current ratio indicate

good short-term financial health, as it has enough assets to cover its short-term liabilities

strong liquidity

common HR objectives

Cost effective employment

Making effective use staff

Matching staff with business’ needs

Ensuring good staff relations

Training staff

whats the focus of taylor's motivational theory

efficiency and productivity

how does taylor approach management

measurement, monitoring and control through analysis

What is maslows theory

(list from top of triangle to bottom)

that people have 5 sets of needs

TOP

self actualisation - do they feel they’re the best they can be

self esteem - are they receiving praise, acknowledgement etc

social - do they feel included

safety - do they feel safe in their environment

physiological - water, food, shelter

what does maslow believe a business should offer and why

different incentives to workers in order to help them fulfil their needs and progress up the hierarchy

what does Herzberg believe to be more important than scientific approach

non financial factors

what are herzbergs 2 factors

motivators and hygiene

what is a motivator factor according to herzberg

one that directly motivate people to work harder

what is a hygiene factor according to herzberg

one that can demotivate if not present

(but doesn't actually motivate workers to work harder)

he just wants to ensure these are met

what are examples of herzbergs hygiene factors

good working conditions

appropriate supervision and policies

examples of financial rewards - taylor/herzberg

piece rate pay

commissions

salary schemes (eg pensions)

performance related pay

examples of non financial rewards

job enlargement

job rotation

job enrichment

empowerment

training

delegation

what are a business’ core competencies

give examples

the unique abilities of a business which differentiate them from competitors

eg superior customer service, innovative design, efficient supply chain

what is Elkington’s triple bottom line

the idea that firms should commit to being conscious of their societal and environmental impact

rather than just focusing on generating profit (the standard bottom line)

what is enterprise in terms of the political environment

how government policies / decisions impact a company's ability to operate and grow

(may help or restrict)

what is fiscal policy

the government's use of taxation and spending to influence the economy

what is monetary policy

a central bank’s (eg Bank of England’s) control of money supply and interest rates to control economic activity

what does PESTLE identify

the external factors effecting a business (eg their strategic position)

what are porters five forces

threat of new entrants - can intensify competition and effect brand loyalty

bargaining power of suppliers - influences costs

bargaining power of buyers - to negotiate lower prices

threat of substitutes - how easy is it for customers to go elsewhere

industry rivalry (threat of competition)

what does Carroll suggest about corporate social responsibility

they should integrate social and environmental concerns into their operations and interactions with stakeholders

overall promoting ethical and sustainable practices

what is the order of Carroll’s CSR pyramid

Philanthropic - give back to society (TOP)

Ethical - do the right thing

Legal - obey the law

Economic - be profitable

(BOTTOM - most important- enables the others)

what is market penetration - Ansoff’s matrix

existing products into existing markets

to increase market share

eg using a campaign to boost sales

what is product development - Ansoff’s matrix

introducing new products into existing markets

eg adding a vegan burger to the existing menu

what is market development - Ansoff’s matrix

selling existing products into new markets

eg through new geographical markets / distribution channels

what is diversification - Ansoff’s matrix

selling new products in new markets

eg Amazon launching Amazon Fresh

what are porters generic strategies

ways a business can achieve competitive advantage through either cost leadership or differentiation

why is cost leadership important - porters generic strategies

If selling prices are broadly similar, the lowest-cost operator will enjoy the highest profits whilst gaining market share

what does a differentiation strategy aim to offer

a product that has a distinctive difference from the competitions

customers must value the differentiation

eg tesla self driving cars - makes them stand out against other car sellers

what does it mean to be stuck in the middle

Being unable to pursue both a low-cost or differentiation strategy resulting in a lack of competitive advantage due to poor performance overall

what is licensing

allowing another company to use the company’s intellectual property

(eg Disney licensing its characters to a toy/clothes company)

what are the benefits of businesses embracing change

competitive advantage

advancements in tech can be taken advantage of

stakeholders gain from improved productivity

which 2 theorists suggested there are 4 main reasons for change resistance

Kotter and Schlesinger

what did Kotter and Schlesigner suggest are the 4 main reasons for resistance to change

Self interest

Different assessment of the situation

Low tolerance for change/inertia

Misinformation and misunderstanding

what does self interest as a form of resistance to change arise from

a perceived threat to jobs security, status and financial position

what do those feeling self interest resistance to change often do

put their own interests ahead of the organisations especially if they aren’t particularly loyal

what does misinformation and misunderstanding as a form of resistance to change arise from

people not understanding why change is needed possibly as they’re misinformed/given a lack of info about the real strategic position of the business

• some may think things are better then they are

what does different assessment as a resisting force to change mean someone has - Kotter and Schlesinger

a disagreement about the need for change/what the change needs to be

different from self interest as resistance here is based on what they feel is best for the business

what does low tolerance/inertia as a form or resistance to change arise from

some people prefer things to stay the way they are

they need security, predictability and stability in their work

what are the 6 ways Kotter and Schlesinger suggest a business can overcome resistance to change

education/communication

participation/involvement

facilitation/support

manipulation/co-option

negotiation/bargaining

explicit/implicit coercion

how can education and communication be used to overcome resistance to change

people will be able to see the logic behind the change

misconceptions/misinformation/inaccuracies can be addressed

it needs to be delivered consistently and long term for best impact

how can participation and involvement be used to overcome resistance to change

people are brought on board

participation often leads to commitment, not just compliance

Delays and obstacles with change should be avoided

how can manipulation and co-option be used to overcome resistance to change

specific individuals are given management roles

if they’re part of the change management they may be forced to go along with the change instead of resisting it

manipulating people also means only selective use of information is shared which encourages people to behave in a particular way

how can negotiation and bargaining be used to overcome resistance to change

resisters are incentivised

eg offering better financial rewards to those who accept the change requirements

commonly used when a business needs to restructure the organisation

what is explicit coercion - resisting change

people being told exactly what the implications of resisting change will be

what is implicit coercion - resisting change

suggesting the likely negative consequences for the business of failing to change, without making explicit threats

what must be the case for change to occur

the driving force of change must exceed the restraining force

what are Handy’s four classes of culture

power

role

task

person

what is power culture

power is held by just a few individuals in the center whose influence spreads throughout the organisation

there are few rules and regulations

a strong culture but can quickly turn toxic (eg decisions go unchallenged)

what is role culture

when people have very clear roles and responsibilities within a defined hierarchy

Power derives from a persons position

Typically part of a tall organisational structure with a long chain of command

what does it mean if a business is bureaucratic

its formal, rule-based, and hierarchical

decisions often follow strict procedures and go through many levels of approval

they prioritise rules and regulations over individual discretion

what is task culture

teams are formed to solve particular problems

any power will derive from expertise as long as it requires it

There is no single power source

the task is the important thing so power within the team will often shift depending on the mix of the team members and the status of the problem or project

what is person culture

when people believe themselves to be superior to the business (their expertise is what brings in clients and revenue so they see themselves as the core of the business)

Everyone has similar training, background & expertise

It’s common in firms of professionals eg accountants, lawyers

give examples of sources of culture

rules/regulations

organisational structure

management

decision making

recruitment

give examples of factors which may influence the culture of an organisation

• The founder

• Stage of the business

• Management style

• Organisational structure/policies/practices

• Reward schemes

• The industry

• Environment (eg remote/in person)

• External environment

what is an emergent strategy

a strategy which responds to events as they arise often involving challenges but not restricted by formal planning tools and methods

give examples of causes of strategic drift

• Lack of adapting to a change in external environment

• What worked before doesn’t work now

• Complacency has set in – often built on previous success

• Senior management deny there is a problem