Business Management

What is management?

Management is the process of working with people and other resources in order to achieve the desired goals of a business.

What does POLC stand for?

• Planning

• Organising

• Leading

• Controlling

What are the 3 roles of management?

• Interpersonal

• Informational

• Decisional

What are some skills required from a manager to manage a business successfully

• Interpersonal

• Communication

• Strategic thinking

• Vision

• Problem solving

• Decision making

• Flexibility

• Adaptability to change

What does SMART stand for?

• Specific

• Measurable

• Achievable

• Realistic

• Time frame

SMART - Define Specific

Straight forward anfd emphasises what the business wants to happen.

SMART - Define Measurable

Progress can be measured so changes can be seen and kept on track.

SMART - Define Achievable

Challenging but not too far out of reach.

SMART - Define Realistic

Owner and employees are both willing and able to work towards.

SMART - Define Time frame

Have deadlines to promote commitment.

What are some financial business goals that a manager might have?

• Maximise profits

• Increase market share

• Maximise growth

• Improve share price

What are some non-financial business goals that a manager might have?

• Social goals

• Environmental goals

• Personal goals

What are some ways to involve staffs in the decision making process?

• Innovate

• Motivate

• Mentor

• Train

How do managers motivate staffs?

• Lead by example

• Encourage suggestions

• Implement conflict resolution strategies

• Delegate responsibility

• Provide a safe work environment

• Make clear expectations

• Communicate regularly

• Take interest in staff

How do managers mentor staffs?

• Ensure access to mentors for all employees

• The participants know what’s expected of them and assist them with their transition into work

• Assists with training and development of all employees

• Provides career and psychological support

What is the Classical Approach?

The classical approach/theory was all about improving efficiency, decreasing costs, and increasing profits in the labour sector.

Describe the Pyramid Structure of a business

The pyramid structure consists of a few managers at the top, the workers at the bottom, and several layers of middle management to supervise the people beneath them and implement the instructions that flowed down from the top.

What is the Division of Labour?

The degree to which a total task can be divided into small, usually unskilled, tasks.

Describe the rigid chain of command in a business

Refers to the line of authority in a business — the reporting relationship (in terms of who reports to whom) from the top to the bottom.

Describe the span of control in a business

Refers to the number of subordinates who report directly to a specific manager.

What is an autocratic leadership style?

An autocratic style is where managers use a high degree of direction and permit little or no participation in decision making by subordinates.

What is the Behavioural Approach?

The behavioural approach/theory focuses on the fact that managers get things done by working with people. The approach makes two closely related claims about worker motivation and productivity:

• Paying attention to workers’ needs improves their satisfaction and morale.

• Worker motivation and productivity depend on social relations with other workers.

What is a weakness of the Classical Approach?

The classical approach considered people unimportant. They were there to do as they were told and, if they did not do as they were told, they were sacked.

What is a democratic leadership style?

Where managers encourage a high degree of employee participation in decision making as well as open communication channels.

What is the Contingency Approach?

The contingency theory argues that there is no universal or best way to manage a business. In other words, the organisational structure and management style should depend on the type of tasks that are done in the business.

What are the 5 components in Maslow’s Hierarchy of Needs (from least to most essential)

• Self actualisation

• Self esteem

• Social needs

• Safety and security needs

• Basic Needs

What is Operations Management?

• Refers to the business processes that involve transformation or, more generally, ‘production.’

• Concerned with the design, operation, and control of the transformational process that converts resources such as raw materials, energy, and labour into finished goods and services.

• Primary Industry —> Secondary Industry

What are the two types of Goods and Services?

• Tangible: physical products that can be handled and stored.

• Intangible: They cannot be touched

What are the three key elements of the production process in a business?

• Inputs

• Processes

• Outputs

What are ‘inputs’ during the production process?

Resources used in the process of production.

What are the ‘processes’ during the production process?

The conversion of resources into services.

Define STMs

Simply transformed manufactures (STMs) are characterised by their ability to be further processed in a wide range of processes.

Define ETMs

Elaborately transformed manufactures (ETMs) are manufactured goods that are highly processed and valued.

What are the ‘outputs’ during the production process?

Refers to the end result of a business’ efforts — the service or final product that is delivered to consumers.

Differentiate between quality management, control, and assurance

• Quality management is the strategy used by business to make sure that its products meet consumer expectations.

• Quality control is based on an inspection of the product to ensure it meets the needs of the customers.

• Quality assurance involves putting into place of procedures and processes to avoid faults or errors before they happen.

Define marketing

To find out what customers want and to develop products that will meet that want.

What is the term for when business must select specific groups of customers to concentrate their marketing efforts on?

Target market

What is the Mass Marketing Approach?

The seller mass produces, distributes, and promotes one product to all buyers — this seeks a large range of customers.

What is the Market Segmentation Approach?

Occurs when the total market is subdivided into groups of people who share one or more characteristics based on:

• Demographics

• Geographic

• Lifestyle

• Behaviour

Define the Demographic segment

Population characteristics such as:

• Gender

• Age

• Education

• Occupation

• Family size

• Religion

Define the Geographic segment

Where people live

Define the Lifestyle segment

People’s attitudes and values

Define the Behaviour segment

Loyalty to a product, use rate, purchase occasion, and price sensitivity.

What is a Niche market?

A narrowly selected target market segment (also known as a micro market)

What are the 4 P’s of marketing?

• Product

• Price

• Promotion

• Place

4 P’s of marketing — Define Product

A good or service, an idea, or any combination of the three that can be offered in an exchange.

Product — What are the three key areas of ‘product?’

• Positioning

• Branding

• Packaging

Product — Define Positioning

Refers to the image a product has in the minds of consumer.

Product — Define Branding

A name, term, symbol, or special design that identifies a good or service and distinguishes it from its competition.

Product — Define Packaging

Involves designing and producing a container or wrapper for a product.

4 P’s of marketing — Define Price

Refers to the amount of money a customer is prepared to offer in exchange for a product.

Price — What are the 4 pricing methods and its intentions?

• Cost plus margin — involves adding a fixed % to the cost incurred in producing the product.

• Market based price — prices set according to the level of supply and demand.

• Competitor based pricing — choosing a price that is either below, equal, or above that of the competitors.

• Discount price — reducing the price of stock that is not selling to stimulate demand.

Price — What are the 4 pricing strategies and its intentions?

• Price skimming strategy — by placing a high price on the product before lowering it over time

• Penetration pricing strategy — setting the lowest price possible to achieve larger market share

• Loss leader pricing strategy — prices set at a very low level to encourage consideration of the newly introduced product

• Price points — where similar products are set at different prices.

4 P’s of marketing — Define Promotion

Involves directly communicating with the customer and aims to inform, persuade, and remind a consumer about a business product.

Promotion — What are some elements of ‘promotion?’

• Personal selling

• Advertising

• Sales promotion

• Relationship marketing

• Public relations and publicity

4 P’s of marketing — Define Place

Concerned with the process of distributing the product from where it is made to the customer.

Place — What are the 3 most commonly used channels of ‘distribution?’

• Producer to customer

• Producer to retailer to customer

• Producer to wholesaler to retail to customers

Place — Define Channel Choice

Refers to the number of outlets a firm chooses for its product.

How might a business respond to change?

• Transformational change — a major restructure throughout the whole organisation.

• Incremental change — results in minor changes, usually involving only a few employees.

What are some external influences that may affect a business?

• Changing nature of markets

• Economic influences

• Geographical influences

• Technological developments

• Social influences

• Legal influences

• Political influences

What are some internal influences that may affect a business?

• Accelerating technology

• E-commerce

• New systems and procedures

• New business cultures

Define BIS

Business information systems (BIS) is a computerised planned system designed to collect information from the internal and external environments and to store, process, and disseminate the data in a form managers require to manage the business.

What are some reasons why change in a business is resisted?

• Management — making hasty, poorly timed, and unclear decisions can lead to employees losing confidence.

• Fear of job loss

• Disruption to routine — worried that they cannot adapt o the new procedures and can be made worse if there is no training provided.

• Time — not enough time to process the change, accept it, and then implement it.

• Fear of the unknown

• Inertia — an unenthusiastic response to proposed change due to having to move out of your “comfort zone.”

• Cost — financial cost of its implementation.

What are some strategies for reducing resistance to change?

• Avoid threats if possible

• Provide constant feedback

• Build trust among employees

• Offer support

• Support change with new learning

• Specify the nature of the change

• Allows employees to participate in the change process

Describe Lewin’s Model of Change

• ‘Unfreeze’ the existing practice

• ‘Implement’ the change

• ‘Re-freeze’ and consolidate the changes

What are the two sets of forces in the change system?

• Driving forces — people have to understand it is necessary to do something before they will accept it.

• Resisting forces — to operate against change

What is the main role of a Management Consultant?

To help businesses improve their performance by investigating existing business problems and developing plans for improvement.