VCE Busman 3&4 exam revision

unlimited liability

The owner is personally and fully responsible for all losses and debts of the business

Limited liability

only liable to the extent of their original investment for any debt incurred

Ethical management

Refers to the process of abiding by any moral standards and doing the 'right' thing in the best interest of all stakeholders.

unincorporated

is a legal status of a business whereby the business owner and the business are viewed as the same legal entity

e.g sole trader and partnerships

Incorporated

is a legal status of a company whereby the company is established as a separate legal entity to the shareholder/s.

Corporate culture

A business' corporate culture consists of the values, beliefs and expectations that are shared by the business' internal stakeholders, such as the managers and employees.

Offical corporate culture

is the formal written expression of values and beliefs DESIRED by management and are contained in the mission statement, vison statement and values statement

A business' official corporate culture consists of the values, beliefs and expectations the business' internal stakeholders (eg, managers and employees) should demonstrate, according to the business' formal documentation (such as policies and slogans).

Real corporate culture

A business' real corporate culture consists of the values, beliefs and expectations actually practised by the business' internal stakeholders (eg, managers and employees).

Sole trader ( definition & characteristics)

A private sector business owned and operated by a single individual

- Unlimited liability, no perpetuity, easy to establish, private sector business

Discuss Sole trader ( 4 marks)

A: • Owned & operated by single individual ∴ keeps all profit earned , • easy to establish ∴ puts less stress and reduces expenses for the owner

D: •Unlimited liability ∴ personal assests can be seized to recover a debt , • no perpetuity (no ongoing life) ∴ business existence threatened by death of owner

Partnership ( definiton & characteristics)

A private sector business that is owned and operated by 2-20 partners

- private sector business , unlimited liability for the partners, no perpetuity

Discuss Parternship ( 4 marks)

A: • Greater access to finances ∴ useful in funding expansion of business & improving operation , • more knowledge avaliable ∴ quality of decisions is improved

D: • profits have to be shared ∴ not self satisfying , • potential dispute in decision making process if conflicting ideas

Private limited company ( definiton & characteristics)

An incorporated business that is owned by 1-50 private shareholders

-incorporated business , perpetuity , subject to extensive government regulations

Discuss Private limited company (4 marks)

A: • limited liability , • more knowledge avaliable ∴ quality of decisions is improved

D: • Extensive government regulation ∴ increasing the number of reporting tasks manager which is time consuming , • more expensive to setup than sole trader and partnership

Public listed company ( definiton & characteristics)

An incorporated business that is owned by general public shareholders as ( minimum of 5 shareholders), shares are freely traded on the Australian Stock Exchange (ASX)

-shares listed on ASX so can be publicly traded , financial reports have to be published to public , unlimited number of shareholders , perpetuity etc.

Discuss Public listed company ( 4 marks)

A: • unlimited shareholders so can be issued on ASX meaning greater access to finances , • limited liability so liable to the extent of their original investment for any debt incurred

D: • Extensive government regulation ∴ increasing the number of reporting tasks manager which is time consuming , • more expensive to setup than sole trader and partnership

Social enterprise ( definiton & characteristics)

Private sector business that exists with the purpose of fulfilling a social need through distributing profits to benefit a specific cause ( environment or community)

-primary business objective of fulfilling social need , private sector

Discuss Social Enterprise (4 marks)

A: • Community benefits from business activites, • employees have purposeful work so more likely to be satisfied with their job

D: • Difficult to balance both social and financial needs , • hard to find finances to operate a social enterpirse cause profits are low

Government business enterprise ( definiton & characteristics)

A public sector business that is owned and operated by the government

-public sector business , engages in commercial activity ( selling goods or services in exchange for money) to earn profit

DIscuss Government Business Enterprise (4 marks)

A: • Provide services that private sectors hesistate to invest in , • can rely on government for initial investment

D: • Governments and politicians can interfere and change the strategic direction of the business., • Productivity may be lower than private-sector businesses as there tends to be a lack of accountability in the public sector.

Business Objective

stated outcome which a business wishes to achieve in a given period of time

Business objective of 'to make a profit'

where a business aims to ensure that revenue exceeds expenses in a given period of time

Explain a strategy that a business could implement to achieve the business objective 'to make a profit'. [3 marks]

Implementing technology in the workplace can improve the speed and volume of production, making processes more efficient. (1 mark - strategy explanation)

This leads to a reduction in cost per unit, as production becomes more efficient and expenses decrease. (1 mark - link to cost reduction)

Lower expenses relative to revenue earned result in higher profit, helping the business achieve its objective. (1 mark - connection to making a profit)

Business objective of ' to increase market share '

where a business aims to grow the total proportion of sales attained compared to competitors in a given period of time.

Explain a strategy that a business could implement to achieve the business objective 'to increase market share'. [3 marks]

Promotion strategies such as advertising on billboards, television, and creating slogans/logos help define the business' brand and generate awareness. (1 mark - strategy explanation)

Increased awareness leads to greater sales, helping the business grow. (1 mark - link to sales increase)

The business gains a larger market share compared to competitors over time, reinforcing its position. (1 mark - comparison to competitors and market share growth)

Business objective of 'to improve efficency'

where a business aims to ensure resources are used well ( efficiently ) to produce outputs (the final product)

Business objective of 'to improve effectiveness'

where a business aims to ensure that resources are used well (effectively) to achieve business objectives

Business objective of 'to fulfill a market need'

where a business aims to fill a gap in the market in a given period of time

Explain a strategy that a business could implement to achieve the business objective 'to fulfil a market need'. [3 marks]

Market research helps businesses analyze the current market to identify unmet consumer needs. (1 mark - strategy explanation)

Businesses can then fill the gap by providing goods or services that are not currently available. (1 mark - link to addressing market needs)

This ensures the business appeals to consumer expectations, leading to the achievement of the objective to meet a market need. (1 mark - connection to fulfilling market demand)

Business objective of 'to fulfill a social need'

where a business aims to have positive interactions with the environment and community through providing support for a specific cause in a given period of time

Explain a strategy that a business could implement to achieve the business objective 'to fulfil a social need'. [3 marks]

Reducing wastage in the production process helps minimize resource use and errors. (1 mark - strategy explanation)

Implementing training programs ensures employees understand recycling and correct production procedures. (1 mark - link to how the strategy is applied)

Less wastage reduces environmental destruction, helping the business achieve its objective of fulfilling a social need. (1 mark - connection to social responsibility)

business objective of 'to meet shareholder expectations'

where a business aims to earn a profit so that dividends and share values increase such that shareholder expectations are met in a given period of time.

Stakeholders

are individuals or groups with a vested interest in the activities of a business

Owners (definiton & interests)

are individuals who have legal possession and control over a business

-to make profit

-business continues to grow in future so value of their equity (ownership) increases.

Manager (definiton & interests)

are 'change role models' that organise and coordinate the activities of employees in the workplace

-Receiving bonuses from business owners for achieving business objectives

-making sure business objective are being achieved so business can grow in future.

employee (definiton & interests)

individuals who provide labour in exchange for a monetary reward ( such as a salary)

• Provision of long-term job security.

• Receiving fair pay and working conditions.

• Having opportunities to engage in personal and professional development

customer (definiton & interests)

individuals who purchase products (goods or services) to satify their needs

- • Receiving high-quality goods and services at affordable prices.

• Engaging with businesses that are ethical and sustainable.

• Receiving friendly and helpful customer service and assistance

suppliers (definiton & interests)

Individuals or groups that source raw materials and component parts to sell them to a business for use in the production of its goods and services.

• Increasing their revenue. • Earning a profit from the raw materials and resources they supply.

• Having reliable and honest relationships with businesses they supply

General community (definiton & interests)

individuals and groups who are impacted by a business's operations and decisions, often because they are located in close proximity to the business.

-Increasing the local employment rate and boosting the local economy

-Observing business activities that lead to improvements in the community and environment

Shareholder (definiton & interests)

individuals who OWN a business by INVESTING in it

-interest in financial performace of a business such that dividends and shareholder value increases.

Autocratic ( definiton & feature)

a CENTRALISED decision making style in which managers tell employees what to do by ONE-WAY communication

- centralised decision making ( final decision by manager)

-one way communcation (no employee input)

Discuss Autocratic ( 4 marks )

A:- Instructions clear , advantageous if employees are inexperienced as they know what is expected of them so improving productivity

-makes quick and effective decisions as centralised , advantageous as time effective

D:-employees not included in decision making so not feelin valued and thus reducing productivity

-less idea generation cause no employee input thus less innnovaiton

Persuasive ( definiton & feature)

a CENTRALISED decision making mangement style in which managers tell employees what to do by ONE WAY communicatoin and provide REASONS for decisions made.

- centralised decision making ( final decision by manager)

-one way communication to tell employees the reasons for certain decision made.

Discuss Persuasive ( 4 marks)

A:-may gain employee trust & support by explaining the reasons for decisions

-decision is made quick cause no input from employees thus saves time

D:-less flow of ideas in decision making cause no input so less innovation being produced.

-morale reduced so wont feel valued thus less productivity.

Consultative (definiton & feature)

a CENTRALISED decision making in which managers CONSULT with employees by TWO WAY

communication before coming to specific decisions

- centralised ( final decision by manager)

-two way communication when consulting employees about specific ideas

Discuss Consultative (4 marks)

A:-employees feel valued so increasing morale thus increasing business productivity.

-quality of final decision would improve as more knowledge avaliable

D:-time consuming to consult every employee thus distracts managers from core business operations.

-if employee ideas not used their morale will reduce

Participative ( definiton & feature)

a DECENTRALISED decision making in which managers and employees work together collaboratively by TWO WAY communication to come to specific decisions.

-decentralised ( decision making shared)

-two way communication (managers and employees work together)

Discuss Participative (4 marks)

A:- potential for increased profit as quality of decision is improved

-employees may grow & develop their skills through more opportunity within workplace

D:-conflict between employees & managers when there is disagreement btw different opinions

-time consuming to come to specific decision

Laissez-faire ( definiton & feature)

A DECENTRALISED decision making management style in which employees have complete control of business operations and there is TWO way com.

-Decentralised, managers dont have complete control over decisions made

-Two way comm cause employees are required to inform managers of decision made.

Discuss Laissez-faire (4 marks)

A:- a greater flow of ideas in the decision making process (due to there being more knowledge available), which can lead to innovation.

-employees feel a sense of ownership, which can promote outstanding work

D:-potential for resources to be inappropriately used (such as stealing materials from the business).

-employee may not be skiled enough to have full control of decision made, thus productivity reduced & deadline not met

4 factors for right management style in workplace

-nature of task

-experience of employees

-time

-manager preference

Communication

ability to create and exchange ( transfer ) information , either verbal or non-verbal , from a sender to receiver , allowing feedback to occur.

Delegation

The ability to transfer authority and responsibility from a manager to an employee to carry out specific activities.

Interpersonal skills

the ability to form positive relationships with employees.

Planning

The ability to define business objectives and choose the methods or strategies to achieve them in the future.

Leading

the ability to positively influence and motivate individuals to achieve business objectives.

Decision-making

the ability to define a specific problem and choose a specific course of action from the alternatives.

name the steps for appropriate structure for "management skills-business objective questions"

1. Define the management skill and the business objective (explicitly or implicitly)

2. Briefly outline how the management skill can be applied by a manager in the workplace

3. State that the business objective can be achieved as a result

Name the steps of planning process

1. Define the business objective

2. Identify strategies to achieve the business objective

3. Choose a strategy to implement

4. Monitor the success of the strategy to see if the business objective is achieved note: if the objective is not achieved, then an alternative strategy should be implemented

suitable strucuture to explain relationship between two concepts

1.Define the two terms

2.State the specific relationships that exists

3.Provide an example to elevate your response

Key Characteristics of Stakeholder

- Owned and managed by one individual.

-Unlimited liability: personal assets can be used to repay business debts.

-Simple and inexpensive to establish.

Key Characteristics of Partnership

Shared ownership and management.

Unlimited liability for all partners.

Advantages of Partnership

Shared workload and pooled talent.

Continuity of business if one partner dies.

Low start-up costs compared to a company.

Disdvantages of Partnership

Unlimited liability for personal and business debts.

Potential for personality clashes and disputes.

Difficulty finding suitable partners.

Partners are liable for each other's debts.

key charactersitics of Private Limited company

Identified by "Pty Ltd." in the name.

Shares offered to employees or family members.

Smaller in size compared to public companies.

Key Characteristics of Public Listed Company

Ownership dispersed among shareholders.

High level of financial disclosure required.

Typically larger than private companies.

Name the 5 management styles

autocratic, persuasive, consultative, participative, laissez-faire

Define managment styles

the manner in which managers communicate with employees, and the methods in which management makes decisions.

Explain the relationship between managing employees and business objectives. (3 marks)

✅Managing employees refers to coordinating employee activities in the workplace.

✅ Business objectives are stated outcomes a business aims to achieve within a timeframe.

✅ Relationship: Effective management of employees helps achieve business objectives.

✅ Example: Training employees in customer service improves consumer interactions, increasing sales and achieving the objective of market share growth.

Intrinsic vs Extrinsic Rewards

Definition: Intrinsic rewards come from within the person (e.g., personal satisfaction), while extrinsic rewards are tangible and come from external sources (e.g., pay rises, promotions).

Tiers of Maslow's hierarchy and how they relate to a business (Need to get them in order)

-Physiological (Satisfactory remuneration)- Safety (Safe working conditions, Job Security)- Social (Teamwork, friends, support)- Esteem (Responsibilities, Recognition, Promotions)- Self-actualisation (Creativity, opportunities to learn

Maslow's Hierarchy: Intrinsic vs Extrinsic Rewards

Intrinsic Rewards: Social, esteem, and self-actualisation needs are intrinsic.

Extrinsic Rewards: Physiological and safety needs are extrinsic.

5 principles of Locke and Latham's Goal setting

- Clarity (Simple, clear and specific goals that are measurable)- Challenge (Not too challenging, not too easy)- Commitment (More input employees have the more motivated they are)- Complexity (Straightforward and allow employee skills to develop)- Feedback (Offering recognition for progress and outlines expectations)

Are rewards in Locke and Latham's Goal Setting Theory intrinsic or extrinsic

- Employees may receive extrinsic rewards for completing a goal (Pay rise, Promotion)- Employees may receive intrinsic rewards if the 5 principles are applied (Every principle increases satisfaction when goal is complete

What are the Four Drives

- Drive to Acquire (The desire for non-material things)- Drive to Bond (Evoking a sense of belonging in the business)- Drive to Learn (The need to understand the world around us, be challenged and faced with interesting and varied experiences)- Drive to Defend (Motivation comes from removing fears and insecurities from the workplace)

Are rewards in The Four Drive Theory intrinsic or extrinsic

- Drive to acquire is satisfied through extrinsic rewards- Other Drives are satisfied through intrinsic rewards

Discuss Maslow's Hierarchy of Needs. ( 4 marks)

A:• Helps HR understand individual employee needs ∴ allows for tailored motivation strategies increasing productivity.• Easy to understand and implement ∴ practical for managers to apply in workplaces.

D:• Lacks empirical evidence ∴ effectiveness in real workplace settings is uncertain.• Difficult to determine employees' exact needs ∴ strategies may be ineffective if needs are already satisfied.

Discuss locke and Latham's (Goal setting ) Motivation theory [4 marks]

A:• Provides ongoing feedback ∴ helps employees improve performance and achieve goals.Easy to implement for various goals ∴ applicable across different business functions.

D:• Failing to meet a goal is demotivating ∴ can reduce employee morale and engagement.• Time-consuming for managers to set goals and provide feedback ∴ may divert focus from core business operations.

Discuss Lawrence and Nohria's (4 drive theory) motivation Theory

A:• Requires managers to build positive relationships with employees ∴ ensures a better understanding of employee motivation.• Achieving the drives improves productivity ∴ helps businesses meet objectives more effectively.

D:• Managers may not implement the correct strategy ∴ employees may remain unmotivated.• Some workplace applications create competition between employees ∴ may harm teamwork and overall productivity.

Describe Maslow's Hierarchy of Needs (3 marks)

Definition:A sequential motivation theory stating individuals are motivated by satisfying five needs in order: physiological, safety, social, self-esteem, self-actualisation.

Key Points:

Needs must be met in sequence; once satisfied, a need no longer motivates.

Managers must progress through the hierarchy to sustain motivation.

No next need after self-actualisation, so motivation may plateau.

Describe the Goal Setting Theory (Locke and latham). [3 marks]

Definition:Locke and Latham's Goal Setting Theory states that employees are motivated by clear goals and appropriate feedback.

Key Points:

Motivation is driven by five principles: clarity, challenge, commitment, task complexity, and feedback.

Goals encourage employee engagement and improve performance.

Describe the Four Drive Theory (Lawrence and Nohria). [3 marks]

Definition:The Four drive theory is a motivation theory which states that humans have four fundamental human drives that, when fulfilled, act to motivate.

Key Points:

The four drives are: Acquire (purchasing goods/services) Bond (forming relationships) Learn (expanding skills) Defend (removing fears/insecurities)

Each drive acts independently to influence motivation.

Explain how the principles of Maslow's Hierarchy of Needs can be applied to resolve low employee motivation at Boxers United Pty Ltd.[6 marks]

Definition:A sequential motivation theory stating that individuals must satisfy lower-level needs before progressing to higher-level needs. The five needs, in order, are: physiological, safety, social, self-esteem, and self-actualisation.

Application to Low Motivation at Boxers United Pty Ltd:

Safety Needs: Providing training on gym equipment (e.g., punching bags) reduces workplace injury → improves employee motivation. Offering long-term contracts increases job security.

Self-Actualisation Needs: Encouraging employees to train clients for competitions or design boxing programs for children gives them a sense of purpose, resolving low motivation.

Mark Allocation:

Define Maslow's theory & explain its sequential nature (2 marks)

Reference all five needs (1 mark)

Explain two needs with examples (3 marks)

Explain how the principles of Lawrence and Nohria's Four Drive theory can be applied to resolve low employee motivation at Boxers United Pty Ltd. [5 marks]

Definition:A motivation theory stating individuals have four independent drives: acquire, bond, learn, and defend.

Application to Low Motivation at Boxers United Pty Ltd:

Drive to Bond: Rites & rituals (e.g., Friday Night Drinks) build trust and open communication, improving motivation.

Drive to Defend: An anonymous suggestions box allows employees to voice concerns, reducing workplace insecurities.

Mark Allocation:

Define theory & mention independent drives (2 marks)

Reference all four drives (1 mark)

Explain two drives with examples (2 marks)

Explain how the principles of Locke and Latham's Goal Seeking theory can be applied to resolve low employee motivation at Boxers United Pty Ltd. [4 marks]

Definition: A motivation theory that suggests goal setting, combined with feedback, can enhance employee motivation. The theory includes five key principles: clarity, challenge, commitment, task complexity, and feedback.

Application to Low Motivation at Boxers United Pty Ltd:

Clarity & Challenge: Deontay can set clear and challenging goals for employees, like training five clients a week, to enhance motivation.

Feedback: Regular feedback on employees' progress ensures they stay engaged and can improve their performance.

Mark Allocation:

Define theory & mention five principles (2 marks)

Reference clarity, challenge, and feedback (1 mark)

Explain clarity and feedback with examples (1 mark)

Compare Maslow's motivation theory and Locke and Latham's (goal) motivation theory. [4 marks]

Sim: • Both aim to improve employee motivation ∴ ensuring employees are willing to expend energy on tasks.• Focus on achieving a higher state of fulfillment ∴ both theories guide employees toward personal or goal achievement.

Diff: • Maslow's theory is sequential ∴ one need must be satisfied before the next can be pursued.• Locke & Latham's theory is non-sequential ∴ goals, achievement, and feedback can occur simultaneously.

Compare Maslow's motivation theory and Lawrence and Nohria's (4 drive) motivation theory. [4 marks]

Sim:• Both focus on developing positive relationships ∴ Maslow's social need and Lawrence & Nohria's drive to bond promote friendship and connection.• Both are motivation theories ∴ aim to increase employee motivation by addressing human needs or drives.

Diff: • Maslow's theory is needs-based ∴ focuses on a hierarchy of needs (e.g., social needs come after basic needs) whereas Lawrence & Nohria's theory is drives-based ∴ emphasizes four independent drives (acquire, bond, learn, defend), with no sequential order.• Maslow's theory places more importance on higher needs ∴ while all drives in Lawrence & Nohria's theory are equally important.

Compare Locke and Latham's (goal) motivation theory and Lawrence and Nohria's ( 4 drive) motivation theory. ( 4 marks)

Sim: • Both aim to increase employee motivation ∴ ensuring employees are willing to put in effort to complete tasks.• Cooperation between employee and manager is essential ∴ managers need to understand and address employee needs or goals.

Diff:• Lawrence & Nohria's theory (4 drive) is drives-based theory focuses on four independent drives (bond, acquire, learn, defend) while Locke & Latham's theory (goal) is goals-based theory focuses on setting goals, achieving them, and providing feedback.• Locke & Latham's theory (goal) focuses on business objectives while Lawrence & Nohria's (4 drive) focuses on individual employee motivation.

5 Types of Motivational Strategies

- Performance Related Pay- Career Advancement- Investment in Training- Support Strategies- Sanction Strategies

Define performance related pay and give example

a financial reward to employees when they perform their duties in a manner that equals or exceeds a set of pre-determined goals

- Pay rises- Bonuses- Gainsharing (Giving money to employees for suggesting improvements to productivity)

Performance related pay Impact on motivation (Short and Long Term)

Short Term

- Initial impact but wears off reasonably quickly

Long Term

- Only a long term impact if the payments are ongoing

What Motivational theories does Performance related pay relate to

Maslow: Esteem and Physiological needs

The Four Drives: Drive to acquire

Define career advancement

The assignment of more responsibilities/authority to employees or the promotion of employees to higher positions

Career Advancement impact on motivation (Short and Long Term)

Short Term

- Immediate boost to self esteem

Long Term

- Improves loyalty, Self-actualisation

What Motivational Theories do Career Advancement Relate to

Maslow's: Security needs, Esteem needs, Self-Actualisation

Four Drives: Drive to acquire, Drive to learn

Define investment in training.

the use of training programs to expand the skills and knoweldge of employees

Investment in Trainings impact on motivation (Short and Long Term)

Short Term

- Increases commitment and loyalty

- Creates a feeling that the business cares about development

Long Term

- Improved skills can heighten esteem

- Trained staff can meet more business objectives

What Motivational Theories do Investment in Training relate to

Maslow: Esteem need, Self Actualisation need

Goal Setting: Challanging, Clear

Four Drives: Drive to acquire, Drive to learn

Define support and give two types of support strategies

The assistance or services provided by the business to help employees cope with difficulties that may impede work performance

- Mentoring- Counseling

Support Strategies impact on motivation (Short and Long Term)

Short Term

- Help Resolves employee issues

- Can resolve problems employees face

Long Term

- Improve employee loyalty and build positive relationships