Business Summary

Sole trader

A business structure owned and operated by one individual with unlimited liability.

Private limited company (Pty Ltd)

An incorporated business with 1 to 50 non-public shareholders and limited liability.

Public listed company (Ltd)

An incorporated business with an unlimited number of shareholders whose shares are traded on the stock exchange (ASX).

Social enterprise

A business structure that trades to make a profit but exists primarily to fulfill a social or environmental cause.

Efficiency

How well a business uses its resources to achieve its objectives by minimizing waste, reducing time, or lowering costs.

Effectiveness

The degree to which a business achieves its stated objectives and produces desired outcomes.

Stakeholder conflict

When the interests and expectations of two or more stakeholder groups compete or clash with one another.

Autocratic management style

A management style where the manager makes all decisions alone and tells employees what to do using one-way top-down communication.

Consultative management style

A management style where the manager asks employees for input and feedback using two-way communication before making the final decision.

Official corporate culture

The desired values and beliefs a company presents to the public through mission statements, logos, and slogans.

Real corporate culture

The actual unwritten values, behaviors, and relationships present among staff within a business.

Maslow's Hierarchy of Needs

A motivation theory proposing that employees are motivated by five sequential levels of needs: physiological, safety, social, esteem, and self-actualisation.

Locke and Latham's Goal-Setting Theory

A motivation theory stating that setting clear, challenging goals and receiving feedback motivates employees and improves task performance.

Lawrence and Nohria's Four-Drive Theory

A motivation theory identifying four basic human drives that dictate behavior: the drive to acquire, bond, comprehend, and defend.

Investment in training

A non-financial motivation strategy where a business pays for employees to gain new skills and knowledge to perform their jobs better.

On-the-job training

Employees improving their knowledge and skills within the workplace while performing their actual job tasks.

Off-the-job training

Employees improving their knowledge and skills in a location external to the business, usually led by professional instructors.

Performance appraisal

A method by which the job performance of an employee is documented and evaluated against pre-determined standards.

Redundancy

The termination of employment when a specific job position is no longer required by the business due to restructuring or technological changes.

Fair Work Commission

Australia's national workplace relations tribunal that sets minimum wages, approves enterprise agreements, and resolves industrial disputes.

Award

A legally binding document set by the FWC that outlines the minimum terms and conditions of employment for an entire industry.

Enterprise agreement

A negotiated agreement between an employer and a group of employees specifying pay and working conditions for a specific business.

Arbitration

A formal dispute resolution process where an independent third party listens to both sides and makes a legally binding decision.

Automated Production Line

A series of workstations linked by a transfer system where electronic or mechanical devices perform sequential assembly tasks.

Just In Time

An inventory management strategy where materials arrive at the production facility precisely as they are needed, minimizing inventory storage costs.

Quality Assurance

A proactive quality strategy where a business's processes are audited and certified by an independent external body against predefined quality standards.

Total Quality Management

An ongoing, organization-wide commitment to continuous improvement, employee empowerment, and customer focus to eliminate defects.

Lean Management

A systematic approach to operations designed to eliminate waste and maximize customer value through continuous improvement.

Global Outsourcing

The business practice of contracting specific operational functions or business tasks to an external, third-party business located in an overseas country.

Net profit figures

The amount of money remaining after a business's total expenses and taxes are subtracted from its total revenue over a set period.

Rate of productivity growth

The percentage change in output relative to inputs over time; measures resource efficiency where a positive rate shows higher output per unit of input.

Number of customer complaints

The total number of customers who express dissatisfaction with a product or service directly to the business over time.

Force Field Analysis

A decision-making tool developed by Kurt Lewin that identifies and weighs driving forces against restraining forces when evaluating a proposed business change.

Steps in Force Field Analysis

1. Define desired change; 2. Identify driving & restraining forces; 3. Weight/score each force; 4. Develop action plan to strengthen drivers & weaken restrainers; 5. Implement plan and evaluate if desired equilibrium is reached.

Porter's Generic Strategies

A strategic framework proposing that a business can gain a competitive advantage by choosing either a Lower Cost or Differentiation strategy.

Porter's Lower Cost Strategy

A strategy where a business aims to become the lowest cost producer in its industry, allowing it to either offer cheaper prices or sell at industry average to increase profit margins.

Porter's Differentiation Strategy

A strategy where a business offers unique product features, superior quality, or strong branding to stand out from competitors.

Three-step Change Model

A systematic process developed by Kurt Lewin that can be used by a business to implement a transition successfully.

Communication

A low-risk strategy where managers clearly and respectfully express in advance why and how a business change needs to occur.

Support

A broad term for nurturing activities related to understanding employee emotions during a change and providing services to look after them.

Manipulation

Persuading or coercing an employee to do what you want by withholding the full truth or putting them in a position where they cannot disagree.

Threat

A high-risk strategy involving intimidation where an employer threatens an employee's job or promotion prospects if a change is not carried out.

Systems Thinking

The ability to see the "big picture" of the business. It involves understanding that every decision and change has an impact on the entire organisation and its environment, rather than viewing changes as isolated events.

CSR considerations while implementing change

The ethical and sustainable decisions made by a business that go beyond legal obligations to protect stakeholder wellbeing and the environment during a transition.

Performance-related pay

A financial motivation strategy where an employee's remuneration is tied directly to their performance against set standards or KPIs (e.g., bonuses, commissions).

Career advancement

A non-financial motivation strategy where employees are promoted to higher-level positions with increased responsibility, status, and remuneration.

Sanction

A non-financial motivation strategy using penalties or discipline imposed on an employee for poor performance or undesirable behavior.

Learning Organisation (Senge)

A business that facilitates the learning of its members and continuously transforms itself to be more flexible and adaptive. It relies on five disciplines: Systems thinking, Personal mastery, Mental models, Building shared vision, and Team learning.

Grievance procedure

A formal, step-by-step process outlining how disputes between employees and employers will be handled within the business.

Mediation

A dispute resolution process where an independent third party facilitates discussion to help conflicting parties reach their own mutually agreeable solution.