All Business Management Definitions

Sole trader:

An unincorporated business structure that is owned and operated by one individual.

Partnership:

An unincorporated business structure that is owned by two to 20 owners.

Private limited company:

An incorporated business structure that has at least one director and a maximum of 50 shareholders.

Public listed company:

An incorporated business that has a minimum of 3 directors and an unlimited number of shareholders. Listing and selling its shares on the ASX.

Social enterprise:

A type of business that aims to fulfil a community or environmental need by selling goods or services.

Government business enterprise (GBE):

A business that is owned and operated by the government.

Business objectives:

The goals a business intends to achieve.

Profit:

Total revenue earned minus total expenses incurred.

Market share:

The total percentage of sales a business makes in the industry it operated in.

To fulfil a market need:

When a business fills a gap in the market, which involves addressing customer needs that are currently unmet or underrepresented by other businesses in the same industry.

To fulfil a social need:

Improving society and the environment through business activities.

Efficiency:

How productively a business uses its resources to produce good or service.

Effectiveness:

The extent to which a business achieves its stated objectives.

Stakeholders:

Individuals, groups, or organisations who have a vested interest in the performance and activities of a business.

Owners:

Individuals who establish, invest, and have a share in a business, often with the goal of earning a profit from its operations. In public listed and private limited companies, owners are known as shareholders.

Managers:

Individuals who oversee and coordinate a business’s employees and lead its operations to ultimately achieve the business’s objectives.

Employees:

Individuals who are hired by a business to complete work tasks and support the achievement of its objectives.

Customers:

Individuals or groups who interact with a business by purchasing and utilising its goods and services.

Suppliers:

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

The general community:

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

Communication flow:

The direction of information transfer between managers and employees, which can occur in a one-way or two-way manner.

Decision-making:

Determining a course of action for a business from a set of alternatives.

Autocratic management style:

Involves a manager making decisions and directing employees without any input from them.

Persuasive Management Style:

Involves a manager making decisions and communicating the reasons for those decisions to employees without their input.

Consultative management style:

Involves a manager seeking input from employees on business decisions but making the final decision themselves.

Participative Management Style:

Involves a manager sharing information with employees so that employees can participate in decision-making

Laissez-faire Management Style:

Involves a manager communicating business objectives to employees and giving them freedom to make decisions independently

Planning:

The process of determining a business’s objectives and establishing strategies to achieve these aims.

Decision-making:

The skill of selecting a suitable course of action from a range of plausible options.

Communication:

The skill of effectively transferring information from one party to another.

Delegation:

The skill of assigning work tasks and authority to other employees who are further down in a business’s hierarchical structure.

Interpersonal:

The skill of creating positive interactions with other employees, to foster beneficial professional relationships.

Leadership:

The skill of motivating others in order to achieve a business’s objectives

Corporate culture

The shared values and beliefs of a business and its employees.

Official corporate culture:

The shared views and values that a business aims to achieve, often outlined in a written format.

Real corporate culture:

The shared values and beliefs that develop organically within a business, and are practised on a daily basis by its employees.

Maslow’s Hierarchy of Needs:

A motivational theory that suggests people have five fundamental needs, and their sequential attainment of each need acts as a source of motivation.

Motivation:

The willingness of an individual to expend energy and effort in completing a task.

Physiological needs:

The basic requirements for human survival, such as food, water, and shelter.

Safety and security needs:

The desires for protection from dangerous or threatening environments.

Social needs:

The desires for a sense of belonging and friendship among groups, both inside and outside the workplace

Esteem needs:

An individual’s desires to feel important, valuable, and respected.

Self-actualisation needs:

The desires of an individual to reach their full potential through creativity and personal growth.

Intrinsic motivation:

Is a drive that comes from within an individual.

Lawrence and Nohria’s Four Drive Theory:

A motivational theory that suggests that people strive to balance four fundamental desires.

The drive to acquire:

The desire to achieve rewards and high status.

The drive to bond:

The desire to participate in social interactions and feel a sense of belonging.

The drive to learn:

The desire to gain knowledge, skills, and experience

The drive to defend:

The desire to protect personal security as well as the values of the business.

The Goal Setting Theory:

A motivation theory that states that employees are motivated by clearly defined goals that fulfil five key principles.

Performance-related pay:

A financial reward that employees receive for reaching or exceeding a set business goal

Career advancement

The upwards progression of an employee’s job position.

Investment in training:

Allocating resources to improve employee skills and knowledge.

Support strategies:

Involve providing employees with any assistance that improves their satisfaction at work.

Sanction strategies:

Involve penalising employees for poor performance or breaching business policies.

Define On-the-job Training:

Employees improving their knowledge and skills within the workplace.

Off-the-job training:

Involves employees improving their knowledge and skills in a location external to the business.

Management by objectives

Involves both managers and employees collaboratively setting individual employee goals that contribute to the achievement of broader business objectives.

Performance appraisals:

Involve a manager assessing the performance of an employee against a range of criteria, providing feedback, and establishing plans for future improvements

Self-evaluation:

Involves an employee assessing their individual performance against a set of criteria.

Employee observation:

Involves a range of employees from different levels of authority assessing another employee’s performance against a set of criteria.

Termination

The process whereby a business ends its employment contract with an employee.

Retirement:

Involves an individual deciding to leave the workforce permanently as they no longer wish to work.

Redundancy:

Involves an employee no longer working for a business because there is insufficient work or their job no longer exists.

Resignation:

Involves an employee voluntarily terminating their own employment, usually to take another job position elsewhere.

Dismissal:

Involves the involuntary termination of an employee who fails to meet required work standards or displays unacceptable or unlawful behaviour

Entitlement considerations:

Legal obligations an employer owes to its employees following the termination of their employment contract.

Transition considerations:

Social and ethical practices that a manager can consider implementing when terminating employment.

Human resource managers

Individuals who coordinate the relationship between employees and management within a business

Employees

Individuals who are hired by a business to complete work tasks and support the achievement of its objectives.

Employer associations

Advisory bodies that assist employers in understanding and upholding their legal business obligations.

Unions

Organisations composed of individuals who represent and speak on behalf of employees in a particular industry to protect and improve their wages and working conditions

The Fair Work Commission (FWC)

Australia's independent workplace relations tribunal that has a range of responsibilities outlined by the Fair Work Act 2009.

Awards: (Aka, Industry Awards):

Legal documents that outline the minimum wages and conditions of work for employees across an entire industry.

Agreements: (AKA: Enterprise Agreements)

Legal documents that outline the wages and conditions of employees and are applicable to a particular business or group of businesses.

Dispute resolution process:

Is a series of steps that disputing parties follow in order to resolve a disagreement and reach a resolution.

Mediation:

Involves an impartial third party facilitating discussions between disputing parties to help each side of the conflict reach a resolution themselves.

Arbitration:

Involves an independent third party hearing arguments from both disputing parties and making a legally binding decision to resolve the conflict.

Operations management:

Involves coordinating and organising the activities involved in producing the goods or services that a business sells to customers.

Efficiency:

How productively a business uses its resources when producing a good or service.

Effectiveness:

The extent to which a business achieves its stated objectives.

Define Inputs:

The resources used by a business to produce goods and services.

Define Processes:

The actions performed by a business to transform inputs into outputs.

Define Outputs:

The final goods or services produced as a result of a business’s operations system, that are delivered or provided to customers.

Manufacturing businesses:

Use resources and raw materials to produce a finished physical good.

Service businesses:

Provide intangible products, usually with the use of specialised expertise.

Automated production lines:

Involve machinery and equipment that are arranged in a sequence, and the product is developed as it proceeds through each step.

Robotics:

Are programmable machines that are capable of performing specified tasks

Computer-aided design (CAD):

A digital design software that aids the creation, modification, and optimisation of a design and the design process.

Computer-aided manufacturing (CAM) techniques:

Involve the use of software that controls and directs production processes by coordinating machinery and equipment through a computer.

Artificial intelligence (AI):

Involves using computerised systems to simulate human intelligence and mimic human behaviour.

Online services:

Are services that are provided via the internet.

Forecasting:

A materials planning tool that predicts customer demand for an upcoming period using past data and market trends.

A master production schedule (MPS):

A plan that outlines what a business intends to produce, in specific quantities, within a set period of time.

Materials requirement planning (MRP):

A process that itemises the types and quantities of materials required to meet production targets set out in the master production schedule.

Just in Time (JIT):

An inventory control approach that delivers the correct type and quantity of materials as soon as they are needed for production.

Quality:

Is a good or service’s ability to satisfy a customer’s need.

Quality control:

Involves inspecting a product at various stages of the production process, to ensure it meets designated standards, and discarding those that are unsatisfactory.

Quality assurance:

Involves a business achieving a certified standard of quality in its production after an independent body assesses its operations system.

Total Quality Management (TQM):

A holistic approach whereby all employees are committed to continuously improving the business’s operations system to enhance quality for customers.