Business Management All Units

flat/horizontal leadership structure

few levels of hierarchy, wider spans of control, decentralized decision-making, short chains of command 

tall/vertical leadership structure

many levels of hierarchy, narrow span of control, centralized decision-making, long chains of command 

autocratic

tyranical, rule-oriented, doesn’t receive input from subordinates 

paternalistic

insists on its employees being looked after as family, provides sense of security and loyalty, good work environment 

democratic

values inclusiveness and employee input. not ideal for crisis

situational

adapts to any situation and is competent and confident to make right decisions

laissez-faire

hands off, competent employees are necessary, employees have more control, lack of interference from leader of organization 

Taylors Scientific Management Theory

focused on efficiency of employees and workers respond positively to more money for their work 

Maslow’s Hierarchy of Needs 

Humans have different kinds of needs. physiological, safety & security, love & belonging, esteem, self-actualization 

Herzberg’s Two Factor Theory

Focuses on hygiene factors such as workplace conditions

Deci & Ryan’s Self Determination Theory

Recognised that extrinsic motivators could result in some motivation, but could have negative effects. autonomy, competence, relatedness 

Equity Theory

focused on processes and the satisfaction/motivation in the workplace by determining and understanding fairness 

Expectancy Theory

human behavior is determined by anticipated results or consequences

Financial rewards

includes salary, wages, profit-related pay, performance related pay

Non-Financial Rewards

teamwork, purpose, empowerment, job excitement, 

Extrinsic Motivation 

motivation to meet an external goal

Internal motivators

internal desires that motivate someone

vertical communication

is top-down or bottom-up communication where communication starts with employees and gets to senior managers and etc

Horizontal communication

when two employees from different departments of an organization converse on the same hierarchical level

Diagonal communication

between employees at different hierarchical levels and in different departments 

market orientation 

business focuses on creating products to meet buyers needs/wants

product orientation

business focus on research and development for their products to have a USP or differentiation

market segmentation

the process of dividing ip the market into distinct groups of customers to meet their desired wants

target market

advertising and adhering to a specific market whether niche, or mass marketing

Sales Forecasting

predicting sales over a period of time

quota sampling

individuals chosen based on pre-defined characteristics (age, gender, ethnicity)

convenience sampling

using people within easy reach

random sampling

selecting anyone in the population, its random

Brand loyalty 

exists when customers continue to buy a particular brand even when alternative products exist

Brand value

additional value consumers assign to a product because of its strong brand 

premium pricing

permanently setting a high price because of image or reputation. creates perception of value but limits the target market/ number of customers

dynamic pricing

pricing based on demand. increases revenue but consumers may feel ripped off

competitive pricing

pricing based on competition and prices rivals have set. low risk but difficult to stand out in market

loss leader pricing

setting price lower than production cost. attracts customers but expensive to sustain

Below the line promotion

marketing activities in which the organization has direct control over

Above the line promotion

paid for marketing communications through the use of independent mass media

Capital Expenditure

money spent on items to be used for many years

Revenue Expenditure

money spent on day to day operations

Internal sources of finance 

personal funds, sale of assets, retained profit 

external sources

loan capital, share capital, business angels, venture capital

loan capital

sourced from financial institutions, repay with intrest

share capital

sale of shares

business angels

Private individual who directly invests their assets in new and growing businesses 

venture capital

investment firms provide capital to new and emerging business