VCE BUSINESS MANAGEMENT

Communicating

The two way process of sending and receiving information

Delegating

The process of handling over tasks and responsibilities to subordinates

Leading

Involves the skill of the manager to influence others to do their best to achieve

Planning

Refers to defining objectives and determining strategies to achieve those objectives

Decision Making

The ability to choose the best course of action from a range of options

Interpersonal skills

Refer to the ability to communicate, interact and build positive relationships with other people both individually or in groups

Steps for effective communication

1. be clear (plan the communication)

2. Choose the most appropriate method, timing and suitable location

3. Tailor the message to suit the audience

4. Eliminate noise, distractions, including over communication

5. Ensure the message is received and understood. - seek feedback

6. Allow questioning and modifications to the message if required

Main categories of planning

1. Strategic planning: long term up to 5 years

2. Tactical planning: medium term, up to 6 months to 2 years

3. Operational planning: short term, day-to-day plans

Planning process

D- Define objectives

A- Analyse using a SWOT analysis

D- Develop alternative strategies (determining possible ways of achieving objectives)

I- Implement a strategy

M- Monitor and evaluate the strategy deciding if the objectives are being met

Decision making process

1. Identify the issue or problem that needs to be solved or decided upon

2. Gather the facts relating to the problem or issue

3. Develop a range of alternative possible solutions

4. Analyse and evaluate the alternatives - rank and sort them

5. Choose one of the alternatives and implement it

Corporate culture

The shared values and belief held by an organisation

Official corporate culture

The desired culture a business wants to establish and project to the public

Real corporate culture

The actual or prevailing culture that exists

Indicators of a corporate culture

- Mission statement

- The way staff treat each other

- Image (customer service/branding)

- Dress code/ uniform (relaxed, informal, professional)

- Management style used

- Rituals, celebrations, heroes

Areas of management responsibility

- Operations

- Finance

- Human resources

- Sales and marketing

- Technology support

Maslows Hierarchy of needs

1. Psychological needs

2. Security needs

3. Social needs

4. Self esteem needs

5. Self actualisation needs

Locke and Latham's Goal setting

Specific

Measurable

Attainable

Relevant

Time bound

Lawrence and Nohria's Four drive theory

1. Drive to acquire

2. Drive to bond

3. Drive to comprehend (learn)

4. Drive to defend

Motivation Strategies

- Performance related pay

- Career advancement

- Support

- Sanction

- Investment in training

On-the-job training

occurs within the working environment

Off-the-job

occurs away from the workplace

Termination

when employees leave the organisation

Resignation

Voluntary termination that occurs because the employee is unsatisfied or unsuited in their current job, or they have another job to go to

Redundancy

Involuntary termination - occurs when a job no longer exists (e.g a robot has replaced workers jobs)

Retirement

Occurs when an employee permanently stops employment

Dismissal

Involuntary termination generally occurs when there are factors that are regarded as contrary to policies or requirements of the organisation

e.g (poor work performance)

Exit interview

should involve the HR manager finding out the reason why the person is leaving. (If the interview reveals reasons such as major dissatisfaction with the job, the organisation or problem such as work place bullying, then investigation must take action)

Industry-wide award

a legally binding agreement made by the Fair Work Commission arising from submissions made to it by employers, unions and other peak bodies

- sets out minimum pay and working conditions

- 10 National Employment Standards form part of the award

Collective agreement

results from a period of good-faith bargaining at a workplace between employees and employer.

- The agreement covers pay and working conditions and incorporates 10 minimum standards

- The Fair Work Commission provides approval for the agreement

Individual contract

an agreement made directly between an employer and an employee that covers working conditions and remuneration.

- The employee and employer negotiate the terms and conditions and any dispute arising from the contract is enforced through courts

Performance management strategies

- Management by objectives

- Appraisals

- Self evaluation

- Employee observation

Management by objectives

This approach involves participative goal setting whereby the manager and employee jointly determine and agree on a set of objectives/goals for the employee and the beginning of the review period.

- managers track their employees progress which allows them to offer additional assistance if targets are likely to be missed.

Appraisals

The process of measuring an employees individual performance over a set period. This can occur using a formal meeting between the manager and employee or can be done on an ongoing informal basis (oral or written feedback)

Performance appraisals methods:

- the essay methods

- the comparison rating scale method

- a combination method

Self-evaluation

Involves the employee evaluating and reflecting on their own performance.

Employee observation

360 Degree feedback is a process used to gain a border, more objective perspective on the performance of an employee.

Workplace relation groups

- Human resource managers

- Employees

- Unions

- Employer associations

- The Fair Work Commission

Human resource managers

Involves 3 stages

1: often involved as employer representatives in the process of negotiating new agreements

2: responsible for making sure that the agreements are implemented correctly

3: may be require to negotiate in times of industrial unrest and disputes

Employees

Involved because their wages and conditions of work are at stake in this process.

- Need to ensure that they are satisfied with the way in which employer pays them and provides the agreed conditions otherwise some industrial action may result.

Employer associations

Bodies that represent employer groups. (they are a bit like unions for businesses).

- they may provide advice and support for businesses and may lobby the government over matters that concern them

(e.g Australian Medical Association - represents doctors)

The Fair Work Commission

The national workplace relations tribunal. It is an independent body with the power to establish the safety net of minimum workplace conditions, overview enterprise bargaining, monitor and approve industrial action and resolved disputes and monitor termination of employment

Dispute resolution

The processes by which disputes are bought to an end. This can occur through:

- a NEGOTIATED outcome : where the parties concerned sort out things themselves

- a MEDIATED outcome: where the parties use the services of an independent mediator to help them arrive at their own agreement

- an ARBITRATED outcome: where an independent arbitrator of court determines how the dispute is to be resolved and makes a binding decision or order to this effect

Grievance procedures

Steps that should be followed when a person has a complaint or concern.

step 1: management meet with the employee or employees concerned, as well as their representative (the cause of the issue or problem needs to be outlined and discussed)

step 2: If no resolution can be reached, the dispute may be referred to mediation. This involves an independent third party assisting the parties who are in dispute to work towards a compromise and come to their own agreements. (The third person will usually not offer suggestions or solutions)

step 3: This involves a third party participating in the resolution of a dispute and attempting to resolve row differences through discussion.

- Th Fair Work Commission, a tribunal member or a member of staff trained as a conciliator brings both sides together to help them reach an agreement.

step 4: The final step in a typical dispute resolution process is arbitration. If a resolution still cannot be resolved, then a tribunal member may be refer the dispute to the Fair Work Commission for arbitration.

The relationship between operations and business objectives

Organisations try to be efficient and competitive and operations is how they can achieve this. Operations can influence the quality, cost and availability of an organisation's good or services. It therefore has a direct impact on them achieving their objectives

Efficiency

This refers to how well a business uses its resources to achieve its objectives

Effectiveness

The degree to which a business has achieve its objectives

Automated production lines

Involves a process where raw materials enter and finished products leave with little or no human intervention.

- where a series of work stations are linked by an electronic control system.

- Each station performs a specific operation automatically and the product is constructed step by step, using machines or robots that perform specific tasks, as it moves along the line in a predefined sequence.

Computer-Aided design

A software system that allows a product to be designed on a computer

- designers and product development engineers can easily experiment with variations of designs allowing for greater creativity in product design as products can be tested before they are produced

Computer-Aided manufacturing

The use of software to control and computerise the manufacturing process.

-It involves the control of machinery, tools and equipment whereby they are fed programmed instructions through a computer.

Website development

Allows businesses to increase sales and improve operation systems using online technology

Materials Requirement Planning

Looks at MPS and determines the exact materials that will be needed to meet the MPS.

- Ensures that the business is never under stock with materials, so that production is continuous.

- Ensures that the business isn't overstocked where money is tied up with idle stock.

Just In Time

Materials are delivered to the business just as they are needed in the production process.

-Requires the operations manager to keep just enough materials on hand to get the workplace through the next production period

- For it to be effective there must be a strong relationship between the business and suppliers

Forecasting

Requires a prediction of the materials that may be needed in the upcoming period.

- allows a business to prepare and meet the forecasted demand and allows the ordering of raw materials inputs ahead of time for periods of high demand or to produce more finished goods than required on days leading up to an expected busy time

Master Production Schedule

Shows exactly what is going to be produced, the quantity to be produced, how the production will be carried out (including labour requirements) and when the production will occur.

- outlines delivery dates and when contracts are to be met

Quality control

A system that aims to ensure predetermined standards are met involving the use of inspections of a product/service at various points in the production process

Quality Assurance

A process whereby a business receives certification that its systems and processes meet strict national and/or international standards as determined by the International Standards Organisation

Total Quality Management

A process that emphasises continuous improvement in all aspects of the business by sharing responsibility among all members of a business with customer focus (both internal and external) being the top priority.

- It aims to REMOVE all faults or errors before production occurs and the system encourages the belief in continuous improvement (Kaizen) - an ongoing commitment to achieving the highest possible standard

Lean management

An approach that improves the efficiency and effectiveness of operations by eliminating waste and improving quality.

- works towards reducing or eliminating seven wastes

Waiting

Excess inventory

Transportation

Motion

Over production

Overprocessing

Defects

Corporate social responsibility in operations

Refers to how businesses takes responsibility for their actions that impact on the wider community through the use of ethical practices.

CSR Inputs

- Fair dealing with suppliers

- Ensure suppliers are ethical and socially responsible

- Environmentally sustainable inputs (this may cost more and may not be available locally)

- Local vs Overseas (local suppliers create jobs for local communities that spend wages, which benefit the local community, where using overseas suppliers reduces this

CSR Process

- OH&S (beyond legal requirements) improved outcomes for staff, less time lost through injuries, but can be costly through rewriting of procedures

- Training - benefits staff by upscaling, increasing motivation, however loss of time whilst training employees

- Efficient uses of resources - minimising waste, and ensuring waste is disposed of in a manner that reduces impacts on the environment

CSR Outputs

- Create good products that support the reduction of waste - fit for intended purpose and so there is reduced chance of returns, defective products of those that may cause injury to consumers

- Packaging decisions - aim to minimise packaging the reduce environmental footprint while still considering perishable items and hygiene

Inputs

The resources used in the production process to achieve a final output. They include:

- Raw Materials

- Capital equipment

- Labour

- Money

- Time

Processes

Refers to the actions performed on the inputs to transform and convert the into the finished product or service

Outputs

The finished product or completion of a service

Global sourcing of inputs

Refers to the practice of selecting and using suppliers from an overseas location to obtain the most cost-effective materials and other inputs

Overseas manufacturing

Refers to goods being produced in a country that is different from a business's headquarters.

-Focuses on reducing labour costs

Global outsourcing

Where a business uses organisations from around the world to undertake some of the business functions.

-This is done to reduce costs, improve quality or improve productivity

Supply chain management

The range of suppliers from which a business purchases its inputs.

- includes the resources involved in moving a product or service from suppliers to manufactures and then on to consumers

The concept of business change

A business planned or unplanned response to both internal or external pressures. It can take the form of radical or incremental change.

Bench marking

Setting a standard to measure against

e.g: measuring performance against past years performance

Key performance indicators

- Percentage of market share

- Net profit figures

- Rate of productivity growth

- Number of sales

- The rate of staff absenteeism

- The level of staff turnover

- The number of customer complaints

- The level of wastage

- The number of workplace accidents

Percentage of market share

Refers to the business's share of the total industry sale for a particular good or service, expressed as a percentage

Net profit figures

The difference between revenue and expenses and is used by business owner as a means of determining the financial performance of a business. What determines a business's long term success

Rate of productivity growth

Measures the change in the amount of output per unit of input in one year compared to the previous year. The growth in the rate of productivity helps a business measures how efficiently they are using their resources

Number of sales

Measures the number of goods or services (products) sold in a given period of - it and can reflect the number of customer buying products

- quantity or $ value

Rate of staff absenteeism

Measures the number of workers who neglect to turn up for work when they are scheduled to do so. High rates can be a reflection of a number of factors including job dissatisfaction, ongoing personal or health issues

The level of staff turnover

Refers to the number of staff who the business over a given period of time and need to be replaced. Similar to absenteeism a high rate can indicate that employees have a low job satisfaction

The number of customer complaints

Where customer contact the business and express their displeasure with the business or its product.

- indicate whether or not customers are satisfied with the performance of the business. (through quality, customer service, price)

The level of wastage

Refers to the amount of materials or products that are discarded by the business

- can occur due to a reasons such as poor quality, overstocking, poor processes, overproduction or poorly trained employees

The number or workplace accidents

Looks at the amount of people that are injured at work and is a measure of workplace safety.

Lewin's Force Field Analysis

A decision making tool for business that is used to compare forces against change so that an informed decision can be made.

- It provides the business with an objective fact-based view of the change before it is even attempted to be implemented

Steps of the Force Field Analysis

- Define the target of change

- Identify the driving forces pushing for the change and the restraining forces

- Analyse the forces that can be changed

- Develop an action plan on what can be changed

Driving forces

Forces that support the change

Restraining forces

Forces that work against the change

Driving forces for change

- Managers

- Employees

- Competitors

- Legislation

- Pursuit of profit

- Reduction of costs

- Globalisation

- Technology

- Innovation

- Societal attitudes

Managers (driving force)

Typically hold a position of responsibility in the business and therefore want to introduce the change they consider will improve the business's performance or assist in overcoming a problem

Employees (driving force)

May initiate change particularly if they develop new ideas that result in an improvement in their pay or working conditions.

- If believed in the need for a proposed change, they are likely to be a driving force

Competitors (driving force)

Businesses who are in the same market. Businesses need to know what their competition is doing and determine what effects they may be having on them and their customers

Legislation (driving force)

Changes in any laws or regulations must be met by a business. Businesses may need to update their practices to be in line with the new or amended legislation.

Pursuit of profit (driving force)

Successful businesses, regardless of their size, will implement changes and improves in an effort to increase sales, market share and profit.

-one business may be looking at improving the quality of its products services while others may pursue a profit increased by cutting back on expenses

Reduction of costs (driving force)

A main driver for change and one of the quickest ways to improve profit and business performance

- e.g (employing staff part time rather than full time)

Globalisation (driving force)

Businesses competing in a global market due to the improvement in communication

- driving force for many businesses of all sizes.

- It has increased competition and allowed a business to expand into new markets

Technology (driving force)

Constant improvements to technology can drive a business to make changes to keep up.

- e.g (businesses storing data in the cloud rather than physically storing it)

Innovation (driving force)

Refers to the introduction of new things, ideas or methods into a business.

- can give a business a competitive edge allowing businesses to compete on a global scale

Societal attitudes (driving force)

Society places a great deal of pressure on a business to implement change. In particular, changes to areas of concern for the status of women in the workforce, the environment and making workplace more family friendly

- e.g (fishing industry using dolphin safe fishing practices - highlighting the need for businesses to remain up to date with changes)

Restraining forces for change

- Managers

- Employees

- Time

- Organisation inertia

- Legislation

- Financial consideration

Managers (restraining force)

May not welcome the change and act as a blocker to stop the change from occurring

- this could be as they feel their role, power or position is threatened

Employees (restraining force)

Fear of change is a natural reaction for many people as it takes them out of their comfort zone or has a degree of uncertainty

- a change can cause fear and anxiety for these stakeholders

Time (restraining force)

There may not be enough time for responsibility for implementing the change to take advantage of an opportunity

- could be the wrong time of the year

- wrong time in the economy

Organisation Inertia (restraining force)

An unenthusiastic response from people within the business to the proposed change.

- When a business does not adapt well to factors from the business environment or are not vibrant and progressive, it can be difficult to implement a successful change