Functions of Business

What are the 4 functions of management and explain them

**Planning**

(Setting Goals) Planning is the process of setting short- and long-term goals and deciding how to achieve them

**Organizing**

(Allocating Resources) Organizing is arranging people and tasks to carry out the business’s plans and objectives

**Leading**

(Motivating and Communicating) Through leadership, managers achieve organizational goals by motivating, communicating, and encouraging participation. Can be **External:** Positive or Negative Methods, **Internal:** Comes from within the person and is usually stronger than external

**Controlling**

(Checking everyone is doing what they’re supposed to) Involves activities, such as employee discipline, performance appraisals, and budgeting. Managers use these methods to increase, maintain, or decrease the resources that are allocated to them to ensure productivity. In production this would be as checking quality and meeting numbers, in marketing and distribution this would be ensuring sales revenue and expenses are in line. Finance would be in conjunction with an accountant keeping company records and financial transaction and ensuring money is spent responsibly. In human resources this wold be ensuring employees receive training, and assessments.

How would controlling look in all the sectors

Production: This would be as checking quality and meeting numbers

Marketing and Distribution: This would be ensuring sales revenue and expenses are in line

Finance: Would be in conjunction with an accountant keeping company records and financial transaction and ensuring money is spent responsibly

Human Resources: This wold be ensuring employees receive training, and assessments

Autocratic Leadership, Advantages and Disadvantages

The leader(s) make all decisions and employee participation is not allowed

Advantages

* Works great where quick decisions are necessary
* Works great when employees are entry level

Disadvantages

* Used all the time, it causes too much discontentment among staff
* Few people like being told what to do constantly

Laissez-Faire Leadership, Advantages and Disadvantages

Leaves employees alone to do their work

Advantages

* Beneficial to those employees who like independence, are self disciplined and experts
* Management/leaders have to do less actual managing

Disadvantages

* Can be difficult for new workers or those who require more direction

Democratic Leadership, Advantages and Disadvantages

Encourages employees to have a say in the decision-making process

Advantages

* Employees creative ideas and contributions can improve the company
* It increases morale, and team spirt through collaboration, and the recognizing of employee achievements
* Most effective style to keep employees content and increase productivity

Disadvantages

* May not always be practical because of time constraints

What is and what kind of situation is best for using Committee Team structures

A committee is made up of people from different areas who do ongoing work on a specific task.

It is best to use committee team structure when personalities are compatible and those involved have specific expertise in the topic or issue.

What is and what kind of situation is best for using Cross Functional Team structures

Team has members from different functional areas.

This allows for a diversity of input and quick decision making

Best used when you need a variety of perspectives and skills for example a car development team

What is and what kind of situation is best for using Virtual Team structures

A virtual team works together across long distances through computer communication instead of face-to-face meetings

Best used when you want to keep expenses low, need to save time and don’t need face to face communication

What is and what kind of situation is best for using Task Force structures

A task to accomplish a specific task, after which it is disbanded

Best used when the task or problem is short term.

What is and what kind of situation is best for using Self Managed structures

A self-managed team has no official leader

Best for when the higher ups don’t necessarily need/want to be involved and when the team is self motivated to complete all their work

What is and what kind of situation is best for using Informal Team Structures

An informal team is not put together by management but forms naturally

What are the 6 different team structures

Committee

Task Force

Virtual

Self-Managed

Cross-Functional

Informal 

What is Production

The functional area responsible for turning inputs into finished outputs through a series of production processes

The inputs are the factors or production, and the outputs are goods and services that we sell

What is management

To achieve organizational goals, management decides how to utilize human, financial, and material resources.

6 Factors of Production

Natural Resources: 6 Primary industries

Raw Materials: Any goods used in the manufacturing of other goods. Divided into ingredients (in the final product) and supplies (used up while making the product)

Labour: All the physical and mental (cognitive) work needed to produced goods and services. Physical is like moving dough, and capital is logistics and scheduling

Capital/Monetary Capital: Resources invested into to produce product, rarely needs to be replaced (ex. Machinery). Liquid Capital is capital that can be easily turned into cash, items that are non liquid, like buildings these are called capital goods. Intellectual Property are things like patents and copyrights as they have value as well

Information: Businesses require information to reduce risk, enhance it’s probability, and produce goods and services Competition/Consumer Preferences/Suppliers/Newest Technology/Sources of Supply

Management: Management consists of the people who run the business and control or direct the factors of production. Allocating resources, decides on scheduling

6 Natural Resources

1. **Fuel and Energy**
2. **Logging and Forestry**
3. **Water**
4. **Agriculture**
5. **Mining**
6. **Fishing and Trapping**

4 Stages of Production

1. Purchasing: Raw Materials/Capital Resources Considering Quality and Value (price) 

* Chocolate Chips 


2. Processing: Converting raw materials/inputs into finished or semi finished products 

* Mixing and baking ingredients, decorating 


3. Quality Control: Make sure product meets quality standards

* Fully baked? Size? Smell? Taste


4. Grading: Offering consumer different level products, could be based on size, quality

* Beef, Gas, Eggs

3 Ways to Increase Productivity 

* Increase Speed: Use technology, employee training   


* Increase Quality: Train Employees
* Increase Both: Both 

What things are apart of branding

* Slogan 
* Loga/Trademark 
* Brand Name

6 Functions of HR         

Recruitment: Looking for the right employee. Internal hiring from within the company. External hiring from outside. It involves analyzing job requirements, advertising job vacancy, and shortlisting candidates

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Selection: Placing the right candidate in a particular positing. Involves interviewing and checking fro qualification, verifying references, advertising skill/experience tests

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Training: Developing a skill, competency or knowledge that is required by the job. Involves job specific training, company procedures, and WHMIS

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Development: A long process of upgrading an employee’s performance overtime can be expanding employee responsibilities

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Compensation and Benefits: Compensation is the money and other benefits received by employees in exchange for their work, eg health insurance, paid vacation, employee allowance.

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Assessment (Performance Appraisal): Employees are assessed to see if they need to make improvements in their job or see if they qualify for job promotion, annual pay raises, special rewards and bonuses, incentives

What is the human resources department responsible for

The human resources department is responsible for coordinating all activities involving the company’s employees eg. conflict resolution, departures, dismissals, retirement

4 Different Types of Assessment

Top Down: Evaluation by the employee’s direct supervisor

360 Degree Evaluation: The employee is evaluated by four parties, not only by his direct supervisor. These are: the direct supervisor, subordinates, co-workers and customers

Matrix Evaluation: This type of evaluation, the employee is evaluated by different managers

Self Assessment: Employee rates himself/herself on the same criteria used by the direct supervisor to evaluate him/her and then the two evaluations are compared.

4 P's of Marketing 

Product: Uniqueness, Quality, Features, Benefit, Design 

Price: Competitor price, Cost to produce, Target Market what they can 

Place: Distribution channels, selling directly, selling indirectly, speciality vending machines  

Promotion: Advertising, makes people aware of your brand, Sales Promotion, coupons, samples 

What is a channel of distribution

Channels of distribution are the paths of ownership that goods follow as they pass from the producer or manufacturer to the consumer

Direct: The business that makes the product sells directly to the consumer

Indirect: The business sells to an intermediary (typically a retailer) who then sells the product to another business or consumer

Speciality: The consumer buys from a place other than a retail store eg. vending machines and catalogue.

Slogan

A short identifiable catchy phrase that is usually attached to the company’s name and logo 

Logo or Trademark

A logo/trademark is a word, symbol, design and or a combination that a business uses to distinguish its goods or services from others.

2 C’s of Marketing Mix

Consumer, Competition

Explain the 1st C of Two

Consumer: The more marketers know about their potential customers the better they can anticipate or influence there customers buying decisions

***Geographic***

* **Location**
* **Climate**
* **Urban/Suburban**

***Demographics***

* **Age**
* **Gender**
* **Ethnicity**
* **Family lifestyle**
* **Income level**
* **Generation**

***Psychographic***

* **Values**
* **Likes/dislikes**
* **Health**
* **Lifestyle**
* **Hobbies**

***Behaviour***

* **Brand loyalty**
* **Usage rate**
* **Desired features**

Explain the 2nd C of two

Competition: The competitive market refers to the sellers of a specific product, and is often expressed in terms of the total dollars spent annually on the product. The percentage of the market that a company or brand has is called its **market share**

**Indirect competition means products or services are not directly related to each other targeting the same Target Market.**

**Direct competition means products that are similar to one another targeting the same Target Market.**

5 Stages of the Product Life Cycle

Launch/Introduction: This is a brand new product on the market, at this point the Consumer is unaware of the product and needs to be to be informed…so that would be the focus at this stage. Marketers will focus on advertising through trend setter

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Growth: As sales increase competition does as well. They often try to add features and quality at this stage. Advertising is focusing on visibility like promoted commercials, billboards, print ads etc.

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Maturity: Growth is flat; it does not increase or decrease, and brand equity is at its highest. Businesses keep advertising the product to keep it in the consumers’ eye. High income can be used to develop and fund new products.

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Decline: When sales decrease because customers leave to buy other brands, and they are not replaced, a product can enter the decline stage this is when the product is vulnerable to becoming obsolete. Advertising or change in price can slow down or stop decline

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The Decision Point: The business may make an effort to regain original sales figures and brand equity or they may discontinue the product altogether.  If they try to save the product a variety of options are available: repricing, repositioning, new promotion.

Supply and Demand Graph

Maslows Hierarchy

Assets

Things of value owned by the company

Liabilities

Debts owed by the company

Owner’s equity

Net worth of the company on that day

Balance Sheet Formula

Assets - Liabilities = Owner’s Equity

What is the purpose of the Balance Sheet? What are 3 pieces of information you can find on the balance sheet?

The purpose of a balance sheet is to figure out the net worth of the business at a particular time. You can find out total assets, total liabilities, and owners equity/net worth

Income/Revenue

Money that comes into the company ie.  Sales, Investment Interest etc

Expenses

Costs associated with generating revenue for the company ie. rent, phone bills etc

Profit or Loss

The amount of money the company makes in a fiscal period

Income Statement Formula

Revenue – Expenses = Net Profit or Loss (if it’s positive it’s a profit, if it’s negative its a loss)

What is the purpose of the Income Statement? What are 3 pieces of information you find on the Income Statement

The purpose of an income statement is to see if your business is making money (profitable) or is not. You can find out total revenue, total expenses and wether the business is profitable or not