business management

identify the 6 business types

sole trader, partnership, private company, public company, social enterprize, government business enterprize (GBE)

define sole trader

a business owned and operated by one person

define partnership

a business owned by two or more people (generally a maximum of 20)

define private limited company

An incorporated business that has a maximum of one shareholder and a maximum of 50 employee shareholders, and whose shares are offered only to those who the business wishes to have as part owners

define publicly listed company

An incorporated business with a minimum of one shareholder (and no maximum), and whos shares are openly traded on the Australian Securities Exchange (HIGHLY COMPLEX BUSINESS STRUCTURE)

define social enterprize

a business that operates with the objective of fulfilling social need

define government business enterprize

a business that is owned and operated by the government

advantages & limitations of a sole trade business

- complete control

- low cost of entry

- no partner disputes

- personal (unlimited) liability for all debts

- difficult to operate if sick

advantages & limitations of a partnership

- lower start-up cost

- shared responsibility and workload

-pooled funds and talent

- personal (unlimited) liability for all debts

- possibility of disputes

advantages & limitations of a private limited company

- limited liability (separate legal entity)

- easy transfer of ownership

- cost of formation

- personal liability for all business debts if directors knew that debts could not be paid

advantages & limitations of a publicly listed company

- greater potential for growth as they can gain capital for issuing shares on the market

- limited liability (separate legal entity)

-cost of formation

- personal liability for all business debts if directors knew that debts could not be paid

advantages & limitations of a social enterprise

- can open up new markets

- Meeting a social need can have a positive effect on profit and market share, as well as business image

- difficult to obtain capital at the start

- it can be difficult to focus on both social and business objectives

advantages & limitations of a government business enterprize

- can operate with some independence from the government

- able to carry out government policies in areas where the private sector may hesitate to invest in

- political interference of day to day-to-day operations

identify 7 business objectives

- to make a profit

- to increase market share

- to meet shareholder expectations

- to fulfil a social need

- fulfil a market need

- to improve efficiency

- to improve effectiveness

define market share

The proportion of total sales in a given market or industry that is controlled or held by a business, calculated for a specific amount of time (expressed as a percentage)

define efficiency

how well a business uses recources to achieve objectives

define effectiveness

the degree to which a business has achieved its stated objectives

identify the 6 stakeholders

- owners

-managers

- employees

- customers

- suppliers

- general community

define stakeholder

groups and individuals who have a vested interest in a business's activities

define manager

the person who has responsibility for meeting a businesses objectives

(conflicts) What do owners want

- return on investment

- growth of market share

(conflicts) What do managers want

- achievement of objectives

- job security

(conflicts) What do employees want

- to be paid

- job security

- job satisfaction

- safe working conditions

(conflicts) What do customers want

- high-quality goods and services

- low-cost goods and services

- variety and choice

(conflicts) What do suppliers want

- long term contracts

- steady demand

- reliable customers who pay on time and have the funds to carry out payments

define corporate socail responsibility

refers to a business going above and beyond its legal obligations in relation to it's employees, the environment, and the community

identify the 5 management styles

- autocratic

- persuasive

- consultative

- participative

- Laissez-faire

define autocratic management style

one where the manager tells staff what decisions have been made

define persuasive management style

one where the manager attempts to 'sell' decisions made

define consultative management style

one where the manager consults employees before making decisions

define participative management style

one where the manager unites with staff to make decisions together

define Laissez-faire management style

one where the employees assume total responsibility for, and control of, workplace operations

advantages & limitations of autocratic management style

- directions are clearly defined, with little to no room for confusion

- control is centralised at top management, so time is used efficiently and problems are dealt with quickly

- There is no employee input so ideas are not encouraged or shared, so employees may feel undervalued

- decrease in job satisfaction as no responsibility is given

advantages & limitations of persuassive management style

- workers believe their opinions and feelings are considered, which may lead to more positive job satisfaction

- instructions and explanations remain clear

- Communication is still poor and limited to a top-down, one way system

- Employees may remain frustrated as they are denied full participation in decision making

advantages & limitations of consultative management styles

- Asking for suggestions from employees may lead to a greater variety of ideas as to how the business should improve

- Employees begin to have some control, so they gain job satisfaction and gain more interest in operations

- The time taken to consult all the relevant employees can slow the entire process.

- When a number of ideas are shared, some are bound to be ignored or overlooked in the final decision. This may cause conflict or resentment

advantages & limitations of a participative management style

- employee/ employer relations are positive and there is a reduced likelihood of disputes

- employees have a greater opportunity to acquire more skills

- Reaching decisions can be time-consuming when differing views clash

- internal conflict may arise as there can be disagreements in relation to decisions

advantages & limitations of laissez-faire management style

- employees feel a sense of ownership, which can increase job satisfaction

- there is open communication allowing for more ideas to be shared, leading to business improvement

- There is complete loss of control from management, meaning misuse of businesses resources and money may be made

- can breed personal conflicts

appropriateness of management styles

- nature of the task

- time

- experience of employees

- manager preference

identify the 6 management skills

- communication

- delegation

- planning

- leadership

- decision making

- interpersonal skills

define communication

the ability to transfer information from a sender to a receiver, and to listen to feedback

define delegation

the ability to transfer authority and responsibility from a manager to an employee to carry out specific activities

define planning

the ability to define business objectives and decide on the methods or strategies to achieve them

define leadership

the ability to influence or motivate people to work towards the achievement of business objectives

define decision making

the ability to identify the options available and then choose a specific course of action from the alternatives

define leadership skills

the ability to deal or liasie with people and build positive relations with staff

define corporate culture

the values, beliefs, ideas and expectations shared by members of the business

define official corporate culture

this is seen officially in the policies, objectives or slogans of a business

define real corporate culture

this is seen in the unwritten or informal rules that guide how people in the business behave sucha s the way they dress, the language staff use, and the way that staff treat each other and customers

three phases of the employment cycle

1. Establishment Phase

2. Maintenance Phase

3. Termination Phase

define human resource management

the effective management of the formal relationship between the employer and employees

define human resource manager

coordinates all the activities involved in acquiring, developing, maintaining and terminating employees from a business's human resources

identify the three theories of motivation

1. Maslow's Hierarchy of Needs

2. goal setting theory (locke and lathams)

3. the four drives theory (lawrence and nohria)

define hierarchy of needs

maslows sequence of human needs in the order of their importance, fulfilling personal needs.

the 5 stages of maslows hierachy

1. physiological (the need for air, food, water and health)

2. safety (the need for safety, stability and shelter)

3. social (the need for love, belonging and inclusion)

4. esteem (the need for sel esteem, power, control, recognition

5. self actualisation (the need for development, creativity and growth)

strengths and limitations of maslows hierarchy of need

- allows management to develop an understanding of individual needs, which can promote healthier relations within the workplace, as there is a deeper understanding

-the theory is easy to understand, managers should be able to apply it and employees should be able to relate to it

- It is only a theory, it is not supported by evidence, and stages will not apply to all individual needs

- A manager may struggle to identify what stage an employee is at, making it difficult to apply to the workplace

what are the five goal setting principals in lock and lathams goal setting theory

1. clarity

2. challenge

3. commitment

4. feedback

5. task complexity

strengths and limitations of lock and lathams goal setting theory

- Setting goals that are clear and specific, challenging but not overwhelming will motivate employees and improve their performance

- better relationships between management and employees will arise due to the collaborative element of goal setting

- setting vague goals can lead to poor performance eg if goal isnt challenging enough

- employees may focus only on their goals and fall behind in other aspects of work

what are the four drives

ABCD

- acquire (material goods)

- bond

- comprehend/ learn

- defend

strengths and limitations of the four drives theory

- The drives will convert into effort that is directed at improving behaviour, thereby improving business performance and achieving objectives

- The four drives are adaptable to many environments or situations

- These don't necessarily cover all the drives that will motivate a person

- It can include competition between employees, which can lead to conflict or lack of collaboration

identify the 5 motivational strategies

- performance-related pay (pay increase, bonus, commission, share plan, profit sharing, gain sharing)

- career advancement

- investment in training

- support strategies

- sanction strategies

Strengths and limitations of Performance-Related Pay

- should improve productivity levels

- will only apply when there is actual performance improvement

- other employees doing similar work may expect similar rewards, even if their performance is not as good, leading to conflict

- not all employees are motivated by pay

strengths and limitations of career advancement

- can retain valuable, hard-working employees

- can provide job satisfaction as employees feel valued

- promotions cannot just be created, they must exist and don't exist all the time

- promotion can cause resentment and jealousy creating a negative work environment

strengths and limitations of investment in training

- improves the skills of employees, leading to an increase in production quality, and employees feel valued

- indicates that business values their contribution and they believe in them

strengths and limitations of support strategies

- Low cost

- Can help develop meaningful relationships

- Employees may become too dependent on support

- Requires a positive corporate culture

strengths and limitations of sanction

- can motivate employees to improve their work performance

- may quickly stop the inappropriate behaviour of some employees

- can reduce employees' sense of belonging and create a negative work environment/ poor job satisfaction

- only a short term motivator

define on the job training

occurs when employees learn a specific set of skills to perform particular tasks within the workplace. this usually occurs in the work environment and uses equipment machinery and documents that are present in the workplace

define off the job training

occurs when employees learn skills in a location away from the workplace. it usually involves sending individuals or groups of employees to a particular specialised training institution, and they gain gain further qualification

strengths/ limitations of off the job training

- may gain further qualifications

- An outside specialist can provide a broader or more in-depth understanding of operations, which can be brought back into the workplace for other employees to benefit from

- more expensive

- loss of time at work

- employees may leave with the additional qualification they gain

strengths/ limitations of on the job training

- is low cost

- Employees are working while being trained, so it is more productive

- New employees can pick up bad habits from more experienced employees

- not everyone has the ability to teach - quality of staff may differ and learning may not occur

identify the 4 performance management strategies

1. Management by objectives

2. appraisal

3. employee self-evaluation

4. employee observation

define management by objectives

a process by which management and employees agree on a set of goals for each employee, with these goals all contributing to the objectives of the business as a whole

define appraisal

the formal assessment of how efficiently and effectively an employee is performing their role in the business

define employee self evaluation

a process whereby employees carry out self-assessment, based on a set of agreed criteria

define employee observation

a strategy where a variety of opinions on the performance of employees is sought with the aim of arriving at a more comprehensive picture of past and current performance

define termination

the ending of the employment of an employee

identify the 3 types of voluntary termination

1. retirement

2. resignation

3. redundancy - job no longer exists

identify the 2 types of involuntray termination

1. involuntary redundancy - job no longer exists

2. dismissal

define entitlement consideration

the rights to benefits that employees have when leaving the workplace, either on a voluntary or an involuntary basis

define transitional considerations

issues relating to the process of changing from one job to another or from one set of circumstances to another

define trade unions

Organisations formed by employees in an industry, trade or occupation to represent them in efforts to improve wages and the working conditions of their members

employer associations

Organisations that represent and assist employer groups

FWC

Australia's national workplace tribunal has a number of responsibilities

define Award

a legally binding document determined by the Fair Work Commission that sets out minimum wages and conditions for whole industries or occupations

advantages and disadvantages of an award

- Less costly for the business

- Less time consumed in determining appropriate terms and conditions

- Provides less flexibility — cannot be customised to the needs of a workplace

- A business making use of Awards may not attract the best or most talented candidates for a position.

define an agreement

an agreement on pay and conditions of work made at the workplace level and negotiated between groups of employees (or represented by their union) and employers

advantages and disadvantages of an agreement

- Very flexible — can be tailored to specific workplace needs.

- May be used to attract talented or highly skilled employees to the business.

- Takes a long time to negotiate — employees must be consulted, and the agreement must be approved by the Fair Work Commission.

- Better conditions than the Award can be costly for the business.

dispute resolution process

1. listening to staff

2. negotiation

3. mediation

4. conciliation

5. arbitration

define negotiation

it involves direct discussions between the parties, without the involvement of external third parties

define mediation

the confidential discussion of issues in a non-threatening environment, in the presence of a neutral, objective third party, who helps the parties in dispute to work towards an agreement, but does not offer suggestions or solutions

define conciliation

third party does not make a binding decision, but they can offer advice and suggestions

arbitration

a means of dispute resolution involving an independent third party (such as a commissioner of the Fair Work Commission) hearing both arguments in a dispute and determining the outcome

define operations management

all the activities in which managers engage to produce goods or services

define inputs

resources used in the process of production

key elements of an operations system

inputs, transformation, outputs

define transformation

the conversion of inputs (resources) into outputs (goods or services)

define outputs

the end result of a business's efforts — the service or product that is delivered or provided to the consumer

characteristics of a service business

- Produce services that are intangible (cannot be touched)

- Services cannot be stored

- Customer is involved in production

- Services tend to be differentiated or tailored to individual customers

- Examples include haircut, transport, education

characteristics of a goods business

-Produce goods that are tangible (can be touched)

- can be stored for later use

- Little customer involvement in production

- Production process and consumption are not linked

- Manufactured goods tend to be homogeneous or standardised

- Examples include bread, clothing, and cars

technological developments

1. automated production line

2. robotics

3. CAD

4. CAM

5. AI

6. online services

define automated production line

comprises machinery and equipment arranged in a sequence with components added to a good as it proceeds through each step, with the process controlled by computers