Business

Business Types

• Sole trader, 1 person, unlimited liability

• Partnership, 2-20, unlimited liability

• Public companies: 50+ non employee shareholders. Ltd. Limited liability

• Private companies: No more than 50 non employee shareholders. Pty Ltd. Limited Liability

• Social Enterprise

• Government Business Enterprise: VicRoads, Australia Post

Business Objectives

• Make a profit

• Increase market share

• Improve efficiency (making the best possible use of resources)

• Improve effectiveness (Achieving all stated goals and objectives)

• Fulfil a market need

• Fulfil a social need

• Meet shareholders expectations

Stakeholders

• Owners

• Managers

• Employees

• Customers

• Suppliers

• General Community

Management Styles

• Autocratic

• Persuasive

• Consultative

• Participative

• Laissez-faire

Management Skills

• Communication

• Delegation

• Planning

• Leadership (the process of influencing workers so that they want to do their best to achieve business objectives)

• Decision Making (SWOT)

• Interpersonal

Maslow’s Hierarchy of needs: Go through in order

Physiological: Basic survival needs of food, water, etc

Safety and security: Job security, occupational health and safety, reasonable superannuation

Belonging: Socialisation within the workplace

Esteem: Employees need to be recognised

Self-actualisation

Locke and Latham’s goal setting theory

Clarity, challenge, commitment, feedback, task complexity

Lawrence and Nohria’s four drive theory

Drive to acquire, drive to bond, drive to learn, drive to defend

Unlike hierarchical models (such as Maslow's hierarchy of needs), the theory states that all four drives operate simultaneously within every individual, and no single drive needs to be satisfied before another becomes active.

Motivation Strategies

• Performance related pay

• Career advancement

• Investment in training

• Support

• Sanctions

Performance management strategies

• Management by objectives (using the achievement of objectives as a criteria to evaluate the success of an employee or manager

• Appraisals (evaluations of an employee’s work over a period of time

• Self-evaluation

• Employee observation

Participants in the workplace

• Human resource managers

• Employees

• Unions

• Employer associations

• Fair work commission: national workplace relations tribunal that has the power to establish the safety net of minimum workplace conditions, oversee enterprise bargaining, monitor and approve industrial action, resolve disputes through mediation and arbitration, and monitor termination of employment

Technologies

• Automated production lines

• Robotics

• Computer aided design

• Computer aided manufacturing

• Artificial intelligence

• Online services

Materials Management

• Forecasting: A prediction of the materials that may be needed in the upcoming period

• Master production schedule: A document showing what a business plans to produce and the plan to produce it within a given time period

• Materials requirement planning: Once the MPS has been completed, the manager can create the MRP. This outlines all the materials that will be required

• Just in Time: A materials management strategy that involves the operations manager keeping just enough materials on hand to get the workplace through the next production period

Quality Management (How well a product, service, or process meets or exceeds customer expectations)

• Quality control: Methods that simply check and reject items that do not meet the expected standard. (Quality checks and audits)

• Quality Assurance: Methods of measuring the quality of a product or process against a standard. (Audits and staff training)

• Total Quality Management: An organisation-wide management approach that engages every employee in the continuous improvement of processes, products and services to achieve total customer satisfaction

Lean Management

The establishment of systems that will eliminate waste and inefficiencies of any kind in the process of making a good or providing a service. I.e. idle time, unused materials, defective products.

Principles:

1. Pull: Not producing items until a customer has ordered the product to prevent a build up or unwanted stock

2. One-piece flow: Aims to complete production of one unit at a time in a continuous flow

3. Zero defects: The process of identifying production errors or defects at the state in which they occur. This prevents them from being passed on to the next stage of production

4. Takt: The maximum time required to complete production to meet customer demand. One-piece flow relies on the takt being carefully calculated to prevent bottleneckes and/or idle time.

Global considerations

Global sourcing of inputs

Overseas manufacturing

Global outsourcing

KPIs

• Percentage of market share

• Net profit figures

• Rate of productivity growth

• Rate of staff absenteeism

• Level of staff turnover

• Level of wastage

• Number of sales

• Number of customer complaints

• Number of workplace accidents

• Number of website hits

Triple Bottom Line

Economic, social, environmental

Lewin’s force field analysis theory

• Weighting

• Ranking

• Implement: Strengthen driving forces and weaken restraining forces

• Evaluate: All changes should be evaluated to monitor if the change was successful

Porter’s generic strategies theory

Cost advantage and differentiation

Senge’s learning organisation theory

• Systems thinking

• Personal mastery

• Mental models

• Building a shared vision

• Team learning

Lewin’s Three-step change model

Unfreeze: Remove inertia and perpare stakeholders for the change. Breaking down the old way of doing things.

Change: New processes or practices may be introduced. Some support systems may need to be implemented to assist with a smooth transition

Refreeze: Establishment of a new stability and culture. May require new policies to be introduced to reinforce the changed business so that it becomes the status quo.

Low and high risk strategies to overcome employee resistance to change

Low:

• Communication

• Empowerment

• Support

• Incentives

High:

• Manipulation

• Threats