Business Management Unit 3 AOS 1

Types of Businesses

- Sole trader

- Partnership

- Private limited company

- Public listed company

- Social enterprise

- Government business enterprise

to make a profit

the total revenue earned, minus the total expenses incurred

Mgmt skill: interpersonal

the skill of creating positive interactions with other employees to foster beneficial professional relationships

Mgmt skill: Planning

the process of determining a businesses objectives and establishing strategies to achieve these aims

mgmt skill: delegation

is the skill of assigning work tasks and authority to employees who are further down in a businesses hierarchical structure

Mgmt Skill: Communication

is the skill of effectively transferring information from one party to another

Mgmt Skill: Decision Making

is the skill of selecting a suitable course of action form a range of plausible options

mgmt skill leadership

is the skill of motivating others in order to achieve business objectives

Corporate Culture

the shared values and beliefs of a business and its employees

Official corporate culture

the shared views and values that a business aims to achieve, often outlines in a written format.

real corporate culture

the shared values and beliefs that develop organically within a business, and are practiced on a daily basis by its employees

management skills

planning, decision making, communication, delegation, interpersonal, leadership

The appropriateness of management style

time, nature of task, experience of employee, manager preference.

Laissez - Faire (Ads and Disads)

Ads: employees have increased motivation, collaboration leads to different insights

Disads: Loss of Management control, potential for conflict

Laissez - Faire

involves a manager communicating business objectives to employees and giving them the freedom to make decisions independently. FEATURES DECENTRALIZED AND TWO WAY COMMUNICATION

Persuasive (Ads and Disads)

Ads: employees have clearly defined roles, employees may feel a greater sense of involvement

Disads: Employee motivation may be low, due to exclusion of decision making, all views and ideas come from a potentially limited views of the manager

Persuasive

Involves a manager making decisions and communicating the reasons for those decisions to employees without their input. FEATURES CENTRALIZED DECISION-MAKING AND ONE-WAY COMMUNICATION

Consultative

involves a manager seeking input from employees on business decisions but making the final decisions themselves. FEATURES CENTRALIZED DESICION MAKING AND TWO WAY COMMUNICATION

consultative (Ads and Disads)

Ads: multiple perspectives and suggestions from employees, employees may feel more motivated

Disads: Employees may bring unsuitable suggestions and not understand, conflict may occur if ideas are ignored or overlooked.

Participative

involves a manager sharing information with employees so that employees can participate in decision making. FEATURES DECENTRALIZED DECISION MAKING AND TWO WAY COMMUNICATION

Participative (Ads and Disads)

Ads: Quality of decisions may improve due to various perspectives, employees feel more motivated when contributing

Disads: Multiples perspectives from managers may result in a compromise, potential for conflict between employees

Autocratic

involves a manager making decisions and directing employees without any input from them. FEATURES CENTRALIZED DECISION MAKING AND ONE WAY COMMUNICATION

Autocratic (Ads and Disads)

Ads: Employees have clearly defined roles, decision making can be quick

Disads: All solutions and ideas come from limited views of the manager, low employee motivation

Management styles: More control - Less control

Autocratic, persuasive, consultative, participative, lassiez - faire.

Communication flow

the direction of information transfer between managers and employees, which can occur in one or two way manner

Management style

the approach and manner in which employees are directed and motivated within a business. they are characterized in terms of communication flow and decision making style.

Decision making

determining a cause of action for a business from a set of alternatives

Stakeholders: Suppliers

individuals or groups that source raw materials, component parts, and processed materials and sell them to a business for use in the production of its goods and services

Stakeholders: customers

individuals or groups who interact with a business by purchasing and utilizing its goods and services

Stakeholders: general community

the individuals and groups who are impacted by a businesses operations and decisions, often because they are located in close proximity to the business

Stakeholders: Owners

individuals who establish, invest, and have a share in a business, often with the goal of earning a profit from its operations

Stakeholder: managers

individuals who oversee and coordinate a businesses employees and lead its operations to ultimately achieve businesses objectives

Stakeholder: employees

individuals who are hired by a business to complete work tasks and support the achievements of its objectives

Stakeholders

are individuals, groups, or organisations who have a vested interest in the performance and activities of a business

to fulfill a market need

is when a business fills a gap in the market, which involves addressing customer needs that are currently unmet or underrepresented.

Business objective

the goal a business intends to achieve by using the smart principle to write them.

To improve efficiency

is how productively a business uses its resources when producing a good or service

to improve effectiveness

is the extent to which a business achieves its stated business objectives.

to fulfill a social need

is improving a society and the environment through business activities

to meet shareholder expectations

shareholders expect to make a return on their investment

to increase market share

is a businesses percentage of total sales within an industry

Public listed company (Ads and Disads)

Ads: Limited liability ( to the value of the original investment), greater access to capital

Disads: Complex reporting requirements (annual reports), complex to establish, setup process takes time.

public listed company

an incorporated business that has an unlimited number of shareholders and lists and sells its shares on the ASX

Private limited company (LTD) (Ads and Disads)

Ads: Limited liability ( to the value of the original investment), greater access to capital

Disads: Complex reporting requirements (annual reports), complex to establish, setup process takes time.

Private limited company

is an incorporated business structure that has at least one director and a maximum of 50 shareholders.

Social enterprise (Ads and Disads)

Ads: Community benefits from the businesses activities, business can develop a positive reputation

Disads: Difficult to balance achievement of financial objectives with social objectives, may be difficult to obtain a bank loan as the biz does not solely focus on financial objectives

Social enterprise

a type of business that aims to fulfill a community or environmental need by selling goods or services.

Government business enterprise (Ads and Disads)

Ads: GBE's can rely on government for initial investment, delivers goods and services that help the community and communities needs

Disads: Gov and politicians can interfere and change the strategic direction of the biz, GBE's have excessive rules and formalities

Government business enterprise

a business that is owned and operated by the government

Partership (Ads and Disads)

Ads: relatively simple and inexpensive to establish, risk shared between partners.

Disads: Unlimited liability (liable for all debts incurred by partners), potential for disputes and conflict

Partnership

a business owned and operated by a minimum of two to twenty owners

Sole trader (Ads and Disads)

Ads: Simple and inexpensive to establish, owner keeps all profits

Disads: Unlimited liability (liable for all debts incurred), harder to get finance (loans) from banks

Sole trader

a business structure that is owned and operated by one individual

Managers and Employees conflict

Managers want greater profits from their revenue, employees want higher wages.

management skills def

the abilities or competencies that managers use to help them complete the tasks that are necessary for the achievement of business objectives