2: Managing a business Flashcards
What is management?
‘Getting things done through other people’
What is power?
The ability to get things done
What is needed for effective management?
Organisations rarely run like clockwork and all depend on the directed energy of those within them.
They need managers
Classifications / bases of power
Coercive power:
- physical force and punishment
Reward or resource power:
- based on control of valuable resources
Legitimate or position of power:
- associated with a position in an organisation
Expert power:
- based on experience, expertise, or qualification
Referent or personal power:
- based on force of personality (charisma)
- can attract or influence other people
Negative power:
- power to disrupt operations
- e.g. industrial action or sabotage
What is authority?
The right to do something or to ask someone else to do it and expect it to be done
Another word for legitimate power
Managerial authority can be exercised how?
- Making decisions within the scope of authority
- Assigning tasks to subordinates and expecting satisfactory performance of these tasks
What is responsibility?
The obligation a person has to fufil a task which they have been given
What is accountability?
A person’s liability to be called to account for the fufilment of tasks they have been given by persons with a legitimate interest in the matter
What is delegation?
Delegation involves giving a subordinate responsibility and authority to carry out a given task, while the manager retains overall responsibility
Types of manager
- A line manager has authority over a subordinate
- A staff manager has authority in giving specialist advise to another manager or department, over which they have no line authority
- A functional manager has authority over a hybrid line of staff
- A project manager has authority over project team members with repsect to an in progress project
Inevitable tensions involved in staff members asserting authority over other managers
The staff manager can undermine the line manager’s authority
Lack of seniority
Expert staff managers may lack realism going for technically perfect but commercially impractical solutions
Staff managers lack responsibility for the success of their ideas
What is the management process? (4)
Four main tasks
- Planning
- Organising
- Controlling
- Leading
What are the types of managerial roles? (3)
Informational role
Interpersonal role
Decisional role
What is business culture?
The common assumptions, values and beliefs that people share such that ‘this is the way we do things around here’
What are the types of business culture? (4)
- Internal process culture
- the business looks inwards aiming to make its internal environment controlled - Rational goal culture
- goals to satisfy external requirements - Open systems culture
- flexible to new ideas - Human relations culture
- business looks inwards to maintain its existence and wellbeing of staff
What is a management model?
Models are used in management theory to represent a complex reality, such as a client’s business, which is then analysed and broken down into its constituent parts
What is the rational goal model of management?
A business with a rational goal culture uses the reason why the business does something to make sure its done as well as possible
- systematic work methods
- detailed division of labour
- centralised planning and control
- ‘low involvement’ employment relations such as contract workers
What is the internal process model of management? (6)
- Rationality
- Hierarchal lines of authority
- Detailed rules and procedures
- Division of labour
- Impersonality
- Centralisation
What are the main business functions? (6)
Marketing
Operations or production
Procurement (acquiring goods or services)
Human resources
Fincance
IT
What is marketing?
The set of human activities directed at facilitating and consummating exchanges
OR
The management process which identifies, anticipates and supplies customer requirements efficiently and profitably
Difference between customer and consumer
Customer:
- purchases and pays for a good or service
Consumer:
- ultimate user of the good or service
What are consumer markets?
the markets for goods and services bought by individuals for their own or family use
What are some examples of consumer markets?
Fast moving consumer goods (FMCGs):
- high volume, low unit value, fast re-purchase
- e.g. bread, baked beans
Consumer durables
- low volume, high unit value
- white goods: fridges, freezers
- brown goods: mobile phones, cars
- soft goods: clothes, bed linen
Services:
- insurance
- broadband
- utilities
- holidays
What is marketing mix?
The set of controllable marketing variables that a firm blends to produce the response it wants in the target market
What is the most common way of presenting the marketing mix for tangible products? (4)
The four Ps
- Product
- Price
- Promotion
- Place
What are the remaining Ps of services marketing?
People
Processes
Physical evidence
What is market segmentation?
The division of the market into homogeneous groups of potential customers who may be treated similarly for marketing purposes
What are some examples of market segmentation?
High income groups
Families with children
Low income groups
What is a product?
Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need
It includes physical objects, services, persons, places, organisations and ideas
What are the main elements of a product?
Basic or core product:
- e.g a car
Actual product:
- e.g. Ford Focus
Augmented product:
- Ford Focus with 0% finance or extended warranty
What are some general factors to be considered when taking a product from basic to actual and augmented?
- Quality and reliability
- Packaging
- Branding
- Aesthetics
- Product mix
- Servicing
- Technology
What are the four Cs of pricing?
- Costs
- Competitors
- Customers
- Corporate objectives
Advantages of selling direct?
- No need to share profit margins
- Control over ultimate sale
- Speed of delivery to ultimate customer likely to be quicker
Advantages of using intermediates in sale
- More efficient logistically
- Costs usually lower
- Consumers expect choice at point of sale
- Producers may not have sufficient resources to sell direct
What is promotion?
Promotion is all about communication, thus informing customers about the product and persuading them to buy it.
What are the main types of promotion? (5)
- advertising
- sales promotion
- public relations
- digital marketing
- direct marketing
- personal selling
What does one mean by push and pull promotion techniques?
Push:
- ensuring products/services are avaliable to consumers by encouraging intermediaries
- e.g. Sainsbury’s to stock items
Pull:
- persuading the ultimate consumers to buy
What is digital marketing?
Any form of marketing that is conducted through electronic devices and computers.
Often involves the use of websites, search engines, social media, digital media and other similar channels
What are common types of digital marketing? (5)
- Search engine optimisation (SEO)
- Pay per click
- Social media marketing
- Affiliate marketing
- Email marketing
What are the common benefits of digital marketing?
- Global access
- Low cost
- Flexibility
- Better targeting of customers
- Quick connection
- Relationship building
What is operations management?
Creating as required the goods or sevices that the business is engaged in supplying to customers by being concerned with the design, implementation and control of the business’ processes so that inputs are transformed into output products and services
What are the four Vs of operation?
- Volume
- Variety
- Variation in demand
- Visibility
What is research and development (R&D) ?
May involve pure research and/or applied research and/or development
Pure research:
- original research to obtain new scientific or technical knowledge
Applied research:
- Research which has an obvious commerical or practical end in view
Development:
- The use of existing scientific and technical knowledge to produce new technology or systems before starting commercial production operations
What is procurement?
The acquisition of goods and/or services at the best possible total cost of ownership, in the right quantity and quality and at the right time, in the right place and from the right source for the direct benefit of the business
What is the procurement mix? (4)
Contains four elements:
- Quantity
- Quality
- Price
- Lead time
What are the five rights of procurement?
- The right quality, in
- The right quantity, at the
- The right price, in
- The right place, at
- The right time
What is a supply chain?
The network of organisations, their systems, resources, and activites that are required to turn raw resources into a product or service provided to a customer
Upstream and downstream supply chain members
Upstream:
- the elements of the supply chain which provide materials and production of the goods and services
Downstream:
- the elements of the supply chain that are involved after the product has been manufactured or service provided
What is human resource management (HRM) ?
“The creation, development and maintenance of an effective workforce, matching the requirements of the business and responding to the environment”
What would you mean when describing an approach to HRM as hard or soft?
Hard approach:
- emphasises the resources element of HRM
Soft approach:
- emphasises the human element of HRM
- concerned with employee relations
What are the Harvard four Cs of HRM?
- Commitment
- Competence
- Congruence
- Cost-effectiveness
Key points to consider in regard to managing an IT function
- Monitoring
- Planning
- Structure
- Staffing and skills
Examples of IT delivery activities
- IT service ops
- capacity monitoring
- customer billing and budgeting
- business ops
- service continuity
Examples of IT support activities
- maintaining appropriate IT config
- physical and logical integrity of infrastructure e.g. routine admin
- prevention, investigation and resolution of incidents and problems
What is organisational behaviour?
The study and understanding of individual and group behaviour in an organisational setting in order to help improve organisational performance and effectiveness
What is motivation?
The degree to which a person wants certain behaviours and chooses to engage in them
What are the benefits of motivated workers?
- higher productivity
- better quality of work with less waste
- greater sense of urgency
- more feedback given and demanded
- suggestions for improvements
Stages of group development
- Forming
- Storming (conflict stage)
- Norming
- Performing
Team roles observed by Meredith Belbin
- The leader
- The shaper
- The plant
- The evaluator
- The resource investigator
- The company worker
- The team worker
- The finisher
Effectiveness of a manager is governed by what influences? (3)
- Authority
- Autonomy
- Leadership
Likert’s four leadership styles
Exploitative-authoritative:
- decisions imposed by managers on subordinates
Benevolent-authoritative:
- leadership is by a condescending form of the master-servant relationship
Consultative:
- superiors have substantial but not complete trust in their subordinates
Participative:
- superiors have complete confidence in subordinates
What are meant by covert variables affecting organisational behaviour in a company?
internal processes that are not directly observable
e.g. attitudes, underlying competencies and skills, communication patterns
