3rd-6th May: TAGS Paper 1 (5 topics) Flashcards
What is the purpose of business objectives?
- > focus for all activity
- > means of measuring performance
- > provide a sense of unity
- > provide a clear focus when decision making
- > motivate employees
What is a Business Objective?
= targets which a business adopts in order to achieve its overall corporate aims. (SMART targets)
3 different types of objectives and the differences between them?
- Corporate: relate to the business as a whole (e.g. market share of 12%)
- Functional: related to specific functions of the business e.g. HR, Marketing, Operations, Finance
- Unit: individual aims (e.g. shop sales of £500,000)
What is a Mission Statement?
= a qualitative statement that sets out the over riding goal, the reason for a business’ existence and vision for the future.
Purpose of a mission statement?
- clearer sense of business purpose and values
- motivates, inspires, guides the staff and investors
- helps with creating a strong culture for employees
- differentiates a business from competitors
- relevant to all stakeholders
- > align customer values
- track progress of business, head in intended direction
- informs public about business purpose so good for PR
- > helps with brand recognition
- long term strategy, helpful with decision making
What makes a good mission statement?
> differentiation, less vague > clear/ clarity > truthful and realistic > relatable to everyone > exciting, inspiring
Some criticisms of mission statements?
- not always supported by business actions
- often vague, general, lack detail
- can be cynically regarded by staff
- or viewed as a PR stunt
- not wholehearted supported by senior management
What are some examples of common business objectives?
- customer satisfaction
- sales/profit maximisation
- market share
- survival
- employee welfare
- social objectives
- cost efficiency
What factors affect whether business objectives are fulfilled?
> coordination within an organisation > management, also helped by strong culture > resources/ finance > reliability / accuracy of objectives > cash flow > risk and attitude to risk > age / size of a business > external influences + PESTLE > competition
What is Promotion?
= one of four pillars of the marketing mix
involves using a variety of methods to communicate with customers and persuade them to buy your product
What is Branding?
= a characteristic name or symbol that distinguishes one product from another supplier
What are some influences on the promotional mix?
- stage in the product life cycle (e.g. advertising + PR at launch stage)
- type of market: mass or niche and competitors actions
- marketing budget
- marketing strategy / objectives
- nature of the product
- target market: new customers or existing customers?
- distribution
What are the 5 different types of promotion?
1) Sales Promotion
2) Direct Marketing
3) Advertising
4) Personal Selling
5) Public Relations
What is Sales promotion and what are the pros/cons?
= short term incentives to encourage purchase
includes BOGOF, loyalty schemes, free samples
+ brings about an immediate, effective action
+ could encourage brand switching
- sales effect short term due to being impulse
- may damage brand rep., customers become used to it
What is Public Relations and what are the pros/cons?
= communicating with the media and other parties to enhance the image of the business (to increase sales)
+ spreads awareness, create a stronger reputation and image
+ cheap
- has to be carefully managed, can go wrong
- no control over perceptions
What is Direct Marketing and what are the pros/cons?
= promotional material targeted at a customer / business
+ tailored
+ cheap, already have information available
- can be a waste of time
What is Personal Selling and what are the pros/cons?
= based on face to face communication with customers \+ greater engagement, tailored answers \+ more persuasive, can demonstrate - can be offputting - limited numbers reached
What is Advertising and what are the pros/cons?
= Paid for communication
+ message can be controlled, reaches a wide base
+ creates brand loyalty in a mass market, message repeatedly shown
- can be very costly
- impersonal element
What is a Corporate brand?
What is an Own - label brand?
= promotes the brand name of a corporate entity
BBC
= an example of corporate branding where retailers assign their branding to a range of goods / services
ESSENTIAL WAITROSE
What is an Umbrella brand?
= one brand encompasses many others
this makes different products easily identifiable to the consumer by grouping them under one brand name
P+G, DOVE, CADBURY
What is a Global brand?
= easily recognisable and operating worldwide
brands are based on familiarity, availability, stability
IKEA
What is a service/product brand?
= brands that are associated with products or that give perceived value to services e.g. MARMITE, NETFLIX
What are the main benefits of strong branding?
- added value: this helps when the brand is being sold to another business
- ability to charge higher prices, esp. if brand is market leader (associated with higher quality)
- more inelastic PED
- brands inspire customer loyalty leading to repeat sales and word of mouth
- retailers/distribution more easy to secure
- can sell a brand as a non tangible asset (has value on a balance sheet)
- an umbrella brand allows you to launch new products successfully
What are the 4 ways to build a brand?
- Create a USP = gaining a competitive advantage through differentiation
- Advertise = constantly communicate the message of the brand and any symbolism/values attached, use a mixed media approach
- Sponsorships = association of the brand with something/someone, align values, better perceptions and increased profile of the product
- Social Media = trends, hashtags, popular events
- > can build relationships and trust through communication with customers
What is Viral marketing?
= strategy that encourages people to pass on messages to others about a product or service electronically
- aim is brand awareness
What is Emotional branding?
= practice of using emotions of a consumer to build a brand
seeks to create a bond between the customer + product by provoking an emotional response to advertising
- long lasting attachment can lead to brand loyalty
What are the main reasons for staff recruitment?
- Business expansion
- Existing employees leaving
- Business is relocating (not all existing workforce want/can move)
- Business needs employees with new skills/specialisation
What are the stages in the Recruitment Process?
1) Define requirements: Job description and Job specification
2) Attract potential employees: Job Advertising (internal/external)
3) Select Right People: Shortlist, Job interviews, Ability tests
4) Contraction and Induction
What is the difference between Job description and Person specification?
Job description = contains responsibilities and workload, duties, title of job, location, managers, salary
Person specification = qualifications, characteristics, skills, experience
What is Internal Recruitment?
= within a business, recruitment within a company taking selection from existing staff
Involves promotion and reorganisation
What is External Recruitment?
= advertising job vacancies outside of the business to recruit people who do not already work there
- inviting applications from outside the business from the most qualified staff
What are the different methods for both Internal and External Recruitment?
Internal = promotion, transfers, internal advertising on intranet ect., personal recommendations
External = job centres, recruitment agencies, job advertisement, headhunting, personal recommendation
What are the advantages + disadvantages of Internal Recruitment?
+ cheaper and quicker
+ people already familiar with business and culture
+ provides opportunities for promotion, motivating
- businesses already knows strengths and weaknesses of candidates
- ideas may stagnate
- another vacancy may be created
- may cause rivalry/resentment
What are the advantages + disadvantages of External Recruitment?
\+ more innovation \+ could find better suited due to bigger pool of candidates \+ wider range of experience - more expensive and time consuming - induction training needed - selection process may not be enough
What are the main costs of Recruitment and selection?
> lost output from replacing an employee > logistical cost of running the process e.g. agency fees for a temp. cost of advert loss of productivity while the new employee is inducted
What is Training?
= process of equipping employees with the skills and knowledge necessary to carry out their job effectively
Why is Training important?
> to maintain quality and customer service
reflects externally - business is viewed as a desirable place ( which will then increase recruitment pool)
health and safety, address new legislation
ensure they have skills needed, support them
productivity and efficiency
provide a sense of motivation, need to improve
-> support employee promotion and progression
What are the three types of training?
On-the-Job = where an employee learns in the workplace from experienced employees
Off-the-Job= any form of education that takes place outside of the workplace
Induction training = introductory training for employees new to an organisation
What are the main costs of training?
- productivity time lost by employee receiving
- productivity time lost by a second employee of training happens in house
- fees paid to an external training provider
(management are impatient, business want to minimise short term costs, training takes time to have the desired effect, effects may be more intangible than tangible, fear they will be poached by competitors)
What methods can be included in On-the-Job training?
- demonstration / instruction where someone shows you
- coaching which is more intensive involving a close working relationship
- job rotation where the trainee is given several jobs in succession to gain experience
- projects where employees join a project team
What methods can be included in Off-the-Job training?
- day or past time attendance at college
- development courses
- online learning
What are the pros/cons of On-the-Job training?
+ tailored to the business’ way of working
+ productive as employees are hands on from the start
+ trainee faced with real life scenarios
+ saves time and cost of paying a professional to train others
- risk of expensive errors e.g. customer service, potential to pick up bad habits
- loss of productivity on equipment
- can be distracting to other employees
- may have to take a lower priority (staff focus on other targets)
What are the pros/cons of Off-the-Job training?
+ employer likely to train others at the same time
+ opportunity for specialist trainers who raise standards and skills
+ raise awareness of the importance of training
+ can fully concentrate away from work without pressures
- may often be unsupervised or away from the control of supervisors
- costly to pay for specialists
- worker is unproductive whilst traininf is taking place
What can be included in induction training?
- health and safety
- tour of organisation
- introduction to colleagues
- details of employment e.g. holiday, salary
What are the pros/cons of Induction training?
+ employee feels respected and valued
+ better understand their place of work, culture
-> feel more integrated
+ provides necessary info.
+ ensures operation efficiency (more familiar with goals/vision ect.)
+ establishes good communication (meet managers ect., know who they are reporting to)
- takes time
What is Motivation?
= enthusiastic pursuit of the objectives or tasks set out by a firm
What are the main non-financial methods of motivation?
- Delegation = allocating tasks to employees and passing authority for a task to junior staff. You need to trust these employees and have authority to delegate
- Consultation = asking the views of staff you manage and involving them in the decisionmaking process
- Empowerment = delegation where the employee has more responsibility and scope to make decisions about the task. More power and control over working life.
- Team working = organising employees into teams. Teams could be multi skilled and look at the future.
- Flexible working = offers employees a range of working options and patterns to suit them.
- Job enlargement = a term for anything that increases the scope of the job
1) Job rotation = increasing activities by switching between tasks, trained in more skills
2) Job enrichment = involves extra responsibilities and challenges, extra workload
What are the pros / cons of Delegation?
Empowerment?
Delegation:
+ makes sure the teams potential is maximised
+ builds trust between managers and subordinates
+ shows democratic leadership/effective hierarchy
- managers may not choose most suitable employee
-> pass on work when they are overloaded, instead of to motivate
Empowerment:
+ staff recognised for ability and trusted are less frustrated, increased productivity
+ greater loyalty and satisfaction
+ may lead to opportunities being identified + exploited
- may lead to increased risks and mistakes
- seen as a way of making managers redundant/insecurities
What are the pros/ cons of Consultation?
+ can help avoid union action
+ shows paternalistic leadership style /boosts morale
+ can help to avoid minor issues becoming larger
+ employees feel their opinion is valued
- employees views may not be well informed/inexperienced
What are pros/cons of Team working?
Flexible working?
Team working:
+ fits well with Maslow’s idea of social needs
+ gives flexibility which modern managers like
+ shared responsibility, better ideas, better results
+ peer pressure can keep motivation high
- tensions, arguments (productivity drops)
- team not always the best approach
Flexible working:
+ greater cost effectiveness
+ more job satisfaction and motivation
+ reduces levels of sickness, absence, loyalty higher
- difficult to suit everyone
- some staff may take advantage
What are the pros/cons of Job rotation?
Job enrichment?
Job rotation: \+ multi skilled employees reduces costs \+ less boredom, improved productivity - time consuming - employees may not want a new challenge Job enrichment: \+ more interesting job role \+ lower absenteeism rates \+ sense of achievement (Maslow) \+ prepared for potential future promotions - may feel job has become harder - more training needed
What are the main financial methods of motivation?
- Piecework = working for payment per item/ unit produced
- Commission = a bonus earned on top of a salary in line with achievement (like a sales target)
- Bonus = a lump sum paid onto of a salary due to achievement
- Profit share = employees are paid an annual dividend/share of level of profits
- Performance related pay = financial reward to staff whose work is above average (usually done after a staff appraisal)
What are the pros/cons of Piecework?
+ incentive to complete the work
+ employees may work more hours to get the job done
+ experienced and efficient works are rewarded
+ supervision is unnecessary, easier for managers as they only need quality control
- higher wastage due to a focus on speed
- quality is not the focus so it may suffer
- people won’t change (Herzberg)
What are the pros/cons of Commission?
+ motivation to sell more
+ skilled salespeople are rewarded
+ only pay for productivity of employee
- sales people on commission only could struggle with pay (not a steady income)
- risky in times of low demand / recession
- employees focused on sales rather than needs of customer
What are the pros/cons of Bonus?
+ used as a token / sign of appreciation
+ encourages staff to work harder for a specific project ect. (therefore future benefits)
+ improves employee satisfaction
- could encourage short term risk taking
- more individual rather than team playing
- big bonuses are expensive - fall into ‘bonus culture’ ‘fat cats’ (inequality and conflict)
What are the pros/cons of Profit Share?
+ brings employees together, staff are less competitive, focused together on companies profitability
+ bridges gap between employer and employee
+ increases commitment and sense of belonging
- salaries of individual employees go up equally (less promotion opportunities)
- focus on profit vs. quality / customer service
- for small business, company profits changing drastically may affect personal earnings
What pros/cons of Performance related pay?
+ makes it easier for managers to control and manage their staff
+ easy for businesses to rank staff when looking at promotions or redundancies
- causes jealousy and unhealthy rivalry
- those that don’t meet targets may blame line managers and become demotivated
- does nothing to promote teamwork
What were the main findings from Mayo’s theory of Human Relations?
> employees are motivated by RELATIONAL factors more than MONETARY rewards or ENVIRONMENTAL factors
-> so increased breaks and good lighting only temporality increased productivity
relational factors = camaraderie, attention
employee satisfaction increased employee participation in decisions and productivity
employees were happier after talking about their problems
OVERALL 3 MAIN THINGS NEEDED: better communication, increased participation from managers, working as a team
What are the main outcomes for businesses based on Mayo’s Human Relations theory?
- businesses should encourage team work and encourage involvement from a manger
- involve workers in decisions for motivation
- workers need to know / feel their managers are interested in them ‘Hawthorne effect’
- financial incentives and working conditions are only short term fixes
What is Maslow’s Hierarchy of needs?
everybody has the same needs:
BASIC needs e.g. food, water, warmth, safety so job security (these are main motivators if unsatisfied)
PSYCHOLOGICAL needs e.g. esteem needs like accomplishment, recognition, status belongingness from friends / team, communications
SELF FULFILMENT needs e.g. self actualisation, scope to develop new skills and meet new challenges
(move up the table for motivation as each level is satisfied)
What are the main outcomes for businesses based on Maslow’s hierarchy of needs?
- methods of motivation will depend on levels of pyramid
- in a very low paid job, money may be a motivator but once money needs have been met then safety and security are important
What is Herzberg’s two factor theory?
there are MOTIVATOR factors which are concerned with the job itself rather than pay or status
-> these include recognition, responsibility, achievements
there are also HYGIENE factors which surround the job rather than relate to the job itself
-> these include working conditions, interpersonal relations, salary, company policy
> fulfilling hygiene factors will prevent dissatisfaction, rather than directly motivate
fulfilling the motivators would increase motivation
What are the main outcomes for businesses based on Herzberg’s Two Factor theory?
- a business must provide the hygiene factors otherwise employees will be dissatisfied
but to directly motivate workers they must focus on motivators: make the job interesting, recognise and reward achievements, give responsibility - bribes will never be effective in the long term
- enriching jobs means there needs to be challenging tasks
Main Insight: unless the job itself is satisfying, there is no way to make working life satisfying
What are the main outcomes for businesses based on Taylor’s SM theory?
- tall hierarchy may be better so workers can be controlled / supervised
- autocratic leadership style is best for this theory
- performance related pay would be a good motivator
e. g. piece rates, bonuses
