business topic 2 (chap 8.7 -9) Flashcards
signs businesses engage in ethical business practices & act honestly and what for
-not engage in misleading/deceptive product descriptions
-safe working enviro for employees
incorporate CORPORATE SOCIAL RESPONSIBILITY
avoid negative publicity & deterioration of reputation
-consumer boycotts
-highexpectations from customers
-managers need high personal and ethical standards so employees perceive importance of ethical considerations
‘cutting corners’
taking shortcuts in the cheapest, fastest and easiest way.
- producing an inferior product not to the industry standard — in quality and work processes.
- costs and procedures that for safe work environment should not be disregarded for profits.
-unethical,unlawful behaviour.
–may gain an unfair advantage over their main competitors.
CORPORATE social responsibility
open & accountable bus actions based on respect for society and environment (social welfare) when making business decisions
-more than simply complying with laws and regulations
-rewarded with improved bus performance
triple bottom line (enviro, social, eco)
-
PROFIT bottom line
-measure traditional ‘profit & loss’ financial bottom line -
PEOPLE bottom line
-measure how socially responsible business been -
PLANET bottom line
-measure how environmentally sustainable bus been
social enterprises
businesses established to achieve social objectives > making profit for shareholders/owners
-pursue endeavors that generate revenues, which fund their social causes
ethical issues businesses regularly have to address in daily operations HRCFT
- fairness and honesty
-obey rules & regulations
-tell truth - respect for others
-treat staff
-expect staff act ethically -
conflict of interest
-one takes adv of situation for self-interest
corruption undermines integrity of bus if unchecked, infiltrates workplace culture
-entrenched** within business, changing attitudes & practices of individuals diff
-if corrupt practices **exposed, reputation damaged
4.financial management
-reflect obj of bus & shareholders
-financial reports regularly audited - truthful communication**
-no false/misleading ads
-unethical
sustainable
account impact bus has on enviro it operates
-contributes to efficiency & effectiveness of bus by ensuring best use of resources, and minimising waste
-^ likelihood of long term survival
-for society, maintain enviro for future survival, deplete less resources
strats for bus to minimise CONFLICT OF INTEREST
- devise corp code of conduct
-set of ethical standards for managers & employees abide by
-provide internal stakeholders with ethical guidelines for workplace behaviour & practices
-need to ensure employees trained & understand values - establish formal proceedings for reporting unethical behaviour in workplace
organisational change
adopt new behaviour resulting in diff in operation of org over time
-moderate corporate culture
-new organisational structures
-recruit employees with new skills
-develop diff work practices
MANAGERS and change (2 internal influences bus need to respond to change)
respondingto unplanned changes requires responsive decision making from management to reduce disruption of business
-push for changes –> better outcomes and achievement of objectives
could restrain change
-hasty decisions, indecisve
-lack experience and skills to oversee transformation**
-unable to deal with resistance from stakeholders in business
eventually cause employees lose confidence in decision making abilities of management
employees and change (driving and restraining)
INNOVAtive enviro where ideas shared and acted on likely driving force for change
-recommend changes to policies, PP, products
-operations, marketing change from employee creativity to develop innovative products
restraining force
-expect to be paid fairly, trained properly and treated ethically in return for contribution to production.
-merge/acquisition could breakdown existing corporate culture
-adapt to new procedures threaten established work routines, need training
externl influences causing change CLTS
competition
tech (self-service checkouts)
social
OR
eco,
financial (IR),
markets
* changes to government policies (inc employment policies)
how can compeititors drive change 4
-open new business competintg with existing one
-undergo change to stay relevant to customers
pricing policies by competitor
-bus adopt similar strat
adopt new tech (production & products)
-competitor change products/processes
advertising campaigns, develop online presence
external change
legislation
new laws pass, must comply with new legislative requirements, change operations
-state gvts (smoking in public)
-local councils(parking restrictions) or federal lol
external change
tech
to be competitive**
-slow to exploit tech –> likely fail bc competitors capture greater market share & develop sustainable competitive advantage
-allows to operate processes more efficiently –> cut costs, improveproductivity
-size don’t matter to ake advantage of it (EFTPOS, self-service checkouts)
external change
social
adapt to changes in society’s attitudes and values
-affecting operations
-increased access to rapid communications made pop more aware of business practices
-pressure forces bus to implement procedures to preserve natural enviro and ensure ethical supply chain
-sell safe products, respect staff,
effective managing change
strategic planning
-ability to manage, adapt change determines bus’ competitive advantage and survival
-successful managers anticipate & adjust to changing circumstances (PROACTIVE not reactive)
-long term survival depends on ability of managers to continuously scan enviro, predict future trends and exploit change
-share vision w/ employees to understand change
proactive approach to change
situations where change planned and occurs before bus affected by pressure in enviro (prepared)
-mor effective, allows bus gain competitive advantage
reactive appraoch to change
unplanned, occurs after bus affected by pressures from enviro
-less effective
-lose productivity/sales from failure to recognise imminent change
-failure to respond immediately lose time as it attempts to recover
how should change be appraoched? what happens if its poorly managed? how can you mitigate this?
thoroughly evaluated to assess impact
-poorly managed –> employee resistance, lost productivity –> decrease profits, unmet objectives
-esp hard when beyond control of manager
-communication, employee involvement in change process, training, support, leadership skills and responsive management structures
access to current and up-to-date info, as this helps them determine what changes, to be made & decision aking + analyse data
why do business fail to manage change
in upheaval of restructuring process, employees (crucial!) often NEGLECTED
-communication channels break down
OMFH
examples of info collecting for change
**OPERATIONS **manager of MANUFACTURING bus collects data abt PRODUCTION COSTS
FINANCE manager collect data abt financial TRANSACTIONS and measure CASH FLOWS
**
HUMAN RESOURCE manager record staff ABSENCES, TRAINING requirements and overtime payments
data and info
unprocessed figures eg. sales, customer complaines
processed data selected, prgamosed for manager
where od managers get info they need to change
business information system BIS
-gathers data, organises & summarises, converts to practical info for managers who use data to make decisions
how do manager treatment to employees affect their attitudes to change
determines acceptance/resistance to change
-leader with high expectation of abilities to initiate and implement change –> ppl willing to embrace it
6 common reasons why change resisted FPRRRI
FINANCIAL COSTS
PURCHASING NEW EQUIP
REDUNDANCY PAYMENTS
RETRAINING
REORGANISING PLANT LAYOUT
INTERTIA
RESISTANCE due to financial costs
must weight up costs & benefits of change
-financial costs of implementing changes
resistance due to redundancy payments
lose jobs –> entitled to financial compensation (redundancy payment)
-money given to employees when forced out of work cause skills no longer relevant
-very high esp if employees MADE redundant
resistance to change due to inertia
inertia: unenthusiastic response to proposed change
- desire predictable status quo (existing state)
-lack of control, uncertainty of future
-worse if poor leadership and management during change
driving & restrainig forces of change
DRIVING: support change
RESTRAINING: against
-^market share
-^revenue
-obtaining customers from new market segment
-economies of scale
for organisational change: changes in internal & external enviros
-cost risks
-damage corporate image
-upset business partners/stakeholders
status quo/current conditions result from
conditions bus operating in
-managers analyse situation to identify and balance driving and restraining forces
considering forces exerting pressure to change
-effective change: weight of driving forces > restraining forces
-remain equilibrium/weight of restraining > driving, change unlikely occur
driving forces <—–equilibrium —->restraining forces
strategies to reduce resistance to change CACL!!
create CULTURE for change
-supportive environment to reduce resistance
-constant feedback
change AGENTS
-identify ind/group influential in bus to act as catalysts to help manage process
-initiate, stimulate, facilitate change effort within orgs
-internal to org (manager, employee)/external *consultants)
effective COMMUNICATION
-managers need to communicate with stakeholders regarding need for change and progress
-open communication channels to transfer info otherwise resistance
positive LEADERSHIP(flashcard for this)
positive leadership to reduce resistance
manager treatment of employees determines resistance to change
-rewarded with ppl willing to embrace change
- employees believe they have trust and support of manager
-more prepared to accept risks if manager concerned with welfare
management consultant
someone with specialised knowledge and skills with area of business
-specialise in range of areas (risk management, brand protection, sustainability)
what do management consultants provide
-range of bus experiences
-specialised knowledge and skills
-external, objective perspective
-access to latest research
-CHANGE MANAGEMENT advice
carefully prepared goals will benefit managers by providing
- targets — coordinate decisions because they know what they want to achieve
- measure performance — goals act as benchmarks
- motivation for employees
- commitment — getting employees to agree to achieve a certain goal gives them a personal stake in the success of the business.
is ‘to improve customer service’ a goal?
no, nothing specific (how much, by when, how to )
6 main goals of a business
- profits
-max diff betw total rev & costs (profit margin)
- more beneficial if long term - market share
-bus share of total industry sales for product
-small gains translate to large profits
-usually for large bus (extensive product range, promotion inform, persuade, remind)
-SMEs restricted to size (no. customers living in area) -
social
-operate within community
-community service, employment, social justice -
share price
shareholders part ownership of public company ROI
-comapnies need to max returns of shareholders (^ share price)
-hope sell higher price for capital gains and entitles investor to prop profits as dividends -
growth
-internal (employ more, ^ sales, develop new products/outlets)
-external (merge, acquire) expansion -
enviro
-enviro friendly practices
-sustainable development (needs of present pop met w/o endangering future gens ability to meet needs)
-‘green’ attitude for future gens
profit maximisation
max diff betw total rev (sales x price) and total costs
when will manager acept short term reduced profits
-enter new market
-intrdouce new product
- generally lower prices to acquire large customer base
2 strats manager can use to maxp rofits
- ^ sales by lowering price
- well-targeted marketing campaign
why is profit maximisation more suitable as long term goal
extended period to achieve
-short term can have negative publicity and affect future sales
distinguish internal and external growth
Internal growth: by
-employing more people
-, increasing sales,
-purchasing new equipment
- introducing new products
External growth: merging or acquiring other businesses.
-outside the company.
why do some small businesses prefer maintaining existing size
-avoid the pressure of expansion,
-keep control over the business’s operations
- maintain personal contact with customers.
3 main social goals of a business summarised
community service — business sponsorship of a wide range of community events
provision of employment— continuity of small business through employment of family members
social justice — adopting a set of policies that ensure people are treated equally and fairly.
how can some goals be compatiable (example) and conflicting
strategies employed by a business to achieve the goal of maximising growth may simultaneously help that business achieve the goals of maximising profits and increased market share.
for businesses to acquire a larger market share, spend money on advertising.
-affect capacity to maximise their profits by informing consumers about their products and persuading the market to purchase
SMART goals
Specific
Measurable (quantifiable, numbers to track)
Attainable (realistic, how?)
Relevant (support other goals, based n market conditions)
Time bound (deadline)
staff involvement
involving employees in decision-making and giving necessary skills and rewards.
relationship betw staff involvement & labour productivity
recognise
-involvement,
- knowledge,
-skills
-creativity
of employees ^ productivity
- increase motivation
- solutions to organisational problems
feel valued and take responsibility for their suggestions implemented. only ifi bus recognises importance of innovation, mentoring, motivation, training
why should bus encourage innovative bus culture
gain competitive edge through innovation.
-Employees important source of innovative ideas, should be encouraged.
-work enviro maximise employee involvement & satisfaction –> ^ output
-management does not micromanage people (excessive control)
-not afraid of mistake
role of intrapreneur in assisting bus to maintain comp adv
Intrapreneurs (ind takes entrepreneurial role within bus)
-develop ideas for bus growth
-creating, innovating
-problem solving.
-solutions may generate profits,
- help growth
-maintain its competitive edge.
important for bus to mentor employees bc
mentor has more experience, acts as role model for less experienced employees.
mentoring program
- New employees learn what is expected of them and it assists with their transition into the workplace,
- -assists in training and development, passing on experience and knowledge and developing the possibility of skill transfer.
- provide support for inexperienced employees.
-^ staff retention, ^ productivity, dedication
why is training an investment not expense
trained employees acquire more skills;become more effective and efficient at their jobs & increase productivity.
motivation for staff involvement
individual internal process directs, energises, sustains one’s behaviour
-rewards: ^ pay, ^ conditions –> also appreciation, communicate, encourage suggestions
-punishment: fear of reprimand, demotion, dismissal
-intrinsic motivation more long term & effective motivating force than external rewards (money, grades, promotions)
socialisation
new employee first weeks of employment learns how to cope & succeed (mentored)
multiskilled employees
develop skills in wide range of tasks through ongoing training
-adapt to rapidly changing tech enviro
-better customer service
-participate in work teams (innovate –> comp adv)
-promotion –> greater commitment
to ^ PRODUCTIVITY. commonly use INFORMAL ON-THE-JOB TRAINING whilst formal off-the-job for highly skilled, technical employees
