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Business, Technology and Finance > Chapter 2: Managing a business > Flashcards

Chapter 2: Managing a business Flashcards

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1
Q

What is management?

A

Management can be defined as the process of dealing with or controlling things or people.

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2
Q

How can you divide the management process?

A

The management process can be divided into four main areas: planning, organising, controlling and leading

Planning: looking forwards to set the direction of the business - setting strategies

Organising: allocating resources and processes to meet plans

Controlling: corrective action if direction of business differs from expectations

Leading: how managers exercise their authority: influencing people so that they will contribute to the organisational objectives

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3
Q

What are the managers key roles?

A

Informational: A manager needs to collect and share relevant information to ensure the smooth running of the business.

Interpersonal: A manager needs to have effective interpersonal skills to lead and coordinate the employees but also be able to judge how best to manage the employees.

Decisional:
A manager needs to be able to make effective decisions regarding:

  • resources
  • problems and issues
  • negotiation
  • possible opportunities
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4
Q

What is power? What are the different types?

A

Power is the ability to get things done.

Reward power- can reward another for meeting requirements

Coercive power- negative side that allows punishment

Referent power: one person’s desire to identify with or imitate another

Expert power: based on the perception that a person has some relevant expertise or special knowledge that others do not

Legitimate power: power derived from being in a position of authority within the organisation

Negative power- the ability to disrupt operations e.g., by industrial action, refusal to communicate information or sabotage

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5
Q

What is authority?

A

Authority is the right to do something or the right to request and expect another person to do something
It allows individuals to make decisions and to assign tasks

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6
Q

What is responisibility?

A

The obligation a person has to fulfill a task assigned to them

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7
Q

What is accountability?

A

A person’s liability to be called to account for the fulfillment of a task

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8
Q

What can be delegated to subordinates?

A

Authority and responsibility can be delegated to subordinates. However, accountability cannot

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9
Q

What are the pros of delegation?

A
  • Relieves senior of less important activities
  • Quicker decisions
  • Greater flexibility
  • More interesting for the subordinate
  • Allows career development
  • Brings together skills and ideas
  • Greater motivation
  • Allows performance appraisal
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10
Q

What are the cons of delegation?

A
  • Over-supervision can waste time and is demotivating
  • Under-supervision can lead to inferior products
  • Manager only delegates boring work
  • Manager delegates impossible tasks as they are not liable
  • Manager refuses to delegate enough
  • Inadequate training
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11
Q

What is a line manager?

A

Someone with direct authority over subordinates (Production Manager over shop floor staff)

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12
Q

What is a staff manager?

A

Someone with authority in advisory capacity (e.g., IT manager advises Production Manager)

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13
Q

What is a functional manager?

A

Hybrid of line and staff manager - Has authority in certain circumstances to direct, design or control activities or procedures in another department
E.g., finance manager requiring timely reporting of revenue data from the sales manager)

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14
Q

What is a project manager?

A

A temporary team manager

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15
Q

What is the management hierarchy?

A
  1. Top Management: Manage the whole business
  2. Middle Management: Manager other managers of the business
  3. First-line management: Manage operational parts of the business
  4. Direct operation staff: Supervisors and operational staff. Delivering the product/service
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16
Q

What is ‘culture’?

A

Culture is the common assumptions, values and beliefs that people share that become ‘the way we do things around here’
Managers must understand the culture of an organisation to operate effectively

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17
Q

What is flexible vs controlled culture?

A

Flexible: Does the business allow change/initiative
Controlled: Does the business seek stability and order?

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18
Q

What is inward vs outward-looking culture?

A

Inward-looking culture: Does the business focus on internal operations?
Outward-looking: Does the business adapt to external change and opportunities?

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19
Q

What is human relations culture?

A

A flexible, inward-looking approach where business is highly focused on being flexible to internal needs

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20
Q

What is open systems culture?

A

A flexible, outward-looking approach that is internally flexible as it adapts to constantly changing external environments

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21
Q

What is rational goal culture?

A

A controlled, outward-looking approach. It is procedurally-driven and adapts to external conditions

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22
Q

What is internal process culture?

A

A controlled, inward-looking approach that is used in rigid and stable organisations. It is driven by procedures

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23
Q

What is organisational behaviour?

A

The understanding of individual behaviour, group behaviour and patterns of structure in order to improve organizational efficiency and performance

24
Q

What are the overt aspects of the organisational iceberg?

A
  • Rules/regulations
  • Products
  • Physical Assets
  • Financial
  • Resources
25
Q

What are the covert aspects of the organisational iceberg?

A
  • Attitudes
  • Personalities
  • Conflict
  • Informal communication
26
Q

What are the features of ‘hard’ Human Resource Management?

A
  • Short-term perspective
  • Centralised structure
  • Training focused on meeting the
    current needs of the organisation
  • Management style top down,
    imposed
  • Dictatorial/control business culture
    -Goal is to meet organisational
    objectives
  • Emphasis on resource element of
    HRM
27
Q

What are the features of ‘soft’ Human Resource Management?

A 
- Emphasis on human element of
HRM
- Goal is to create human assets
- Flexibility culture
- Management style participative
- Training focused on personal and
career development
- Devolved, delegation, autonomy
- Long-term perspective
28
Q

How do you measure effectiveness of HRM?

A

The Harvard four C’s model can be used to evaluate the effectiveness of HRM.
Commitment
 assess employees’ motivation, loyalty and job satisfaction.
Competence
 look at skills, abilities and potential.
Congruence
 do management and employees share the same vision and goals?
Cost-effectiveness:
 operational efficiency and productivity.

29
Q

Who is Frederick Taylor?

A

Frederick Taylor stated that people were similar and could be treated in a
standardised fashion.

30
Q

What does Taylor’s scientific management approach include?

A

His scientific management approach consisted of the following:
 Development of a true science of work, e.g. work study, planning, etc.
 Scientific selection and development of staff
 Assumptions:
– people are mainly concerned with economic gain
– people respond as individuals, not as groups
– everyone can be treated in the same way.
 Workers do as they are told. The role of management is to tell them.
 High wages is main motivator.
 Little team emphasis

31
Q

What is a group?

A 
A group is a collection of people with the following characteristics:
 a common sense of identity
 a common aim or purpose
 behavioural norms
 communication between members
 a leader
32
Q

What are Bruce Tuckman’s four stages of group formation?

A

FORMING
Initially a collection
of individuals

STORMING
Members compete
for group roles

NORMING
Group norms
emerge

PERFORMING
Operating to
full potential

33
Q

What are Meredith Belbin’s group roles?

A

The leader – co-ordinates the group
 The shaper – promotes activity
 The plant – thoughtful and thought provoking
 The monitor-evaluator – criticises ideas
 The resource-investigator – adds to others ideas
 The company worker (implementer) – administrator and scheduler
 The team worker – defuses potential conflicts
 The finisher – progress chaser
 The specialist/expert – if required

34
Q

What is marketing operientation?

A

Marketing orientation: business focuses on the needs of potential customers
as the basis for its operations. Its success is dependent on developing and
marketing products that satisfy those needs.

35
Q

What is Sales Orientation?

A

Sales orientation: main purpose is to sell more of the product or services
already available. There is no attempt to identify customer needs nor create
products or services which will satisfy them.

36
Q

What is Production Orientation?

A

Production orientation: main aim is to make as many units as possible.
Customer needs are secondary to increasing output.

37
Q

What is Product Orientation?

A

Product orientation: the company becomes obsessed with developing a highly
sophisticated and expensive product way beyond the needs of customers.

38
Q

What is marketing segmentation?

A

Market segmentation is ‘the division of the market into
homogeneous groups of potential customers who may be treated
similarly for marketing purposes’.
Segmentation allows the organisation to vary its marketing mix to each of the
segments it caters for.
For example, when targeting families, the marketing mix will focus on the safety of
the product, whereas if the segment is a high income group, the promotion will focus
on the quality or status of the purchase.

39
Q

What are consumer markets?

A

Consumer markets: products/services bought for the use of individuals and
their families:
– fast-moving consumer goods (low value, high volume)
– consumer durables (high value, low volume)
– services. (e.g. doctor, dentist, holidays)

40
Q

What are industrial markets?

A 
Industrial markets: products/services bought for the use of companies:
 raw materials
 components
 capital goods
 supplies
 services.
41
Q

What are the characteristics of industrial markets?

A

small number of large customers
 large purchase size
 expert buyers – rational decisions – based on technical/detailed specifications
 high bargaining power
 complex negotiation.
Industrial marketing contrasts directly with consumer marketing.

42
Q

How can you outline the marketing mix?

A

The marketing mix can be outlined by using the 4Ps (for a product
industry) or 7Ps (for a service industry) model.
The 4Ps model considers the following factors:
 Product – what the customer is physically buying or experiencing
 Promotion – how awareness raised of the goods or services
 Place – how the goods and services are distributed
 Price – what is charged to the customer and any discount/loyalty schemes
offered

43
Q

What is marketing mix?

A

According to Kotler: Marketing mix is the set of controllable marketing variables that a firm blends to produce the response it wants in the target market
(Kotler).

44
Q

What are the extra 3 P’s for the market mix within the service industry?

A

An additional 3 factors can be added for use in the service industry to create the 7Ps
model:
 People – the employees who provide the service
 Processes – the order and how well things are done
 Physical evidence – not many tangible products but appearance of employees
is an example or how comfy the hotel bed is.

45
Q

How does technology affect marketing?

A

Intelligent systems,
mobile technology, social media and big data are some of the technological changes
that have revolutionised how businesses identify, understand and reach their target
markets.

46
Q

What are operations?

A

Operations involve the transformational process of changing inputs into outputs in order to add value. Operations management
involves the design, creation, implementation and control of these
processes.

47
Q

What four things affect operational management?

A

The four Vs
 Volume
High-volume operations are likely to be more capital-intensive than low-volume
operations, and there is likely to be a greater specialisation of labour skills.
 Variety
Some operations handle a wide range of different inputs/outputs.
Others are much more restricted in the range of inputs/outputs.
 Variation in demand
With some operations, demand might vary significantly with periods of peak and
low demand. Other operations might handle a fairly constant volume of
demand.
 Visibility
When an operation is highly visible, the employees will have to show good
communication skills and interpersonal skills in dealing with customers.

48
Q

What is pure research?

A

Pure research is intended to gain new scientific or technical understanding although there is no commercial view point in mind.

49
Q

What is applied research?

A

Applied research is research aimed at achieving an obvious commercial or practical view point.

50
Q

What is development?

A

Development takes existing scientific or technical knowledge and uses it to produce new products or systems intended for commercial production.

51
Q

What is Procurement? What should you consider?

A

Procurement is ‘the acquisition of goods and/or services.
The main factors to consider are as follows:
 Quantity: the aim is to balance the risk of stock outs against the costs of
holding stock.
 Quality: the quality of inputs affects the quality of outputs.
 Price: the best price should be obtained based on weighing up quality, lead
times, cost of holding stock etc.
 Lead times: the time it takes from order to the delivery of the goods.

52
Q

What are the five rights of procurement?

A

Organisations can gain competitive advantage through effective, responsive and
reliable supply chains. The five rights of procurement highlight what must go well
for a supply chain to be deemed effective.
The five rights are:
 The right quality, in
 The right quantity, at
 The right price, in
 The right place, at
 The right time

53
Q

What is a supply chain? What is an integrated supply chain?

A

A supply chain is the network of organisations, their systems, resources and activities that are required to turn raw resources into a product or service for the end consumer.

An integrated supply chain sees members of the supply chain working collaboratively with the shared goal of satisfying the ultimate consumer through quality and efficiency. This can be facilitated by integrated information systems.

54
Q

What do Upstream supply chain members do? What about Downstream?

A

Upstream supply chain members typically provide the raw materials and components for the production of goods or services.
 Downstream supply chain members are involved in getting the finished goods to the ultimate consumer and will include wholesalers and retailers.

55
Q

How do you distinguish between IT Service Delivery and IT Service Support?

A

IT Service Delivery: Data extraction and reports, budgeting, customer billing, capacity monitoring

IT Service Support: IT systems maintenance, IT security controls, Prevention of IT problems, Investigation of IT problems

Business, Technology and Finance (15 decks)

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