chapter 6: achieving business goals Flashcards
what is the importance of carefully planning business goals
- serving as targets - easier to make coordinated decisions cos it knows what its trying to achieve
- measuring sticks - act as benchmarks to measure performance
3.motivation - represent a challenge –> act as motivating force - commitment - employee participation in goal setting process allows them to have personal share in bus’s success
to be most effective, business goals should be smart. What are S.M.A.R.T. goals
- specific - straughtforward
2.measurable - able to see change –> stay on track - achievable - not too challenging–> demotivating
- realistic - rep smth owners/employees willing to work
- timebound - deadlines, sub-deadlines
list the main business goals
profits
market share
grwoth
share price
social
environmental
define profit maximisation
your cash flow position consists of info abt ur revenue expenses and resulting balance (revenue-expenses)
profit maximisation occurs when there is a maximum difference b/w total revenue coming into the bus and total costs being paid out
what is the formula for total revenue and profit
Total revenue (TR) = totals sales x price
Total costs (TC) = total expenses incurred in operating the bus
profit =TR-TC
maximum profit = TR @ max diff from TC
what are ways of maximising profits to increase sales
- lowering prices so customers purchase more
- increase sales through well-targeted marketing campaigns
- creating more innovative products
- delivering better services
new bus entering market usually performs best by initially setting low prices to build customer base
define market share
market share refers to the bus’s share of the total industry sales for a particular product
(usually goals for large buses)
what is one of the most important strategies used to increase market share
promotion describes the methods used by a business to inform, persuade and remind a market about its products
- convince new customers to try a new product
- maintaining established customer’s product loyalty
advertising affirms/assures customers that they are making the right decisions
define internal and external growth
internal growth:
- employing more ppl
- increasing sales
- introducing innovative products
- purchasing new equipment
- establishing more outlets
external growth:
achieved by merging with or acquiring other buses
what are some reasons why a bus owner would be content maintaining the size of their bus
- avoid added pressures f expansions in a desire for a quiet life or particular lifestyle
- keep control over the bus’s operations
- maintain personal contact with the customers
list two reasons why a person woudl buy shares and how the bus will give their investors a return on investment
two reasons why a person will buy shares:
purchase shares in hopes of selling them for a higher price
owning shares entitles an investor in part of company’s profits - in form of dividends
company’s need to maximise the returns of their shareholders by keeping share price rising and paying back healthy dividends
what ae the social goals of a bus
- community service - business sponsorship of a wide range of community events, promotions and programs
–> supporting educational, cultural, sporting and welfare activities - provision of employment - most large buses do not regard as main goals but SME’s rely on employing family members to see continuity of their bus
- social justice - adopting a set of policies to ensure that employees or other community members are treated equally and fairly
what are the environmental goals of a business
sustainable development occurs when the needs of present population are met without endangering the ability of future generations
–> balance b/w economic and environmental concerns
pressure to change has come from society’s increasing awareness of environmental issues
achieving a mix of bus goals
most goals are interdependent and compatible ie strategies implemented to achieve a particular goal will assist in achieving multiple goals
however, can be difficult to achieve goals simultaneously as some goals may be incompatible; conflict each other
–>formed to adopt a compromised position; a trade off b/w conflicting goals
–> facing dilemma
define staff involvement
staff involvement means involving employees in the decision-making process and giving them necessary rewards and skills
important to provide work enviro that maximises employee involvement and satisfaction as it result in high levels of output
define labour productivty
measures how much an employee can rpdouce in a set period of time
- increased productivity
- long term bus success
define staff involvement (type of decentralisation)
allwoing employees to exhibit more determination and initiative in pursuing bus goals. this provides 2 advantages:
- increased employee motivation
- solutions to organisational problem\
however, staff involvement only successful if business recognise importance of:
- motivations
- mentoring
- training
- innovation
how does a business foster more innovation
buses encourage innovation thru employees
more recently, employees who take on the entrepreneurial roles within a bus are called intrapreneurs
–> can cause managers dilemma as innovative employees are nonconformist
–> attempting to get these emps to follow the rules suppresses their creatvity
how does a business demonstarte that they value new ideas
rewards, trustful management - micromanage, sufficient financial, manament, human and time resources, not fearing consequences of mistakes
define motivation
motivation refers to the individual, internal process that directs, energises and sustains a persons behaviour
one of the most important management functions bcos high levels of motivation result in increasing rates of productivity
how does a bus motivates its employees
in the work enviro, managers have relied on:
- rewards: increased pay and improved conditions
- punishments: fear of reprimands, demotion or dismissal
tips for motivating and keeping staff:
- lead by eg
- positive reinforcement
- provide flexible work arrangements
- offer opps for employees to advance
- delegate responsibility
- provide sake work enviro
- take interest in employee’s development
define mentoring, socialisation and mentor
mentoring: the process of developing another individual by offering tutoring and coaching, and modelling acceptable behaviour
socialisation: the process a new employee undergoes in the first few weeks of employment thru which he or she learns how to cope and succeed
mentor: someone (usually more experienced employee) who develops less experienced employee (the protege)
- to learn acceptable attitudes and behaviours
- strengthens their dedication and commitment to firm
- exposure to important bus values
how are mentoring programs beneficial
- allows for employees regardless of exp, background, genders or ethinicities
- assists new employees to transition into workplace
- passes on skills & abilities of experienced employees
- career and psychological support t develop their interpersonal skills and provide sense of satisfaction
- increases possibility of skill transfer
define empliyee traingin
employee training refers to the process of teaching staff how to perform their jobs more efficiently and effectively by boosting their knowledge and skills
- continually upgrade skills
- aim of developing multiskilled employees
as nature of workplaces change, esp due to tech innovations, existing employees must be trained and retrained
why would a bus want multiskilled employees
better able to:
- adapt to rapidly changing technological environment
- provide better customer service
- participate effectively in work teams
–> improves range of innovative ideas
–>maintain competitive advantage
- gain promotions thus increasing commitment
