Exam 🤬 Flashcards
What is a business?
A business is an entity that provides goods or services to customers in exchange for money, with the aim of generating profit.
what are the 6 business types
- sole trader
- partnership
- private limited company
- public listed company
- government business enterprise
- social enterprise
sole trader definition
A business structure that is owned and operated by one individual
what are 4 ways to identify a sole trader?
- unlimited liability
- owner retains all profits after personal income tax is paid
- simple and cost effective
- single individual makes all decisions
what are 3 advantages of a sole trader?
- owner has full control and decision-making power
- Easy to register and set up
- The owner can retain all business profits
what are 3 disadvantages of a sole trader?
- unlimited liability
- may be difficult to take time off
- limited expertise (may lack diverse skills, making it challenging to manage business effectively)
what is unlimited liability
the personal legal responsibility a business owner has for an unincorporated business’s debts
what is unincorporated
a legal status of a business whereby the business owner and the business are viewed as the same legal entity
partnership definition
A business that is owned by 2 to 20 people
what are 4 ways to identify a partnership?
- 2-20 owners
- simple and cost effective structure
- profits shared between owners
- unlimited liability
what are 3 advantages of a partnership?
- Easy and simple to register and set up
- distribution of tasks, leveraging the skills and expertise of each partner
- Greater range of expertise and ideas amongst numerous partners
what are 3 disadvantages of a partnership?
- Profits must be shared among partners
- Differences in opinion or conflicts among partners can arise
- Unlimited Liability
Private limited company definition
An incorporated business structure that has at least one director and a maximum of 50 shareholders
what are 4 ways to identify a private limited company?
- pty ltd after business name
- only up to 50 shareholders
- limited liability of the shareholders
- shares can only be sold privately
what are 3 advantages of a private limited company?
- limited liability
- raise funds by selling shares to a selected group of investors
- company exists independently of its owners, providing stability and continuity (separate legal identity)
what are 2 disadvantages of a private limited company?
- It is expensive to set up and operate as there are higher set-up and ongoing administration costs
- Limited to 50 shareholders, restricting the ability to raise capital publicly
public listed company definition
An incorporated business that has an unlimited number of shareholders and lists and sells its shares on the ASX
what are 6 ways to identify a public listed company?
- ltd after business name (limited liability)
- shares sold publicly
- unlimited shareholders
- limited liability of shareholders
- stricter regulations due to public listing
- have to display financial info publicly
what are 3 advantages of a public listed company?
- limited liability
- can raise significant funds by selling shares to the public on stock exchanges
- shareholders can easily buy or sell shares on the open market
what are 3 disadvantages of a public listed company?
- Subject to stringent government regulations and reporting requirements
- Loss of Control, shareholders have a say in major decisions, (dilute control of owner)
- The process of becoming a public company can be expensive and time-consuming
social enterprise definition
Type of business that aims to fulfil a community or environmental need by selling goods or services
what are 2 ways to identify a social enterprise?
- mission, focus is on social or environmental cause
- profits are reinvested in the business or donated to charities
what are 3 advantages of a social enterprise?
- can gain a positive reputation by contributing to society
- Can take various legal forms, adapting to the specific goals of the enterprise
- may attract support from customers who value socially responsible businesses
what are 2 disadvantages of a social enterprise?
- Profits must be reinvested or used for charitable purposes
- Balancing social and financial objectives can be challenging
Government Business Enterprise definition
A business that is owned and operated by the government
what are 2 ways to identify a GBE?
- owned by the government but managed separately
- exists to provide a public service
what are 2 advantages of a GBE?
- Delivers goods and services that help the community and the community’s needs
- Can benefit from government support, including funding or regulatory advantages
what are 2 disadvantages of a GBE?
- Subject to potential changes in strategic directions dictated by the government
- Management decisions may be influenced by government directives
what is limited liability
when shareholders are only liable to the extent of their original investment, meaning they are not personally responsible for the business debts.
what are dividends
regular sums of money paid out to shareholders from a company’s profit
what are business objectives
the goals a business intends to achieve
what are the 7 main business objectives?
- to make a profit
- to increase market share
- to meet shareholders expectations
- to fulfil a market need
- to fulfil a social need
- to improve efficiency
- to improve effectiveness
making a profit definition
earning more revenue than business expenses
increasing market share definition
a business’s percentage of total sales within an industry
meeting shareholder expectations definition
providing a financial return on their investment in the company, which is in the form of dividends or capital gains
fulfilling market need definition
when a business fills a gap in the market, which involves addressing customer needs that are currently unmet or underrepresented by other businesses in the same industry
fulfilling social need definition
improving society and the environment through business activities.
what are stakeholders
Stakeholders are individuals, groups, or organisations who have a vested interest in the performance and activities of a business.
what is efficiency
how productively a business uses its resources when producing a good or service.
effectiveness definition
the extent to which a business achieves its stated objectives
what are 5 internal stakeholders?
- shareholders
- owners
- directors
- management
- employees
suppliers definition
individuals or groups that source raw materials, component parts, and processed materials and sell them to a business for use in the production of its goods and services
what are 5 external stakeholders?
- customers
- competitors
- suppliers
- trade unions
- general community
customers definition
individuals or groups who interact with a business by purchasing and utilising its goods and services
what are 10 stakeholders
- customers
- competitors
- suppliers
- trade unions
- general community
- shareholders
- owners
- directors
- management
- employees
competitors definition
a business rival in the same market offering the same/similar product or service of a business
trade union definition
an organised association that represents workers in a particular trade or profession
general community definition
individuals and groups who are impacted by a business’s operations and decisions, often because they are located in close proximity to the business
shareholders definition
Individuals who have purchased shares in a company and are therefore part owners of that company
managers definition
individuals who oversee and coordinate a business’s employees and lead its operations to ultimately achieve the business’s objectives
employees definition
individuals who are hired by a business to complete work tasks and support the achievement of its objectives
directors definition
An individual or member of a board of people that have overall responsibility for managing the company’s business activities
owners definition
individuals who establish, invest, and have a share in a business
what are 2 general expectations of managers
- recognition of their achievement of business objectives
- increase status and growth (career advancement)
what are 2 general expectations of owners
- receive return of their investment (growth of business)
- fostering positive relationships with stakeholders (boost reputation)
what are 2 general expectations of employees
- fair wage and salary
- have job satisfaction
what are 2 general expectations of customers
- high quality outputs received
- experience good customer service
what are 2 general expectations of suppliers
- increase their own revenue
- establish a long-term relationship with business
what are 2 general expectations of the general community
- increase local employment rate
- ensure business operations are socially responsible
what is a management style?
the approach and manner in which employees are directed and motivated within a business.
what are the 5 management styles
- autocratic
- persuasive
- consultative
- participative
- laissez-faire
what are 3 things to look for when identifying a management style?
- communication
- decision-making
- employee involvement
what is centralised control
one individual having concentrated authority to make decisions
which management styles have centralised control
- autocratic
- persuasive
- consultative
which management styles have decentralised control
- participative
- laissez-faire
autocratic management style definition
An autocratic management style involves a manager making decisions and directing employees without any input from them
3 advantages of autocratic management style
- Decisions can be made quickly as there is no consultation
- quick instructions give tasks completed quicker
- clearly defined instructions (less confusion)
3 disadvantages of autocratic style
- Attitude and trust remain negative as there is no employee participation
- Increased potential for conflict
- low employee motivation (due to no involvement)
persuasive management style definiton
A persuasive management style involves a manager making decisions and communicating the reasons for those decisions to employees without their input.
2 advantages of persuasive management style
- Management retains full decision-making control (with still more trust for emps)
- Quick decision-making allows for work processes to be completed faster
3 disadvantages of persuasive management style
- Businesses lack the opportunity to take into account a broader range of approaches
- it takes time to consult with employees prior to making decisions
- Employees remain frustrated because they are denied any participation in the decision-making process
which management styles have two-way communication
- consultative
- participative
- laissez-faire
which management styles have one-way communication
- autocratic
- persuasive
consultative management style definition
A consultative management style involves a manager seeking input from employees on business decisions but making the final decision themselves.
3 advantages of consultative management style
- greater variety of ideas, which can help make a better decision
- Employees are more involved in the business so can feel a sense of fulfilment which can improve moral
- may feel more motivated and involved with the business when asked to contribute their ideas
3 disadvantages of consultative management style
- it takes time to consult with employees prior to making decisions
- Some issues don’t suit a consultation process
- if the process is not consistent, staff will be uncertain of their roles
participative management style definition
A participative management style involves a manager sharing information with employees so that employees can participate in decision-making
3 advantages of participative management style
- Positive relations between management and employees means there is a lower likelihood of disputes
- The two-way communication process means greater flow of ideas
- High motivation and job satisfaction as a result of employee participation
3 disadvantages of participative management style
- More time consuming, as more views must be considered
- Compromises made rather than clear, decisive decisions
- Not all employees may wish or be equipped to contribute
laissez-faire management style definition
A laissez-faire management style involves a manager communicating business objectives to employees and giving them freedom to make decisions independently.
3 advantages of laissez-faire management style
- Helps employees feel a sense of ownership towards the project they are working on
- Encourages creativity, which is conducive to a dynamic working environment
- Communication is open and ideas are shared
3 disadvantages of laissez-faire management style
- Resources, including time and money may be misused or used ineffectively, due to the loss of management control
- May lead to creative differences and thus internal conflict
- Focus on business objectives can be easily lost
what are the 4 factors when deciding a management style that needs to be considered
- time
- employee experience
- nature of the task
- manager preference
what management styles are suitable when there is limited amount of time and why
autocratic or persuasive as the manager can make decision quickly and do not need to discuss with employees
what management styles are suitable when there is a lot of time available and why
consultative, participative, or laissez-faire as there can be lots of discussion about the best option (two-way discussions)
what management styles are suitable when they have inexperienced employees and why
autocratic or persuasive, as they will be unlikely be able to help
what management styles are suitable when they have experienced employees and why
consultative, participative, or laissez-faire as they can give there experienced opinion and ideas (two-way communication)
what management styles are suitable when the tasks are simple and why
autocratic or persuasive, the discussion of ideas may not be needed so the manager can figure it out themselves
what management styles are suitable when the tasks are complex and why
consultative, participative, or laissez-faire as they allow for two-way conversations and managers and employees can make more innovative and well-informed decisions by sharing ideas and suggestions
what management styles are suitable when the manager likes to have control and why
autocratic or persuasive, has centralised decision-making and one-way communication
what management styles are suitable when the manager likes to have shared control and why
consultative, participative, or laissez-faire, allows for two-way conversations and employee involvement in the decision-making processes
what are management skills
the abilities or competencies that managers use to complete tasks for business objectives
what are the 6 main management skills?
- planning
- decision-making
- communication
- delegation
- interpersonal skills
- leadership
planning definition (management skills)
The process of determining a business’s objectives and establishing strategies to achieve these aims.
what are the 3 levels of planning?
- strategic
- tactical
- operational
what is strategic planning (management skills)
Strategic planning involves the broadest scope of what a business aims to achieve in the next two to five years and affects the general direction of business decisions made.
what is tactical planning (management skills)
Tactical planning involves the long-term strategies a business intends to use in the next one to two years in order to fulfil its strategic plan.
what is operational planning (management skills)
Operational planning involves the short-term actions a business takes on a daily basis to achieve its tactical plan.
what is a way of planning (management skills)
SWOT analysis, (strengths, weaknesses, opportunities, threats)
when are 2 times planning might be used by a manager
- determining long-term goals of a business
- planning training programs
decision-making definition (management skills)
The skill of selecting a suitable course of action from a range of plausible options
when are 2 times decision-making might be used by a manager
- determining the direction of the business (long-term objectives)
- where to allocate different resources
communication definition (management skills)
Communication is the skill of effectively transferring information between parties.
when are 2 times communication might be used by a manager
- to give directions
- to resolve conflicts
delegation definition (management skills)
Delegation is the skill of assigning tasks and authority to lower-level employees in the business hierarchy.
when are 2 times delegation might be used by a manager
- give to more experienced employees (for good quality)
- to meet tight deadlines (finish work)
interpersonal definition (management skills)
Interpersonal is the skill of creating positive interactions with other employees, to foster beneficial professional relationships.
when are 2 times interpersonal skills might be used by a manager
- conflict resolution
- collaboration (group work)
leadership definition (management skills)
the skill of motivating others in order to achieve a business’s objectives
when are 2 times leadership might be used by a manager
- motivate teams/employees
- leading by example
what management styles use planning frequently
- autocratic, persuasive, consultative
what management styles use decision-making frequently (below that sometimes)
- autocratic, persuasive, consultative
- participative
what management styles use communication frequently (below that sometimes)
- consultative, participative, laissez-faire
- autocratic, persuasive
what management styles use delegation frequently (below that sometimes)
- participative
- persuasive, consultative, laissez-faire
what management styles use leadership frequently (below that sometimes)
- participative, laissez-faire
- consultative
corporate culture definition
Corporate culture is the shared values and beliefs of a business and its employees.
what are the two types of corporate culture
- real
- official
what is real corporate culture
Real corporate culture involves the shared values and beliefs that develop organically within a business, and are practised on a daily basis by its employees.
what is official corporate culture
Official corporate culture involves the shared views and values that a business aims to achieve, often outlined in a written format.
what are 3 indicators of official corporate culture
- logos
- slogans
- written policies
what are 3 indicators of real corporate culture
- language used
- dress
- behaviours of employees
what are 2 similarities of real and official CC
- concerned with the shared values and beliefs of people in the business.
- aim to change the way employees interact with each other and the business
what are 2 differences between real and official CC
- OCC is often written, whereas RCC is usually unwritten
- OCC includes the ideals of businesses, RCC includes what occurs in actuality
what are 3 benefits of positive corporate culture
- Increased productivity
- Increased work ethic
- Greater profitability
what are 3 costs of negative corporate culture
- Decreased productivity
- Decreased work ethic
- Decreased profitability
what is human resource management?
the organisation of employee’s roles, pay, and working conditions
What does effective human resource management give
enable a business to
- retain its employees,
- giving them high levels of motivation
- job satisfaction
What does poor human resource management give
employees being unsatisfied and demotivated by their work task (affecting business objective completion)
what is motivation
the willingness of an individual to expend energy and effort in completing a task.
what does more motivation by employees lead to?
(2)
- willingness to work hard to achieve business objectives
- increase productivity of them
what are 3 benefits of motivated employees
- Likely be more focused, adaptable, and productive
- Employees feel valued, appreciated
- More satisfied employees mean a business can retain and use employees’ skills and experiences
what is Maslow’s Hierarchy of Needs
a motivational theory that suggests people have five fundamental needs, and their sequential attainment of each need acts as a source of motivation.
what are the 5 fundamental needs (Maslow’s)
- physiological
- safety and security
- social
- esteem
- self-actualisation
what are the intrinsic needs (Maslow’s)
social, esteem, self-actualisation
what are the extrinsic needs (Maslow’s)
physiological, safety and security
what are physiological needs (Maslow’s)
the basic requirements for human survival, such as food, water, and shelter
what are 2 examples of physiological needs in a business
- wage
- working conditions
what are safety and security needs
the desires for protection from dangerous or threatening environments
what are 3 examples of safety and security needs in a business?
- job security (long term contracts)
- safe and healthy workplace (safety equipment)
- required training is given
what are social needs
the desires for a sense of belonging and friendship among groups, both inside and outside the workplace
what are 2 examples of social needs in a business
- having friendly associates
- having organised employee activities
what are esteem needs
an individual’s desires to feel important, valuable, and respected
what are 2 examples of esteem needs in a business
- working for a promotion
- pay being risen due to status of role
what are self-actualisation needs
the desires for an employee to reach their full potential through creativity and personal growth
what are 3 examples of self-actualisation needs in a business
- challenging work allowing for creativity
- participative decision-making
- opportunities for personal growth and advancement
what are 2 advantages of Maslow’s Hierarchy of Needs
- Simple and easy to understand, so easy to implement
- managers can observe employee behaviour and figure out what motivates them (increasing efficiency, productivity, and profitability of the business)
what are 3 disadvantages of Maslow’s Hierarchy of Needs
- time-consuming for management to assess which needs have been met for each individual employee
- no explanation of what motivates employees once they have achieved self-actualisation.
- no way to measure precisely how satisfied one level of need must be before the next higher need becomes a motivator
what is Lawrence and Nohria’s four drive theory
a motivational theory that suggests that people strive to balance four fundamental desires
what are these 4 fundamental desires (lawrence and nohria)
- drive to acquire
- drive to bond
- drive to learn
- drive to defend
drive to acquire definition
the desire to achieve rewards and high status
what types of rewards can the drive to acquire give
- non-financial
- financial
what are 3 non-financial rewards that employees can get
- pathways for promotion
- prestigious job title
- increased range of responsibilities
what are 3 financial rewards that employees can get
- performance-based bonuses
- higher wages
- increase in salary due to promotion
drive to bond definition
the desire to participate in social interactions and feel a sense of belonging
how can a manager fulfil the drive to bond
creating an environment that promotes both work-related and personal interactions
what are 3 examples of how a manager can implement strategies to fulfil the drive to bond
- Celebrating employee milestones and birthdays
- Encouraging group work instead of tasks to be done by a single person
- Holding social events that employees can regularly attend and participate in
drive to learn definition
desire to gain knowledge, skills, and experience
what should managers do to fulfil the drive to learn
provide employees with opportunities to grow, face and overcome challenges and enhance their knowledge and skills
what are 3 examples of manager implementing strategies to fulfil the drive to learn
- Adopting a mentoring system between junior and senior employees
- Regularly rotating the types of tasks assigned to employees
- Assigning challenging work tasks to employees to broaden their range of skills
drive to defend definition
the desire to protect personal security as well as the values of the business
how can managers fulfil the drive to defend
ensure that employees can defend themselves and the business when required
what are 3 ways that managers can fulfil the drive to defend
- Implementing policies using employee input
- Developing a vision that employees agree with
- Building trust by supporting and collaborating with employees
What are 3 advantages of Lawrence and Nohria’s four drive theory
- is a model for managers for an increase in employee engagement and motivation
- managers can use any 4 drives at one time
- Strategies that motivate employees through the drive to acquire can also boost productivity
What are 3 disadvantages of Lawrence and Nohria’s four drive theory
- time-consuming (determining each strength for each drive in each employee)
- Should one drive dominate, an imbalance can occur between the personal and business outcomes
- Dominant drives for each employee can change over time, (management has to regularly assess effectiveness)
What is Locke and Latham’s goal setting theory
A motivational theory that states that employees are motivated by clearly defined goals that fulfil five key principles
what are the 5 key principles for goal setting
- clarity
- commitment
- task complexity
- feedback
- challenge
what should does a clear (clarity) goal include (goal setting theory)
Clear and specific goals, that are easy to measure
As well as having a time-frame to coordinate resource use
What does a committed goal include (goal setting theory)
a goal that an employee want to work towards
With more input of the goal creation, the more likeliness of goal completion
what is a complex goal include (task complexity) (goal setting theory)
It is important that goals are challenging enough to motivate employees, though the level of complexity should not overwhelm them.
what happens if the goal is too complex (goal setting theory)
motivation will decrease as it may be out of their reach
what should a challenging goal include (goal setting theory)
challenging goals create more motivation, because people are more motivated to complete something that they haven’t done before.
The goal should still be achievable. There is no point setting a goal that is unachievable or beyond the capabilities of the employee (setting up to fail).
what does feedback of the goal include (goal setting theory)
include opportunities for ongoing, constructive feedback for the employee.
why is feedback on goal important (what does it give) (goal setting theory)
It provides opportunities to offer recognition for progress achieved, to make adjustments to the goal if necessary
how should goals be established by employees and managers
Managers need to sit down with individual employees or small teams of employees to collaboratively create a set of goals that they could work towards achieving over a specific period of time.
what are 3 advantages of the goal setting theory
- Goals that align employee goals with achieving business objectives are likely to improve business performance
- The process of managers setting goals with employees can improve levels of trust and the relationship between employees and management.
- Employees may be more motivated to complete tasks if work goals align with their personal interest
what are 3 disadvantages of the goal setting theory
- Goals that are too difficult can become overwhelming and lead to dissatisfaction
- If goals are not specific enough, employees be confused and can lack focus.
- The process of collaboratively establishing goals with individual employees or teams and providing regular feedback is very time consuming
what are financial motivating strats
(motivational strategies)
strategies that generate motivation by providing some monetary incentive
what are non-financial motivation strats (motivational strategies)
strategies that provide an incentive or benefit to the employee through non-monetary means
what are the 5 main motivation strategies
- performance-related pay
- career advancement
- investment in training
- support
- sanction
performance-related pay definition
a financial reward that employees receive for reaching or exceeding a set business goal
what are 3 advantages of using performance-related pay
- Can provide immediate motivation
- Clear criteria on how to achieve the incentive
- Can be used to motivate many employees at once improving overall business performance.
what are 3 disadvantages of using performance-related pay
- Can cause conflict among employees if they feel assessment is unfair
- Safe work practices may be sacrificed to achieve set outcomes
- time-consuming for the manager to review each employee’s performance against criteria and determine who receives a financial reward
what is a short-term advantage of performance-related pay
Employees may be motivated to improve performance quickly in order to gain financial rewards
what is a short-term disadvantage of performance-related pay
Employees may be demotivated if they are competing against their colleagues for financial rewards.
what is a long-term advantage of performance-related pay
With history of reward and recognition for high-performing employees, employees are more likely to be motivated by the expectation that they will receive rewards in the future
what is a long-term disadvantage of performance-related pay
In the long term, employees may become demotivated if they continually have to compete with their peers to achieve financial rewards
what can career advancement in a business look like
job enlargement
job enrichment
what is job enrichment
employees having increased authority over their work and a greater depth of content
what is job enlargement
giving employees more tasks to do (could be more complex or more variety)
career advancement definition
the upwards progression of an employee’s job position
what are 3 advantages of career advancement
- Can provide a means of retaining valuable employees, (can develop inside the business, with promotion or more responsibilities)
- Employees may develop broader skills and knowledge base which may help with long term career opportunities
- cheaper than recruiting new employees
what are 2 disadvantages of career advancement
- May not motivate employees immediately as a promotion can take time to earn
- May cause resentment from those overlooked for promotion (conflict)
what is a short-term advantage of career advancement
Employees may be rapidly motivated if they are taking on more responsibility in the workplace
what is a short-term disadvantage of career advancement
Employees may become resentful and demotivated if they believe they were not considered for a promotion.
what is a long-term advantage of career advancement
Employees may be motivated by ongoing opportunities to be promoted or take on additional responsibilities.
what is a long-term disadvantage of career advancement
There may be a limited number of responsibilities an employee can absorb into their role within a business. (only can get so high position-wise)
investment in training definition
allocating resources to improve employee skills and knowledge
what can investment in training look like in a business (3)
- providing employees with mentoring
- training programs within the business
- paying for employees to be trained by other professionals outside of the business
what are 3 advantages of investment in training
- Employees feel valued as the business recognises their work and is willing to invest in them
- productivity gains and quality improvements as employees are increasing their skills and knowledge
- Can provide a sense of job security for employees as the business is making an investment in the employee
what are 3 disadvantages of investment in training
- Training can be financially expensive, especially for off-the-job training
- There may be a loss of productivity temporarily while the employee is being trained
- Training may not be directly relevant to tasks undertaken by employees.
what is a short-term advantage of investment in training
Employees may be motivated in the short term by the opportunity to learn new skills
what is a short-term disadvantage of investment in training
Taking time off work to participate in training programs may cause employees to lose momentum and consequently lack motivation.
what is a long-term advantage of investment in training
Employees may be constantly motivated as they feel valued by the business when they are provided with opportunities to develop their skills
what is a long-term disadvantage of investment in training
Employees may become demotivated by the consistent workflow interruptions caused by training programs.
support (motivational strategy) definition
involve providing employees with any assistance that improves their satisfaction at work
what can support look like in a business (2) (motivational strategy)
- regularly checking on their health and wellbeing.
- praising and encouraging good performance.
what are 3 advantages of using support (motivational strategy)
- Problems can be dealt with efficiently before they escalate, saving time.
- Support is generally financially cheap
- Employees who feel supported are less likely to leave the business.
what are 3 disadvantages of using support (motivational strategy)
- It can be time-consuming for a manager to maintain relationships with staff
- May be ineffective if a manager does not have good interpersonal skills.
- It can be costly to provide ongoing support
what is a short-term advantage of using support as a motivational strategy
Employees may be motivated by working in a business where their wellbeing is considered and valued.
what is a long-term advantage of using support as a motivational strategy
Employees may be motivated for a long period of time when they feel valued by management and are able to resolve issues efficiently.
sanction definition (motivational strategy)
involve penalising employees for poor performance or breaching business policies
what is 3 examples of sanction being used in a business
- written warnings
- demotion
- lost promotional opportunity
what are 3 advantages of sanction being used as a motivational strategy
- can motivate some workers to improve their performance
- It can get some employees motivated to act quickly as they feel guilty
- Does not incur any immediate cost to implement.
what are 3 disadvantages of sanction being used as a motivational strategy
- Can create a negative corporate culture as tasks are completed out of fear.
- Excessive emphasis on sanctions can reduce employee sense of belonging
- Levels of trust between employees and management may decrease.
what is a long-term disadvantage of using sanction as a motivational strategy
The use of sanctions can contribute to a negative workplace environment, decreasing employee satisfaction and motivation.
what is a short-term disadvantage of using sanction as a motivational strategy
Employees may become resentful of their managers using sanction, potentially leading to resignations and decreases in productivity.
what is a short-term advantage of using sanction as a motivational strategy
Employees may be motivated to quickly follow instructions in order to avoid punishment.
what are the 2 types of training
- on the job
- off the job
training definition
the process of increasing the knowledge and improving the skills of an employee to help them perform more effectively and efficiently in their role.
what does on the job training involve
employees improving their knowledge and skills within the workplace
what are 3 ways on the job training can be implemented by a business
- Being coached by an existing employee on how to perform a role
- Job shadowing (watching over experienced employee working in the same position)
- senior staff member acts as a mentor
what are 3 advantages of on the job training
- No travel is required, expenses and costs are reduced
- Employees can quickly become familiar with work equipment, reducing the time to complete their training
- Training is tailored to meet the specific needs of the business
what are 3 disadvantages of on the job training
- Poor habits of staff may be passed on to other employees
- Quality of the trainer may vary (teaching skills of other employees low)
- Senior staff who are responsible for training new employees are taken away from their own work duties
what does off the job training involve
employees improving their knowledge and skills in a location external to the business
what are 3 ways that off-the-job training could be implemented (examples of types)
- Attending conferences that provide theoretical knowledge
- Performing simulations or workshops external to the workplace
- Online training courses that are performed outside of traditional working hours
what are 3 advantages of off the job training
- training from professionals gives employees new perspectives on how to perform their roles to a higher standard
- It does not take more experienced employees away from their jobs to train other employees
- Errors made by employees during training do not occur on site, decreasing expenses associated with waste
what are 3 disadvantages of off the job training
- More expensive, with fees charged for travel costs, loss of productivity, possibly accommodation
- Lost working time and potential output while the employee is absent from work
- Employees may try to find a job elsewhere with the external qualifications they gain, causing this investment in training to be redundant
performance management definition
the process used to improve business and individual employee performance to ensure that goals and objectives are being met.
what are the 4 performance management strategies
- management by objectives
- performance appraisals
- self-evaluation
- employee observation
what does management by objectives involve (performance management) (definition)
both managers and employees collaboratively setting individual employee goals that contribute to the achievement of broader business objectives.
what are 3 advantages of using management by objectives as a performance management strategy
- Promotional opportunities may arise for employees who consistently achieve their objectives
- Collaboration between managers and employees when setting objectives can foster positive workplace relationships
- Aligning employee objectives with the business’s overall objectives means that employees are always working towards business goals
what are 2 disadvantages of using management by objectives as a performance management strategy
- Developing objectives that benefit both the business and employees can take time
- Employees may take harmful shortcuts in their work in order to achieve their objectives, negatively impacting progress of objective
what does performance appraisals involve (definition, performance management)
a manager assessing the performance of an employee against a range of criteria, providing feedback, and establishing plans for future improvements
what is a way that performance appraisals can be undertaken, and how does it work (performance management)
Essay Method, manager will keep a journal on each employee being appraised, these may be about the performance of different aspects of the employees tasks
what are 3 advantages of using performance appraisals as a performance management strategy
- Employees who demonstrate strong performance may be recognised for promotional opportunities.
- Communication between managers and employees during one-on-one reviews, improving workplace relationships.
- The results from the performance appraisal process can outline areas where employees are struggling, training can be given
what are 2 disadvantages of using performance appraisals as a performance management strategy
- Employees may lose motivation if they receive multiple poor performance appraisals
- This process can be time consuming as managers individually review each employee’s performance
what does self-evaluation involve (definition, performance management)
an employee assessing their individual performance against a set of criteria
what are 3 advantages of using self-evaluation as a performance management strategy
- can save managers time, as employees evaluate their own performance
- The employer can gain insight into an employee’s understanding of their own strengths and weaknesses and assign work accordingly
- Employees may be empowered to improve performance (directly involved in performance management)
what are 2 disadvantages of using self-evaluation as a performance management strategy
- If an employee is biased or dishonest in assessing their performance, a manager will not gain reliable information
- Employees may underestimate or exaggerate their own skills, (not reliable or accurate eval)
what does employee observation involve (definition, performance management)
a range of employees from different levels of authority assessing another employee’s performance against a set of criteria
what are 3 advantages of using employee observation as a performance management strategy
- Employees may be responsive to feedback provided by peers as they value their opinion
- When an employee is unaware that they are being observed, it allows for an accurate analysis of an employee’s performance
- The manager can gain multiple different perspectives about an employee
what are 3 disadvantages of using employee observation as a performance management strategy
- Results may be misleading if employees are aware they are being evaluated
- Employees may feel stressed if they are made aware that they are being observed, leading to poorer performance
- The development of criteria for observers to use can be time consuming
what is termination (of an employee)
the process whereby a business ends its employment contract with an employee
what is the termination method that is both voluntary and involuntary
redundancy
what are the 2 termination methods that are exclusively voluntary
retirement, resignation
what is the termination method that is exclusively involuntary
dismissal
what is retirement
Retirement involves an individual deciding to leave the workforce permanently as they no longer wish to work
what is resignation
Resignation involves an employee voluntarily terminating their own employment, usually to take another job position elsewhere.
what is redundancy
Redundancy involves an employee no longer working for a business because there is insufficient work or their job no longer exists.
what is dismissal
Dismissal involves the involuntary termination of an employee who fails to meet required work standards or displays unacceptable or unlawful behaviour.
what is voluntary redundancy
a business allows employees to nominate themselves to become redundant after the business announces that this process will occur
what is involuntary redundancy
a manager notifies employees that their position in the business has been made redundant, providing them with no choice in the matter.
what are the two types of considerations a business may have when terminating an employee
- transition
- entitlement
what are entitlement considerations
legal obligations an employer owes to its employees following the termination of their employment contract
what is an example of an entitlement consideration for retirement
entitled to receive their accrued entitlements including payment of untaken annual leave and untaken long service leave
what is an example of an entitlement consideration for resignation
The employee must give a period of notice to the employer. The amount of notice is stipulated in the employment agreement. An employer can withhold money if the employee does not give the minimum required notice.
what is an example of an entitlement consideration for redundancy
notified in writing about the redundancy which should include matters such as reasons for termination, period of notice, actual date of termination and the redundancy payment
what is an example of an entitlement consideration for dismissal
to full payment for the work they have completed
what are transition considerations
social and ethical practices that a manager can consider implementing when terminating employment.
what are 3 examples of common transition considerations a business may have when termination occurs
- offering resume writing or interview training to employees to improve their employability
- introducing counselling and financial services to ease the uncertainty of leaving the business
- providing retiring employees with reduced number of hours as getting closer to retiring
what are the 5 main participants in the workplace
- HR managers
- employers/employer associations
- employees
- unions
- Fair Work Commision
what are human resource managers
individuals who coordinate the relationship between employees and management within a business.
what are 3 vague roles of HR managers
- hiring employees
- Implementing agreements
- Resolving conflicts
what is the main goal of employees
to work towards completing business objectives
what are 3 vague roles employees have
- Complete tasks with proper care and diligence
- Avoid misusing confidential information
- Obey terms in their contract
what is an employer association
An employer association is a group or organisation that represents the interests of employers in a specific industry or sector.
what are 3 vague roles of employer associations
- provide support to employers
- provide advice to employers
- represent employers during negotiations
what is the collective bargaining period
the negotiation between employer and employees in regards to wages and conditions
what is a union
organisations composed of individuals who represent and speak on behalf of employees in a particular industry to protect and improve their wages and working conditions.
what are 2 vague roles of unions
- Seek better wages and work conditions (for emps)
- Represent employees and negotiate these new wages and conditions (for emps)
what is the fair work commision (FWC)
Australia’s independent workplace relations tribunal that has a range of responsibilities outlined by the Fair Work Act.
what are 3 vague roles of the FWC
- Set national minimum working standards
- Approve and monitor enterprise agreements
- Act as a mediator
what are the 2 main ways of determining wages and working conditions
awards and agreements
what are awards
legal documents that outline the minimum wages and conditions of work for employees across an entire industry
what are 2 advantages of using awards
- All employees within a particular industry, receive the same minimum wage and working conditions (level playing field)
- the use of Awards is time efficient, (no bargaining process)
what are 2 disadvantages of awards
- Businesses lack the opportunity to develop a relationship with their employees, as awards are based upon predetermined standards
- Employees may be unsatisfied by only receiving the minimum wages and conditions.
what are agreements
legal documents that outline the wages and conditions of employees and are applicable to a particular business or group of businesses
how is the agreement developed
collective bargaining, done by employees and employers (or the representatives) at the workplace level
what are 2 advantages of agreements
- positive relationships between employees and employers may develop in the negotiation process
- Can improve employee satisfaction and performance (better wages and working conditions)
what are 3 disadvantages of agreements
- More time-consuming for employers to undertake negotiations
- Employees who cannot gain representation from unions may be exploited by employers (power imbalance)
- As they provide wages and/or working conditions above the Award, they are generally more expensive to implement
what are disputes commonly about between employers and employees (3)
- wages and working conditions
- safety
- business policies
what is the dispute resolution process
a series of steps that disputing parties follow in order to resolve a disagreement and reach a resolution
what are the 2 dispute resolution methods
mediation and arbitration
when a dispute occurs, what are the 4 simple steps for an outcome (dispute resolution process)
- try to resolve in the business
- if cannot be solved, get a third party to try to help
- attempt mediation
- if mediation doesn’t work, go to arbitration
what is mediation (dispute resolution)
Mediation involves an impartial third party facilitating discussions between disputing parties to help each side of the conflict reach a resolution themselves.
what are 3 advantages of mediation
- Participants in mediation are generally more satisfied with the agreed outcome
- It is less expensive than more formal dispute resolution processes (informal setting)
- When parties reach decisions together, it promotes positive working relationships for the future
what are 3 disadvantages of mediation
- Each party is under no obligation to reach an agreement
- There may be an unbalanced power dynamic between employees and managers (employees are tentatitive/nervous)
- If a final decision is not reached, the process can be a waste of time.
what can the third party do in mediation
third party only assists the conversation to help the disputing parties to work towards their own agreement but will not offer suggestions or make any decisions on their behalf
what is arbitration (dispute resolution)
Arbitration involves an independent third party hearing arguments from both disputing parties and making a legally binding decision to resolve the conflict.
what are 2 advantages of arbitration
- It guarantees that a final decision is made by a third party
- The final decision is legally binding (argument cannot happen again)
what are 3 disadvantages of arbitration
- expensive, due to the costs incurred from conducting hearings.
- Employees have reduced control over the final decision and therefore may be unhappy at the end of this process.
- may harm future workplace relations (people may be unhappy (both parties))
what are 2 similarities between arbitration and mediation
- Both methods require an independent body or individual to be involved in resolving the dispute
- Both methods are more formal than resolving disputes within a workplace without a third party
is what operations management
Operations management involves coordinating and organising the activities involved in producing the goods or services that a business sells to customers.
what can businesses get when they get increased efficiency (3)
- production costs can be minimised,
- levels of waste may decline,
- and the time taken to produce goods or services can be reduced
how can operations managers optimise a businesses operating system
electing the most suitable strategies to lower production costs, improve quality, and reduce wastage
how can operations management contribute the achievement of business objectives
By improving levels of efficiency and effectiveness in a business’s production process
what are the 3 key elements of an operations system
- inputs
- processes
- outputs
what are inputs
the resources used by a business to produce goods and services
what are 3 examples of inputs
- labour resources (employees)
- raw materials, such as flour and iron
- capital resources, such as equipment and machinery
what are processes
the actions performed by a business to transform inputs into outputs
what are 3 examples of processes
- mixing
- designing
- constructing
what are outputs
the final goods or services produced as a result of a business’s operations system, that are delivered or provided to customers
manufacturing business definition
A manufacturing business use resources and raw materials to produce a finished physical good
service business definition
A service business provide intangible products, usually with the use of specialised expertise
what are the 6 main operations characteristics that a service or manufacturing business can have
- Tangibility
- Storability of the output
- degree of customer contact during production
- Occurrence of production and consumption
- Standardised or tailored product
- Labour or capital intensive
what is a tangible output
an output that can be touched
Tangibility for manufacturing business’s
transform inputs into tangible outputs
Tangibility for service business’s
transform inputs into intangible outputs
what is inventory
Inventory includes the resources and finished goods held as stock.
Storability of the output for manufacturing businesses
they can store outputs as inventory and distribute them to customers at a later date.
Storability of the output for service businesses
cannot store the service and sell them later
degree of customer contact during production for manufacturing businesses
requires minimal customer contact in order to produce a good.
degree of customer contact during production for service businesses
There is a high level of customer involvement when producing a service
Occurrence of production and consumption for manufacturing businesses
production and consumption occur separately.
Occurrence of production and consumption for service businesses
Production and consumption happen simultaneously.
what are standardised goods
goods that are produced consistently and are virtually identical to one another.
Standardised or tailored product for manufacturing business
Generally goods can be easily standardised and mass produced
Standardised or tailored product for service business
As customers are directly involved in the production process, services are easily customised for individual client requirements. (so tailored)
Labour or capital intensive for manufacturing businesses
business are often more capital intensive (machines)
Labour or capital intensive for service businesses
Services are performed rather than produced and are often more labour intensive
what are 3 similarities between manufacturing and service businesses
- aim to optimise efficiency and effectiveness in their operations.
- aim to optimise their operations to produce high-quality outputs at a low cost of production.
- have to deal with suppliers during the process of managing operations
what are the 6 main technological strategies
- automated production lines
- robotics
- computer-aided design
- computer-aided manufacturing techniques
- artificial intelligence
- online services
what are automated production lines
Automated production lines involve machinery and equipment that are arranged in a sequence, and the product is developed as it proceeds through each step.
what are 3 advantages of automated production lines
- Improving accuracy can reduce errors and the number of resources wasted in production. Reduces environmental impact and improve its reputation.
- Technology can complete tasks for extended periods of time
- Removing tasks that may be tedious or dangerous to complete can positively impact employee morale
what are 3 disadvantages of automated production lines
- a poor reputation if it implements technology that makes employees redundant
- Sudden breakdowns of automated production lines can halt production altogether (down productivity)
- It can be expensive for a business to repair and update automated production lines
what is robotics
programmable machines that can perform specified tasks
what are 3 advantages of robotics
- Performing tasks precisely and accurately can ensure products are consistently produced at a high standard (boosting reputation)
- Tasks can be performed much faster than human labour
- Removing the need for employees to complete dangerous tasks can improve workplace safety
what are 3 disadvantages of robotics
- A business may develop a poor reputation if it implements robotic technology that makes employees redundant
- It can be expensive for a business to repair and update robotic technologies
- There are high initial setup costs associated with purchasing, programming, and installing robotics.
computer-aided design definition
digital design software that aids the creation, modification, and optimisation of a design and the design process.
what are 2 advantages of computer-aided design
- Customers have the flexibility to modify a design to suit their needs. Attracting more customers
- Can speed up the product design process as designs can be created and modified faster
what are 3 disadvantages of computer-aided design
- Can develop a poor reputation if the CAD software makes numerous employees redundant
- It may be costly to continuously update or repair
- There are high initial setup costs associated with purchasing and installing
computer-aided manufacturing techniques definition
Computer-aided manufacturing (CAM) techniques involve the use of software that controls and directs production processes by coordinating machinery and equipment through a computer.
what are 3 disadvantages of computer-aided manufacturing techniques
- The business may develop a poor reputation if the CAM software makes numerous employees redundant
- Sudden breakdowns can cause production to halt altogether and compromise productivity
- It may be costly to continuously update or repair CAM software
what are 3 advantages of computer-aided manufacturing techniques
- Improved accuracy allows for high quality products to be consistently produced (improves reputation)
- Removing tasks that may be tedious or dangerous to complete may positively impact employee morale
- Can speed up the manufacturing process as machinery does not have to be manually reset by humans
Artificial intelligence definition
Artificial intelligence (AI) involves using computerised systems to simulate human intelligence and mimic human behaviour.
what are 3 advantages of artificial intelligence
- Artificial intelligence can provide prompt customer service 24/7. Boosting satisfaction and reputation
- Artificial intelligence may remove tedious tasks for employees(boosts job satisfaction)
- Artificial intelligence can perform functions much faster than humans
what are 3 disadvantages of artificial intelligence
- The business may develop a poor reputation if artificial intelligence makes numerous employees redundant.
- There are high initial setup costs associated with purchasing and installing artificial intelligence
- It may be costly to recalibrate and maintain artificial intelligence
Online services definition
Online services are services that are provided via the internet
what are 3 advantages of online services
- Online services, such as food ordering platforms, can process orders accurately and provide increased customer convenience (boosts reputation)
- Online services can process bookings faster than employees (for example)
- Employees get increased job satisfaction if the online service removes tedious or boring tasks from their workload
what are 3 disadvantages of online services
- If the platform providing the online service experiences technical difficulties it may disrupt the business’s operations
- The process of a business developing its own platform that provides online services may be time consuming
- There may be high initial establishment costs for a business that develops its own platform to provide online services
what are the 4 main materials strategies
- forecasting
- master production schedule
- materials requirement planning
- Just in time
forecasting definition
a materials planning tool that predicts customer demand for an upcoming period using past data and market trends.
what are 2 advantages of using forecasting
- Prevents the excessive ordering of materials that may go to waste if unneeded
- Can reduce the cost of storage as it prevents the need for a large space to store materials
what are 2 disadvantages of using forecasting
- It can be time consuming to analyse historical data and market trends
- Production halts may occur if the business has insufficient materials due to inaccurate predictions
master production schedule definition
A master production schedule (MPS) is a plan that outlines what a business intends to produce, in specific quantities, within a set period of time.
what are 2 advantages of master production schedule
- Improves a business’s reputation by having a reduced impact on the environment. (not buying excessive stuff)
- Clear rostering can allow employees to develop a positive work-life balance.
what are 3 disadvantages of master production schedule
- May find a master production schedule unhelpful as it is not a flexible program.
- It can be time consuming to map out details of production
- Implementing and maintaining this plan can be expensive.
Materials requirement planning definition
Materials requirement planning (MRP) is a process that itemises the types and quantities of materials required to meet production targets set out in the master production schedule
what are 2 advantages of materials requirement planning
- Ensures a business only has the exact materials it needs, decreasing waste generated in production
- It is less likely that production will halt due to insufficient materials or organisational errors.
what are 2 disadvantages of materials requirement planning
- It can be time consuming to constantly update the materials plan.
- Implementing and maintaining the materials plan can incur additional administrative and training costs.
just in time definition
Just in Time (JIT) is an inventory control approach that delivers the correct type and quantity of materials as soon as they are needed for production.
what are 2 advantages of just in time
- Eliminates idle stock, therefore limiting the amount of stock wasted from expiry or damage in storage
- Reduces expenses associated with waste
what are 3 disadvantages of just in time
- may fail to meet customer demand from a lack of reserves stock (damage reputation)
- If suppliers are unreliable and fail to deliver the correct materials at the right time, production may be brought to a halt.
- Delivery costs may increase due to more frequent deliveries
quality definition
a good or service’s ability to satisfy a customer’s need.
what are 3 main quality strategies
- quality control
- quality assurance
- total quality management
quality control definition
Quality control involves inspecting a product at various stages of the production process, to ensure it meets designated standards, and discarding those that are unsatisfactory.
what are 3 advantages of quality control
- Prevents faulty/unsafe products from reaching the customer.
- Inexpensive to implement, as it is controlled internally by the business
- good reputation for the business and potential higher revenue from having more satisfied customers
what are 3 disadvantages of quality control
- Defects may be missed
- Errors are eliminated after they occur, usually when the product has already been created. Costs with waste
- It can be time consuming to identify and address the causes of errors in production
quality assurance definition
Quality assurance involves a business achieving a certified standard of quality in its production after an independent body assesses its operations system.
what are 3 advantages of quality assurance
- it is a proactive process –errors are detected and avoided BEFORE they occur.
- Costs are reduced because there is less wastage and re-working of faulty products
- improve a business’s competitiveness as customers are likely to have increased confidence in the business and its products.
what are 3 disadvantages of quality assurance
- It can be expensive to organise an external body to assess the operations system of a business.
- It is a medium to long-term process; quality assurance systems cannot be implemented quickly.
- May need continual monitoring to ensure that the standards are met.
total quality management definition
Total Quality Management (TQM) is a holistic approach whereby all employees are committed to continuously improving the business’s operations system to enhance quality for customers.
what are the 3 features of using total quality management
- customer focus, meaning identifying and fulfilling the exact needs and wants
- continuous improvement, doing methods to ensure high standard is met
- employee empowerment, ensuring teamwork and participation is fostered allowing that everyone is improving quality
what are 2 advantages of total quality management
- The system eliminates defects and waste, thereby reducing production costs and effectively increasing profits.
- TQM helps in understanding customer needs and meeting their expectations –adds to areas of competitiveness.
what are 2 disadvantages of total quality management
- Employees may feel confused about their role in improving quality if managers fail to communicate the TQM strategy clearly
- Often takes many years and significantly planning to implement.
what is waste
Waste refers to any resource that is discarded because it cannot be further used in the production process.
what is waste minimisation
Waste minimisation is the process of reducing the amount of unused material, time, or labour within a business.
what are the 3 waste minimisation strategies
- reduce
- reuse
- recycle
what is reduce
Reduce is a waste minimisation strategy that aims to decrease the amount of resources, labour, or time discarded during production.
what is an example of how reduce can be implemented
Adjust the amount of goods produced each month based on predicted customer demand.
what is reuse
Reuse is waste minimisation strategy that aims to make use of items which would have otherwise been discarded.
what is recycle
Recycle is waste minimisation strategy that aims to transform items which would have otherwise been discarded.
what is an example of how reuse can be implemented
Reusing functional parts of defective products
what is an example of how recycle can be implemented
Technologies can be implemented for recycling various resources like glass, paper, metals, plastics, etc
what is lean management
Lean management is the process of systematically reducing waste in all areas of a business’s operations system whilst simultaneously improving customer value.
what are the 4 lean management principles
- takt
- zero defects
- one-piece flow
- pull
what is the pull strategy / principle (lean management)
Pull is a lean management strategy that involves customers determining the number of products a business should produce for sale.
what is one-piece flow (lean management)
lean management strategy that involves processing a product individually through a stage of production and passing it onto the next stage of production before processing the next product, continuing this process throughout all stages of production.
what is zero defects (lean management)
Zero defects is a lean management strategy that involves a business preventing errors from occurring in the operations system by ensuring there is an ongoing attitude of maintaining a high standard of quality for the final output.
what is takt
Takt is a lean management strategy that involves synchronising the steps of a business’s operations system to meet customer demand
what are 3 advantages of using lean management strategies/principles
- A business can improve its reputation as it is actively reducing and managing waste, which benefits the environment.
- Reduces the overall use of materials, which leads to fewer production costs.
- A business can reduce the amount of time that is wasted between tasks.
what are 2 disadvantages of using lean management strategies/principles
- It can be costly to implement lean management as implementing new policies, procedures, and training employees can come at a high expense.
- It may be time-consuming to train inexperienced employees and provide them with the knowledge to commit to lean production methods.
what is CSR (definition)
the ethical conduct of a business beyond legal obligations, and the consideration of social, economic, and environmental impacts when making business decisions.
what are 3 examples of how CSR can be used in inputs
- Using environmentally-sustainable inputs
- Using renewable energy to power facilities and equipment
- Using local suppliers
what are 3 examples of how CSR can be used in processes
- Minimising level of wastage (e.g. using technology)
- Disposing of waste appropriately
- Reducing or eliminating packaging
what are 3 examples of how CSR can be used in outputs
- Ensuring finished products are of an acceptable quality and must be safe and reliable (e.g. no defective or harmful products)
- developing an alternative product that is more environmentally friendly
- Ensuring ethical dealings with customers regarding returns and making repairs/replacements for defective goods
global sourcing of inputs definition
Global sourcing of inputs involves a business acquiring raw materials and resources from overseas suppliers.
what are 2 advantages of global sourcing of inputs
- Higher quality materials can be sourced, allowing a product to better meet customer expectations.
- There is greater access to cheaper raw materials and resources, allowing reduced operating costs
what are 3 disadvantages of global sourcing of inputs
- difficult to communicate with suppliers (language barriers)
- Delivery may be time-consuming depending on where the supplies are being sent from
- If resources are damaged during the transportation process, they may need to be discarded, (more expenses)
overseas manufacture definition
Overseas manufacture involves a business producing goods outside of the country where its headquarters are located.
what are 3 advantages of overseas manufacture
- greater access to highly skilled employees who have expertise in production
- greater access to labour resources, (reduce business costs)
- Production speeds can be improved through the use of highly skilled and experienced overseas employees.
what are 3 disadvantages of overseas manufacture
- Manufactured goods may be damaged during the transport process
- Delivery is time-consuming (compared to home)
- Poor communication and language barriers leads to production and delivery delays
global outsourcing definition
Global outsourcing involves transferring specific business activities to an external business in an overseas country.
what are 3 examples of global outsourcing jobs
- data entry
- packaging and distribution
- call centres
what are 3 advantages of global outsourcing
- can allocate more resources and focus on its own areas of expertise.
- Productivity increases as the external business has the expertise to complete specified tasks more efficiently
- able to decrease labour costs (no local emps)
what are 3 disadvantages of global outsourcing
- reduced control over some of its activities (not in the business)
- difficult to communicate with external, overseas businesses (language)
- Local employees from the business’s main operating country lose their jobs.
what are 2 similarities between overseas manufacture and global outsourcing
- Both involve the execution of business activities in a location away from the business’s main headquarters.
- Both allow the business to reduce operational expenses.
what are 2 differences between overseas manufacture and global outsourcing
- A business retains full control of its operations when implementing manufacturing overseas.
- A business that implements global outsourcing retains little control over the transferred activities.
what are 2 similarities between global sourcing of inputs and overseas manufacture
- have the potential to improve quality and reduce production costs.
- Products or raw materials and resources travel between countries during delivery
what are 2 differences between global sourcing of inputs and overseas manufacture
- Global sourcing of inputs involves acquiring resources and raw materials from overseas suppliers for
manufacturing in the business’s main country of operation. - Overseas manufacture involves a business’s manufacturing phase occurring in a country outside of the
business’s main headquarters.
what are 2 similarities between global sourcing of inputs and global outsourcing
- Both allocate certain business tasks to external businesses.
- Both allow the business to reduce operational expenses.
what are 2 differences between global sourcing of inputs and global outsourcing
- Global sourcing of inputs involves acquiring resources and raw materials from overseas suppliers for manufacturing in the business’s main country of operation.
- Global outsourcing involves the completion of specific business activities, such as IT services, in a country outside of the business’s main headquarters.
what is business change
the alteration of behaviours, policies, and practices of a business.
what are the 2 types of approaches a business can have to business change
- reactive approach
- proactive approach
proactive approach to business change definition
A proactive approach is when a business changes to avoid future problems or take advantage of an opportunity to gain a competitive advantage.
reactive approach to business change definition
A reactive approach is when a business undertakes change in response to a situation or crisis.
what is 2 similarities between a proactive approach and a reactive approach to business change
- They are utilised by a manager or business to implement change
- they involve the business undertaking change for future benefits, such as growth, progression, and to improve or restore its brand image
What are 3 main differences between a proactive and reactive response to business change
- why they occur (in response or to take advantage of future)
- the use of risk strategies (reactive = high risk, proactive = low)
- the planning or timing of response
what are key performance indicators
Key performance indicators (KPIs) are criteria that measure a business’s efficiency and effectiveness in achieving its different objectives
What are the 10 KPI’s
- percentage of market share
- net profit figures
- rate of productivity growth
- number of sales
- number of customer complaints
- rates of staff absenteeism
- level of staff turnover
- number of workplace accidents
- level of wastage
- number of website hits
percentage of market share definition (KPI)
Percentage of market share measures the proportion of a business’s total sales, compared to the total sales in the industry, expressed as a percentage figure
net profit figures definition (KPI)
net profit figures are calculated by subtracting total expenses incurred from total business revenue earned, over a specific period of time
rate of productivity growth definition (KPI)
Rate of productivity growth is the change in the total output produced from a given level of inputs over time, expressed as a percentage figure.
number of sales definition (KPI)
Number of sales is the total quantity of goods and services sold by a business over a specific period of time.
number of customer complaints definition (KPI)
Number of customer complaints is the number of customers who notified the business of their dissatisfaction over a specific period of time.
rates of staff absenteeism definition (KPI)
Rates of staff absenteeism are the average number of days employees are not present when scheduled to be at work, for a specific period of time.
level of staff turnover definition (KPI)
Level of staff turnover is the percentage of employees that leave a business over a specific period of time and must be replaced
number of workplace accidents definition (KPI)
Number of workplace accidents measures the amount of injuries and unsafe incidents that occur at a work location over a specific period of time.
level of wastage definition (KPI)
Level of wastage is the amount of inputs and outputs that are discarded during the production process.
number of website hits definition (KPI)
Number of website hits is the amount of customer visits that a business’s online platform receives for a specific period of time
how to calculate rate of productivity growth (KPI)
(new productivity - old productivity) / old productivity
times 100
force field analysis definition
Force Field Analysis is a theoretical model that determines if businesses should proceed with a proposed change.
what are driving forces
Driving forces are the factors affecting the business environment that promote and support business change
what are restraining forces
restraining forces are factors that resist a business change or actively try to stop it.
what are the 4 processes in a force field analysis
- weighting
- ranking
- implementing a response
- evaluating a response
weighting (force field analysis) definition
Weighting is the process of scoring and attributing a value to the driving and restraining forces.
in simple what happens in weighting (Force Field Analysis)
Business will identify driving and restraining forces and then rank them based on importance
Mostly 1-5 rank
what ranking tells us in terms of driving vs restraining (Force Field Analysis)
- If driving higher likely to succeed
- If driving equal or lower it is unlikely to succeed
In simple what is implementing a response (Force Field Analysis)
Implementing an action that can be taken to strengthen the driving forces, reduce or eliminate the restraining forces, and/or the actual execution of the change.
what happens in ranking (Force Field Analysis)
each driving and restraining forces ranks are added together to see if the driving outweighs, are equal to, or less than the restraining forces
in simple what is happening in evaluating a response (force field analysis)
comparing the actual change to the anticipated change and determining whether further action needs to be taken.
This can be done by using KPI’s to measure the success
what are 2 disadvantages of a business implementing the force field analysis
- Conducting the analysis will require business resources, at a cost to the business
- Can be time-consuming
what are 3 advantages of a business implementing the force field analysis
- Businesses can save money by only implementing change where success is likely
- increase morale (with successful change)
- can examine if a proposed change can be implemented successfully
what are the 11 things that can act as driving forces to a business
- owners
- managers
- employees
- pursuit of profit
- reduction of cost
- competitors
- legislation
- globalisation
- technology
- innovation
- societal attitudes
what is globalisation (driving force)
the process by which governments, businesses, and people across the globe are becoming more interconnected, allowing for increased international trade and cultural exchange
societal attitudes definition (driving force)
Societal attitudes are the collective values, beliefs, and views of the general public.
what are 6 things that can act as restraining forces to a business
- managers
- employees
- legislation
- organisational inertia
- time
- financial considerations
organisational inertia definition (restraining force)
Organisational inertia is an unenthusiastic response from the people within the business to the proposed change.
What are Porter’s two generic strategies
- lower cost
- differentiation
Porter’s lower cost strategy definition
Porter’s lower cost strategy involves a business offering customers similar or lower-priced products compared to the industry average, while remaining profitable by achieving the lowest cost of operations among competitors.
what are 3 advantages of businesses using Porter’s lower cost strategy
- Attractive to cost-conscious customers
- Reduces the expense of operations
- barriers to entry for new competitors as it is often challenging for them to match lower prices
what are 3 disadvantages of businesses using Porter’s lower cost strategy
- Customers are not loyal to particular brands
- Low prices may result in customer perceptions that the good or service is of lower quality
- Thin profit margins and reliance on low operating costs can leave a business vulnerable to unexpected increases in expenses
porter’s differentiation strategy definition
Porter’s differentiation strategy involves offering customers unique services or product features that are of perceived value to customers, which can then be sold at a higher price than competitors.
what are 3 advantages of Porter’s differentiation strategy
- Customers are often loyal to the business because of unique product features or services not offered by competitors.
- Quicker sales from loyal customers when new products or services from the business are introduced
- Can charge premium prices for products as customers cannot purchase the product elsewhere.
what are 3 disadvantages of Porter’s differentiation strategy
- Can be difficult to prevent competitors from replicating points of differentiation.
- Higher selling prices can deter cost-conscious consumers.
- New employees may require additional training to adapt their skills to match the business’s point of difference.
what is a similarity between Porter’s lower cost and differentiation strategies
They both increase a business’s profitability by providing a competitive advantage
competitive advantage definition
Competitive advantage is the conditions or attributes that place a business in a superior position compared to its immediate competitors.
what is leadership in change management
the ability to positively influence and motivate employees towards achieving business objectives during a transformation.
what are 3 way managers can show strong leadership in change management
- building a shared vision
- providing ongoing communication
- providing ongoing support
what are the 13 strategies to respond to KPI’s
- staff training
- staff motivation
- change in management styles
- change in management skills
- cost cutting
- increased investment in technology
- improved quality in production
- initiating lean production techniques
- redeployment of resources (natural, capital and labour)
- innovation
- global sourcing of inputs as a business opportunity
- overseas manufacture as a business opportunity
- global outsourcing as a business opportunity
what is cost cutting
the process of reducing business expenses
what are 3 ways of implementing cost cutting
- merging staff roles, or removing them entirely
- sourcing materials from cheaper suppliers
- stopping the production of goods with high amounts of unsold stock
what is the redeployment of resources
involves reallocating natural, labour, and capital resources to different areas of the business to improve productivity and effectiveness.
what does redeployment of labour resources involve
transferring employees to other areas of the business (can be because of increased amount of technology)
what does redeployment of natural resources involve
business reusing, recycling, or repurposing its raw materials (think waste minimisation strats)
what does redeployment of capital resources involve
business using physical assets for a different purpose than what they were initially intended for
what are 3 ways innovation be used to respond to KPI’s
- developing new goods and services that meet existing customer needs,
- promoting its products with unique marketing techniques,
- implementing faster and more productive methods of operating
what are 6 ways to develop a positive corporate culture
- leading by example
- implementing a uniform
- rewards and recognition (for good work)
- positive communication in workplace
- developing employee training programs
- hosting social gatherings
What is a learning organisation
A learning organisation is an organisation that facilitates the growth of its members and continuously transforms itself to adapt to changing environments.
what are the 5 principles of having a learning organisation (senge)
- systems thinking
- mental modes
- shared vision
- team learning
- personal mastery
what does becoming a learning organisation do
It will help a business manage change more effectively
what is systems thinking (learning organisation)
a management approach that considers the interrelationship between the parts of a whole system (ability to see the big picture rather than in isolation)
what is mental modes (learning organisation)
existing assumptions and generalisations that must be challenged so that learning and transformation can occur in an organisation
what is shared visions (learning organisation)
an aspirational description of what an organisation and its members would like to achieve (able to develop a vision that the people within the business believe in).
what is personal mastery (learning organisation)
Personal mastery is the discipline of personal growth and learning, aligned with one’s values and purpose (people within the business with undertake continual learning)
what is team learning (learning organisation)
the collective learning that occurs when teams share their experience, insights, knowledge, and skills to improve practices
what are low-risk strategies (responding to change)
Low-risk strategies are measured management approaches that gradually encourage employees to accept and participate in a business change.
what are the 4 low risk strategies
- communication
- empowerment
- support
- incentives
what is communication as a low risk strategy
Communication as a low-risk strategy involves managers openly and honestly transferring information to employees, and listening to their feedback so that employees are fully aware of the reasons for, and impacts of an upcoming change
what may communication to employees lead to (low-risk strategy)
increases employees’ understanding of the proposed change and builds trust in management, (less likely to resist change)
what is empowerment as a low risk strategy
empowerment as a low-risk strategy involves managers providing employees with increased responsibility and authority during times of change.
what may empowerment of employees lead to (low risk strategy)
directly involved within the process, leading to a greater willingness to contribute to the change process.
what is support as a low-risk strategy
Support as a low-risk strategy involves managers providing employees with assistance as they move from current to new practices.
what may support to an employee lead to (when implementing a change)
2 things
- reduce an employee’s level of fear and stress
- make them feel more prepared to embrace the change
what is incentive as a low-risk strategy
Incentives as a low-risk strategy involves managers providing financial or non-financial rewards to encourage employees to support change.
what are 3 advantages of using a low-risk strategy
- Low-risk strategies can make employees feel valued by the business.
- Communication, empowerment, and support all result in a higher chance of change being successful in the long term due to increased trust and cohesion between managers and employees
- Incentives and empowerment can provide employees with opportunities to advance their careers.
what are 2 disadvantages of using a low-risk strategy
- All low-risk strategies are not useful in crisis situations as they take a longer period of time to be effective
- Incentives lead to financial expenses for the business
high-risk strategies definition
High-risk strategies are autocratic management approaches used to influence employees to quickly accept and follow a business change
what are 2 high-risk strategies
- threat
- manipulation
what is manipulation as a high-risk strategy
Manipulation as a high-risk strategy involves influencing employees to support a proposed change by providing incomplete and deceptive information about the transformation.
what is an example of manipulation being used
managers leaving out details, distorting the facts, or making the change seem more beneficial than it actually is
what is threats as a high-risk strategy
Threat as a high-risk strategy involves forcing employees to follow a proposed change by stating that they may or will cause harm to them if they fail to do so.
what are 2 advantages of high-risk strategies
- High-risk strategies are effective in crisis situations where change must occur rapidly
- The initial implementation of high-risk strategies can be relatively inexpensive for the business
what are 3 disadvantages of high-risk strategies
- may lead to the development of a negative corporate culture in the future, due to long-term distrust
- The relationship between management and employees is compromised.
- There may be low morale in the workplace
what is lewin’s 3 step change model
Lewin’s Three-step Change Model is a process that can be used by a business to implement change successfully.
what are the 3 steps in lewin’s change model
- unfreeze step
- change step
- refreeze step
what is the unfreeze step
The unfreeze step involves moving a business to a state where stakeholders are prepared to undergo change.
what are 3 strategies that can be used to apply the unfreeze step
- identifying what needs change and why
- communicating urgency
- engage stakeholders (let them raise concerns)
what is the change step
The change step involves moving a business towards its desired state.
This step transforms the business’s practices to meet its new objectives.
what are 3 strategies that can be used to apply the change step
- providing ongoing support
- communicate clearly
- involving employees in the change
what is the refreeze step
The refreeze step involves ensuring a change is sustained within a business for the long term.
what are 2 strategies that can be used to apply the refreeze step
- embed changes into everyday practices (update policies)
- monitor and evaluate the change (use KPIs)
what are 2 positive effects of change on owners
- can provide a business owner with an increased return on their investment and greater financial security
- opportunities for business owners to use their leadership skills to connect with employees and develop stronger interpersonal relationships
what are 2 positive effects of change on managers
- more opportunities to develop new skills or advance their career
- may provide a manager with financial and non-financial reward
what are 2 negative effects of change on owners
- a business owner may experience personal and financial implications
- overwhelmed and stressed by the increased workload and responsibilities
what is a negative effect of change on managers
- a manager may lose their job and financial security
what are 2 positive effects of change on employees
- provided with new responsibilities and opportunities for career advancement that improve their motivation and overall job satisfaction
- undertake training to provide them with a different set of skills, helping improve their future employability
what are 2 negative effects of change on employees
- develop complex skills and learn difficult processes, which may increase stress levels
- employees may fear for their job or financial security (for redundancies to be made)
what are 2 positive effects of change on customers
Greater satisfaction due to:
- lower costs
- better quality
what are 2 negative effects of change on customers
- with cheaper suppliers less quality (decreased satisfaction)
- dissatisfied with increase in price
what are 2 positive effects of change on the general community
- job opportunities, local employment rates may increase
- if a change is reducing environmental impact then, they may improve living standards for general community
what is a positive effect of change on suppliers
- demand may increase if a business requires a greater amount of resources to meet its production needs
what is a negative effect of change on suppliers
- may require its suppliers to involuntarily adjust their processes to meet the new demands of the business
what is a negative effect of change on general community
- change that results in redundancies may increase local unemployment rates and poverty levels
what are the 3 things that the business should consider CSR for when making a change
- employees
- general community
- environment
what is 2 examples of CSR strategies that could be used for employees
- offer counseling
- providing extra training
what might considering employees look like when making a business change (CSR)
involves a manager addressing factors that promote staff wellbeing during periods of business change. Considering things like:
- social, financial, and mental wellbeing of employees
what might considering the general community look like when making a business change (CSR)
involves a business reducing or eliminating practices that are
detrimental to the wellbeing of society
what is 2 examples of CSR strategies that could be used for the general community
- hiring local suppliers (when choosing new ones)
- redeploy employees to other roles (if taken over by technology)
what might considering the environment look like when making a business change (CSR)
involves a business reducing the negative impacts of its activities on the planet
what is 2 examples of CSR strategies that could be used for the environment
- purchasing technology that minimises the waste generated
- choosing local supplier (less carbon emissions)
what are 2 advantages of using CSR considerations when making a business change
- Customers may be more inclined to purchase from socially-responsible businesses
- develop a positive reputation, leading to more customers purchasing its goods or services
what are 2 disadvantages of using CSR considerations when making a business change
- A constant focus on CSR may decrease a business’s productivity levels
- CSR practices can be expensive for a business to initially implement
what are 3 examples of what reviewing KPIs can evaluate after the change has occurred (how effective it was)
- identifying whether the change has successfully achieved its objectives
- whether the change has negatively impacted another area of performance
- whether more effort and time are required for the change to achieve desired objectives
