Exam Revision Flashcards
Sole trader disadvantage
Knowledge and skills are limited to the owner
Partnership disadvantage
Conflicts could arise due to shared decision making
Private limited company advantage
There is a greater variety of expertise and ideas as more people are involved
Private limited company disadvantage #1
Expensive to set up
Private limited company disadvantage #2
Complex reporting requirements such as annual reports
Public listed company disadvantage
Same as Private limited company
Social enterprise disadvantage #1
difficult to balance the achievement of financial objectives with social objectives
Social enterprise disadvantage #2
May be difficult to obtain a bank loan as the business does not solely focus on financial objectives
Government business enterprise disadvantage #1
Governments and politicians can interfere and change the strategic direction of the business
Government business enterprise disadvantage #2
Productivity may be lower than private sector businesses as there tends to be a lack of accountability in the public sector
Autocratic disadvantage
may increase costs associated with replacing employees as staff may leave the business due to lower motivation
Persuasive management style
involves a manager making decisions and communicating the reasons with the employees without their input
Physiological Needs
Physiological needs are the basic requirements for human survival e.g living wage
Safety and Security Needs
Safety and security needs are the desire to feel protected from dangerous or threatening environments
Social Needs
Social needs are the desired for a sense of belonging and friendship among groups, both inside and outside the workplace
Esteem Needs
Esteem needs are the desire for an individual to feel important, valued and respected
Self-actualisation Needs
Self-actualisation needs are the desire for employees to reach their full potential through creativity and personal growth
Maslow’s advantage #1
can give managers clear path to motivate employees
Maslow’s advantage #2
motivated employees are able to progress through the lower levels of the hierarchy easily
Maslow’s disadvantage #1
not all employees are motivated by the same things
Maslow’s disadvantage #2
assumes that there are no other fundamental needs that can motivate employees
Four Drive Theory
The four drive theory is a motivational theory that suggests that people strive to balance four fundamental desires
Drive to acquire
the desire to achieve rewards and high status
Drive to learn
the desire to gain knowledge, skills and experience
Drive to bond
the desire to participate in social interactions and feel a sense of belonging
Drive to defend
the desire to protect personal security as well as the values of the business
Four drive theory advantage #1
provides a simple approach to motivating the employees of a business
Four drive theory advantage #2
Satisfying the drives can improve employee performance and productivity and therefore increase the business’s profits
Four drive theory disadvantage #1
managers may find it difficult to manage all four drives simultaneously
Four drive theory disadvantage #2
rewarding individual employees may lead to unhealthy competition
Goal setting theory
the goal setting theory is a motivational theory that suggests employees are motivated by clearly defined goals that fulfil five key principles
GST #1
clarity: goals should be specific and easy to measure
GST #2
commitment: employees should be involved in setting their goals and the goal should incorporate the employees personal interests
GST #3
Challenge: the goal should be difficult enough to encourage the employees to improve in order to achieve it
GST #4
Task complexity: The goal should not overwhelm employees and should be achievable
GST #5
feedback: managers should provide regular support to the employees and adjust the goals as needed
goal setting theory advantage #1
when employee goals align with business objectives, they can contribute to achieving the business’s financial aims, such as to make a profit
H.O.N & F.D.T Similarity #1
both theories suggest employees are motivated by the desire to improve knowledge and skills
H.O.N & F.D.T Similarity #2
Both theories suggest employees are motivated by the desire to feel a sense of belonging within the workplace through social needs and the drive to bond
H.O.N & F.D.T difference #1
HON- must be met in a sequential order
FDT - drives may be relevant to an employee in no particular order
H.O.N & F.D.T difference #2
HON - employees are motivated to fulfil only one at a time
FDT - all needs can drive employee behavior simultaneously
HON & GST similarity #1
both recognise the importance of feedback from management - self esteem needs in HON and feedback principle in GST
HON & GST similarity #2
Both theories place emphasis on motivating through intrinsic factors - GST involves setting intrinsic goals and the HON’s higher-order needs are considered intrinsic motivators
HON & GST difference #1
HON - focus on fulfilling one need at a time in sequential order
GST - requires all principles to be incorporated simultaneously to motivate an employee
HON & GST difference #2
HON - applied by the manager alone
GST - involves employees input to create goals collaboratively
FDT & GST similarity #1
both theories recognise that employees are motivated to achieve success - FDT’s drive to acquire and GST of being promoted to a position of more responsibility
FDT & GST similarity #2
both suggest that multiple factors motivate an employee at any given time - all four drives may be active simultaneously and business goals should incorporate multiple principles simultaneously
FDT & GST difference #1
GST - involves employee input
FDT - applied by the manager alone
FDT & GST difference #2
GST - believes an individual can only be motivated through purely intrinsic factors
FDT - also addresses extrinsic motivators through drive to acquire
Motivation strategy #1
performance related pay - financial reward employees receive for reaching or exceeding business goals
Motivation strategy #2
Career advancement - the upward progression of an employee’s job position
Management by objectives
involves both managers and employees collaboratively setting individual employee goals that contribute to the achievement of broader business objectives
MBO disadvantage
employees may take harmful shortcuts in their work in order to achieve their objectives
Performance appraisals
involves a manager assessing the performance of an employee against a range of criteria providing feedback and establishing plans for future improvement
Performance appraisals advantage
employees who demonstrate strong performance may be recognsied for promotional opportunities
entitlement considerations
are legal obligations can employer owes to its employees following the termination of their employee contract
entitlement consideration #1
annual/long service leave - must be paid out to an employee upon the termination of their contract
entitlement consideration #2
redundancy pay
transition considerations
are social and ethical practices that a manager can consider implementing when terminating employees
role of H.R
recruit, hire, train and terminate - hire candidates with the required qualities and skills to assist the business in achieving its objectives
role of employees
complete tasks with proper care and diligence - complete set tasks with the aim of contributing to business objectives
role of employer associations
provide advice - encourage employers to communicate strongly with their employees when making changes at the business
role of unions
represent employees and negotiate new wages and conditions on behalf of their members - communicate the concerns and desires of employees to employers during collective bargaining, with the aim to protect and improve their wages and conditions
role of the Fair Work Commission
set national minimum working standards - revise and update National Employment Standards to protect the wages and working conditions of employees
Awards
Awards are legal documents that outline the minimum wages and conditions of work for employees across an entire industry
Award advantage
transparency and equality between employees is maintained, as they all receive the same wages and conditions as set out by their award
Enterprise agreements
are legal documents that outline the wages and conditions of employees and are applicable to a particular business or group of business
enterprise agreement advantage
a business may attract highly skilled and talented employees if it is paying wages that are above the industry average
award & agreement similarity #1
businesses must uphold requirements of employment as stated through NES
award & agreement similarity #2
contractual disputes are dealt with by the FWC
award & agreement difference #1
award - applicable to an entire industry
agreement - applicable to a business or group of businesses
award & agreement difference #2
awards - are developed by the FWC
agreements - are reviewed and approved by the FWC
mediation
involves an impartial third party facilitating discussions between disputing parties to help each side of the conflict reach a resolution themselves
mediation advantage #1
when parties reach decisions together it promotes a positive working relationship for the future
mediation advantage #2
it is less expensive than more formal dispute resolution processes as it usually occurs in an informal setting
mediation disadvantage #1
does not always result in a legally binding decision meaning parties could go back on their agreement in the future
mediation disadvantage #2
if a final decision is not reached, the process can be a waste of timea
arbitration
involves an independent third party hearing arguments from both disputing parties and making a legally binding decision to resolve the conflict
arbitration advantage #1
it guarantees a final decision is made by a third party, enabling a business to move forward from a dispute
arbitration advantage #2
employees are not coerced into agreeing to a resolution as the likelihood of a power imbalance between disputing parties is reduced
arbitration disadvantage
is the most expensive dispute resolution process due to the costs incurred from conducting hearings
arbitration & mediation similarity #1
both methods require an independent body or individual to be involved in resolving the dispute
arbitration & mediation similarity #2
both methods are more formal than resolving disputes within a workplace without a third party
arbitration & mediation difference #1
mediation - does not result in a decision that is legally binding
arbitration - guarantees a legally binding decision
arbitration & mediation difference #2
mediation - a final decision is not always guaranteed
arbitration - the independent body makes the final decision
Automated production lines
involves machinery and equipment that are arranged in a sequence and the product is developed as it proceeds through each step
Robotics
are programmable machines that are capable of performing specified tasks
computer aided design (CAD)
is digital design software that aids the creation, modification and optimization of a design and the design process
Computer aided manufacturing (CAM)
involves the use of software that controls and directs production processes by coordinating machinery and equipment through a computer
Artificial intelligence (AI)
involves using computerized systems to simulate human intelligence and mimic human behavior
Online services
are services that are provided via the internet
Managing materials
managing materials involves organizing and monitoring the delivery, storage and use of materials required for production
forecasting
forecasting is a materials planning tool that predicts customer demand for an upcoming period using past data and market trends
forecasting advantage #1
informed decisions about the quantity of materials required can improve a business’s ability to meet customer demand
forecasting advantage #2
can reduce the cost of storage as it prevents the need for a large space to store materials
forecasting disadvantage #1
it can be time consuming to analyse historical data and market trends
forecasting disadvantage #2
businesses may need tom hire forecasting specialists, which increases training and wage costs
master production schedule (MPS)
is a plan that outlines what a business intends to produce in specific quantities within a set period of time
MPS advantage #1
improves a business’s reputation for having a reduced impact on the environment
MPS advantage #2
by determining production targets, businesses are more likely to meet customer demand, increasing sales and therefore net profit figures
MPS disadvantage #1
it can be time consuming to map out details of production
MPS disadvantage #2
implementing and maintaining this plan can be expensive
Materials requirement planning (MRP)
is a process that itemizes the types and quantities of materials required to meet production targets set out in the master production schedule
MRP advantage #1
Ensures a business only has the exact materials iut needs, decreasing waste generated in production. this improves the business’s sustainability reputation
MRP advantage #2
accurate ordering of the quantities of materials required avoids excess storage and therefore reduces associated expenses
MRP disadvantage #1
it can be time consuming to constantly update the materials plan
MRP disadvantage #2
implementing and maintaining the materials plan can incur additional administrative and training costs
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
JIT advantage #1
eliminates idle stock, therefore limiting the amount of stock wasted from expiry or damage in storage
JIT advantage #2
reduces storage costs and expenses associated with waste, meaning this money can be used in other areas of the business
JIT disadvantage #1
if suppliers are unreliable and fail to deliver the correct materials at the right time, production may be brought to a halt
JIT disadvantage #2
discounts from bulk buying may be reduced
Quality control
involves inspecting a product at various stages of production process to ensure it meets designated standards, and discarding those that are unsatisfactory
QC advantage #1
providing customers with consistently high quality products may improve a business’s reputation
QC advantage #2
the strategy is inexpensive to implement, as it is controlled internally by the business and no external parties are required to carry out the quality checks
QC disadvantage #1
it can be time consuming to identify and address the causes of errors in production
QC disadvantage #2
errors are eliminated after they occur, usually when the product has already been created. This may cause a business to incur costs associated with waste
Quality assurance
involves a business achieving a certified standard of quality in its production after an independent body assesses its operations system
QA advantage #1
receiving external certification from an independent body can improve a business’s competitiveness as customers are likely to have increased confidence in the business and its products
QA advantage #2
A reduced number of errors enables production to flow smoothly
QA disadvantage #1
completing documentation required for external body to check the operations system can be time consuming
QA disadvantage #2
it can be expensive to organise an external body to asses the operations system of a business
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
TQM advantage #1
a business can adapt TQM to suit its specific business requirements
TQM advantage #2
a business engaging in TQM can minimise the amount of waste generated, improving the business’s reputation of being sustainable
TQM disadvantage #1
it may take time for a business to enjoy the benefits of TQM as it requires a shift in culture
TQM disadvantage #2
introducing TQM can be costly for a business as employees have to be trained as they can continuously identify methods to improve quality
QC & QA similarity #1
Both strategies reduce the number of faulty products reaching customers
QC & QA similarity #2
Both strategies require a good or service to meet set standards
QC & QA difference #1
Quality control is reactive as it identifies and eliminates errors after they occur. quality
assurance is proactive as it prevents errors from occurring
QC & QA difference #2
Quality control does not involve external certification. quality assurance involves a business
receiving certification after it meets standards set by an external body.
QC & TQM similarity #1
Both strategies can be implemented to see notable improvements in the quality of the final output
QC & TQM similarity #2
Both strategies are internally controlled and involve employees assessing quality
QC & TQM difference #1
Quality control focuses on setting predetermined standards of quality in the first stage of this strategy
TQM focuses on continuously developing and improving standards
QC & TQM difference #2
QC is reactive as it identifies and eliminates errors after they occur. TQM is proactive as it aims
to prevent errors from occurring
QA & TQM similarity #1
Both strategies are proactive as they prevent errors from occurring
QA & TQM similarity #2
Both strategies improve the process of producing a good or service
QA & TQM difference #1
Quality assurance focuses on meeting set standards of quality to gain external certification
TQM focuses on internally developing and improving standards within the business
QA & TQM difference #2`
TQM does not involve external certification
quality assurance involves a business
certification after it meets standards set by an external body.
Waste minimisation
is the process of reducing the amount of unused material, time, or labour within a business
Lean management
is the process of systematically reducing waste in all areas of a business’s operations system while simultaneously improving customer value
Pull
involves customers determining the number of products a business should produce for sale
one-piece-flow
involves processing a product individually through a stage of production and passing it onto the next stage of production before processing the next, continuing this process throughout all stages of production
takt
involves synchronizing the steps of a business’s operations systems to meet customer demand
zero defects
involves a business preventing errors from occurring in the operations systems by ensuring there is an ongoing attitude of maintaining high standard of quality of the final output
lean management advantage #1
A business can improve its reputation as it is
actively reducing and managing waste, which
benefits the environment
lean management advantage #2
Reduces the overall use of materials, which leads
to fewer production costs
lean management disadvantage #1
Employees may be reluctant to commit to an
attitude of zero defects due to the effort and
commitment required.
lean management disadvantage #2
It can be costly to implement lean management
as implementing new policies, procedures, and
training employees can come at a high expense
proactive approach to change
involves a business changing to avoid future problems or take advantage of future opportunities
reactive approach to change
involves a business changing in response to a situation or crisis
reactive & proactive similarity #1
both are utilised by a manager or business to implement change
reactive & proactive similarity #2
both require the support of the manager who must utilise management and leadership skills
reactive & proactive difference #1
proactive - low risk strategies
reactive - high risk strategies
reactive & proactive difference #2
proactive - planned, coordinated and controlled
reactive - spontaneous, urgent and pressured
force field analysis
is a theoretical model that determines if a business should proceed with a proposed change
force field analysis advantage #1
a business can examine if a proposed change can be implemented successfully
force field analysis advantage #2
a business can save money by only implementing change where success is likely
force field analysis disadvantage #1
Can be time-consuming, especially
if a business is already aware of the
need for mandatory change. For
example, a change is required for
legislation
force field analysis disadvantage #2
Conducting the analysis will
require business resources, at a cost
to the business
owners as a driving force
owners can act as a driving force for change if they believe change will be beneficial to
future business performance
managers as a driving force
Managers can act as a driving force for change when the proposed change
will enhance the business’s ability to meet objectives
employees as a driving force
employees may act as a driving force for proposed changes that would improve their work environment
pursuit of profit as a driving force
Businesses are encouraged to implement changes that improve their financial performanceed
reduction of costs as a driving force
The reduction of costs can act as a driving force as businesses may implement change to improve efficiency and effectiveness, and reduce unnecessary costs that may arise in business processes.
competitors as a driving force
When competitors change prices, use new technology, or run advertising campaigns, this can affect the performance of other businesses in the market. This makes competitors a driving force for change as a business must always adapt to remain competitive.
legislation as a driving force
If current operations breach the new legislation, a business will have no choice but to change the way it operates.
globalization as a driving force
globalisation is a driving force for change as it provides opportunities for businesses to expand to new countries. If a business fails to recognise that it’s competing in a global market, it will likely not survive as globalisation acts as a constant driving force for businesses
technology as a driving force
Businesses should also ensure they take into consideration relevant technological advancements when producing goods and services. If a business fails to adopt suitable technology, it may impact its ability to compete and survive
innovation as a driving force
Since businesses are always looking for ways to improve their products to gain a competitive edge, innovation will always act as a driving force
managers as a restraining force
Managers may not support a change if they do not believe the change will be beneficial for the business’s performance, or if the proposed change threatens their position.
employees as a restraining force
Employees may resist a business change if the
outcome is uncertain, they fear they cannot adapt, it affects their job security or work routine,
or they fail to see a reason for the change. To overcome employees as a restraining force, managers usually have to persuade or create incentives for the proposed changes to be adopted, often needing to demonstrate key leadership and management skills.
legislation as a restraining force
Businesses must ensure they comply with laws and regulations to avoid fines, suspensions, or even closure. To overcome a legislative restraining force, a business may have to apply for licences, obtain permits, or even change contracts and agreements so they comply with the law.
organisational inertia as a restraining force
A business may have been operating in a certain way for such a long time that it can become
difficult for change to occur. To overcome organisational inertia, a business may have to change leadership, restructure the business, or create work environments that
promote new directions.
time as a restraining force
Business change often has to be completed before, after, or within a certain time period. If time has been identified as a restraining force, a business may have to find ways to alter the
time restriction. This may mean the change is progressively implemented in stages or another
business is engaged to assist with implementing the change
financial considerations as a restraining force
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 amongst competitors
pricing approach #1
similar prices - Experiences higher profit margins than competitors because the business has the lowest cost of operations
pricing approach #2
slightly lower - Maintains a higher profit margin prithan competitors by having the selling price decrease by a smaller amount than the business’s cost-saving per unit
pricing approach #3
much lower - Thin profit margins are outweighed by a high volume of customer sales gained from selling products at significantly lower prices.
reducing operating cost methods
- Producing basic, no-frills products.
- Reducing expenditure on marketing and advertising.
- Lowering the costs of labour and operations through overseas manufacturing.
reducing cost supplies methods
- Obtaining discounts from suppliers by purchasing supplies in bulk.
- Securing cheaper supplies from global sourcing of inputs.
porter’s low cost strategy advantage #1
attractive to cost-conscious customers
porter’s low cost strategy advantage #2
business operations are optimised and must remain efficient to maintain low cost of production
porter’s low cost strategy disadvantage #1
Standardised or basic products may
not meet the needs of customers
who have specific needs.
porter’s low cost strategy disadvantage #2
Low prices may result in customer
perceptions that the good or
service is of lower quality
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
Point of differentiation #1
introducing new technology
Point of differentiation #2
innovating its original good or service
point of differentiation #3
improving durability, meaning the product lasts longer because of higher quality materials or design
porter’s differentiation strategy advantage #1
customers are often loyal to the business because of unique product features or services not offered by competitors
porter’s differentiation strategy advantage #2
can charge premium prices for products as customers cannot purchase the product elsewhere
porter’s differentiation strategy disadvantage #1
can be difficult to prevent competitors from replicating points of differentiation
porter’s differentiation strategy disadvantage #2
higher selling prices can deter cost-conscious consumers
Leadership in change management
Leadership in change management is the ability to positively influence and motivate employees towards achieving business objectives during times of transformation
Leadership in change management strategy #1
building a shared vision where they act to inspire employees and inform them of the reasons and benefits of change, as well as the consequences of not changing
Management strategy #1
Staff training can either be on-the-job or off-the-job training and involves a business equipping employees with the knowledge and skills required to perform work tasks
Management strategy #2
staff motivation is the willingness of an individual to expend energy and effort in completing a task
Management strategy #3
change in management style involves a manager altering the way they direct and communicate with employees
Management strategy #4
change in management skills involves a manager altering the way they approach business tasks and collaborate with employees
Management strategy #5
cost cutting is the process of reducing business expenses
Management strategy #6
increased investment in technology involves implementing automated and computerised processes into a business’s operations systems
Management strategy #7
improving quality in production involves a business implementing processes that increase the perceived value of its good or service
Management strategy #8
initiating lean production techniques involves a business adopting lean management strategies to systematically reduce waste in all areas of production while improving customer value
Management strategy #9
redeployment of resources involves reallocating natural, labour and capital resources to different areas of the business to improve productivity and effectiveness
Senge’s Learning organisation
Senge’s learning organisation is an organisation that facilitates the growth of its members and continuously transforms itself to adapt to changing envorinments
Senge’s #1
systems thinking is a management approach that considers the interrelationship between the parts of the whole system
Senge’s #2
mental models are existing assumptions and generalisations that must be challenged in order for a business to learn and transform
Senge’s #3
A shared vision is an aspirational description of what an organisation and its members would like to achieve
Senge’s #4
Personal mastery is the discipline of personal growth and learning, aligned with one’s values and purpose
Senge’s #5
Team learning is the collective learning that occurs when teams share their experience, insights, knowledge and skills to improve practices
