mod 2: business management Flashcards
management
the process of coordinating resources to achieve business goals including human, informational, physical and financial resources.
It is important because it is the backbone of successful organisations concerned with ‘getting things done’ with and through people to achieve objectives
features of effective management
Planning
Organising
Leading
Controlling
planning
preparation of a predetermined course of action for a business. Developing strategic, tactical, operations plans, goals, objectives and strategies to achieve them.
organising
structuring of the organisation to translate plans and goals into actions. The use of an organisation structure and set of procedures to implement plans
leading
process of influencing or motivating people to work towards the achievement of business objectives. Tries to spark intrinsic and extrinsic motivation in employees
controlling
compared what was intended to happen and what actually occurred. It involves making adjustments to plans and/or procedures to achieve business goals.
skills of management
interpersonal skills, decision-making, strategic thinking, vision, communication, problem-solving, flexibility and adaptability to change, reconciling conflicting interests of stakeholders
interpersonal skills
skills needed to work and communicate with other people and understand their needs, perspectives, and values. Characteristics include:
- verbal communication
- non-verbal communication
- listening skills
- negotiation
- problem solving
- decision making
- assertiveness
interpersonal skills is a key goal of training and development of initiatives.
decision making
identifying and choosing alternatives based on the values and preferences of the decision-maker. It is a central activity of management and is a huge part of any process of implementation. Characteristics include:
- assertiveness
- negotiation
- listening skills
- interpersonal skills
- efficiency
- assessing risk
- operational, tactical, strategic levels of decision making
- steps
strategic thinking
the way people think about, assess, view and create the future for the business. It is proactive and always involves imagining the results that can be achieved. Characteristics include:
- moving out of comfort zones
- passion
- learning
- risk taking
- about the norm objectives
vision
defining what you will do and why you will do it, and defining goals to be achieved in a specific time period. It takes into account current status, processes, efficiency to point the business in the right direction. Characteristics include:
- ambition
- using current values
- guiding
- problem solving
- long term goals
communication
the exchange of information between people through verbal and non-verbal means eg. convos, emails, messages
characteristics include:
- verbal and non-verbal communication
miscommunication
the inability to communicate information effectively
problem solving
finding solutions to difficult and complex issues. Characteristics include:
- verbal communication
- listening skills
- attitude
- defining the problem
- exploring options
- reasonable expectations
flexibility and adaptability to change
the ability to change and adapt to a fast-paced environment that constantly changes with consumer needs/wants. Characteristics include:
- assertiveness
- interpersonal skills
- decision making
- problem solving
reconciling conflicting interests of stakeholders
resolving disputes between stakeholders. Characteristics include:
- interpersonal skills
- communication skills
- problem solving skills
- flexibility and adaptability to change
classical-scientific management
the analysis of a task by managers to determine the best way to complete the task to maximise productivity. It is based on the premise that:
- manager knows the most efficient way to carry out tasks
- the best way is the most efficient way (economies of scale)
characteristics of the scientific method
- management as Planning, Organising, Controlling
- Hierarchical Management Structure
- Autocratic Leadership Style
classical scientific: management as POC
P: management decides what a business is to achieve and how it will be done including picking courses of action
O: the most productive and efficient combination of resources combined which involves utilising human resources to maximise production
C: comparing what is actually happening within the business and what was planned
classical scientific: Hierarchical organisation structure
many layers of management with a strict chain of command from management to employees, with downflow of info
based on the division of labour: each task in broken down into small steps in the production process and a worker is assigned to each step
classical scientific: autocratic leadership style
managers use a high degree of direction and permit little/no involvement in management. Control is centralised to a few senior managers and there is no delegation of authority.
- staff participation: expected to follow orders
- communication: downwards only
- motivational methods: external rewards and sanctions
examples of this is a military officer
advantages of classical scientific method
- clear structure of management
- increased productivity and efficiency
- helped to create better working conditions
- increased wages
- creates bonds between workers and employees
disadvantages of classical scientific method
- creates pressure/burden among employees
- only applicable to simple organisations structures
- focuses on individual performance and categorises into efficient/inefficient
- kills creativity and produces frustration in employees
behavioural management approach
management based on recognising the importance of human behaviour in the success or failure of a business. It seeks to create an inspiring and satisfying workplace environment.
behavioural management approach
management based on recognising the importance of human behaviour in the success or failure of a business. It seeks to create an inspiring and satisfying workplace environment.
characteristics of behavioural management
- management as leading, motivating and communicating
- flat organisation structure and teams
- participative/democratic leadership style
behavioural approach: management as leading, motivating, communicating
Leading: directing/influencing people to achieve a vision by building a positive culture. It involves communicating well and valuing employees
Motivating: energising and driving others to enable as sense of purpose to achieve business goals which includes:
- monetary and non-monetary benefits
- approachable managers
- involving staff in decision making
- intrinsic and extrinsic motivating
Communicating:the exchange of information between people through verbal and non-verbal
behavioural approach: flat organisational structure and teams
flat organisational structure: fewer levels of management with a shorter chain of command. Wide spread of control as responsibility is delegated in teams
working in teams: encourages employees to cooperate and collaborate in the performance of tasks, two-way comms
delayering: strategy to remove 1+ layers of management from structure
behavioural approach: participative/democratic leadership style
collaboration: managers encourage a high degree of employee participation in decision making, so people feel valued/motivated
- self/team regulation
- two way comms
behavioural approach advantages
- greater work empowerment so business can take advantage of ideas/skills of employees
- maintaining motivated workforce can increase productivity
- self/team regulation
- employees feel valued, motivated
- less time lost to disputes
behavioural approach disadvantages
- lack of workplace discipline
- workers may not be responsible to anyone
- difficult to know the best way to motivate people and improve the workforce
- teams can break down
contingency management approach
operates on the premise that management techniques should be dependent upon the business circumstances internally and externally.
As the business environment has evolved, it has become more changeable and volatile so it requires a proactive and reactive response
proactive response
anticipating change in the environment and making changes to the business before they happen
reactive response
changes occuring in the business environment that require immediate changes in the business
characteristics of contingency management approach
- management as adapting to circumstances
- flatter management structure
- changing leadership style
contingency management approach: management as adapting to circumstances
management is adaptable and flexible in response to change. No two business situations are the same which is why no one set approahc is adopted. It takes attributes from many approaches and applies them as required
contingency management approach: characteristics of an ‘adaptable manager’
- shares visions and mission with stakeholders, values people in human input rather than resource
- values diversity and change, copes with stress levels to cultivate culture that embraces change
- keeps up to date with current events and change in the external environment
contingency management approach: flatter management structure
flatter structure with teams which allows for flexibility so that people and tasks can be moved around easily.
contingency management: leadership style that changes
managers will fluctuate between different styles depending on the nature of situation and an appropriate style will be adopted for the situation; autocratice, democratic or laissez-faire
laissex-faire leadership style
trust and reliance on employees to be proactive, incites intrinsic motivation, participative
business external environment factors
economic, financial, geographic, social, legal, political, technological, competitive situation
business internal environment factors
products, location, management, resources, business culture
quality management
strategy to improve operations processes that involves all activities to ensure that outputs of the business are consistent, durable, reliable, and meet the quality standard that was stated in the operational plan. A business will strive for a certain standard of quality because poor quality will be an operations cost through
- customer returns
- poor service
- product recalls/receipts
which damages the value of the business
three main quality management approaches
quality control, quality assurance, quality improvement
quality control
the use of inspections at various point in the production process to check for problems and defects
- predetermined quality standards/parameters set and measured against
- assists in monitoring, controlling, improving operations process
- reactive approach that must be balanced with other proactive approaches
quality assurance
the use of a system to ensure that the set standards are achieved in production. It is a proactive approach where the business emphasises the quality of a product’s design and bring it to the market in a manner that provides comfort to prospective buyers (getting it right the 1st time). It involves:
- effective design that exceeds standards
- rigourous testing and deployment (environmental testing)
eg. Samsung investment in research
Quality Assurance Standards
established to ensure some uniformity in quality of products. They are universally applied in the production of any product, factory, or business and are referred to as the ISO 9000 (Intl. Organisation for Standardisation).
quality improvement
commitment to continuous improvement of a business’ goods/services. Can be improved over time by:
- sourcing higher quality products
- upgrades in technology
- staff training innovation
Total Quality Management (TQM)
managing the total business to deliver quality to customers. It is a business-wide commitment to every aspect of business operation. All KBFs work towards quality
- total/broad spectrum approach
Total Quality Management (TQM)
managing the total business to deliver quality to customers. It is a business-wide commitment to every aspect of business operation. All KBFs work towards quality
- total/broad spectrum approach
supply chain management
the integration and management of the flow of supplies throughout the transformation process. It involves:
- sourcing/global sourcing
- logisitics and distribution
sourcing
the purchasing of inputs for the transformation process domestically
global sourcing
the purchasing of inputs overseas or where they best meet the needs of production/customers. Main benefits include:
- lower costs by lower cost of labour, cheaper resources, economies of scale
- improved quality
- access to inputs not usually available
factors that influence the selection of suppliers (sourcing)
- consumer choice
- quality inputs
- flexibility and timing of supplies
- cost of supplier
costs/issues with suppliers
- falling quality from suppliers contributes to poor output
- increasing cost of inputs
- production/logistics delays can disrupt production process
- supplier reliance
- discontinued items
benefits with suppliers
- quality input= quality output
- change in suppliers leads to improved cost leadership
- can establish a good relationship with supplier and work together to improve quality
- flexibility in production
- global: can gain access to supplies that aren’t availabe otherwise, often cheaper
logistics and distribution
the coordination and distribution of materials, products and packaging involving
- transportation
- storage, warehousing and distribution materials, handling and packaging
storage
finding a secure place to hold stock until required
warehouse
the use of warehouses for storage, protection and distribution of stock
handling and packaging
coordinated system of the efficient movement of stock and its security while in storage and transit
inventory/stock
the amount of raw materials, work-in-progress and finished goods that a business has on hand at any particular time. It is an asset
inventory operation
a crucial part of operations management, and the stategies applied to the management of inventory will have a signficant impact on the transformation process.
types of inventory management
JIC: just in case which is holding stock
JIT: just in time which is ordering stock as required, the default for perishable items
things that are noteworthy regarding stock
- needs to be enough
- adequate storage
- perishable/non-perishable
- logistics (how it is moved/transported)
- cost and income generated
- quality
- accessibility
- packaging
- stock rotation
- security
- cost of storage (refrigeration)
- shrinkage (damaged/written off stock)
JIC advantages
- reduces lead times between order and delivery
- making products in bulk reduces cost (economies of scale)
- stock gives opportunity to generate immediate revenue
JIC disadvantages
- costs associated with holding stock including storage charges, spoilage, insurance, theft, and holding expenses
- cost of obsolescence if stock remains unsold
JIT advantages
- allows retailers to display wider range because less is being stored
- saves money (no storage or insurance cost)
- shrinkage and obsolescence is reduced
- fast investment return and reduced lead time
JIT disadvantages
- requires flexible operations function with flexible processing
- requires a very high ability to respond quickly to changes in market demand and a reliable supplier
marketing
the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational objectives.
features of marketing
- informing
- reminding
- persuading
businesses need to identify the wants and needs of customers through market research which involves:
- identifying customers
- satisfying customers
- retaining customers
strategic role of marketing
to develop and sustain relationships between the business and its customers. It is concerned with the conception, creation and design of a product, its pricing, promotion, and distribution to meet the needs of customers in the market. This lead to achievement of marketing objectives and the overarching goal of profit maximisation
marketing objectives
sales revenue: increasing income from sales
legal accountability & compliance: meeting and exceeding legal requirements in marketing tactics to persuade
brand awareness: extent to which customers are aware of a brand
social, ethical, environmental responsibility: behaving in a manner where it is responsible for the impacts of actions through transparent and ethical behaviour (CSR)
market share: portion of the market controlled by a particular company or product
4P’s of marketing
product, price, place, promotion
4P’s of marketing: product
good or service that is tangible/intangible. It involves:
- total product concept
- branding and logo
- packaging
4P’s of marketing: price
how much customers are willing and able to pay influenced by
- availability of product/service
- competition
- brand image
(avoid recommending to lower the price)
4P’s of marketing: place
location where customers can purchase the product/serivces that a business offers. It involves
- distribution channels
- channel choice
- physical distribution issues
- instore/online
4P’s of marketing: promotion
the activities undertaken by a business to generate interest and make customers aware of the products/services which they sell. It involves
- advertising
- personal selling
- relationship marketing
- communication processes
- public relations
- sales promotions
tangible
physical product that can be owned (good)
intangible
products/activities that are done (service)
Total Product Concept
Many products purchased have tangible/intangible components. It is based on the premise that alot of the products we buy have tangible/intangible benefits/attibutes.
branding
the name, term, symbol, design or any combination of these that identifies a specific product and distinguishes it from competitors.
brand name
the part that is spoken and many are protected by trademarks. It makes a product recognisable to help customers make judgements about the percieved quality, value, image, and risk of a product.
benefits of branding for manufacturer
- creates loyalty
- defends against competition
- allows premium pricing
- increases power over retailer
benefits of branding for retailer
- marketing support
- attracts customers
benefits of branding for consumer
- establishes connection
- easy product identification
- creates interest in product
- communicates features/benefits
shrinkage
damaged/written off stock
promotion
the methods used to inform and persuade the target market to buy products
the promotion mix
Personal selling: customer service
Advertising: paid messaging distributed en masse
Publicity/public relations: unpaid message from reputation
Sales promotions: limited time offers
marketing process
- Situational Analysis (identify)
- Market research (test)
- Establishing market objectives (decision to act)
- Identifying target (identifying who)
- Developing marketing strategies 4ps (development)
- Implementation,monitoring,controlling (corrective action)
If a product no longer meets the needs and wants of customers…
the business should redefine the target market
4Ps of marketing: price approaches
Cost-based pricing: cost of production and then adding a mark-up
market-based pricing: setting prices according to supply and demand, what the market is prepared to pay
competition-based: price covers cost and is comparative to competitive price
4Ps of marketing: price strategies
skimming: set at the highest price possible when there is a high-level of interest in high demand typically used at business introduction stage
loss leader: deliberately selling product at a loss usually so customers buy other products
penetration: pricing just under/close to other products to increase market share and sales income
price points: offer different tangible/intangible features of a product at different price points to try and leverage customers perceived value for money.
marketing: communication processes
opinion leaders: used to portray a message
word-of-mouth: personal experience/recommendation
social media
marketing: place channel choice
intensive distribution: saturating the market with many distribution channels eg. eggs, milk
selective distribution: moderate proportion of al available distribution outlets where travel is sometimes needed eg. furniture, electrical goods
exclusive distribution: only one distribution outlet in a large geographical area eg. cars
HR
human input/capital in the production process of a good/service. Unlike other inputs, it can become more productive over time if nurtured. It is the most important/expensive input.
HR management
The effective management of the formal relationship between employees and employers. There is an inherent tension in this created by differing agendas/
employee and employer agenda
employee: highest pay, good working conditions, paid training and development, maximum leave entitlements
employer: pay as little as possible and maximise productivity, good results, meet KPIs
renumeration
being compensated for opportunity (pay and conditions) being given up by the employee
the role that HRM plays
- provides clarity on roles
- addresses conflict
- trains workers
- minimise cost of labour
the aim of HR management
to develop a committed, motivated, and productive individual that enjoys the challenges they face by their work and maximise achievement of objectives.
objectives of HR management
maximise productivity, minimise cost, social and ethical responsibility, legal compliance
HR cycle
- acquisition: identifying staffing needs, recruitment, selection
- development: training, development, performance management
- maintenance: monetary/non-monetary benefits, legal responsibilities
- separation: voluntary and involuntary
recruitment
attracting people to apply for position in the business.
internal: within the business, creates career paths
external: outside the business, brings new ideas
selection
choosing the most suitable applicant for the vacancy through written application, testing, interviews, background checks
job design
the combination of job description and specification
job analysis
determining the exact nature of the position needing to be filled to ensure the business has enough staff to complete tasks in the business to achieve goals
job specification
written statements regarding the qualifications, skills, and experience needed to apply for the position.
job description
written statements highlighting the duties, tasks, and responsibilities of the position.
HR cycle phase one: acquisition
identifying staffing needs, recruitment, selection
HR cycle phase two: development
training, development
training
process of teaching staff how to perform their job more efficiently and effectively
development
improve staff and to take greater responsibility in the future; aims to develop leadership skills for management positions.
types of training and development
formal off-the-job: classroom activities, modules
informal on-the-job: learning by experience
competency-based training: identifies strength/weakness
corporate uni: forging relationships to obtain best grads
benefits of training and development
- promotion opportunities which reduce turnover
- job satisfaction
- future employability
- technology creates ongoing need for T&D
HR cycle phase three: maintenance
the process needed to retain staff and manage their wellbeing at work. The primary objective is to retain staff and lower turnover. It involves organisational and worker development, monetary/non-monetary benefits, comms and workplace culture, legal compliance, CSR
organisational development
motivating and retaining talented/good staff through:
retention- rate to describe no. of people that stay
job enlargement- increase breadth of task
job rotation- moving staff from one task to another
job sharing- two people sharing job
career path development- prepping staff for promotion
mentoring/coaching-leaders mentor other staff (coaching)
