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Business Managment 3/4 > SAC4 > Flashcards

SAC4 Flashcards

1
Q

Change

A

A process through which a business becomes different/altered in some way. Change can be planned or unplanned. Change can also be described as radical or incremental.

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2
Q

Change - radical

A

A major alteration to the business and is often initialed by critical events. Eg, drop in financial performance, merger/take over, competitor disrupts industry

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3
Q

Change - incremental

A

Occurs more frequently, but is less traumatic to the business and is part of the natural development. Eg; new system, new policies, new products

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4
Q

Change - planned

A

When a manager decides on a specific course of action to alter the business in some way that will assist in the development of the business in the future

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5
Q

Change - unplanned

A

Occurs randomly and may be disruptive

  • strike
  • change in gov funding
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6
Q

Key performance indicators

A

A KPI is a type of measurement that helps you understand how your business is performing in a certain area.

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7
Q

KPI - percentage market share

A

Market share represents the percentage of an industry or markets total sales that is earned by an particular company over a specified time period. Market share is calculated by taking the company’s sales over the period and dividing it by total sales of the industry over the same period

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8
Q

KPI - net profit figures

A

Net profit is calculated by subtracting a companies total expenses from total revenue, thus showing what the company has earned ( or lost ) in a given period of time.

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9
Q

KPI - rate of productivity

A

The rate of productivity growth from one month to the next is the change in percentage terms

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10
Q

KPI - number of sales

A

Refers to the number of products sold to customers. By calculating the number of customers you’ve gained or lost compared to previous periods, you can understand whether or not you are meeting customer needs.

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11
Q

KPI - non financial - rates of staff absenteeism

A

This is the number of days employees are absent from work as a percentage of their total possible working time. Possible causes for problematic and repeated employee absenteeism include job dissatisfaction, ongoing personal issues and chronic medical problems.
This is calculated by the number of days staff are absent as a percentage of the total number of days staff could normally be working.

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12
Q

KPI - level of staff turnover

A

Is the amount of employees leaving the business in a period of time as a percentage of the total number of employees

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13
Q

KPI - level of wastage

A

The amount of stock either as a raw material or during processing which is discarded.
This is literally a calculation of the number of units or total weight / volume of waste materials discarded from the production line.

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14
Q

KPI - number of customer complaints

A

The recorded number of individuals who report a defect, fault or issue in the good or service that they purchased in a given time period.
You only have a problem when the number is steadily growing and unusual

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15
Q

KPI - number of workplace accidents

A

The recorded number of worker or customer related injuries that occur in a business in a given time period. As they say accidents do happen but all measures possibly should be taken to remove or diminish the numbers of these occurring at a business

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16
Q

Concepts of business change

A

Business change occurs when an existing business is altered to a new or modified form.
Change happens because businesses have pressures that they need to adapt to

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17
Q

Lewins force field analysis

A

States that in any change situation, counter balance forces are at work.
These can be driving forces, pushing for change, or restraining forces, hindering the change process.
GOOD STUFF
This theory can be used to achieve a successful change as it is used to distinguish which factors within a situation like change drive a person towards or away from a desired change, and which oppose the driving forces. These can be analysed in order to inform decisions that will make change more acceptable and easy to deal with. It will improve the quality of your decisions and increase your chances of success when going through change.

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18
Q

Kurt Lewin

A

Kurt Lewin was a German-American psychologist, known as one of the modern pioneers of social, organizational, and applied psychology in the United States. He was born in Germany, but was exiled before World War II. So Lewin moved to the US and continued to study in the field of psychology

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19
Q

Four steps that are required to implement Lewins theory

A
  • define the target of change ( by using KPI’s)
  • identify the driving and restraining forces
  • analyse the forces which can be changed
  • develop an action plan on what can be changed.
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20
Q

Driving forces include:

A
  • managers
  • employees
  • competitors
  • legislation
  • pursuit of profit
  • reduction in costs
  • globalisation
  • technology
  • innovation
  • societal attitudes
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21
Q

Restraining forces include

A
  • managers
  • employees
  • time
  • organisational inertia
  • legislation
  • financial considerations
22
Q

Driving forces for change- managers

A

The personal drive that a manager provides to initiate and maintain the momentum of the change. They will also share their vision and try and get others inspired to change by being role models.

23
Q

Driving forces for change- employees

A

If employees support and are happy with the change they can be a great force for driving change through the rest of the business. They are able to influence others and through empowerment, or employee centred management styles and skills, can have an active role in pursuing change

24
Q

Driving forces for change- competitors

A

A business needs to respond to the actions of competitors or risk being left out of the industry. The pursuit of a competitive edge is a constant driving force.

25
Q

Driving forces for change- legislation

A

Businesses need to respond to local, state and federal governments who may bring in legislation that they need to address.
EG; minimum wages, equal opportunity, anti-discrimination, OH+S legislation.

26
Q

Driving forces for change- pursuit of profit

A

Is one of the key objectives of a business and therefore the pursuit of it is a major driving force for business managers and owners. This additionally applies to public listed companies where the owners (shareholders) want the business to pursue profit to provide for dividends and also to promote capital gain of the share

27
Q

Driving forces for change- reduction of costs

A

Following on from the pursuit of profit, this can generally be achieved by increasing sales revenue or reducing costs, and therefore the reduction of costs is a major driving force for businesses.

28
Q

Driving forces for change- globalisation

A

The increase in global trade, communication and transportation on a global scale creates many drivers for business to change.
Some businesses may be exposed to global competitors, or have global opportunities to expand into global markets through free trade agreements, and expanding internet and electronic communication channels.
Others may be driven to seek global manufacturing options to reduce labour costs, outsourcing or obtain raw materials from around the globe based on quality and price

29
Q

Driving forces for change- technology

A

Is one of the largest and most persuasive driving forces for businesses in the modern era. As new technology is developed, it can be put into businesses requiring change EG; robots, automation, 3D printing, airbus, car manufacturing, internet, mobile phones.

30
Q

Driving forces for change- innovation

A

Is the introduction of new products, modifying existing ones, adapting business methods or business activities and is a major source of competitive advantage for businesses and therefore a strong driving force for change

31
Q

Driving forces for change- Societal attitudes

A

Society is moving at a fast pace and societal attitudes with it.
-ageing workforce
- increased participation of women in the workplace
-changing family make-up
All of these effect both the workforce and the consumers for business and therefore need to be responded to.

32
Q

Restraining forces for change- managers

A

If a manager is not convinced by the change, or fear it may threaten their position they can act to seriously inhibit the changes of its success, by negatively influencing the employees, not prioritising the change tasks, or improving them completely.

33
Q

Restraining forces for change- employees

A

This can be a major source of resistance if employees
-fear for the unknown
-fear for their job security
-fail to see reasons for change
Change can be emotional and disorientating.

34
Q

Restraining forces for change- time

A

If a competitor moves into an industry then ideally the business would like to respond as quickly as possible. However sometimes the time required to change business operations, procedures or even products and services can be significant.

35
Q

Restraining forces for change- organisational inertia

A

If an organism is inert it is stationary, or stagnant. The same is true for business who become stuck in the mud enjoying the status quo of their present position.
This often occurs in a stable, traditional businesses, where holding onto long held traditions make it hard to bring about change.

36
Q

Restraining forces for change- legislation

A

Can sometimes make it hard for businesses to change in the way they may want to. An example of this is foreign ownership laws preventing Australian businesses seeking major overseas investment. Eg; quantas

37
Q

Restraining forces for change- financial considerations

A

Whilst the business may have the intentions to change, if it can’t find the financials to pay for these changes then the changes themselves are unlikely to occur as envisioned. This can be especially true for small businesses.

38
Q

Porter history

A

In 1979 Micheal Porter developed a framework that he used to outline the 3 major strategic options open to businesses that wish to achieve a sustainable competitive advantage.

39
Q

What is porters theory

A

It is a strategic management theory which describes how a business can seek to acquire a competitive advantage in its industry or market and therefore dominate that industry or increase is market share. It is therefore a very proactive theory.

40
Q

Porter - cost leadership strategy

A

Is a strategy that allows a business to achieve a competitive edge by reducing production or delivery costs.
A low cost producer must find and exploit all sources of cost advantage.
EG; ALDI, KMART, IKEA

41
Q

Porter -Differentiation

A

Emphasis of the difference between a particular product / service and those that are similar by developing the attributes that customers find appealing. EG; APPLE, TESLA, BMW, NIKE

42
Q

Three steps to approach to focus on - porter STEP 1

A

Carry out a SWOT analysis
Strengths p, weaknesses, opportunities and threats
This allows businesses to gauge its current position and the impact of any future changes it is considering

43
Q

Three steps to approach to focus on - porter STEP 2

A 
Using porters 5 force analysis.
This is a tool that focuses on five important determinants of competitive power. 
1. supplier power 
2. Buyer power 
3. Competitive rivalry 
4. Threat substations 
5. The threat of new entry
44
Q

Three steps to approach to focus on - porter STEP 3

A

Compare the SWOT analysis with the results if the five force analysis
WHEN THE TWO ANALYSIS ARE COMPARED A BUSINESS SHOULD BE CONSIDERING THE FOLLOWING
- reduce or manage supplier power
- reduce or manage buyer power
- come out on top of the competitive rivalry
- reduce or eliminate the threat of substitution
- reduce it eliminate the threat of new entry.

45
Q

Cost leadership / lower cost - strengths

A
  • strong competitive advantage in markets with the “price conscious” consumers
46
Q

Cost leadership / lower cost- weaknesses

A
  • potentially lower customer loyalty as customers are only price sensitive.
  • potentially customers may associate lower price with lower quality
  • standardised goods and services will not meet the demands of customer specific offerings, or who want something “different”
47
Q

Differentiation - strengths

A
  • strong competitive advantage in markets with “brand loyalty”
  • can charge premium pricing as the cost is not such an important consideration to consumers
  • can work with large businesses who have money to create a brand image
  • can work with small businesses who create a unique point of difference.
48
Q

Differentiation - weaknesses

A
  • is not good for “price sensitive” consumer /markets .
  • the “unique features” can be copied by other producers domestically or overseas which destroys your competitive advantage.
  • can be hard to protect your intellectual property, copyright etc.,
49
Q

Trends relating to data

A

Looks at like patterns movements of popularity in data

50
Q

Similarities between lewin and porter

A
  • porter gains competitive advantage on cost and lewin considers competitors as driving forces for change as well as pursuit of profit and cost reduction.
  • porters competitive on differention overlaps with lewin with technology as a driving force.
  • both are decision making tools / models to manage and implement change.
51
Q

Differences between Lewin and porter

A
  • porter is a strategic and proactive
  • while Lewin is reactive to the KPIS
  • porter is only focused on competitive advantage and gaining market share.
  • Lewin looks at a wide range of forces including those that prevent or slow down change
  • Porter does not consider employees and internal factors beyond cost
  • Lewin considers managers and employees as driving and restraint forces
  • Lewin s weighs the driving and restraining forces whereas porter identifies through SWOT analysis
52
Q

Force field analysis in business

A

A force field analysis is a process businesses can use to determine the forces that will drive and those that will resist a specified change. This can help the business that is looking to implement change as it identifies those forces that will work against the change so that managers can work to remove them or minimise their impact, and also identify the forces that will help drive the change.

Business Managment 3/4 (8 decks)

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