Topic 1 Business Management

Question 1

Skills of management

Answer 1

Manager - Someone who coordinates the business’s limited resources in order to achieve specific goals.

Interpersonal
Involves dealing with people

Informational
Involves gathering and disseminating - spreading

Decision making
Involves solving problems and making choices

Question 2

Features of effective management

Answer 2

Planning - setting the objectives

Organising - arranging the resources

Leading - influencing the people to work

Controlling - evaluating and modifying tasks

Question 3

Achieving Business Goals
Profit

Answer 3

Profit is what remains after all the business expenses are deducted from the sales revenue

Question 4

Achieving Business Goals
Market Share

Answer 4

Business’s share of the total industry sales for a particular market

Question 5

Achieving Business Goals
Growth and diversification

Answer 5

How large the business wishes to be and how to expand

Question 6

Achieving Business Goals
Share Price

Answer 6

Share prices must rise and healthy dividends need to be paid

Question 7

Achieving Business Goals
Social

Answer 7

Businesses to consider what is best for the community and wider society
eg social justice, environment

Question 8

Achieving Business Goals
Environmental

Answer 8

Must be conscious of their impact on the environment

Question 9

Operations

Production process

Answer 9

Inputs → Transformed resources are inputs that are changed or converted in the operations process.

Transformation process → Transformation is the conversion of inputs into outputs

Outputs →
End result of a business’s efforts

Question 10

Operations
Quality Management

Answer 10

Quality management is the strategy which a business uses to make its products meet customer expectations.

Question 11

Operations
Quality Management Benefits

Answer 11

• Increased productivity and profits
• Improved reputation and customer satisfaction
  -Strengthened competitive position

Question 12

Operations Quality management
Quality Management

Answer 12

• Inspections at various points of the production process to check for problems and defects

Question 13

Operations Quality management
Quality Assurance

Answer 13

Use of a system so a business achieves set standards in production
Ensure every product made is made with quality

Question 14

Operations Quality management
Total quality management

Answer 14

• Commitment to excellence
  -Emphasises continuous improvement in all of a business’s operation by sharing responsibility of every employee

Question 15

Marketing
Mass Marketing Approach

Answer 15

• Treats all customers the same and offers the same version of the product regardless of individual characteristics

Question 16

Marketing
Market segmentation

Answer 16

Occurs when the total market is subdivided into groups of people

Demographic - population characteristics
Age
Gender
Geographic

Question 17

Marketing
Niche Market

Answer 17

Narrowly selected target market segment
Segment within a segment

Question 18

4 Ps of Marketing
Product

Answer 18

Product features

Apple - was to create touchscreen smartphones to play music, internet

Question 19

4 Ps of Marketing
Price

Answer 19

Amount consumers are willing to pay
Price of the product
Price of the product based on Target market

Question 20

4 Ps of Marketing
Placement

Answer 20

Consider where the product should be available for consumers

Question 21

4 Ps of Marketing
Promotion

Answer 21

Advertising, public relations, overall media strategy for introducing a product

Question 22

Finance
Cash flow Statement

Answer 22

Whether the money flows in and out of the business smoothly and timely
Inflows
Outflows

Question 23

Finance
Income Statement

Answer 23

Summary of income earned, expenses incurred over a period of trading

Question 24

Finance
COGS

Answer 24

opening stock + purchases - closing stock

Question 25

Finance
Gross profit

Answer 25

Sales - COGS

Question 26

Finance
Net profit

Answer 26

gross profit - expenses

Question 27

Finance
Balance sheet

Answer 27

Statement of the business’s assets and liabilities at a particular trading period

Question 28

Finance
Balance Sheet: Assets

Answer 28

Current
Cash
Accounts receivable
Prepaid expenses
Stock

Non Current
Land and buildings
Fixtures and fittings
Intangibles

Question 29

Finance
Balance Sheet: Liabilities

Answer 29

Current liabilities
Accounts payable
Bank overdraft
Credit cards
Accrued expenses

Non current liabilities - long term debt 30 years
Mortgage

Question 30

Finance: Assets

Answer 30

Assets = owners equity + liabilities

Question 31

HR: Human resource cycle

Stage 1 Acquisition - hiring new employees

Stage 2 Development - improving employees skills and abilities

Answer 31

Stage 1
- Identifying staffing needs
- attracting people to apply for the position
- Choosing and hiring most qualified

Stage 2
- Induction training
- Teaching and developing new skills

Question 32

HR: Human Resource cycle
Stage 3 - Maintenance

Stage 4 - Separation

Answer 32

Stage 3
- Motivating employees to remain with the business
- Benefits, financial compensation, employee of the month

Stage 4
- Voluntary
- involuntary

Question 33

Management and Change
Responding to Internal and external influences
Transformational change

Incremental change

Structural change

Answer 33

Transformational change
- A complete restructure throughout the whole organisation

Incremental change
- Minor changes

Structural Change
- Outsourcing
Contracting some operations to outside suppliers

Work teams
Allows businesses more flexible and responsive
Motivate employees to be creative

Flatter organisational structures
- Middle management positions abolished
- greater levels of accountability and responsibility

Question 34

Managing change effectively
Low Risk Strategy

Answer 34

Identifying the need for change

Setting achievable goals

Question 35

Managing Change effectively
High Risk Strategy

Answer 35

Manipulation

Driving forces - Forces that initiate, encourage and support change

Restraining forces - those that work against the change, creating resistance

Question 36

Managing Change effectively
Strategies for reducing resistance to change

Answer 36

Follow a sensible time frame; do not rush through changes
Ensure communication is two way not just from the top down

Question 37

Managing Change effectively

Answer 37

• Represents and promotes the management consulting profession
• Set and maintain internationally recognised standards and develop members

Question 38

Managing effectively
Purpose of CMC delegation

Answer 38

• Provides clients with the confidence that they have engaged with a professional who will deliver the highest level of management consulting