Topic 2 Business Functions And The Activities Of The Businesses Flashcards
Purpose of the 8 business functions
Depend on each other to achieve the business goals.
Work together to ensure the survival and sustainability of the business.
Relationship between the business functions
The general management function is directly linked to all seven business functions.
The financial and administration functions are responsible for gathering, storing and processing info and financial records.
Skilled staff are sourced and appointed by human resources function.
Differences between management and leadership
Leadership
He/ she influences human behavior.
A leader creates vision direction.
Management
He / she guides the human behavior
A manager understands the goal of the business
Meaning of the general management
Sets the overall direction or strategy for the business. Leads organises and controls the other functions.
Meaning of the level of management
Determines the chain of command the amount of authority and status enjoyed by any managerial position.
Top level management
Comprises of CEO and directors.
Ensure that people work together to accomplish certain goals.
Develop long term goals ,strategic plans and business policies
Middle level management
Implement plans made by top level management.
Implement the vision and plans by top management.
Take medium term tactical decisions.
Responsible for specific departments within the business.
Lower level management
Focus on controling and directing.
Take short term routine decisions.
Implement instructions given by Middle management.
Type of decision of top level management
Make long term strategic decisions to achieve long term goals
Middle level decisions
Make medium term tactical decisions
Lower level decisions
Lower level management make short term operational decisions
Responsibility of the top level management
Plan activities of the business
Manage changes in the business environment
Responsibility of Middle level Management
Passes info from top management to lower management
Responsibility to lower level management
Motivates and guides workers
Implements the objectives of the Middle management
Meaning of management tasks
Tools used by an organisation to help complete projects more efficiently by organising and prioritising related tasks
Management tasks
Planning
Organising
Leadership
Controlling
Risk management
Planning
The chosen plan is implemented
The lower level management formulates operation plans
This task evaluates the exsiting goals and activities
Organising
The task bring resources together to achieve set goals.
It’s the mechanism used to execute the plan.
Involves breaking a plan into actions.
Resources are pioritised to essential areas at any given time
Leading
Motivate employees to achieve goals.
Motivate workers to use their skills and resources to their best ability.
Inspire employees to carry out their tasks to best of their abilities.
The employees are motivated to contribute to the success of the business
Controlling
Ensure that the business achieves its goals.
Ensures that activities are carried out as planned.
Continous control ensures that the business runs smoothly.
The risk can be identified during control
Risk management
Identify possible risk by finding risk bearing activities within the organisation.
Assist business to analyse each possible risk and how likely it is that the risk will happen.
Evaluate the potential impact of risks in terms of financial liability.
Meaning of the organisational structure
A system that outlines how certain activities are directed to achieve the goals of an organisation.
These activities include rules , roles and responsibilities
Factors that influence the organisational structure
Size of org
Strategy
Tech
Resiurces
Types of organisational structures
Functional organisational structure and project organisational structure
Matrix Organisational structure
Functional Organisational structure
Employees get instructions from more than on manager
Plans to be executed Determines who will be giving instructions
Project organisational structure
Structured around project teams
Employees are then Grouped to form a project team that will carry out a particular project
Matrix organisational structure
Structured around projects but employees remain in their departments.
Ap project must be completed up to a certain point.
Admin function
Responsible for collecting , processing and distributing info used for dicision making by management
Activities of the Management function
Management info
Handling info
Office practice
Collecting information
Info tech
Management function
Keeping all business transactions up to date
Classifying amd collecting numerical data and statistics
Handling information
Info collected form both outside and inside the business.
Correct and reliable info should be available for meaningful decision making to run business successfully
Office practice
Refers to how the admin staff should handle their duties.
Covers matters such as the dress code for employees , proper filing.
Collection of information
Info is collected from both in and out the business
Correct and reliable info should be available for meaningful decision making and to run business successfully
Information technology
It is the use of electronic equipment to assist with various admin tasks.
Tech is used to communicate and handle info and is referred to as ICT
Data
Refers to raw facts found in graphs/ tables.
Data needs to be processed before it can be used as information.
Information
Refers to processed data that provides info to managers in order to make decisions.
Info can be stored manually in files/computers and so on.
Financial function
Involves the acquiring and utilisation of funds necessary for efficient operations.
Purpose of financial function
Determines how much capital the business needs.
Establishes the sources for acquiring capital.
Decides how to invest / allocate the capital funds in the business
Why the business may need finance
Money for starting up the business, borrowing money in order to start a business.
Money to replace machinery , equipment and computers
Money for expansion to grow a successful business
Sources of financing
Bank loans
Bank overdraft
Asset bases loans
Grant
Receivable funds
Angel funding
Venture capital
Budgeting
Investments
Bank loans
Money borrowed from the bank which will be repaired and agreed upon a time frame.
Used for long term financing
Money repaid with intrest
Bank overdraft
Short term loan added onto the account of an entrepreneur/business.
Repaid with a set of intrest rate over an agreed upon time frame.
Asset based loan
Money is lent to successful businesses that want to expand their operations.
If money is not paid then lender will take that asset.
Grants
Money provided by the government to small businesses in development phase.
Money does not have to be paid back if it benefits the community
Receivable finance
Loan is equal to outstanding invoices due.
