Topic 2: Business Management Flashcards
Identify the features of effective business
management
The features of effective business management are Planning, Organising, Leading, and Controlling
Recall the acronym for the features of effective business management
POLC
Identify the requirements for business goals
Specific, Measurable, Achievable, Realistic, and Time-based
Recall the acronym for the requirements for business goals
SMART
True or False: Profit maximisation is a long-term goal, in general, and may require the business to accept lower profits, or even losses, in the short-term
True
Explain why unethical business activity may initially boosts a company’s share price but in the long term, be harmful for the business
Unethical activities will boost the business since most unethical activities are financially good (slavery) but ultimately will harm the business by damaging its reputation
Recall when the classical management approach was invented
The classical management approach was invented during the Industrial Revolution
Identify the types of classical management approach
The types of classical management approach are classical-scientific and classical-bureaucratic
Identify the principles of classical-scientific management
The principles of classical-scientific management are:
1. Scientifically examine each part of a task
2. Select suitable workers and train them
3. Cooperate with workers
4. Divide work and responsibility
Recall who pioneered the classical-scientific approach
Frederick W Taylor pioneered the classical-scientific approach
Recall how Taylor examined the tasks to determine the most efficient method to perform it (classical-scientific)
Taylor used time and motion studies
Recall who pioneered the classical-bureaucratic approach
Max Weber and Henry Fayol pioneered the classical-bureaucratic approach
Outline the principles of the classical-bureaucratic management approach
The principles of the classical-bureaucratic management approach are:
1. A strict hierarchical structure
2. Clear lines of communication and responsibility
3. Jobs broken down into simple tasks; specialisation
4. Rules and procedures
5. Impersonal evaluation of employee performance to avoid favouritism and bias
Identify the types of planning
The types of planning are strategic, tactic, and operational planning
Identify the steps of the organising process
- Determining the work activities
- Classifying and grouping activities
- Assigning work and delegating authority
Identify the steps of the controlling process
The steps of the controlling process are:
1. Establish standards
2. Measure performance
3. Take corrective action
Identify the types of management approaches
The types of management approaches are classical, behavioural, and contingency management approach
Recall who pioneered the behavioural management approach
Elton Mayo pioneered the behavioural management approach in The Hawthorne Studies
Identify the main features of the behavioural management approach
The main features of the behavioural management approach are providing worker satisfaction, emphasising teamwork, and providing facilities
True or False: Under the contingency management approach, there is no miracle ‘blueprint’, the manager must adapt their approach to their employees, business, and circumstances in general
True
Identify the advantage and disadvantage of dividing the business functions
Division causes the business to become more specialised but it also requires a higher level of coordination to run smoothly
Identify the key business functions
Operations, Marketing, Financial, and Human Resources
Identify the types of quality management
The types of quality management are Quality control, Quality assurance, and Total quality management
Identify the 4 features of marketing
Place, Promotion, Price, and Product
Explain the correlation consumers make with price and quality
Consumers correlate prices with quality.
Low price = Low quality
High price = High quality
Identify the methods businesses calculate their price
The methods are cost-based, market-based, and competition-based
Identify the main purpose of recording financial transactions
The main purpose of recording financial transactions is to summarise transactions into financial reports and statements. The records and documents allow the business owner to see the financial aspects of the business over a period
Recall what accountability is also known as
Accountability is also known as stewardship
Identify what it means if a business is liquid
A business is said to be liquid if it has the cash available to meet payments as they are due
Recall, in a cash flow statement, what is the cash inflow classified into
Cash inflow is classified into operating, investing, and financing activites
Recall, in an income statement, what are the main categories
The main categories are revenue, cost of goods sold (COGS), gross profit, expenses, and net profit
Gross profit = …
Gross profit = Sales − COGS
COGS = …
COGS = Opening stock + Purchases − Closing stock
Net profit = …
Net profit = Gross profit − Expenses
Assets = …
Assets = Liabilities + Owner’s Equity
Recall, in an income statement, what are the main categories of expenses
The expenses are selling, administrative, and financial expenses
Explain why taxation is not included in an income statement
Taxation is not a selling, administrative, or financial expense and therefore, the income statement is not concerned with it
Recall what owner’s equity is also known as
Owner’s equity is also known as capital
True or False: Intangibles are classified as current assets/liabilities
False: Intangibles are classified as non-current assets/liabilites
Identify the main elements of the human resource/staffing process
The main elements are:
1. Acquisition
2. Development
3. Maintenance
4. Separation
Identify the types of voluntary separation
The types of voluntary separation are retirement and resignation
Identify the types of involuntary separation
The types of involuntary separation are retrenchment and dismissal
True or False: Redundancy is an involuntary separation
False: It is both an involuntary and voluntary separation
Identify what KPI is an acronym for
Key Performance Indicator
Outline acquisition of human resources
Acquisition is the hiring of new employees
Outline development of human resources
Development is the improvement in employees’ skills and abilities
Outline maintenance of human resources
Maintenance is the act of motivating employees, with monetary and non-monetary rewards, to stay with the business
Outline separation of human resources
Separation is the act of employees leaving the business
Identify the strategies that a business can implement to manage change effectively
A business can manage change effectively by identifying the need for change, setting achievable goals, resistance to change, and management consultants
Identify possible business goals
A business may have goals for profits, market share, growth, share price, environmental, and social
Differentiate a mission and vision statement
A mission statement is the present actions of a business to achieve its goals. On the other hand, a vision statement is the goals the business wants to achieve and work towards
Identify the promotional strategies that businesses can employ
The types of promotional strategies are personal selling, relationship marketing, sales promotion, publicity, public relations, and advertising
ROI = …
Net Profit * 100 / Cost of Investment
Identify what ROI stands for
ROI stands for return on investment
Identify the skills of effective management
The skills of effective management are:
1. Interpersonal
2. Communication
3. Strategic thinking
4. Vision
5. Problem-solving
6. Decision-making
7. Flexibility
8. Adaptability to change
9. Reconciling the conflicting interests of stakeholders
Identify the features of classical management
The features of classical management are planning, organising, and controlling
Identify the features of behavioural management
The features of behavioural management are leading, communicating, and motivating
