Business Spencely Flashcards

Question

Examples of causes of variances (internal)- within a businesses control

Answer 1

Overestimating/underestimating Changing the selling price Improving efficiency Poor communication

Answer 2

Competitor behaviour Cost of raw materials Changes in the economy

Answer 3

Competitors offering lower prices Staff become less motivated and efficient at work Increase in energy prices Higher than expected rental cost

Answer 4

Lower interest rates Bad publicity for a competitor

Answer 5

Small variances aren’t a problem as they can actually motivate Large variances both adverse and favourable can demotivate (favourable because staff don’t see the need to work hard anymore and become complacent e.g. Nokia went from #1 to almost off the market due to complacency)

Answer 6

Cut prices Update products Enter new markets Promotional strategies Streamlining production Motivating employees Cut supplier costs Conduct additional market research

Answer 7

More ambitious targets next time Spread what’s going right throughout the organisation Increase production/staff to meet demand

Answer 8

The point at which the business is not making a profit or a loss

Answer 9

The difference between actual output and break even output (a business operating with a positive margin of safety is profitable. a negative margin of safety means the business is making losses)

Answer 10

- raising selling price per unit -reducing variable costs per unit

Answer 11

People who owe the businesses money (receivables) e.g. customers

Answer 12

People or organisations that are owed money by a business (payables) e.g. suppliers

Answer 13

It is the period of time given by suppliers before customers have to pay for goods and services e.g. 30 days, 60 days, 90 days

Answer 14

Predicting the future flows of cash into and out of the firm’s bank over a specific period of time

Answer 15

-If a business runs out of cash it will almost certainly fail even if it is profitable -Cash is the lifeblood of a business -Needed to support loan applications -Forecasting helps to avoid unexpected cash flow crisis -Cash flow is dynamic and unpredictable -Particularly important for start-ups and small businesses and those with seasonal demand

Answer 16

-Cash sales -Sale of fixed assets -Grants (money that the government gives to a business but doesn’t get it back e.g. social or ethical businesses) -Loans from banks -Share capital invested -Interest on bank balances -Receipts from debtors

Answer 17

-Payment to suppliers -Interest on loans and overdrafts -Wages and salaries -Payments for fixed assets e.g. machinery -Dividends paid to shareholders -Repayment of loans -Tax on profits -Payment to creditors

Answer 18

The key is to get your debtors to pay you before you have to pay your creditors

Answer 19

Capital expenditure- spending on assets that might be used again and again e.g. machinery Revenue expenditure- spending on the day to day running of the business e.g. wages, raw materials

Answer 20

Internal: retained profits , share capital (if you own 100% of shares), raising money from selling an asset, entrepreneur’s savings External: loans, venture capital, overdraft, crowd funding, debt factoring, share capital

Answer 21

Internal sources- already exist within the business External sources- are funds injected from outside the business

Answer 22

Finance needed over a longer period usually over a year. Businesses need long term finance to: -Purchase long term assets -Finance long term plans e.g. expansion

Answer 23

Finance needed for a limited time period normally less than one year. Businesses need short term finance to: -Pay outstanding bills -Overcome cash flow shortages

Answer 24

Long term- venture capital, share capital, loans, retained profit, crowd funding Short term- overdraft, debt factoring, retained profit

Answer 25

A businesses own profit they can use to pay off short term expenses or long term loans

Answer 26

-the legal structure of the business -the cost of the source of finance -flexibility -control -the purpose for which the finance is needed

Answer 27

PLC’s as they have access to the London stock exchange

Answer 28

Money owed to the business that the business is expecting to be paid

Answer 29

lack of planning by managers overtrading allowing too much credit e.g. 90 days instead of 30 poor credit control (not chasing up people who owe them money) inaccurate cash flow forecasting

Answer 30

overtrading happens when a business expands too quickly without having the financial resources to support such a quick expansion. If suitable sources of finance are not obtained, overtrading can lead to business failure e.g. small bakery asked to provide all of tescos baked goods, say yes, but don’t have the staff or machines to do so, so will run out of stock soon

Answer 31

It is the finance available to the business for its day to day trading activities. Working capital is available to a business when a customer pays for the goods or service they have received. Working capital is used to pay wages, fuel and raw materials. It revolves around cash flow not profit

Answer 32

Bank Overdraft- expensive Debt factoring- reduce profit margin Sale and Leaseback- may not receive a good price for the asset, committed to paying a rental which can reduce profits Offer less trade credit- customers move to other business with better terms, prices may have to be lowered to compensate Leasing of non current assets- could impact on profitability Improved control of working capital- additional staff to oversee control will increase cost Negotiate improved terms for trade credit- difficult for a firm with a poor payment record, discount for prompt payment lost affect profit margins

Answer 33

reducing production cost- the quality may be worse increase prices- lose customers to competitors offering lower prices improving the business effiency use capacity more fully reduce the number of substandard products- increased costs because staff will need to be hired so higher total number of salaries improve production methods eliminate unprofitable aspects- loss of jobs, reduces morale of people still working there

Answer 34

the power or ability to carry through an action

Answer 35

a person under the authority or control of another within an organisation (employee)

Answer 36

passing authority down the organisation (decision making)

Answer 37

provides subordinates with the means to excercise power and control over their working lives

Answer 38

deciding on the direction for a business inspiring and motivating staff to achieve these objectives

Answer 39

planning and organising and co-ordinating people and resources

Answer 40

risk seeking having a vision having followers

Answer 41

risk adverse implementing a vision having subordinates

Answer 42

the leader or manager makes decisions on their own e.g. Donald Trump

Answer 43

employees are consulted but decision making remains firmly at the top-like being a father e.g. Jack Ma

Answer 44

employees are fully involved in the decision-making process. Leaders discuss issues, delegate responsibility and listen to advice e.g. Barack Obama

Answer 45

leader has minimal input; decisions are left to those lower down in the hierarchy e.g. Warren Buffet

Answer 46

The organisation’s cultures and traditions- e.g. John Lewis have a history of involving staff in decisions ‘partner’ The nature of the tasks and time scales- e.g. urgent, short term VS highly creative, long term The personality skills of the manager/leaders e.g. good communicators may lend to democratic, strong vision & decisive may lend to autocratic The group size e.g. small- democratic, large- autocratic The employees themselves, their skills and abilities e.g. highly skilled employees- Laissez-Faire/democratic, unskilled- autocratic

Answer 47

refers to a state of independence e.g. i have the autonomy to decide, i don’t have any autonomy in that

Answer 48

The level of confidence the manager has in his team The time frame e.g. urgent Personalities, skills of managers/ leaders The group size Employees skills & abilities Nature of the task involved e.g. creative/urgent Culture & traditions e.g John Lewis shares The particular situation The company structure, especially the span of control (how many people you are supervising)

Answer 49

Competitors Comparisons over time Comparisons to a standard (called an industry average)

Answer 50

Scientific decision making- A logical and research based approach to decision making

Answer 51

Benefits- A decision is made in an objective manner Risk is reduced as decisions are made on the basis of researched data and facts Drawbacks- Does not mean decisions will always be right Can slow the decision-making process down (gathering data takes time) Data may not be accurate Sole use of data when making decisions may lack creativity and therefore innovation

Answer 52

Set objectives- SMART, ensure these fit in with the businesses mission statement, what it wants to achieve and where it wants to be within the given time frame Gather data- e.g. cost, demand, location, available workforce, market research Analyse data- to provide a recommendation, can use various quantitative techniques such as decision trees Select the strategy- decision on which strategy will be used will be based on recommendations that come from data analysis Review the decision- Implementation itself will result in tactical and operational decisions being made. Review to see how well the outcome has succeeded in achieving initial objectives.

Answer 53

The ability to understand something without the need for conscious reasoning, similar to a ‘hunch’; a gut feeling not based on scientific decision making

Answer 54

Benefits- (Hunches are used bc of problems involved in scientific decision making) Can lead to more creative or innovative decisions making Much cheaper and quicker as it is expensive to continually gather market research data Scientific model is time consuming due to constant checking and monitoring so decisions are delayed, so intuitive decision making is much quicker Scientific decisions are based on past information- may be better if they use intuitive decision making as they rely on the instincts of the manager who has a qualitative understanding of the market In scientific decision making, the customers may have changed their minds so data might be flawed, this won’t happen in intuitive decision making Drawbacks- They are uninformed decisions so lead to bias and subjectivity, leading to poor decisions being made High risk

Answer 55

The next best thing/ alternative

Answer 56

Benefits- Choices are set out in a logical way, less rushed process based on evidence rather than gut feeling Potential options & choices are considered at the same time Use of probabilities enables the “risk” of the options to be addressed Likely costs are considered as well as potential benefits Easy to understand Drawbacks- Probabilities are just estimates so are always prone to error Uses quantitive data only so it ignores qualitative aspects of decisions Assignment of probabilities and expected values are prone to bias Using decision- making techniques don’t necessarily reduce the amount of risk, also using a decision tree doesn’t guarantee success

Answer 57

A mathematical model used to help managers make decisions when faced with choices. A decision tree is one scientific approach to decision making

Answer 58

Groups or individuals that are affected by and/or have an interest in the operations and objectives of the business e.g shareholders, customers, employees, government, creditors, pressure groups, local community

Answer 59

Yes bc it allows managers to select and use the means of engagement that are appropriate for the degree of power and interest held by the relevant stakeholder No bc things can change very quickly leg, media suddenly showing huge interest in something, therefore stakeholder mapping needs to be dynamic

Answer 60

High level of stakeholder power and high level of stakeholder interest = Key players, Take notice of them, Engage directly with them High level of stakeholder power and low level of stakeholder interest = Keep them satisfied High level of stakeholder interest and low level of stakeholder power = Communicate regularly with them Low level of stakeholder interest and low level of stakeholder power = Communicate only when necessary

Answer 61

Describes the duties that a business has towards groups, e.g. employees, customers, government Not just about following the law but about how business should behave as good citizens. They should avoid pollution, reckless use of limited resources and mistreatment of employees or customers

Answer 62

The management of people at work in order to assist the firm in achieving its objectives

Answer 63

Diversity Employee engagement Training Number, skills and location of employees Talent development Alignment of values

Answer 64

Because most businesses now provide services rather than produce goods (people are the critical resources in the quality and customer service level). Competitiveness requires a business to be efficient and productive (which is difficult unless the workforce is well motivated, has the right skills and is effectively organised). The move towards fewer layers of management hierarchy has placed greater emphasis on delegation and communication.

Answer 65

Employees feeling positively about doing a good job Benefits: -Lower absenteeism (days off) -Increases motivation -Increases productivity -Staff stay longer at the business which reduces labour turnover which lowers training and recruitment cost -Can help your business grow

Answer 66

Refers to whether the business makes a profit or a loss

Answer 67

Production- more units Productivity- reduced cost (per unit)

Answer 68

Training is improving work related skills and knowledge: Training and development programmes ensure that a business has the capabilities to achieve its objectives and to meet the changing skills needed to compete effectively Also develops individual skills and experience to enable them to move up into roles of more responsibility A business needs to identify its training needs, set training objectives, and decide strategies to achieve these The overall objective of training is to fill the gap between existing and the desired knowledge, skills and aptitudes of employees

Answer 69

-Improved employee performance -Can help the business attract the most talented and motivated employees (particularly important for the service sector) -May result in a USP -Lower absenteeism and turnover

Answer 70

Talent development- Refers to the development and guidance of outstanding or star employees or those in key business roles who have potential to make major contributions to the organisation’s performance Training- A process whereby an employee gains job related skills

Answer 71

Diversity recognises that though people have things in common, they are also different in many ways, and employers need to have an understanding of the benefits of a diverse workforce such as the wider range of skills and ideas they bring Benefits: -Diversity of thought (people all bring their thought and since they are all from different backgrounds they have more diverse ideas) -Offers best opportunity to employ/promote the most talented which leads to improved business performance -Diverse workforce allows the business to understand & meet the needs of a market which may be comprised of diverse customers -Can gain a reputation as an attractive employer- can attract highly talented and skilled employees

Answer 72

UK EQUALITIES ACT 2010 offers protection to employees against a number of protected characteristics: Age Disability Gender reassignment Marriage Civil partnership Pregnancy and maternity Race Religion or belief Gender Sexual orientation

Answer 73

Alignment of HR objectives with corporate objectives: Involves recognising that all aspects of a business are working towards the same objectives Therefore, HR managers must assess every action in their department in terms of how they contribute to corporate objectives and whether or not they add value Alignment of employee values with business values: To ensure that the values of a business are communicated and understood by employees at all levels is essential to its success Therefore, the values of employees (of all levels) in dealing with customers, suppliers or other stakeholders are aligned with the values of the business This can enhance the reputation and performance of the business

Answer 74

They assist the business in ensuring its vision is pursued Stakeholders will see how the businesses values are reflected in the decision making and lead to the maintenance of customer loyalty Helps the business to attract suitable staff with similar values

Answer 75

-Matching these to the requirements of the business is an important HR objective -If a new store is opened or new technology is introduced, the HR function will need to ensure that sufficient employees are recruited or trained to meet the new needs of the business

Answer 76

They provide a focus for decision making and effort Helps to measure and benchmark (a measure to compare against others) against the success or failure of the department Improves co-ordination of activities Motivated staff

Answer 77

Available finance Overall business aims Business’ culture

Answer 78

Laws and legislation Economic factors Social factors Trade unions Technology

Answer 79

Staff are viewed as an asset to the business and valued and fundamental to the firm’s success. They are viewed as a competitive advantage and this HRM focuses on the needs of employees such as their roles, rewards and motivation

Answer 80

Staff are viewed as a cost, therefore cost on employees is minimised. They are simply treated like a resource of the business and the focus of this HRM is to identify the workforce needs of the business and recruit & manage accordingly (hiring, firing, moving)

Answer 81

Corporate objectives comes from top of the business and applies to all functions. Functional objectives apply to a separate function like HR or marketing, and they should line up with corporate objectives.

Answer 82

Short-term changes in employee numbers Minimal communication from the top down Pay- enough to recruit and retain staff e.g. minimum wage Little empowerment or delegation Taller organisational structures Suits autocratic leadership style Appraisal systems focused on making judgements ( good and bad) about staff

Answer 83

Suits democratic leadership style Competitive pay structure, with suitable performance-related rewards e.g. share options, profit share Employees are empowered and encouraged to seek delegation and take responsibility Appraisal systems focused on identifying and addressing training and other Flatter organisational structures Strong and regular two-way communication Strategic focus on longer-term workforce planning

Answer 84

It very much depends on the situation, soft could be more motivating for employees whereas hard allows for quicker decision making

Answer 85

Where management works with employees to check their performance

Answer 86

The measure of output generated per employee (measured in units) Interpreting them: - Labour costs at approx 66% of production cost - Increased labour productivity = improvements in efficiency = reduced labour costs per unit = increased competitiveness for the firm - however, the data re depends on which aspects of the business are covered by the data, whether the business is capital or labour intensive, rivals Labour productivity data, and labour productivity ignores wages

Answer 87

Refers to the number of employees who leave and join an organisation over a period of time (usually a year) Labour turnover can be: Voluntary e.g. finding a better job Involuntary e.g. being fired The UK average is 15% but this varies by industries e.g. in the social care industry it is 35% (measured in %)

Answer 88

The average cost of producing one unit of output To note: - Total labour cost includes salaries, national insurance and pensions - Labour cost is determined by the cost of employing workers and their productivity - Labour cost per unit should be looked at over a period of time, as heavy investment in training will increase cost but benefits may not be seen immediately - A fall in labour costs doesn’t improve competitiveness if other costs are rapidly increasing

Answer 89

The proportion of employees not at work on a given day

Answer 90

Salaries, wages, payroll taxes, benefits e.g. bonuses, staff discount, lunch

Answer 91

Job cuts- redundancies, reduce wages, redesign jobs, increase productivity

Answer 92

If costs too high then the business will have a low profit margin If costs are too low then it could impact the businesses customer service as staff will lose their motivation, have incomplete work, and poor workmanship

Answer 93

Productivity rates of the work force Wage rates Non-wage employment costs Management of capacity

Answer 94

Managers will seek some level of labour turnover to bring in new ideas Firms can recruit staff that have been trained by competitors (saves money) Enthusiasm of new staff can influence other workers If sales fall, the firm can benefit for natural wastage (voluntary turnover, they decide to quit) rather than costly redundancies

Answer 95

High recruitment and selection costs High induction and training costs A need to redesign jobs Reduced productivity Low morale amongst existing workforce Poor reputation as an employer

Answer 96

- Customers may be dissatisfied as they may have to deal with different employees - Acceptable levels of labour turnover varies according to the type of the business e.g. if it is full of skilled workers low turnover is needed, if unskilled then doesn’t matter so much - (high rates of retention- the number of staff that stay in a business, is desirable for skilled/ scarce staff)

Answer 97

It is the process to ensure that the organisation is appropriately designed to deliver organisational objectives in the short and the long term

Answer 98

Shows how people and management are organised in the business

Answer 99

Authority and responsibility- who is responsible for whom and who is in charge Individual job roles and titles The people to whom others are accountable The formal routes through which communication flows in the business

Answer 100

Functional, product based, matrix, regional

Answer 101

CEO at top and then 4 sections below (marketing, finance, operations and HR) Positives: Easy to share expertise Talk the same business language Negatives: People identify more with the department than with the business as a whole which can lead to the “silo effect” (operating in the role/ department you are in, and losing focus of the business as a whole Each department may have its own culture, and focus on its own priorities

Answer 102

CEO at the top then divided into products e.g. food/beauty/health and each of those departments have all for functions of a business e.g. Operations etc Positives: Makes sense if the demands of customers vary greatly Groups employees by skill set to meet the needs of customers Negatives: Silo effect (can lose sense of overview of the business) Divisions may begin to compete rather than cooperate Also involves the duplication of resources e.g. several research teams rather than one

Answer 103

CEO at the top then divided by countries or continents and each of these have their own four functions e.g. Operations etc Positives: Makes sense if the strategy involves competing in very distinct regions of the country or around the world Allows for better matching of what is offered to what the market wants Allows for more in depth market knowledge Common in global businesses such as automotive, tobacco and soft drinks Negatives: May have duplication of resources if regional markets do not vary much Silo effect could happen

Answer 104

CEO at the top and below them are managers for each functional part of the business e.g. operations etc and then project managers on other side and employees report to one of each e.g. project manager 1 and Marketing manager Positives: Job holders have more than one boss e.g. product and region Avoids the silo effect by bringing different perspectives Encourages departments to build relationships with one another Negatives: Two managers can cause conflict

Answer 105

Shows who a person is responsible for

Answer 106

The span of control is the number of employees for whom a manager is responsible

Answer 107

Slow speed of communication/feedback/decision making- usually more layers More layers in the hierarchy may be required (costly) Allows for closer supervision of employees

Answer 108

More appropriate if Labour costs are significant- reduce number of managers Gives subordinates the chance for more independence

Answer 109

1) personality and skill/experience of the manager (skilled can managed a wide span of control) 2) size and complexity of the business (wide is normally used for a smaller business) 3) finances available (wide is cheaper) 4) the extent of use of clear objectives throughout the business (narrow structure is required to make sure there are clear objectives as a business grows-this ensures that control is not lost)

Answer 110

The number of layers of management or supervision in the organisation structure

Answer 111

Tall structure = Sometimes called a traditional, tall or mechanistic structure Many layers in hierarchy & narrow spans of control Flat structure = Sometimes called “organistic” Flat hierarchy, wide spans of control Delegation encouraged

Answer 112

Key features- many layers of hierarchy + narrow spans of control Allows tighter control (less delegation) Positives: More opportunities for promotion Negatives: Takes longer for communication to pass through the layers More layers= more staff= higher costs

Answer 113

Key features- few layers of hierarchy + wide spans of control Less direct control + more delegation Fewer opportunities for promotion, but staff given greater responsibility Vertical communication is improved Fewer layers = less staff = lower costs

Answer 114

Removing layers of management from the hierarchy of the organisation

Answer 115

Advantages: Opportunities for delegation, empowerment and motivation It can reduce costs as fewer (expensive) managers are required It bring managers into closer contact with the business Disadvantages: Delayering may create skill shortages- business loses managers and staff with valuable experience Delayering can have a negative impact on motivation (low morale as friends have left) Danger of increasing workload A period of disruption may occur as people take on new responsibilities and fulfil new roles Wider span of control can damage communication Not all organisations are suited to flat organisational structures

Answer 116

The assignment to others of the authority for particular functions, tasks, and decisions (decisions can motivate employees if they are given choice)

Answer 117

Advantages: Reduces management stress and workload Allows senior management to focus on key tasks Subordinates are empowered and motivated Better decisions or use of resources (potentially) Good method of on- the- job training Negatives: Cannot/should not delegate responsibility Depends on quality/ experience of subordinates Harder in a smaller firm May increase workload and stress of subordinates

Answer 118

Businesses with a centralised structure keep decision making firmly at the top of the hierarchy (amongst the most senior management) e.g. Fast food businesses like burger kind and McDonalds (to have economies of scale and ensure consistency)

Answer 119

In a decentralised structure, decision-making is spread out to include more junior managers in the hierarchy, as well as individual business units or trading locations e.g. Hotel chains (so they can have the power to handle customers problems or complaints)

Answer 120

Advantages: Easier to implement common policies and practices for the whole business Prevents other parts of the business from become too independent Easier to co-ordinate and control from the centre e.g. with budgets Economies of scale and overhead savings are easier to achieve Quicker decision-making Disadvantages: More bureaucratic (means a business characterised by strict rules, hierarchical structures and defined roles often leading to a focus on efficiency and control)- often extra layers in the hierarchy Local or junior managers are likely to be much closer to customer needs (so may know better) Lack of authority down the hierarchy may reduce manager motivation Customer service lacks flexibility and speed of local decision-making

Answer 121

Advantages: Decisions are made much closer to the customer Better able to respond to local circumstances Improved level of customer service Consistent with aiming for a flatter hierarchy Good way of training and developing junior management Should improve staff motivation Disadvantages: Decision-making is not necessarily “strategic” Harder to ensure consistent practices and policies at each location May be some diseconomies of scale- e.g. duplication of roles Who provides strong leadership when needed (e.g. in a crisis)? Harder to achieve tight financial control - risk of cost overruns

Answer 122

Small businesses vs Large businesses Highly skilled vs Unskilled employees Autocratic leader vs Laissez faire leader Minimising cost objectives (centralised) vs Increasing market share objectives (decentralised) Highly competitive environment (could be either) Economic environment (strong- decentralised vs weak- centralised) Technological- businesses that collect large amounts of data Business in the service vs manufacturing sector Business operating from one location (decentralised) vs several locations (centralised)

Answer 123

Why change the structure? Growth of the business means a more formal structure is appropriate To reduce costs and complexity (key) Employee motivation needs boosting Customer service and/ or quality improvements Challenges: Manager and employee resistance Disruption and de-motivation = potential problems with staff retention Costs (e.g. redundancies) (decentralised) Negative impact on customer service or quality

Answer 124

The flow of employees through an organisation, including: 1) the inflow- when they are recruited 2) the internal flow- what happens to them within the organisation 3) the outflow- when they eventually leave the organisation

Answer 125

Human Resources planning Recruitment and selection (managing the inflow) Training (e.g. tech training/ safeguarding)(managing the internal flow) Dismissal and redundancy (managing the outflow) Redeployment

Answer 126

It determines the number and types of employees required (skilled/unskilled, short term/long term) An assessment of forecast human resource needs of the business over the next few years (how many are likely to leave, levels of unemployment in area, and competition for workers) Past statistics are used

Answer 127

A vacancy arises, a person specification or job description is written, a decision is made whether to recruit internally or externally, job adverts are placed in appropriate media, application forms are issues and CVs and letters of application are requested, shortlisting takes place, interviews are held and assessment and testing take place, selection takes place and someone is appointed

Answer 128

Job description- a summary of the main duties and responsibilities associated with an identified job role Person specification- identifies the skills, knowledge and experience a successful applicant is likely to have

Answer 129

Externally- (from outside the organisation) Traditional job advertisements- newspaper Recruitment agencies Word of mouth Head hunters (find people who are very good in their field and contact them) Social media Company websites Corporate websites Internally- (from within the organisation) Promotion Redeployment

Answer 130

Advantages: Cheaper and quicker to recruit Employees are already familiar with the business and how it operates Provides opportunities for promotion with in the business- can be motivating Business already known the strengths and weaknesses of candidates Disadvantages: Limits the number of potential applicants No new ideas can be introduced from the outside May cause resentment amongst candidates not appointed Creates another vacancy which needs to be filled

Answer 131

Advantages: Outside people bring in new ideas Larger pool of workers from which to find the best candidate People have a wider range of experience Disadvantages: Longer process More expensive process due to advertising and interviews being required Selection process may not be effective enough to reveal the best candidate

Answer 132

A process that involves increasing the knowledge and skills of a worker to enable them to do their job more effectively

Answer 133

Induction training On-the-job training Off-the-job training

Answer 134

Education for new employees which usually involves learning about the way the business works Effective induction will: Reduce labour turnover Increase motivation Cause employees to contribute to the organisation more quickly Improve employees understanding of the culture of the organisation

Answer 135

(Employees receive training whilst remaining in the workplace) Graduate training Coaching-assuming the employee has all the skills to do the job Mentoring- a person that is there if you have a problem Job rotation- moving individuals to different parts of the business (gives them more skills and a better understanding of the business as a whole) Apprenticeships

Answer 136

Advantages: Employees work as they learn so they are more productive More cost effective They can gain direct experience Avoids problems of adjustment to work environment Disadvantages: Quality of training depends on the instructor and time available Trainer might have developed bad habits Work situation may not be conducive to effective learning

Answer 137

Off the job training occurs when employees are taken away from their place of work to be trained

Answer 138

Usually provided by a local college or university or external organisation When the business itself is unable to provide Distance learning (online learning)

Answer 139

Advantages: Use of specialist trainers- not financially viable (capable of working successfully) for a small firm Employees focus on training and are not distracted by work Opportunity to mix with other employees from other businesses can be a good support to share ideas Disadvantages: Training could be taken in employees own time- not motivating Training may be too general Costs can be expensive

Answer 140

Owners- motivated and trained employees are more productive, increased labour productivity, lower cost per unit, can gain competitive advantage bc they can sell at a lower price or get a higher profit margin, leads to higher profits and higher dividends for the owner Employees- they are able to do the job more effectively, workers can develop a range of skills, they can experience higher job satisfaction, they are less stressed, positive impact on labour productivity, allows them to meet targets, they can achieve bonuses Customers- better training leads to improved customer service, fewer complaints, customers experience higher level of satisfaction with the business, they become more brand loyal

Answer 141

Takes place when an employer terminated an employee’s contract of employment and this leads to employees exiting the HR flow

Answer 142

Redundancy Incompetency Long term illness (not disability) Gross misconduct Substantial reason (imprisonment, or not agreeing to reasonable change of employment)

Answer 143

(Redundancy can only occur if the job no longer exists) 1) Business closes down - all employees are made redundant 2) Technology replaces workers 3) Business moves the operation overseas

Answer 144

It is when an employee is offered suitable alternative employment within the same business A person may be offered redeployment when facing redundancy Employees should be told about suitable alternative employment within the organisation Redeployment is also offered to employees should are unable to continue in their current position due to illness, health or personal reasons

Answer 145

The will to work

Answer 146

Leads to a more productive workforce Motivated employees are better aligned with company objectives Motivated employees are more loyal which decreases labour turnover and absenteeism with reduced costs Customer satisfaction increases when the workforce feels engaged A company that motivates is attractive to prospective future employees The best (motivated) employees could mean a competitive advantage

Answer 147

Taylor, Maslow and Herzberg

Answer 148

That works are motivated by money They would do the minimum if left to their own device His focus was to find the most efficient way to do a job, and make sure each worker did it this way and that the task was being done by the right worker. This approach of his was called the SCIENTIFIC METHOD He favoured DIVISION OF LABOUR which meant tasks were broken down into small repetitive tasks He believed in paying workers (piece rare) the quantity that they produced. This was called PIECE RATE Increased productivity meant fewer workers were needed so workers were worried about losing their jobs This increased productivity could lead to a reduction in quality. Supervisors were needed for quality control

Answer 149

(Pyramid shape) Starting at top- Self-actualisation- Intellectual needs, fulfilling potential, achieving targets e.g. promotion/ challenging work Esteem- Self-respect, level of status e.g. authority/ recognition of achievements Social- Feeling wanted, sense of belonging, part of a team, e.g. social facilities/ mentoring & coaching Safety- Safe working environment; job security, e.g. health and safety protection/ insurance Physiological- Basic needs e.g. food, shelter, e.g. acceptable pay and working conditions Comments of his hierarchy of needs: People have similar types of needs which can be classified into a hierarchy People start at the bottom of the pyramid and once those needs are met they move up to the next need Criticisms of it: However, the theory makes the assumption that everyone has the same needs and that they are in the same order, e.g. high achievers may have little social needs Our perception of what is important at work will vary Not realistic that most employees will reach the top of the hierarchy

Answer 150

There are two groups of factors which influence the motivation of workers: Hygiene factors: Good company policy Supervision Working conditions Pay Relations with colleagues Motivating factors: Interesting & meaningful work Sense of achievement Recognition for effort and achievement Increased responsibility Personal development- promotion Comments on his two factor theory: Hygiene factors don’t motivate, but if they aren’t good, workers will get dissatisfied Motivating factors do positively motivate workers Based on individual needs Has influenced motivational techniques today- job enrichment Criticisms- it is based on a small sample of 200 accountants and engineers, too little focus on groups and teams in the workplace

Answer 151

Taylor- money motivates Maslow- basic need Herzberg- hygiene factors (not motivating)

Answer 152

Employees feeling positively about a job Engaged employees actually care about their work and their company. They don’t work for just a paycheck, or just the next promotion, but work on behalf of the organisation’s goals.

Answer 153

Give employees a clear vision that they can identify with and feel a sense of purpose while at work and to understand how the job they do contributes to overall goals and the bigger picture Good quality environmental conditions- nice place to work Appropriate training Ensure there is a good communication between employees and managers Involving employees in planning and decision making Incentive programs- extrinsic (pay, benefits, promotions) intrinsic (gratitude, praise)

Answer 154

Piece rate- gives a payment for each item produced (ensures employees are paid for the amount of work they do) Commission- workers are paid a bonus on top of their salary (the bonus could be based on sales or united produced ) Performance-related pay- a financial reward to employees whose work is considered to have reached a required standard (and/or above average). Individual performance is reviewed regularly (usually once per year) against agreed objectives of performance standards Salary scheme- workers are paid according to a time period. This could be an hourly wage or an annual wage

Answer 155

They are ways of rewarding employees without increasing their wage/ salary Examples- staff discount, private medical care, generous pension contributions, company car, profit sharing or shares in the company

Answer 156

Profit sharing: (employees get some of the businesses profit) It is a type of performance related pay May not discriminate against individual performance (useless people still get money) Can increase loyalty, breaks down “them and us” (everyone gets profit) If payments are too small, it may not have the desired effect If payments are too large, the firm may not have enough for capital investment (could also irritate shareholders if they are getting less dividends) Share ownership: Can vary greatly e.g. purchase of shares of free shares (helps reduce labour turnover as employees are motivated) Can also be a type of performance related pay

Answer 157

Advantage- Can motivate workers to produce high quantity Disadvantage- Quality can suffer

Answer 158

Advantage- Can motivate workers to do work quickly without compromising quality Disadvantage- Workers can’t earn extra by working harder and producing better income

Answer 159

Advantage- when used in sales it can increase motivation and performance Disadvantage- can lead to overselling, where customers feel overwhelmed by sales staff (staff try sell the product to strongly/aggressively, also labour costs change each month

Answer 160

Advantage- is used to reward the best workers so workers feel motivated to meet their targets Disadvantage- can lead to demoralisation of staff if only certain people are getting increased pay when the whole business is doing well

Answer 161

Empowerment- the delegation of authority and decision making to employees Team working- puts workers into small teams and lets them organise their own work Job rotation- gives the employees more work to do at the same level (a form of job enlargement) Job enrichment- gives the worker more challenging work (also a form of job enlargement) Flexible working- when working patterns and hours are adapted to suit the employees e.g. Flexi-time, compressed hours, annual hours, job sharing, home working Other methods of non-financial motivation: Job enlargement- involved the addition of extra, similar, tasks to a job Joe design- dividing tasks and responsibilities to create a complete job Appraisal system- involves considering and evaluating the performance of an individual employee

Answer 162

Delegation is telling someone exactly what do, empowerment is letting someone do a task how they want it (empowerment is one step further than delegation)

Answer 163

Matrix structure

Answer 164

(Flexible working is when working patterns and hours are adapted to suit the employees) Flexi- time- core hours, must be available between important hours, do rest of the work when you want Compressed hours- e.g. 4 day week, still get paid for 5 days, 4 longer days Annual hours- paid for a certain number of hours per year and can do the work whenever suits them Job sharing- e.g. 2 people doing part time, helps with balancing work/ social life, good for people with other commitments Homeworking- working from home is motivational as you can do child/ pet care and the work environment is more relaxing

Answer 165

Advantages: Can increase motivation and productivity Helps employees with children Homeworking suits families, disabled and remote workers Disadvantages: Can be impactful for businesses that need to serve the public during normal working hours Homeworkers could be easily distracted Job sharing can lead to companies over responsibilities and uneven work load

Answer 166

The cost involved- of profit margins are slim and shareholders are dissatisfied, bonuses will not be offered and/ or funds for training will be scarce The attitude of the management team- If the manager is autocratic, they will seek control over your working life e.g. no flexible work, autocratic manager will focus on pay as the motivator The training given to the management team- higher levels of management training on what motivates workers will lead to less reliance on solely financial methods of motivation The skill levels of the workforce had the nature of the job- delegation and job enrichment require highly skilled employees The importance of the public’s perception of the business- delegation and empowerment may be used to project a positive image and attract high-quality employees State of the economy- in an economic book, businesses can spend more on training and bonuses The effectiveness of communication within and outside the business- High quality two way communication lends itself to techniques such as quality circles or team working

Answer 167

Arises when employees are part of a formal structure that involves them in the decision-making process of a business

Answer 168

Trade unions Works council (will not discuss pay and workout conditions if there is trade union representation) Other- committees, staff associations. These are individual business representation (not backed by regional or national group)

Answer 169

They are organisations established to protect and improve the economic position and working conditions of its members Collective bargaining- describes negotiation on behalf of a group of workers

Answer 170

Largest- Unison which has 1.37 million members Unite which has 1.29 million National education union which has 462,000 (The bigger the union, the stronger their bargaining power)

Answer 171

Action that may take place if there is dissatisfaction among employees

Answer 172

Work-to- rule- employees follow the strict conditions of their employment contract- no voluntary overtime, no participation in supporting activities, staff will still get their basic pay Overtime ban- employers refuse to work overtime. Can have a significant effect on production capacity during periods of peak demand, but ineffective as a bargaining tool during quieter periods Go-slow- Employees work at the slowest or least-productive pace that is allowable undo their employment contracts Strike- The action of last-resort; fraught with danger for both the employer and employee and strictly policed by legislation on industrial action

Answer 173

To protect and improve the real incomes of their members Provide or improve job security Protect workers against unfair dismissal and other issues relating to employment legislation Lobby for better working conditions Offer a range of other work-related services including support for people claiming compensation for injuries sustained in a job

Answer 174

A situation/meeting in which people can talk a problem, especially a public matter

Answer 175

Forum within a business where workers and managers meet to discuss workplace issues EU legislation makes these mandatory for firms that: 1) Operate in two or more EU countries 2) Have more than 1,000 employees What is discussed during works councils? Business objectives and performance Workforce planning objectives (e.g. recruitment, staffing levels) Employee welfare issues (working conditions, health & safety, pay) Training and development programmes Compliance with legislation (e.g. discrimination)

Answer 176

Staff turnover Industrial action Absenteeism

Answer 177

Labour productivity Motivation Ideas from employees Mutual trust Employee retention

Answer 178

Advantages: Increased empowerment and motivation of the workforce Employees become more committed to the objectives and strategy of the business Better decision-making because employee experience and insights taken into account Lower risk of industrial disputes Disadvantages: Time consuming- potentially slows decision making Conflicts between employer and employee interests may be a block to essential change Managers may feel their authority is being undermined

Answer 179

Employees- may go on strike and could be positively impacted such as higher pay Shareholders- may result in fewer dividends in the case of strikes as customers may not be able to purchase products so there is a lower end of year profit Customers- in the case of a go-slow, there are less products for customers to purchase

Answer 180

Profit= revenue- costs Profit margin (is per unit) = profit divided by revenue x 100 (this is the same as profitability

Answer 181

The leadership and management style- autocratic may mean reduced representation and operation of “hard” approach, democratic will be “soft”, inclusive approach The overall corporate objectives- growth objectives in price elastic markets may seek to minimise employee representation to control costs to maintain competitiveness, social objectives- welcome employee representation The history and ownership of the business- firms may have history or culture of employee representation, small forms- it may be determined by the owner and manager, the extent to which the business is owned by employees (e.g. John Lewis Partners) The nature of work and employees hired- highly skilled employees may mean increased involvement in decision making and therefore employee representation, businesses with temporary or seasonal staff are less likely to have high levels of employee representation because they have limited knowledge and experience to offer Employment legislation- in the UK, there are laws which obliges that all UK employers with 50 or more staff need to keep employees informed and consulted, EU work council law

Answer 182

Effective communication Avoiding industrial disputes ACAS- advisory, conciliation and arbitration service Employment tribunals

Answer 183

Regular and effective communication Choosing the right medium of communication e.g. email/ face to face Two way communication allows for feedback Using an appropriate style of management Adapting organisational structures to encourage effective communication- using techniques such as delegation and empowerment

Answer 184

A NO STRIKE DEAL is an agreement between union and employers whereby in return for pay and conditions consideration, a union agrees to refrain from industrial action for an agreed period SINGLE UNION AGREEMENTS are where employees agree to all be represented by one union which makes negotiations simpler

Answer 185

ACAS (advisory, conciliation, and arbitration service) work with millions of employees and employers every year to improve workplace relationships. They are an INDEPENDENT AND IMPARTIAL public body that receives funding from the government. Conciliation- where a Neutral 3rd party encourages negotiation and postpones any industrial actions. No judgment is made, sometimes called mediation. Arbitration- The Arbitrator (3rd party) makes a decisions. In some cases, it can be legally binding

Answer 186

Employment tribunals are informal courts where legal disputes over unfair dismissal or discrimination can be settled

Answer 187

Cutting back the workforce or reorganising them. Rationalisation is used to improve efficiency

Business Spencely Flashcards

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