exam Flashcards
(325 cards)
1
Q
Sole trader
A
- Individual owners of a business
- Entitled to keep all profits of the business after tax
- Liable for all losses (Unlimited liability)
2
Q
Sole trader
advantages/disadvantages
A
advantages
- Simple and inexpensive to established
- Owner has total control of the business
- Minimal government regulation
disadvantages
- Unlimited liability
- Harder to get finances
- Reliant on the knowledge and skill
3
Q
Partnership
A
It’s a business owned between 2-50 people
Either partner is jointly liable for the debts in the business (unlimited liability)
Most partnerships have a partnership agreement between the parties
4
Q
Two types of partnerships
A
General partnership
All partners are equally responsible for the management of the business and each has unlimited liability
Limited partnership
Liability of one or more partners is limited. Silent partners can be apart of the business partnership but are not involved in the day to day running of the business
5
Q
Partnership
advantages/disadvantages
A
advantages
- Inexpensive and simple to start
- Risk is shared
- Minimal government regulations
disadvantages
- Liable for debts caused by other partners
- could be threatened by one partner leaving
- Potential personality clashes
6
Q
Company
A
- Separate legal entity,
- Limited liability
- Same rights as a natural person
- has perpetuity (ongoing life) - must keep financial records for at least 7yrs
7
Q
Two types of companies
A
Private limited companies
Many sole traders/partnerships become private limited companies due to expansion and the opportunity to gain protection by limited liability
Can have up to 50 shareholders
Public listed company
An organisation listed on the Australian stock exchange and any individual can buy shares
Run by a board of directors
8
Q
Company
advantages/disadvantages
A
advantages
- Limited liability
- Business will still continue if a shareholder leaves or passes away
- Separate legal entity
disadvantages
- Complex to start expensive establishments costs
- Higher degree of government control and reporting requirements (private limit comp)
9
Q
Social enterprise
A
A business that uses strategies to improve human wellbeing or the environment rather than maximise PROFIT for its owners/shareholders
10
Q
Government business enterprise
A
- Business run and directed by the government and their aim is to maximise profit
- Operates in the public sector
11
Q
3 characteristics of GBE’s
A
- The government controls the business
- The business is engaged in commercial activities
- The business is a separate legal entity to the government department
12
Q
business objectives
Financial objectives:
A
The desired financial performance of the business
- profit
- growing sales
- improving market share
- increasing productivity
13
Q
business objectives
Market share:
A
Proportion or percentage of the market (and total sales) controlled by the business
14
Q
business objectives
Marketing objectives:
A
Creation of demand for your good or service
Maximise the appeal of your good or service to the most people possible
15
Q
business objectives
Social objectives:
A
- Role of business in the community
- Above and beyond your legal objectives
- Can also be achieved via workplace policies
- equal opportunity policies
- Anti discrimination
policies
16
Q
business objectives
Shareholder expectations:
A
Owners of the company, can own the whole part or shares in a business
17
Q
Stakeholders
A
An individual/group that has a direct interest in the activities of the business. (can be shareholders, employees, customers, suppliers)
18
Q
Macro environment
A
The conditions that a business operates in that they have no control over
19
Q
Operating environment
A
The environment immediately external to a business to which it has close interaction with when conducting business
20
Q
Internal environment
A
The areas of a business that have control over
21
Q
Stakeholders
Mangers
A
Those in changer of sections of an organisation
22
Q
Stakeholders
employees
A
The workers in a business who are paid an income in exchange for their labour
23
Q
Stakeholders
shareholders
A
People who have invested
money in a company
24
Q
Stakeholders
Customers
A
People who purchase the goods and/or services that are made by the business
25
Stakeholders
| suppliers
People or businesses who provide the goods and/or services that are demanded by other businesses
26
Stakeholders
| Trade unions
Bodies that represent the interests of workers
27
Possible conflicts between stakeholders
Employees and shareholders
Employees require safe working conditions and reasonable wages
BUT
this reduces businesses profits and dividends to shareholders
28
Possible conflicts between stakeholders
Management and customers
Management may try to maintain profit and a high dividend to satisfy shareholders
BUT
this will upset customers who want to pay reasonable prices for products
29
Possible conflicts between stakeholders
Management and
community
Management may decide to cut costs by not completing maintenance
BUT
but this could endanger the community
30
Possible conflicts between stakeholders
Suppliers and community
Suppliers want to get paid quickly and fairly
BUT
the may use unethical practices which will upset the community
31
Possible conflicts between stakeholders
Management and suppliers
Management wants to reduce costs to increase profit
BUT
suppliers may charge higher prices for ethical material
32
Corporate social responsibility
The obligation that a business has over and above the legal responsibilities to the wellbeing of employees, customers, shareholders, the community and the environment
33
management responsibility
| Operations
- Running of business
| - Responsible for the protection of the business product or the provision of a service
34
management responsibility
| Finance
Responsible for managing the financial aspect of the business
35
management responsibility
| Human Resources:
- Responsible for coordinating all activities from acquiring to terminating (hiring/firing) employees in the business
- Manages the relationship between employer and employee
- Focus on employee motivation, staff retention, staff reviews
36
management responsibility
| Sales and marketing
Includes developing products, pricing, promoting distributing and promoting products to customers
37
management responsibility
| Technology support
Responsible for installing and maintaining technology, as well as providing assistance to the users of technology in the business
38
1. Autocratic management style
- All decision making is centralised
- Communication is one way (downward)
- Managers are in full control and want to retain authority
- No input from employees
39
Autocratic
| advantages/disadvantages
advantages
- Decision making is quick
- Suits high risk and difficult decisions
disadvantages
- Discourages teamwork
- Low motivation and job satisfaction for employees
40
2. Persuasive Management style
Management make the decision and then persuade employees of the benefit of that decision
- manger has control and authority
- focused on achieving the task
41
Persuasive
| advantages/disadvantages
advantages
- Suits high risk decision
- Employees have a clear idea of what they have to achieve
disadvantages
- No input from workers into the decision making process
- Workers may feel alienated not respected
42
3. Consultative Management style
Management consult with employees about the issue/ process, but the manager makes the final decision based on suggestions and input received.
43
Consultative
| advantages/disadvantages
advantages
- lots of ideas from employees, which help in the decision making outcome
- Is a motivator and increase job satisfaction
disadvantages
- Time consuming
- Employees will be upset if management does not take on their ideas
44
4. Participative management style
- Managers work closely with employees, to get them to work together to improve the businesses overall performance
- Encourages employees to share in the decision making and problem solving tasks
45
Participative
| advantages/disadvantages
advantages
- Positive employer/employee relationship (less likely for conflict)
- High levels of motivation and job satisfaction
disadvantages
- Can take a long time to reach a decision as everyone needs to be considered
- Internal conflicts may arise, employees given to much power
46
5. Laissez Faire management style
- Employees assume total responsibility for control of workplace operations
- Management does not play a central decision making role in the organisation and employees are empowered to make decisions
47
Laissez Faire
| advantages/disadvantages
advantages
- Employees feel a sense of ownership
- Open communication lines and people are valued
disadvantages
- Loss of control by managers
- Personal conflicts may impact the achievements of business outcomes
48
Contingency management theory/situational approach:
Is the need for managers to adapt their management style to suit the situation at hand
49
the appropriateness of management styles
1. Nature of task
- Easy = autocratic
| - Complex = participative (teamwork)
50
the appropriateness of management styles
2. Time that is available
- If you have limited time = autocratic, persuasive
| - If you have lots of times = consultative, participative, laissez faire
51
the appropriateness of management styles
3. The experience and skill level of employees
Lots of experience = Laissez Faire
52
the appropriateness of management styles
4. Managers experience
Finding your management style
53
the appropriateness of management styles
5. Managers and staff
Personality, experience, values, beliefs, skills
54
Management skills
The abilities or skills that a manager uses to achieve a business objectives.
55
Relationship between management style and skill
The type of management style a manger selects determines the management skills they will need
56
Management skills
| 1. Communication
- Is the transfer of information from a sender to receiver
- Can be used to help explain a vision, outline changes and ask for opinions
- Nonverbal communication (body language, visual)
- Verbal communication (written, oral form)
57
Management skills
| 2. Delegation
Is the ability to transfer authority and responsibility from a manager to an employee to carry out specific activities
58
Management skills
| 3. Planning
The ability to define business objectives and decide on methods and strategies to achieve them also helps with long term planning of the business
59
Strategic planning
- long term planning
| - 2-5 years
60
tactical planning
- Flexible, adopting planning 1-2 years
| - Helps achieve the strategic planning
61
operational planning
- Short term planning
| - Specific details on how the business can conduct in the short term
62
Management skills
| 4. Leading
Is the skill of a manager when guiding workers towards achieving the goal of the business
- motivator
- good communicator
- role model
63
Management skills
| 5. Decision making
Is a multi step approach where a selection is made between a range of alternatives
64
Management skills
| 6. Interpersonal skills
Skills used everyday to communicate and interact with other people both individually and groups (understanding the other person)
65
Corporate culture
The shared values and beliefs and behaviours of the people in the business
66
Official corporate culture
The preferred values, beliefs and behaviours of the people, within a business stated in official documents like a company motto or mission statement
67
Real corporate culture
How things actually operate, the actual values and beliefs presented in the company
68
Strategies to develop corporate culture
The creation of a vision statement
- Vision statement → the future vision for the business (aspirational)
- Mission statement → written statement that defines a business core purpose and focus
- Values statement → the values of the organisation
69
Strategies to develop corporate culture
Establish management structures
linking management and structures help employees function and shape corporate cultures
70
Strategies to develop corporate culture
choice of management style
autocratic
| ects
71
Strategies to develop corporate culture
Implementation of policies
policy is a detailed process, procedures and rules that must be observed
72
Strategies to develop corporate culture
Branding of the business
it represents the way customers view the business
73
Strategies to develop corporate culture
People
employing the right people that suit the business
74
Strategies to develop corporate culture
Physical environment and material symbols
Physical environment and material symbols
75
Strategies to develop corporate culture
rituals
Employees of the week, Christmas parties
76
Business objectives
The stated, measurable targets of what a business wants to achieve
all business objectives must consider stakeholders in the business and how the objective will effect/influence them
77
What a HRM can't do
- They can't tell other departments about what work needs to be done
- They have the authority to advise NOT to direct other line managers
78
Management by Objective (MBO)
- The process of setting goals using SMART principles which relate to the employees key area of responsibility.
- Creates a sense of direction and provides a measure to assess an employee's work performance
79
Adapting to MBO theory
It helps all members of the organisation achieve personal objectives and business objectives
80
Employee engagement
The commitment employees feel towards a business based on identifying the values, visions, objectives and the way the business operates
81
Motivation
- It’s what drives a person to do things a certain way or to achieve a certain goal
82
Maslow's Hierarchy of Needs
| info
- Abraham Maslow (1908-1970)
- hierarchy of needs is a sequence of human needs in order of importance and you can’t move up between needs unless the basic need has been satisfied
83
Maslow's theory is important in a business because...
businesses have to create workplaces that attempt to satisfy all the needs of the employees
if they don’t the employee will become unmotivated and chose to leave
84
MHN
| physiological needs
food, water, warmth, rest
- providing a job
- fair wages
85
MHN
| safety needs
security, safety
- job security
- business is following OH&S policies
86
MHN
| belonging and love needs
intimate relationships, friends
- being part of a team
- friendly work associates
87
MHN
| esteem needs
feeling of accomplishment
- job title
- promotions
- job recognition
88
MHN
| self-actualisation
achieving one's full potential
- challenging work allowing for creativity
- opportunity for personal growth
89
Locke and Latham's - Goal setting theory
| info
Is based on the idea that employees are more likely to be motivated if they are able to strive for specific goals and can be rewarded for achieving these goals
Feedback of employees is vital to this model
90
LL
| In order to motivate the goal must be
- specific
- clear
- provide a challenge to the employee
91
Locke and Latham's 5 goal setting principles
1. task complexity
2. clarity
3. challenge
4. commitment
5. feedback
92
LL
| Task complexity
understanding the task at hand and how difficult or easy is the task is for employees to achieve
93
LL
| Clarity
how clear is the goal, do the employees know what to do to achieve the task
94
LL
| Challenge
what level of challenge is there and is it achievable
95
LL
| Commitment
how committed are the employees in achieving the goal
96
LL
| Feedback
Continuous, are we moving towards achieving the goal (reviews/performance)
97
Benefits of goal setting theory
- ensure that all employees have closely aligned goals and have a high level of financial success
- Employees become energised and empowered
- Improvement in team collaboration
98
Lawrence and Nohria - Four drives Theory
| info
- based on an understanding of human physiological and the strength of this differs between individuals over time
- If one dominates it can affect personal and business outcomes
99
4DT
| Identify 4 basic motivational needs
Drive to acquire
Drive to bond
Drive to comprehend/learn
Drive to defend
100
4DT
| drive to acquire
Basic need - clothing, shelter, water, food
Complex need - Status, promotion power
- The drive to “have things”
- Reward system (financial or personal)
- promotions
101
4DT
| Drive to bond
- Connection with peers
- Build relationships
- To be apart of something
- focus on real corporate culture
102
4DT
| drive to comprehend/learn
- People need to understand whats going on around them
- create jobs and learning opportunity for employees
- degree of job satisfaction
103
4DT
| drive to defend
- Motivate by defending Friends, team/colleague and job
- providing a clear direction
- Link to fear and change
- Creates fair strategies so employees know where they stand
104
Comparing motivational theories
Hierarchy of Needs (Maslow) and Goal Setting Theory (Locke and Latham)
Similarities
- Both have 5 key components
- GST could lead to MH’s level of self esteem being achieved
- Both set challenging goals - particularly in reference to higher order needs (esteem and self actualisation)
Differences
- GST is about achieving specific goals, MH is about satisfying needs of individuals
- GST has a time frame where as MH is on going
105
Comparing motivational theories
Hierarchy of Needs (Maslow) and Four Drives Theory (Lawrence and Nohira)
similarities
- Both relate to satisfaction
- MH’s belonging relates to 4D’s drive to bond
- Both theories can have a dominant motivator at any particular moment
differences
- MH has 5 levels where as 4D has 4
- MH must progress each level individually, 4D its possible to work towards more than one drive at a time
- MH is sequential, 4D is not
106
Comparing motivational theories
Goal Setting Theory (Locke and Latham) and Four Drives Theory (Lawrence and Nohira)
similarities
- Goal setting is linked to the drive to acquire
- The drive to learn and comprehend is similar to obtaining feedback
Differences
- GST is to set goals where as 4D is to satisfy the drives
107
Motivational strategies
Different motivation strategies for different times for different people it's not a one size fits all,
Business can use both financial and non financial strategies to motivate employees
108
financial Performance related pay
Is a financial reward to employees whose work is considered to have reached a required standard or above the standard.
109
financial Performance related pay
Pay increase
- When an employee starts a job their rate of pay is either negotiable in an employment contract or set by an award.
- After a period of time an employer may offer pay rise to people who work hard or add value to the business
110
financial Performance related pay
Bonuses
One off payment to an employee or group of employees for achieving a particular target or special effort usually a one off incentive
111
financial Performance related pay
Commission
In an amount paid for accomplishing a sale. It’s generally a fixed percentage of the price.
112
financial Performance related pay
Share Plans
A registered company (both public and private) can offer shares of its business to its staff
113
financial Performance related pay
Profit sharing
- Instead of giving employees shares a company can offer a percentage of profits to its employees
- will increase the overall goal of increasing profit so everyone can share it.
114
financial Performance related pay
Gainsharing
Is the method of rewarding employees for making suggestions that improve productivity in the business. The savings that are achieved are given back to the employees.
115
financial Performance related pay
| advantages/diadvaatges
advantages
- Tangible way of recognising achievement
- Encourages goal setting to not be too hard
- Can improve productivity levels
diadvaatges
- Reduces equality in employees
- Acts to demotivate if goals are too challenging
- Short term focus
116
Non-financial motivators
| Career advancement
- Promoting people to more senior positions that gives them more motivation, responsibility and authority.
- Employees need to demonstrate good work habits over an extended period of time before being considered for a promotion
117
Non-financial motivators
| Job enlargement
This involves making a job bigger or more challenging by combining various operations at a similar level (horizontal)
118
Non-financial motivators
| Job enrichment
This involves vertically expanding the job by increasing its depth of content as well as the degree of control the job holder has over their work.
119
Non-financial motivators
| Job rotation
Workers move between jobs to increase the variety of work and also to create a more flexible workforce
120
Non-financial motivators
| advantages/diadvaatges
advantages
- Acts as a reward for past performance
- Helps retain good employee
diadvaatges
- Employees may be promoted over their capable level
- Feeling of unrest if promotion was not warranted or not carried out in a fair manner
121
Investment in training
- Employees gaining skills and job knowledge through training and job experience.
- It’s important to train employees so they can do tasks properly.
- short term the workers performance is likely to improve
- long term employees may be grateful for the improvement in their skill level and may remain loyal to the business
122
Investment in training
| advantages/diadvaatges
advantages
- Demonstrates that you want to advance your employees career
- Creates a sense of loyalty and positive corporate culture
diadvaatges
- Expensive investment
- Highlight where you have problems
123
Support and sanction (reward and punishment)
| Support
- An important motivating factor is the feeling that employees are supported, encouraged and acknowledged for their work performance and have job security
- Frequent and positive communication between managers and subordinates
124
Support and sanction (reward and punishment)
| Sanction
- Often won't take job role seriously until they are threatened with some form of sanction for their unacceptable or poor performance
- can take the form of a Reprimand, counselling, dismissal (no job)
- short-term
125
Support and sanction (reward and punishment)
| advantages/diadvaatges
advantages
- Employees who feel supported by their manager and the business are likely to work more diligently
- Sanctions can act as a motivator
- Support does not cost the business money
diadvaatges
- Support needs a positive corporate culture
- Support relies on manger exercising good communication skills
- Imposing sanctions acts only as a potential short term motivator
126
Training
- The process of teaching staff to perform their job more productively.
- providing people with the knowledge and skills they need to do a job
127
Development
The process designed to build up the skills necessary for future work activities and responsibilities, includes preparing employees for longer term opportunities
128
Organisational Analysis
The entire business is analysed to decide what training activities are needed to best achieve the strategic objective
129
Task Analysis
The individual job and task required to perform that job are analysed to determine whether any specific skills are required for a successful performance
130
Person Analysis
Each employee is assessed to determine what kind of training is required. This helps establish training and development objectives.
131
On the job training
Training that occurs on site such as
- coaching
- tutoring
- mentoring by a supervisor
- involvement in planned work activities, special projects and committees
132
On the job training
| advantages/disadvantages
advantages
- trained on the specific tools or equipment
- able to practice under the supervision of more experience staff (coach or mentor)
disadvantages
- poorly planned and disjointed in delivery making it difficult to grasp information
- external trainer into the workplace, may not have knowledge about the equipment and working practices at the business
133
Off the job training
Training that is conducted outside the work premises.
| lectures written and visual format, visual games and case studies
134
Off the job training
advantages
- A wider range of skills can be taught
- Less opportunity to be interrupted by workplace issues
disadvantages
- More expensive if paying course fees transport and possibly accommodation
- Employees with these new skills/qualification may leave the business to gain a job elsewhere
135
Performance Appraisals
A performance appraisal is the formal assessment of how efficient and effective an employees is in performing their role in the business.
136
Employee self evaluation
Involves employees carrying out a process of self assessment based on an agreed set criteria, should look at the employees career aspirations for the future
137
Employee Observation
The aim is to get feedback from a variety of different parties to arrive at a picture of past and current performance
138
360 degree feedback
- Often used to evaluate the performance of managers and supervisors, by getting input from their supervisors and superiors.
- Helps identify strengths and weaknesses and gives a broad overview of the employee performance also to evaluate leadership, teamwork and interpersonal skills
139
Termination
The ending of employment of an employee. This process is generally handled by the HR manager, who needs to make sure the employee is treated fairly and is within the law.
140
Voluntary
The individual chooses what they plan to do when it comes to employment
141
Retirement (Voluntary)
When an employee decides to give up full time or part time work and is no longer part if the labour force (not a mandatory age of retirement in Australia)
142
Resignation (Voluntary)
Ending of employment by the employee ‘quitting’ their job.
Individuals may resign for number of reasons (Offered a promotion in another business, start own business or change of lifestyle)
143
Involuntary
When the organisation decides to terminate your employment.
144
Redundancy
Occurs when a person's job no longer exists, usually due to technological changes, a business restructure or merger
145
Voluntary redundancy
Occurs when the business wants to reduce the size and/or nature of the workforce and employees are informed of the change and they can nominate themselves for a redundancy
146
Involuntary redundancy
Happens when employee get asked to leave the business against his/her will. The employee is not at fault in anyway, employee is made redundant purely on the needs of the business
147
Retrenchment (involuntary)
Is when an employee loses their job due to a lack of sufficient work to keep them occupied
148
Dismissal (involuntary)
When an employee's behaviour is considered unacceptable they can be dismissed
149
Summary dismissal
the most serious form of dismissal: it's when an employee commits a serious breach of an employment contract
150
Dismissal on notice
when the employee is not performing the job satisfactory, this may be identified during an appraisal (more common)
151
Unfair Dismissal
When an employee is dismissed because the employer has discriminated against them in some way
152
termination
| advantages/disadvantages
advantages
- Cutting of non-productive employees
Reduction in costs
- Change in structure of the business
disadvantages
- Loss of talent
- Decline in moral
- Breakdown of effective teams
153
Fair work commission Australia
Is Australia's national workplace relations tribunal and can make legally binding decisions and orders relating to workplace relations
154
Fair work commission Australia
| role
To assist employees and employers to maintain fair and productive workplace
155
When can you use the Fair Work Commission (FMC)
The employee must believe their employee was terminated for harsh, unjust or unreasonable decisions
156
Entitlements
When a working relationship ends employees are entitled to
- remuneration (wages and salaries owed)
- any accrued annual leave or long service leave
- if they are retrenched they are also entitled to severance/redundancy (bonus pay) entitlements
157
Transition issues
Employees who are retiring from the workplace need assistance to organise their finances (superannuation, personal entitlements and investments)
158
Exit interview
Is when management will interview ex employees as to why they are leaving the business
This can't help the business determine and find their faults
159
Workplace relations (industrial relations)
Is focused on the relationship between employers and employees
Aim → Is to achieve an optimal relationship between these two groups
160
Trade union
- An organisation formed to represent and protect the rights of workers in a particular industry.
- Focus of improving working conditions for employees
- also negotiates on behalf of member during collective bargaining
161
work place relations
| employees
Are involved because their wages and conditions of work are at stake in this process and need to be satisfied with pay and conditions.
162
Employer associations
Are bodies that represent employer groups, they provide advice and support for businesses
163
Fair Work Ombudsman
Role is to promote happy, productive and cooperative workplace relations and make sure all workplaces comply with Australian Laws
164
Awards
Are legally binding minimum requirements for wages and condition in certain industries are reviewed every 4 years by the Fair Work Commission.
165
Enterprise Agreement
Is an agreement that is directly negotiated between the employer and employee at enterprise level and can be made to suit one group or a variety of groups of employees (usually better than current award)
166
Enterprise bargaining/Collective bargaining
involves deciding the terms and conditions of employment through the direct negotiation between union and employees
167
How an enterprise agreement works
An enterprise agreement must be approved by a majority vote by the employees affected and Must be registered and approved by the Fair Work Commission
168
Individual Employment Contracts
An individual can sign a contract with their employer outlining their wages and conditions (must be better than the minimum award)
169
Common law individual (employment) contract
Covers those employees who are not under any award or collective/enterprise agreements
170
Dispute resolution/grievance procedure
a formal systematic process that allows employees to complain about matters that affect them and their work
171
negotiated outcome
where a settlement is reached within the business
172
mediated outcome
where an independent mediator help parties talk about the issues and arrive at their own agreement (doesn’t have to be from FWC)
173
Conciliation
when a third party suggests outcomes
174
Arbitration
where an independent arbitrator/court decides how something will be resolved and makes a legally binding decision
175
Mediation
| advantages/disadvantages
advantages
- It's a much faster and cheaper way to resolve disputes
- parties involved have to agree on the outcome of their disputes, they are both more likely to leave satisfied with the process and the decision.
disadvantages
- not appropriate if there is a power imbalance between the parties
- not a legally binding decision
176
Arbitration
| advantages/disadvantages
advantages
- decision is legally binding
- more useful option if there is a power imbalance as a decision is imposed upon both parties
disadvantages
- More costly than mediation and the parties have to pay the fees of the arbitrator used
- time-consuming
177
Industrial action
Industrial action is illegal in Australia except during a ‘protected period’ when a new collective agreement is being negotiated
178
Strikes
Employees withdraw their labour and production stops
179
Boycott
Employees refuse to do something or deal specifically with someone
180
Picket line
Employees protest outside the work premises and its aim is to stop production
181
Work to rule
Workers refuse to do anything but the bare minimum required and follow every rule
182
Operations Management
Applies specifically to the production or transformation process. Good operations means you attract more customers ultimately increasing profit
183
Relationship between operations management and business objectives
The core objective of a business is to maximise profit. This means businesses need to maximise efficiency and effectively use resources, to produce goods and services at the lowest possible price
184
Inputs
A resource used in the production process. May be owned by the business or come from supplier
- materials
- capital equipment
- labour
- informations from may sources
- time
- money
185
Transformation Process
The conversion of inputs into outputs.
186
Outputs
The final result of a businesses efforts, that is delivered or provided to the customer
187
How manufacturing business differs from a service business
Manufacturing Business
- Transforms inputs into tangible products
- The production process and the consumption process are not linked they occur separately
- Little customer involvement in production
service business
- Transforms inputs into services
- Sometimes customer may need to be present when the service is being delivered for example a haircut
- Production and consumption often occurs simultaneously.
188
Automation
This is the replacement of human effort by machinery and computer (technology)
189
Automation
| Advantages/disadvantages
Advantages
- Decrease in the cost of human labour
- Greater precision of accuracy
- Improved workplace safety
disadvantages
- Security threats - computers may be hacked and virus’ downloaded
- Development costs can be huge and unaffordable
190
Types of automation
| Automated production lines
- Are used in manufacturing industries.
- Reduce the need for human labour as they eliminate elements of human interaction in the production process
- Human component is more in the area of supervision and monitoring the system
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Types of automation
Computer Aided Design
(CAD)
computer “software” that is driven by human labour to show the machinery at a 3D level
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Types of automation
Computer Aided Manufacturing
(CAM)
- Involves the control of machinery, tools and equipment via a computer.
- Are set instructions meaning there is a less chance for error. Saves time and is very efficient
193
Types of automation
Computer Integrated Manufacturing
(CIM)
CIM combines CAD and CAM and is a computer program that controls the production process from start to finish.
194
Types of automation
Flexible manufacturing system
(FMS)
Computers can detect things such as machine breakdown and notify operators about the correct replacement parts required
195
Types of automation
| Robotics
- Programmable machines that have the ability to detect changes in the environment.
- Reduce cost of labour and do not suffer human error
- need to be maintained on a regular basis.
- If one machine fails the whole production is stopped.
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Types of automation
| Website development
- This technology is essential for the effective running of the business.
- It can save time to inform customers of changes.
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Types of automation
ECommerce/operation
management
- The buying and selling of goods and services, or the transmitting of funds or data over an electronic network
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Materials management
It’s the inwards flow of material including the movement and storage of raw materials, work in process inventory and finished good from the start until it's consumed or used
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Master production schedule (MPS)
Is a document that shows what the business plans to produce and the plan to produce it within a given time period.
200
Materials requirement schedule (MRP)
MPR is a computer based inventory management system which helps the operations manager schedule and place orders for materials.
201
Forecasting
Data that is used to identify trends so that the business can predict what materials will be required and in what quantities
Prediction too low→ run out of product and lead to customer dissatisfaction.
Prediction too high→ order too much stock which is wasted or takes up storage space
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JIT (Just in time inventory)
- An inventory management system which aims to avoid holding any stock (either inputs or finished goods)
- Supplies arrive just as they are needed for production, and finished products are dispatched immediately or sold to customers
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Logistics - Transport and Distribution
Refers to the transport of finished products to customers as required, and the distribution of products or movements/delivery of materials from one place to another
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Effectiveness
The degree to which a business achieves its stated objects doing the right thing; the ability of a business strategy to achieve an intended or expected outcome
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Efficiency
The best use of resources in the production of goods and or services. The outcome can be judged on both the quality and quantity of the goods or services produced
206
Quality management
Is the degree of excellence in a good or service and the ability to satisfy the customer
207
Quality control
Refers to the method that simply checks and rejects items that do not conform to the expected standard
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Quality Assurance
Is a system that is establish to ensure predetermined benchmarks are achieved. Benchmarks are usually set by someone outside of your business
209
Total Quality Management (TQM)
holistic approach to quality where all staff in the organisation aim to participate in the ongoing improvement in both the organisations culture and production process
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Waste minimisation
Strategy links most closely with the objective of improving efficiency. By minimising waste, business makes the best possible use of their resources and cut costs which increases profit
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The 4 ways to reduce waste
reduce
reuse
recycle
recovery
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Lean management and waste minimisation
- Is a strategy used by many businesses to achieve efficiencies
- Refers to the establishment of systems that will eliminate waste and inefficiencies of any kind in the process of making a good or providing a service
213
Lean production is based on (3 ways we can implement lean production)
1. Just in time
2. Kaizen concept of continuous improvement
3. Use of automation
Robotics
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Triple bottom line reporting
When a business reports on its economic results (profits) as well as an assessment on its environmental and social performance.
215
Operations system
A business need to include CSR in all three stages of the operations system, as it can improve productivity and contribute to the success of the business
216
Environmental sustainability of inputs
The purchase of sustainable inputs will minimize the effect the business has on the natural environment as well as community health and social conditions
217
Environmental sustainability of inputs
| advantages/disadvantages
advantages
- Reduce impact on the natural environment
- Increased productivity via new technology
- Improved business reputation
disadvantages
- High initial cost, as new technology is expensive
- Not easily accessible
218
Amount of waste generated from processes
The methods used to transform the inputs into the finished goods and services should not cause pollution.
219
Amount of waste generated from processes
| advantages/disadvantages
advantages
- Ethical treatment of employees (faire pay, good working conditions)
disadvantages
- Time consuming
220
Production of outputs
The goods and services produces should not cause problems for users and society, that should enhance quality of life
221
Global outsourcing
Global outsourcing is connected to overseas manufacturing but sometimes service businesses also outsource globally
222
Global sourcing of inputs
It's not unusual for business to seek the lowest cost for their production. Often means purchasing products from overseas
223
Supply Chain
A system of operations, people, activities, information and resources involved in moving a product or service from suppliers to manufacturers and then onto customers
224
Supply chain management
Is the meeting of consumer demands of goods and services whilst making efficient use of inputs, the production process and the distribution of the finished good
225
Advantages and disadvantages of Global sourcing
advantages
- Skills and resources not found in the home nation may be tapped into
- Job opportunities and economic growth will be provided in disadvantaged areas
disadvantages
- Financial and political risk - if the country you
- Loss of jobs in Australia
226
Key concept of change
- Business change is the adaptation of a new idea or behaviour and is a result of pressures within the business environment
- Change is ongoing and inevitable, therefore the need for consistently update or improve the business will enable the business to maintain competitiveness to meet the market
227
Two types of change
1. Proactive
- Business reacts before change has occurred
- Business can seek to shape their own identity and plan for the future they wish to position themselves in
2. Reactive
- Business reacts after change has already happened
- Business can wait to see how driving and restraining forces build around them then respond to them in a reactive way
228
Nature of change
1. Radical change
- Is major alterations to business structure, activities or policies
2. Incremental change
- Is a step by step change which is more frequent and easier to implement and less stressful for the business.
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KPI ( Key performance indicators )
is defined as a measure or set of data that allows a business to determine whether its meeting its business objectives
230
Financial KPIs
- Percentage of market share
- Net profit figures
- Number of sales
231
Non financial KPIs
- Rate of productivity growth
- Rates of staff absenteeism
- Level of staff turnover
- Level of wastage
- Customer complaints
- Number of workplace accidents
232
1. Percentage of market share
Percentage of sales or business that one company has compared with its competitors in the same market
233
2. Net Profit Figures
The amount of income left when expenses are deducted from a business revenue
234
3. Rate of productivity growth
This is a measure of the increases in the amount of outputs given the amount of inputs for a certain period of time
235
4. Number of sales
The total quantity of sales of a particular product or service in a certain time period
236
5. Rate of staff absenteeism
This measures the number of times a staff member is not at work, who is using sick and personal leave over a period of time
237
6. Staff turnover
Measures the number of employees that leave a business in a given period
238
7. Level of wastage
The amount of wastage a business has in the production process gives an indication of efficiency, it also provides a measure of resources (inputs) that have not been converted into outputs
239
8. Number of customer complaints
Is an indicator of how your customers feel about your business and the quality
of the product/ service they have received
240
9. Number of workplace accidents
- can show how a business values employees safety
- less accidents workplace has the more likely the business is concerned for
the well being of its employees
241
Force Field Analysis
- Looks at the forces that are either driving movement towards a goal or change OR blocking movement towards a goal or change (restraining forces)
- Driving forces must out way the restraining forces for the change to be successful
242
Driving forces
Are factors that apply pressure for change to occur
243
Restraining Force
Are factors that repress the pressures for change. They can hinder the progress of change or prevent it from occurring.
244
Driving forces
| Mangers
are key drivers of change. They provide the strategic direction for change and are involved in a ‘hands on’ role
245
Driving forces
| Employees
support the business change it is likely the change will be successful
246
Driving forces
| Competitors
Competition between companies ensures that business are always aware of what their competitors are doing and they can respond to change quickly
247
Driving forces
| Legislation
If the law changes, then businesses are obligated to introduce the required changes such as OH&S and workplace relations
248
Driving forces
| Pursuit of profit
If profit levels are not as high as the magers would like, they may make changes to either generate more revenue or decrease their costs to achieve their goal
249
Driving forces
| Reduction in costs
Change might be an option is the cost of production are proving to be too expensive
250
Driving forces
| Globalisation
- Is the process of increasing independence between countries
- It gives greater access to markets around the world and customers have better options of goods and services
251
Driving forces
| Technology
Constant improvements to technology can drive a business to make changes to keep up.
252
Driving forces
| Innovation
introduction of new things and methods in a business
253
Driving forces
| Societies attitudes
Changes in society attitudes including changes in opinion, values and lifestyle
254
Restraining forces
| Managers
may be afraid, may not have the skills or experience or it may threaten their current role.
255
Restraining forces
| Employees
They are scared to learn new skills or move into new territory
Change is difficult and they may not be emotionally equipped to deal with changes
256
Restraining forces
| Time (most important for restraining)
Often businesses feel that they don’t have time to make the change but if they don’t make a change they will fall way behind their competitors
257
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Restraining forces
Organisational inertia (important for restraining)
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The lack of ability for a business to react to internal and external pressures for change and business continues to do what is has always does
258
Restraining forces
| Legislation
There are instances where a government body might actually stop change from happening.
259
Restraining forces
| Financial considerations
Business may conduct a cost benefit analysis to determine whether the change is reeling going to be worthwhile
260
Porter's generic strategy
Is a decision making tool/measure for management about how best to bring in effect of change. This theory contends that there are two major pathways for an enterprise to choose but not both
261
Cost Leadership Strategy/low cost
- is gained by decreasing or altering costs of the business
- Focuses on low cost production, developing better economies of scale, investing in new technology, pressing supplier for better products
262
Cost Leadership Strategy/low cost
| advantages/disadvantages
advantages
- Increased market share
- Increased profit and productivity
disadvantages
- Low customer loyalty
- May cause changes in reputation
263
Differentiation strategies
is a method that shows how a product is unique, this ensures the product is attractive to customers
264
Differentiation
| advantages/disadvantages
advantages
- a different product would set you up as a leader.
disadvantages
- differentiation you would need money planning and time
265
Leadership
The process of positively influencing and encouraging individuals to set and achieve objectives
266
The need to review KPIs
Managers and leaders need to determine which KPI’s the business wishes to implement and review of a time.
267
Management strategies include
| Staff training and development
Focused on an employees current job and is aimed at improving employee skills, knowledge attitudes and behaviours to allow employees to do their jobs more effectively and efficiently then before
268
Management strategies include
| Staff motivation
Motivation is an individual factor, What makes one person motivated is at times not suitable for another
269
Management strategies include
| Change in management styles or skills
Managers should adopt the management style that coheres with the situation
270
Management strategies include
| Increase investment in technology
Due to the rapid rate of technology development, businesses need to have strategy that allow them to take advantage of new technologies
271
Management strategies include
| Improving quality of production
Business should strive to improve the quality of their products and gain a competitive advantage over rivals also produces less wastage
272
Management strategies include
| Cutting costs
It’s important that businesses analyse their operations thoroughly in order to discover the best way to reduce costs
273
Management strategies include
| Lean production techniques
Involves a systematic process of eliminating waste so the customer gets the most value from their perspective with fewer resources
274
Management strategies include
| Redevelopment of resources
Can include moving employees to a different job or sending them to work in a different place or division within a business
275
Global strategies
Expanding on the global market allows a business to become well known on the international field and it provides further opportunities for a business to become more successful and increase its market share
276
Global strategies
| Online shopping
many businesses offer customers the ability to browse available goods and services via the internet, order goods, purchase goods, pay online, and organise shipment of goods.
277
Global strategies
| Exporting
allows Australian businesses to reach new markets as they can sell their product to new audience.
278
Global strategies
| Staffing
- Relocating employees to the foreign country since they already have a detailed understanding of business operations and activities.
- On the other hand the business may lack local knowledge therefore it will be more expensive to relocate employees instead of hiring locally
279
Global strategies
| Innovation
Identify a gap in the market and developing products or services to fill it, can often lead to success
280
Global strategies
| New technologies
Businesses should keep eye on technological development to ensure they are not left behind
281
Global strategies
| Developing a market niche:
- When businesses are able to offer something that not every business is able to offer
- This allows for the businesses to stand out.
282
Global strategies
| Research and development
A way of creating new products and services, or improving existing ones
283
Domestic strategies
New business opportunities can arise from the existing domestic market in which a business operates. A manager must seek new business opportunities to increase market share and develop strategies to take advantage of this.
284
Domestic strategies
| Multiple Branding Strategy
This is where a business sells multiple brands in the same market.
285
Domestic strategies
| Product differentiation
The ability to come up with a unique product that will stand out in the market and will be able to give the business and opportunity to create a niche in the market
286
Domestic strategies
| Franchising
Allows one business to operate under the trading name of another businesses established brand and sell its products or services for a period
287
Senge’s learning organisation
- In situations of rapid change only those businesses that are flexible, adaptive and productive will be successful
288
Personal mastery
- The ongoing commitment of an individual to undertake continuous learning and development
- can be achieved through training and development, performance appraisal and career advancement
- if employees are able to continuously improve the business will to and will also be less resistant to change and may initiate the change
289
Mental models
- creating a business culture of openness, inquiry and trust
- employees are encouraged to challenge old assumptions and mindsets in order to feel empowered to create something new and better than before
- are assumptions, generalisations and images of how people understand the world
- building from your own life experiences as well as learning from the business allows both employee and business to move forward in the right direction
290
Building a shared vision
People who work within the business and adopt the shared vision will be able to see the long term picture of the business and will make a commitment to the business so it can develop even further
291
Team learning
- Is about bringing people together in a group to work at their best and continually find ways to create good results
- if teams and groups within a business are able to have open communication then greater learning will take place thus business will achieve better results
292
Systems Thinking
- Learning organisation’s use this method of thinking to evaluate the performance of the business as a whole, rather than separate units
- the ability to see the big picture and to look beyond what is happening, not just within the business
293
Advantages and disadvantages
| Senge’s learning organisation
advantages
1. Boosts levels of creativity, thinking, innovation and business competitiveness
2. Continuously striving to improve staff motivation, corporate image and skills
disadvantages
1. Requires cultural change which can take time
2. Large businesses can struggle to share ideas and knowledge between all the members`
294
Low risk strategies
| definiton
They are strategies that don't put the employees at any risk but try to encourage the employees to accept the change
295
two -way communication
- Being open and honest about change so that employees fully understand the direction of the business and its impact
- usually between mangement and employees
- employees can voice their concerns
296
Support
Sometimes employees may need support to manage the change as it can have a negative impact on employees and their health and wellbeing
297
Incentives
Giving something with the aim of persuading or mentoring people to accept the change
298
low risk strategies
| advantages/disadvantages
advantage
- Better relationship with management
- Employee will feel empowered and motivated to do their work or even go beyond
disadvantages
- often be time consuming which can increase the time it takes to implement the change
- cost more (offering incentives and support such as training)
299
High-risk strategies
Are methods of introducing change that are likely to be resented by employees and other stakeholders. Better for short term as they may have a negative consequences in the long term
300
1. Threats
- include threatening employees with the loss of their job or a demotion
- can get employees to embrace the change quickly
- However this can cause resentment and harm relationship
301
2. Manipulation
- Gaining support from employees by the selective use of facts or deception
- tends to push the employee into a situation that they do not want to be in.
302
High-risk strategies
| advantages/disadvantages
advantages
- Jobs get done quicker as there is a possibility of losing job
disadvantages
- harm the relationship and culture within the business
- can cause even more resistance to future change due to loss of trust
303
kurt Lewin believed..
- that change takes place at many levels within a business. He has suggested that change should take place at a structural or systemic level
- In order for change to take place it has to go through these three steps
304
Step 1. Unfreeze
- in order to identify what needs to change, a business needs to identify what types of things need to change and more so employees need to know that support from management is always readily available.
- involves removing resistance to change and motivating and preparing stakeholders to embark on the change
- strong support from upper management
305
Step 2. Change
- Lewin was aware that change is not an event, but rather a process, and he called that process a “transition”
- lines of communication are open so that employees are able to seek guidance on what is taking place as they may be fearful of the change
- Some support, counselling and training systems may need to be implemented to assist with the smooth transition.
306
Step 3. Refreeze
- is about returning the business to a new sense of stability
- It is important that the business consolidates the changes into the culture of the business.
- can be done by rewriting policies, celebrating achievements and more importantly maintaining support and encouragement for all staff as this will eliminate all possible resistance to change.
307
Importance of leadership in Lewin's three step change model
- has to take on a supportive role
- Should adopt a consultative or participative management style to promote more communication and constant communication with employees
- Role becomes really important as leaders need to connect with employees
308
The effect of change on stakeholders
Mangers
- change of mangement style
- change of processes
- change of employment
309
The effect of change on stakeholders
Employees
- introduction of new technology (retraining)
| - business is taken over or merges with another
310
The effect of change on stakeholders
Customers
Customers may not like the change, hoping that the business will revert back to what it was. Others will embrace the change and may even promote the change to others.
311
The effect of change on stakeholders
Suppliers
Change can bring new methods of production, training programs for employees and new suppliers for a business. But these new methods of production may lead to outsourcing.
312
The effect of change on stakeholders
General community
slow decrease in the workforce as they down size. local community suffers as the employees are losing income, reducing their spending and causing local business to loos sales.
313
The effect of change on stakeholders
Shareholders
- If a business is affected in a negative manner then the shareholder dividends will go down and they may decide not to invest in the businesses anymore.
- however a business makes positive changes such as reducing expenses and increasing profit the shareholders may benefit from it.
314
CSR Definition:
Involves managing business processes in order to produce an overall positive impact on the community
- offering back to the community
- Should be considered in all policies and procedures
315
Corporate Social Responsibility considerations
Change of supplier
- If supplies are sourced overseas, ensure workers are not exploited, are paid fairly and have decent working conditions
- Ensure suppliers uphold the same social responsibility standards
316
Corporate Social Responsibility considerations
Introducing new technology
- Ensure technology does not add to pollution or create additional waste
- Ensure workers are given the opportunity to retrain and operate technology
317
Corporate Social Responsibility considerations
Downsizing
Employees are kept informed of changes and processes for redundancies (if needed)
318
Corporate Social Responsibility considerations
Merger or takeover
Existing employees are treated appropriately by the new management team and all legal obligations are honoured
319
The impact of CSR on stakeholders
Employees and mangers
- May find that the task and jobs are modified.
- Need to up skill qualifications
- Managers may need to make long and short term decisions
320
The impact of CSR on stakeholders
Shareholders and owners
- Development of policies that are socially responsible
| - Financial support through initiatives to improve the community
321
The impact of CSR on stakeholders
Customers
- May find that they prefer purchasing goods and services from a business that have a CSR outlook
- Customer may purchase products where profits are passed on to charities
322
The impact of CSR on stakeholders
Suppliers
- Some suppliers may have to change their policies and processes to ensure they can meet the demands of the business
- May have to source from elsewhere so that they can meet the businesses CSR priorities
323
The impact of CSR on stakeholders
Community
- If the business have a poor record in terms of impact on the environment and do not contribute beyond their core business will find that their reputation will decline and communities won't support them
- business will have to work hard to ensure community is aware of the businesses positive doings
324
Advantages and disadvantages of CSR
Advantages
- Better business reputation
- Benefits society health & welfare
- Impact on sustainable future
Disadvantages
- Financial cost
- Diverted time away from core business
325
By reviewing our initial KPIs a business can
- Analyse the size and extent of any transformation
- can identify the areas they had the most success in and the ones which require additional effort or time to be achieved
- Consider an alternative management strategy if they didn’t achieve the results they were looking for
