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Business Management

Business Management
Outcomes
Thestudent:
Thefocusofthistopicisthenatureandresponsibilitiesofmanagementinthebusiness
environment.
P2explainstheinternalandexternalinfluencesonbusinesses
.

P4assessestheprocessesandinterdependenceofkeybusinessfunctions

P5examinestheapplicationofmanagementtheoriesandstrategies

P6analysestheresponsibilitiesofbusinesstointernalandexternalstakeholders

P7plansandconductsinvestigationsintocontemporarybusinessissues

P8evaluatesinformationforactualandhypotheticalbusinesssituations

P9communicatesbusinessinformationandissuesinappropriateformats

P10appliesmathematicalconceptsappropriatelyinbusinesssituations

Students learn about:

Nature of management
Features of effective management
Skills of management
- Interpersonal, communication, strategic thinking, vision,
problem-solving, decision-making, flexibility, adaptability
to change, reconciling the interests of stakeholders
Achieving business goals
- Profits, market share, growth, share price, social,
environmental
- Achieving a mix of the above goals
- Staff involvement innovation, motivation, mentoring,
training

Nature of management
Management is a process of coordinating the businesss

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resources to achieve its goals


Business resources means human, physical and financial
A manager is a person who coordinates the businesses
limited resources in order to achieve specific goals.
Contemporary definition: Management is a process of
working with other people to achieve business goals in a
changing environment.
Management requires

Working with and through others


Achieving the goals of the business
Getting the most form limited resources
Balancing efficiency and effectiveness
Coping with rapidly changing environment

Efficiency Each resource is allocated optimally to each person


to minimise waste and inefficiency.
Basic functions of management
Planning Decides on organizational goals and allocate
and use resources to achieve those goals.
Organising Establishing the rules and reporting
relationships that allow people to achieve organizational
goals.
Leading Encourage and coordinate individuals and
groups so that the work lead forward organizational goals
Controlling Evaluate how well the organization is
achieving its goals and take action to maintain and
improve performance or take corrective action

Features of Effective Management


Effective Management
Effectiveness in management is about achieving goals.
Efficiency is the relationship between inputs and outputs.
The goal is to minimise the use of resources which would
minimise the cost.
Effective management is important for the Australian
economy because it will lead to employment growth and
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high standard of living.


Getting better leaders and managers
Upgrade vocational education and training and business
support to improve peoples employment prospects
Ensure equal opportunities for all people attaining senior
corporate management positions.
Larger companies to develop their managers to best
practice standards and with skills to support their
particular business strategies.
Reform management education institutions to focus on
developing skills for the future.
Effective management in business

Provide vision and direction for the business.


Are the people the people who implement change.
Are decision makers.
Coordinate the activities within the business.
Are legally responsible for what the business does.

Effective management makes business succeed


Role of effective managers is to make the joint effort of
employees directed towards achieving the goals of the
business.
Effective management is important because
Good managers are key to competitive economy and
higher performing enterprises.
Job creation depends on better management skills.
To improve Australian management to meet the worlds
best practices and to meet the challenges of Asia-Pacific
century.

Skills of management
The main skills of management are interpersonal, communication,
strategic thinking, vision, problem-solving, decision-making, flexibility,
adaptability to change, reconciling the conflicting interests of stakeholders

Interpersonal
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Interpersonal skills is the ability to communicate, lead,


delegate, motivate and negotiate. Every manager needs
to develop these skills.
Interpersonal (people) skills are those skills needed to
work and communicate with other people and understand
their needs.
People skills include the ability to communicate, motivate,
lead and inspire.
A manager who lacks empathy is arrogant and
opinionated, unable to communicate or has difficulty
relating to people will not be able to develop positive
relationships with employees
Communication
Communication is the exchange of information between
people; the sending and receiving of messages.
Without effective communication, the most carefully
detailed plans and brilliant strategies will most probably
fail.
Well-written letters, an inviting telephone manner,
pleasant conversation, concise emails, and friendly smiles
and gestures reinforce carefully planned business
strategies and client networking.
Strategic Thinking
Is thinking about the future of the business. This means
finding, choosing and implementing the business to grow
stronger and better in the future.
Strategic thinking allows a manager to see the business as
a whole and to take the broad long term view.
Vision*
The vision statement explains the idea that the business
will strive towards as it fulfils its mission statement. The
vision is generally directed at the stakeholders. Examples
of vision statement are cost effectiveness, environmental
responsibility, motivated, innovative and competent
employees and value to customers.
Problem-solving
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Problem solving is a broad set of activities involved in


searching for, identifying and then implementing a course
of action to correct an unworkable situation.
Complex problem solving is a key manager skill. The
business are best trying to improve things to increase
productivity. The best approach to problem solving is a
systematic approach.
Steps to follow to solve a problem
1. Define a problem
2. Generate alternative solutions
3. Evaluate and select an alternative
4. Implement and follow up on the solution
Decision making
Decision making is the process of identifying the options
available and then choosing a specific course of action to
solve a specific problem
People always have to make a decision. Top-level
managers make decisions about the direction the business
will go in the future and set goals for the business.
Flexibility
All businesses operate in environmental uncertainty. The
development of computers and the world wide web, email
has changed the ways the businesses operate. So to
succeed in a business environment, the businesses have
to be flexible through flexible managers.
Adaptability to Change
Businesses today are recruiting and selecting managers
who can cope with unfamiliar and unexpected
circumstances.
Regardless of their level of management, successful
managers are those who anticipate and adjust to changing
circumstances.
They must be flexible, adaptive and proactive. Those who
are unprepared of passive in the face of change will not
succeed.
Reconciling the conflicting interests of stakeholders
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Stakeholders are groups of individuals who interact with


the business and thus have a vested interest in its
activities.
Most businesses are now extremely sensitive to public
opinion and strive to be recognised as good corporate
citizens.
Society increasingly expects businesses to accept
responsibility and accountability toward all stakeholders
for the promotion and management of change.

Achieving business goals


The key business goals are profits, market share, growth, share price,
social and environmental.

Goal
A goal is a desired outcome (target) that an individual or
business intends to achieve within a certain timeframe.
Success in achieving your goals is often determined by the
amount of planning you undertake. Detailed planning
increases the likelihood of successfully achieving your
goals.
SMART Goal
Specific Goals should be straightforward and emphasise
what the business wants to happen.
Measurable Decide on goals whose progress can be
measured so the business owner can see the change
occur. This helps the business stay on track.
Achievable Goals needed to be challenging but not be
too far out of the businesss reach, otherwise the business
owner and employees will become unmotivated due to the
lack of success.
Realistic Goals must represent something that the
business owner and employees are both willing and able
to work towards.
Time bound The goals must have deadlines and subdeadlines attached to them, otherwise the commitment is
too vague.
Carefully prepared goals benefit managers by
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Serving as targets
Measuring Sticks
Motivation
Commitments

Profits
Profit is the most important goal because it relates to the
success of the business.
Profit = Revenue Cost
Payment of profit to shareholders is called a dividend.
The share of profit kept by the business to finance things
further for growth is called retained profit.
Market share
Market share is the percentage of the market a particular
businesss product or services have.
Growth
Growth refers to an increase in revenue from year to year.
Growth is achieved by doing things better than competing
businesses.
Growth is the aim of long-term investors and managers.
Share Price
Share price is the price at which the shares of the business
is sold in the ASX.
Social
Businesses have a number of social goals such as
providing employment, increasing the standards of living
in people.
Environmental
Environmental goal is to reduce the businesses carbon
footprint, reducing waste in packaging and reducing
packaging requirements.
Achieving a mix of above goals
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Businesses have a range of goals because they have a


range of different stockholders who have different needs.
Staff involvement
In a modern successful business, managers involve staff in
Share the vision concept.
Successful businesses motivate employees and provide
effective mentoring and training.
Innovation
Innovation relates to the idea of developing new products.
Managers have to come with ideas to involve staff in
business so that they have a personal stake in the
business.
Motivation
Motivation is the reason a person gets involved with a
business.
Recognition is the key strategy in motivating employees.
Mentoring
Mentoring is where an experienced person in the business
trains and counsels another employee in the early stages
of development.
Training
Is about giving employees the skills they need to do their
current job really well.
Training begins with induction.
Induction is a structured program designed to introduce a
new employee to both the business and job.
Management approaches
Classical approach
- Management as planning, organising and controlling
- Hierarchical organisational structure
- Autocratic leadership style
Behavioural approach
- Management as leading, motivating, communicating
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Teams
Participative/democratic leadership style
Contingency approach
Adapting to changing circumstances

Management approaches
1. Classical Approach (order comes from the top)
2. Behavioural Approach (teamwork to take decision and problems)
3. Contingency Approach (Backup plan as things come)
4.
Management
Theory

Classical Theory

Behavioural Theory

Contingency
Theory

Major Concept

Reduce costs,
Leading, Motivating
improve efficiency
and Communicating to
and increased profits. bring success to the
business.

Adapting to
changing
circumstances in
aspects of the
business.

Organisational
Structures

Structure is like a
pyramid. There are
managers that are at
the top, middle and
employees at the
bottom.

Fewer manager and


workers have a greater
degree of
accountability.

Employees remain
on their designated
job roles until there
are organisational
changes by the
management.

Levels of
management

There is a strict line


of authority from the
top managers to the
bottom employees.

There are higher level


employees such as
managers which lead
and have more power
and control but the gap
is lower than the
classical approach.

Managers make the


most decisions while
employees are
responsible for their
designated area.

Communication

Communication is
direct in tasks
required to perform

Communication is key
with managers and
employees interacting
with one another.
Teamwork is
encouraged in this
approach.

Depends on
situation but
communication is
usually limited.

Leadership
Style

The managers
decide on the
decisions that are
made and employees
have little to no say
in the decision
making.

Managers have the


most say in the
decision making but
employees are
encouraged to provide
suggestions and ideas.

Managers have the


most decision
making and any
failures are put onto
blame towards the
manager.

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Classical Approach
Developed in the 1900s by theorists
Tries to reduce costs, improve efficiency and profits
Frederick Taylor believed that the best way to do things
were predetermined and with the right type of worker who
is trained and given specific tools, productivity would
increase
Other classical theorists include Henri Fayol, Max Weber,
Frank and Henry Grantt
Management as planning, organising and controlling
Planning is concerned with setting the goals and working
out ways to achieve them
Organising is concerned with designing a framework for
the business. What tasks need to be done? Which workers
will do those tasks?
Controlling is concerned with measuring actual
performance and comparing it with the planned
performance.
Hierarchical organisational structure
Hierarchical organisational structure is pyramid like. The
structure consists of a few managers at the top, a few
middle management to supervise and lots of workers at
the bottom
The classical theorists advocated a strict line of authority
from the top to the bottom
Small Span of control means a manager should control
between four to fourteen workers
Autocratic Leadership Style
Is where the managers use a high degree of direction and
permit little or no participation in decision making by
subordinates

Behavioural Approach
Studied how people behaved in the work environment
Motivation, leadership and teamwork are the major
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outcomes of this theory


People are important factors in success of failure of the
business
Management is leading, motivating and communicating
The leading function
Involves managers in directing, motivating and
communicating to people and resolving conflict
It involves encouraging people to enthusiastically achieve
goals of the business
It involves the workers in decision making process that
affects their work
Ideas to motivate people are:
Ensuring fair and reasonable reward
Giving employees challenging work
Ensuring that they have a say in decision affecting their
work
Making reports available to the worker and supervisor
Developing multiskilling in employees
Providing recognition for achievement
Flat Organisational Structure and Teams
Fewer manager and workers had greater degree of
accountability and responsibility for their work
Removing the middle management is called flattening the
organisational structure
Teamwork is encouraged in big businesses to achieve the
goals
Participate/Democratic leadership
Employee participation in decision making
Open communication channels subordinates input
encourage in decision making

Contingency Approach
Contingency theory advocates adapting to changing
circumstances in every aspect to the business
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According to this theory, there is no best way to manage


the business
Organisational structure and management style should
depend on the type of tasks that the business is doing
Adapting to changing circumstances
The economic, technological, political and social changes
affect the ability of a business to be competitive
Business which react quickly to change can get a higher
portion of market share.
Management process

Coordinating key business functions and resources


Operations
Goods and/or services
The production process
Quality Management
Marketing
Identification of the target market
Marketing mix
Finance
Cash flow statement
Income statement
Balance sheet
Human resources
Recruitment
Training
Employment contracts
Separation voluntary/involuntary
Ethical business behaviour

Management Process
Coordinating key business functions and
resources
Coordination involves making sure the different parts in a
business work together efficiently
Coordination is about making sure all the functions are
working towards common goals
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Operations
Operations has the tasks of making a product that meets
customer expectations
It is concerned with activities that transform inputs into
finished goods and services
An effective operation is important for the profitability and
competitive position of a business
Goods and Services
Businesses provide goods and services to meet the needs
of customers more effectively than competitors
Goods are tangible things designed to meet customer
need cars, iPod and clothes
Services are intangible products such as doctor,
accountant and banking
The goods and services must be provided with the level of
consistency, quality and efficiency
The production process
INPUT sugar, water, cola essence, chemicals, carbon dioxide
TRANFORMERS
OUTPUT Can of coke
Quality management
Quality is manufacturing products or providing services
that are as consistently similar as possible
Quality is about manufacturing products or delivering
services that meet the standards or specification that
were set for that product
Quality management is all about minimising the variations
to defined limits and then building system and procedures
to ensure those limits are never exceeded
Quality assurance involves putting into place systems and
procedures that makes sure an error or fault would not
happen
Quality management has to be proactive workers. Workers
need to be trained to assess the quality of their own work
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Quality assurance is important because it provides


managers with the confidence that they can produce
quality products all the time
Certification is important where an independent
specialist organisation such as Standards Australia inspect
the systems and procedures that certifies that the process
will result in quality products every time
Total Quality Management (TQM) tries to improve
every aspect of the business. It was popular during the
1980s but the current focus is on quality assurance

Marketing
The role of marketing is to develop a product that
customers want
Marketing is not easy because all competitive businesses
are trying to develop a product to meet the same
customer demand
In a successful business, marketing will identify a
customer need and develop a product to meet that in
need. This process will involve pricing, promoting and
distributing
Identification of target market
The target market is a group of people the marketing
effort or product is focused on
Market segmentation is concerned with breaking down the
total market into smaller or more manageable bits
Differentiated marketing involves focusing the market
effort on a number of different segments
Marketing mix
The marketing mix refers to how the 4Ps are combined to
achieve business objectives. These are Product, Price, Place
(distribution) and Promotion.
Product

Product refers to all the benefits a good or service offers to a


customer.
It includes design and style features, image and brand, after-sales
service and warranty.

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Style and image are important features of a product because they


impact on price.

Price

Price is the payment required to purchase a product.


Price is the most important thing customers consider in choosing a
product.
Penetrating pricing is a strategy where prices are set below the
prices charged by competitors.
Where there is limited competition, skimming strategy is where
prices are set at whatever the market will bear

Place

Place refers to the way a product is distributed to customers.


The distribution channel links the point of manufacturing to the final
customer.
Coca-Cola sells through supermarkets, vending machines, service
stations and convenience stores.

Promotion

Promotion is concerned with communicating with its customers.


Promotion is done using the promotional mix:
Personal selling
Advertising
Below the line promotions
Public Relations

Positioning (Product)

Position is the image a product has in the mind of its customers.


Reject Shop vs Myer

Brand (Product)

Brand is a logo, name or symbol that identifies a particular product.

Personal Selling (Promotion)

Sales representative helping a customer by explaining the benefits


of a product to their customers and effectively displaying a product.

Advertising (Promotion)

Bringing awareness of a product or brand out across through


billboards, television, newspaper, the internet etc.

Below the line promotions (Promotion)


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Competitions, free samples and coupons communicate with


customers.

Public relations (Promotions)

Refers to communications with customers without having to pay to


get the message across.
Sports people or celebrities appear on television wearing a logo
associated with the product or using a product.

Distribution Channel (Promotion)

Intensive distribution is where many outlets as possible are used to


distribute the product such as potato chips and drinks.
Exclusive distribution is used for luxury items. An exclusive channel
is used for products right at the top of the market such as Rolls
Royce or Gucci.

Finance
Finance is concerned with where the business sources its
funding. Accounting is a tool that provides information on
financial affairs of a business. There are three major
statements, these are the cash flow statement, income
statement and the balance sheet.
Business Finance Terms
Financial Management

Management of finance with sourcing where is the fund coming


from?
Once a business has secured funding, it then needs to ensure that it
is appropriately accurate.
Cash flow is sometimes described as the life blood of a business.
The management of cash flow involves anticipating cash
expenditure and ensuring that enough of the income earned comes
in the form of cash.

Contingencies

Contingencies are unanticipated events that can lead to financial


difficulty.
For a business to be well managed, it needs to have saved money
for such events because they can place the business under
unexpected financial pressure.

Credit Rating

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A business that is well managed will have a good credit rating which
means that lenders will be prepared to lend the business money
because they know it is safe for them to do so.
The credit rating is determined by financial organisations that
assess the capacity of the business, both to repay debt and manage
finances responsibly.

Accounting

Accounting is a managerial and administrative tool that involves the


recording of financial transactions.
Accounting records financial transactions from delivery dockets,
sales receipts, invoices, cash register records and e-payment
transaction.

Accounting provides information on:

Financial status/position
Cash status/position
Financing or funding information
Cash flows
Profitability and return on investment
Trends in earnings, borrowings, sales and so on that together
indicate the risk the business faces

Cash Flow for a big business

Cash form operating activities these are cash flows related to main
trading operations and prime function
Cash from investing activities these are cash flows related to the
sale and purchases of assets such as land and buildings.
Cash from financing these are cash flows related to the acquisition
of and repayment of both debts and equity finance.

Liquidity

Liquidity is used to describe whether a business has a good or


adequate cash flow.

Cash flow statement

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Sales
Cash Sales $6000
Payment from credit sales $3000

Inflow
Interest from bank deposits $250

Outflow
Rent $5000
Wages $4000
Electricity $750
Stock $8500
Advertising $500
Loan Payments $2000
Telephone $300

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Total Inflow $9,250
Total Outflow $21,050

Closing Cash Balance -$11,800

Income statement

Income Statement aka Statement of financial performance aka


Revenue Statement aka Profit and Loss Statements

Is a summary of income earned and expenses incurred over a period


of trading and how much profit has been derived.

Revenue Statement for the year ended 30 June 2011

Sales - $10,000
Cost of Goods sold - $4,000
Gross Profit - $6,000
Expenses - $3,000
Net Profit - $3,000

Good Profit - Sales - COGS

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COGS - cost of goods sold - value of stock that the business has sold
to the customer.
COGS = Opening Stock $2,000
+Purchase $23,000

Closing Stock $4,000


-> COGS -> $21,000

Expenses/Costs

Selling

Administrati Financial
ve

Commission

Stationary

Salaries

Office Salaries

Wages

Rent

Advertising

Rates

Delivery Expenses

Telephone

Electricity

Audit fees

Depreciation on shop
fittings

Accountant's
fees

Interest
Payments
Lease payments
Insurance
payments

Balance sheet

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Assets = Owners Equity + Liabilities

Balance Sheets/Statement of financial position


Balance sheets detail the financial stability of the business in terms of
what it owns and what it owes.
Balance Sheet Equity + Liability A = OE + L

Assets are in two types. Current and non-current.


Current is within 1 year. Accounts receivable are money received from
other people.
Non-current are used and kept for more than one year such as buildings.

Liabilities are in two types. Current and non-current.


Current is changing in one year. (Short term loans) - accounts payables
Non current is not changing such as long term loans for property.

Bank overdraft - Your balance is 5000 but you have to pay 8000 so you
get an overdraft which is like a short term loan.

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Balance Sheets/Statements of financial positions
Balance sheets details the financial stability of the business in terms of
what it owns and what it owes.

Balance Sheet Equation is Assets = Owner's Equity + Liabilities A = OE


+L

Assets ae items of value to the organisation that can be given monetary


value. Example - buildings, furniture, equipment, goodwill and stock.

Current assets are those whose value is expected to be used up or


turned over within 12 months. Example - Stocks, Debtors, Accounts
Receivable

Noncurrent assets are items that have an expected life for over a year.
Building, furniture, car and truck.

Intangible items are those of worth that have no physical substance e.g.
good will, trademarks, copyright and patens.

Liabilities are items of debt owed to outside parties and other


organisations and include loans, mortgages etc.

Current Liabilities are those in which the debt is expected to be repaid


12 months or less e.g. bank overdraft.

Noncurrent liabilities are those long term debts expected to be paid in


over 12 months e.g. mortgage

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Owner's equity is the money given to a business in order for it to acquire
resources, known as capital.

Use the accounting equation is Assets = Liabilities + Owners


Equity to calculate the following:
1 Total liabilities = $10,000
Total owners equity = $50,000 -> Assets = $60,000
1 Total liabilities = $12540
Total owners equity = $41,543 -> Assets = $ 54,083

Human Resources
Effective management of the formal relationship between the
employer and employees. The human resource cycle is
acquisition, development, maintenance, separation.

Employee can make or break the business

Successful business recognise that they rely on the quality


of their employees to achieve their goals of improved
profits, growth and increased market share.
Management of the staff has to be the top priority for
every business.

For a business to make a best use of its employees it


should:

Take care to hire the best people


Develop cooperative and effective working relationships
Motive staff to do their best in the workplace

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Provide employees with opportunities for trading and


development

Recruitment (Acquisition)

Hiring New Employees


Planning: identifying staffing needs, job analysis.
Recruitment: Attracting people to apply for the position,
internal and external recruitment.
Selection: choosing and hiring the most qualified, testing
and interviewing
Training (Development)

Improving employees skills and abilities.


Induction and training: teaching employees new skills,
helping employees learn tasks associated with their jobs
and to improve their skills.
Skills inventory: compile database of skills and experience
of all current employees
Employment contracts

Is a legally binding, formal agreement between an


employer and an employee.
There are three main type of employment contract:
- Award
- Enterprise Agreements
- Common Law contract
Awards

Award cover the minimum conditions: pay rates, holidays, sick, longservice and maternity, overtime, allowances for tools or uniform and
hours of work.

Enterprise agreement

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Is a negotiated arrangement between an employer and a union or a


group of employees.
An enterprise agreement can:
Replace an award or act as an add-on agreement.

Must comply with all NSW laws regarding employments rights and
entitlements.
Must be in writing and signed by both parties. Are usually for a fixed
term.

Common Law contract

Cover those employees who are not under any award or enterprise
agreements. They are common under professional and managerial
employees. Such contracts are signed individually and are secret.
Both parties have the right to sue if either party do not fulfil their
part of contract.

Maintenance

Motivating employees to remain with the business.


Monetary benefit: rewarding employees efforts through
financial, pay rates.
Non-monetary benefits: rewards such as conditions, fringe
benefits.
Separation voluntary/involuntary

Voluntary separation
Retirement (Old)
Resignation (Choose not to work)
Redundancy (Occupation is non existent anymore)
Retrenchment (Cutting down workers)
Dismissal (Bad work behaviour)
Unfair Dismissal
Employees leaving business
Voluntary: employees leaving on own accord retirement,
resignation.

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Involuntary: employees being asked to leave,


retrenchment, dismissal.

Ethical Business Behaviour

Production methods should fit with strict environmental


regulation.
Acting honestly and morally honouring commitment
Not engaging in misleading and deceptive behaviour
Providing safe work environment

Triple bottom line

Refers to the economic, environmental and social


performance of a business.
This means that the businesses no longer focused on
making a profit at all costs but they recognise the
environmental and social performance.

Ethical Issues

Fairness and honesty


Respect for people
Conflict of Interest - when a person takes advantage of a
situation or piece or information for his on her own gain
rather than for the employers interest.
Financial management - all records should be audited by
Internal and External auditor
Truthful communication

Corporate code of Conduct

Is a set of ethical standards for managers and employees


to abide by.

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Socially Responsible business behaviour

Business management of social, environmental, political


and human consequences of its actions.

Management and Change

Responding to internal and external influences


Managing change effectively
Identifying the need for change
Business information systems
Setting achievable goals
Resistance to change
Management consultants
If business can manage change effectively they can
survive in todays highly unpredictable environment.
Nothing is permanent but change.
Change is any alteration in business and work
environment.
Change can be in consumer tastes, production methods,
markets or type of products sold, how employees perform
tasks.

Responding to internal and external influences

External and internal influences are discussed before.


When businesses change due to external or internal
influences they can result in either transformational (major)
or incremental (minor).
Transformational change is complete restructure
throughout the whole organisation.
Incremental change results in minor changes, involving
only a few employees.

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Impact of change on organisational structure

Outsourcing
Flatter organisation structure (Less levels of managers)
Work teams

Managing change effectively

By using business information system/management


information system which gathers data, organises and
summaries them and converts them into practical
information to be used by managers who use them to make
decisions.
Manipulation - exertion of influence over someone to gets
them to do what you want.
Threat - Loss of promotion, transfer, termination.

Setting achievable goals

A vision statement states the purpose of the business.


If management detects changes then businesses vision
statement needs to be reassessed.
The new goals set should be attainable and realistic and
achievable.

Resistance to change
Change is resisted because
It can be achieved with considerable effort
Is emotionally stressful
Management
Fear of job loss

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Business Management

Disruption to routine
Fear of unknown
Inertia
Cost

Management consultants

Is someone who has specialised knowledge and skills


within an area of business.
They help businesses adapt:
Undertaking change readiness reviews
Creating supportive business culture
Involving all stakeholders in the change process
Gaining and recognising early achievements

Management and change

Responding to internal and external influences


Managing change effectively
- Identifying the need for change
o Business information systems
- Setting achievable goals
- Resistance to change
- Management consultants

Management and Change


Responding to internal and external influences
Managing change effectively (indicated above)
If a business can manage change effectively, they can
survive in todays highly unpredictable environment
Nothing is permanent but change
Change in any alternation in business and work
environment
Change can be in consumer tastes, production methods,
markets or type of products sold, how employees perform
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Business Management

tasks

Responding to internal and external influences


When businesses change due to external or internal
influences, they can result in either transformational
(major) or incremental (minor)
Transformational change is complete restructure
throughout the whole organisation
Incremental change results in minor changes, involving
only a few employees
Impact of change on organisational structure
Outsourcing
Flatter Organisational Structure (Less levels of managers)
Work teams

Managing change effectively


By using business information system management
information system which gathers data, organises and
summaries them and converts them into practical
information to be used by managers who use them to
make decisions
Manipulation exertion of influence over someone to get
them to do what you want
Threat Loss of promotion, transfer, termination

Setting achievable goals


A vision statement states the purpose of the business
If management detects changes, the business vision
statement needs to be readdressed
The news goals set should be attainable, realistic and
achievable

Resistance to change
Change is resisted because:
It can only be achieved with considerable effort
Is emotionally stressful
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Business Management

Management change
Fear of job loss
Disruption in routine
Fear of the unknown
Inertia (Tendency to remain unchanged)
Cost

Management consultants
Is someone who has specialised knowledge of skills within an
area of business. They help the business adapt by:

Undertaking change readiness reviews


Creating supportive business culture
Involving all stakeholders in the change process
Gaining and recognising early achievements

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31