Higher Business Management

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Presentation transcript:

Higher Business Management October 2001 Higher Business Management Understanding Business – Business Environment Unit 1 - LO3

Internal Pressures P48 Issues that will affect the success of the business that an owner can control. Finance available or change in financial position Ability of staff or change in staffing Information available ICT and technology availability Ability of management Changes in costs Employees are a business’s most important (and expensive) resource! Training for staff, high standards of staff. Mistakes/breakages. Poor decisions. BM Unit 1 - L01A

Organisation Corporate Culture •Values, beliefs and norms relating to the company or organisation that are shared by all its staff. shop layout and colour schemes symbols, logos, uniforms etc staff dress staff attitudes towards customers available food and portion size quality of food Mission statements* Influences attitudes of staff Influences stakeholders BM Unit 2 - LO1

Corporate Culture Google video Google blog Understanding Business Activities – P5

An organisation benefits from having a strong corporate culture: Employees feel that they ‘belong’ Staff being more flexible and motivated Improved productivity Improved competitiveness Employee loyalty More ideas on how to solve problems Improved communication Giving staff responsibility for their own work and decision-making by delegation, transfer of responsibility and greater access to information. This often occurs when a business delayers or downsizes. BM Unit 1 - L01A

Several factors need to be considered: Vision and aims of organisation Opinions of employees Design of stores, logos and uniforms etc How people are made aware of culture Policies and procedures

Corporate culture Questions What makes positive or negative corporate culture? What makes positive culture in Google? Why? Describe the factors an organisation should consider when trying to encourage a positive corporate culture? Describe the benefits of having a corporate culture.

Motivated Employees What motivates employees? Increased productivity and quality Reduced absenteeism Low staff turnover Improved reputation Improved customer service Higher sales What motivates employees?

Achieve a Motivated Workforce Effective communication Training and development Teamwork Work environment Support systems Counselling Grievance procedures Return to work interviews Family Friendly policies

Industrial Action Sit in Impact: Overtime ban Halts production Work to rule Go slow Strike Impact: Halts production Sales lost Poor reputation Strained relationships Unhappy workplace If employee relationships breakdown and when they fail to agree on terms – pay, conditions etc then employees make take industrial action. BM Unit 1 - L01A

Corporate Culture Research an organisation that has a strong Corporate Culture or Identity. What do they do to develop Corporate Culture? What do they do to motivate employees? Would you like to work for this organisation? Why?

Nature of Decisions What decisions do you make? In pairs, create a list of decisions that you make daily…

Managers and Decision Making Higher Business Management October 2001 Managers and Decision Making Planning Organising Controlling Commanding Coordinating Motivating Delegating Henry Fayol Write a short description of what each word means P51 Unit 1 - LO3

Management Styles There are 3 main different management styles: Autocratic Style Democratic Style Laissez-faire Style Research what each management style is and give an example of a workplace that may use each (6)

Higher Business Management October 2001 Types of Decisions Strategic - the long-term aims of the business (owners) For example: what products the business will produce over next 5 years increase market share by 20% in next 3 years Unit 1 - LO3

Types of Decisions Tactical - setting out the objectives; more short-term; how to achieve the strategic aims (middle management) For example: to merge with competitor to issue more shares on stock market (to fund…) increase number of employees

Types of Decisions Operational - day-to-day decisions on how to achieve the objectives (managers, team leaders or employees) For example: arranging work rotas ordering stock dealing with customer queries/complaints

Decision Making - Examples What are your strategic aims? What is your tactical aims? What are your operational objectives?

Management Decisions Strategic – Long Term Tactical – Medium Term Owner/senior management Risky and can be difficult/expensive Tactical – Medium Term Senior or middle management Detail how strategic decision will be achieved Operational – Short Term Junior management, section heads or individual workers Practical problems Strategic Tactical Operational

Decision Making - Examples Higher Business Management October 2001 Decision Making - Examples Create a 3 column table. For each of the following organisations, give examples of their decisions at each level. 1. An international commercial transport group – for example, Stagecoach 2. An international not-for-profit organisation – for example, Oxfam 3. A political party – for example, the Scottish National Party 4. A fast food chain – for example, McDonald’s. 5. A sports team – for example, Scottish National Football team   Strategic Tactical Operational Why is there often a conflict of interests between the national team coach and the individual club coaches in sports such as hockey, rugby and football?   3. What do you think could be done to resolve such conflict? Unit 1 - LO3

SWOT Analysis This is the first three steps of decision making process (POG) Strengths Weaknesses Opportunities Threats It can be used to analyse a specific person, product, department or organisation’s performance.

A SWOT analysis should be used to: Identify and build on strengths Assist with decision making Correct any weaknesses Take advantage of opportunities Provide measures to protect against threats Eg legal action taken against illegal music downloaders etc

SWOT Analysis This is the first three steps of decision making process (POG) Create a SWOT analysis for YOU! Strengths Weaknesses Opportunities Threats It can be used to analyse a specific person, product, department or organisation’s performance.

Task Read the story of The Plastic Pig and watch the video on Reliant Robins Carry out a SWOT analysis of the Reliant Robin Write a few sentences in conclusion to what you think of the future for the car

Structured Decision-making Model - “POGADSCIE” Identify the PROBLEM Identify the OBJECTIVES GATHER information ANALYSE information DEVISE alternative solutions SELECT from alternative solutions COMMUNICATE the decision IMPLEMENT the decision EVALUATE

Benefits of Using a Structured Model Higher Business Management October 2001 Benefits of Using a Structured Model No rash decisions are made as time is taken to gather and analyse info The quality/quantity of the information you have The availability of alternative solutions Enhances innovation and responsiveness Unit 1 - LO3

Problems of Using a Structured Model Higher Business Management October 2001 Problems of Using a Structured Model Time consuming to gather and analyse information Can be difficult to choose from a range of possible solutions Can sometimes stifle creativity and gut reactions Unit 1 - LO3

Task: Making a Decision Read over the example of POGADSCIE for a clothes shop on P40 of old Leckie and Leckie TASK - Apply the “POGADSCIE” model to – PROBLEM – staff computers in your organisation are slowing down and not working properly.

Aids to Decision-making Brainstorming A group thinking of as many ideas as possible in short period of time. This can be a very useful way to generate and create ideas. Pest Analysis Political, economic, social and technological external constraints on are identified. (Organisation would then develop strategies to deal with each.) NB Pest and Swot often used together to identify opportunities and threats BM Unit 1 - LO3

De Bono’s Six Thinking Hats Creative suggestions and ideas about the issue Emotional views giving gut feelings about an issue All positive benefits of the issue Control and organise the thinking of an issue All negative thoughts regarding an issue Question what the group thinks about the issue

Group Task Using a structured decision-making process plan a holiday for the members of the group. Record what took place at each step in the process. You should make note of all the factors influencing the final decision. Using everything you have learned about decision-making in this unit, identify factors such as the different objectives of members of the group, constraints such as the availability of the exact holiday wanted, conflict between long-term aims such as saving for a car and short-term objectives such as having a fun-filled holiday.

IT and Decision-making Huge storage capacity Vast amounts of information from the internet Sophisticated software for processing information Reporting and presentation packages (PowerPoint) Improved efficiency and lower costs (less time to find information) Problem of ‘too much’ information? BM Unit 1 - LO3

ICT and decision making Spreadsheets Databases WP Presentation Internet Intranet Email VC Use p57 from textbook to give an example of the use of technology in decision making

Factors Affecting the Quality of Decisions Quality and quantity of information used Training of staff in decision-making Risk-taking The human element (personal interests? Staff ability?)

Why is Effective Decision Making made Difficult? Finance may restrict the best solution Company policy restrict options Staff may resist change Lack of technology Indecisive or lack of training Political factors Economic changes Social factors Technological development Environmental changes Competitors’ activities

Successful Managers Communicate effectively Give guidance and encouragement Arrange necessary training and development

External Pressures p25/26 Issues that will affect the success of the business that an owner can control Political factors Economic factors Social factors Technological factors Environmental factors Competitive factors Read pages 59 - 63

External Pressures to Change (the ‘PESTEC’ analysis) Political/legal (legislation, planning, devolved Parliament, etc) Economic (interest rates, foreign exchange rates, the Euro, etc) Social (ageing population, role of women, greater general prosperity) Technological (e-mail, internet) Environmental (green thinking, natural disasters) Competition (opening or closing of businesses)

External Factors -PESTEC Research online to find examples where businesses have been affected both POSITIVELY and NEGATIVELY from external factors Present findings electronically TASK – Go Activity on P63

Effectiveness of decisions Asking employees Quantitative information eg productivity rates or sales figures Employee absence rates Customer satisfaction surveys

Extension task Using a structured decision making process, plan a holiday for members of the group The group should use various sources to research information – internet, brochures, timetables etc Record what took place at each step and make note of factors influencing final decision

Stakeholders Internal External Shareholders/ Owners Managers Employees Suppliers Customers Banks/lenders Society/Local Community National Government Local Government Taxpayers Donors (Charities)

Stakeholders’ Interests Shareholders - dividends, capital growth Managers - job security, fringe benefits Employees - job security, pay and conditions Suppliers - regular orders, prompt payment Customers - low prices, high quality, good service Banks - ability to make payments for loans Government - payment of taxes, compliance with laws Community - corporate responsibility

Stakeholders’ Influence Shareholders - voting rights at AGM Managers - day-to-day decisions Employees - possible industrial action Suppliers - period of credit, level of discounts Customers - taking their business elsewhere Banks - granting of loans and rate of interest Government - legislation, equal pay, minimum wage, etc Community - protest movements, direct action http://www.thetimes100.co.uk/case-study--the-role-stakeholders--11-329-2.php