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

2. 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

3. 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

4. Corporate Culture Google video Google blog
Understanding Business Activities – P5

5. 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

6. 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

7. 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.

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

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

10. 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

11. 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?

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

13. 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

14. 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)

15. 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

16. 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

17. 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

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

19. 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

20. 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

21. 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.

22. 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

23. 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.

24. 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

25. 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

26. 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

27. 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

28. 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.

29. 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

30. 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

31. 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.

32. 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

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

34. 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?)

35. 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

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

37. 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

38. 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 ( , internet)
Environmental (green thinking, natural disasters)
Competition (opening or closing of businesses)

39. 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

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

41. 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

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

43. 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

44. 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