Business Management - 1. Nature Of Business

Front 1

Features of Effective Management

Think: inputs vs outputs

Back 1

Effective management is to make sure the joint efforts of employees are directed towards achieving the goals of the business.

Producing goods and services requires a combined effort. This combined effort must be effectively coordinated so that the greatest amount of goods and services can be produced for the least cost.

Front 2

What are Goals?

Back 2

A goal is a desired outcome that an individual or business intends to achieve within a certain timeframe.

Talk about: planning, targets, measuring sticks, motivation, commitment

Front 3

What are SMART goals?

Back 3

Specific - straightforward
Measurable - progress can be measured
Achievable - challenging but not too far out of reach
Realistic - everyone is willing to work towards
Timebound - must have deadlines so commit

Front 4

Conflicting Nature of Goals

Think: incompatible

Back 4

It is difficult for a business to achieve all of its financial goals simultaneously because the links between goals make some of them incompatible.

Front 5

Maximize Profits

Back 5

Profit Maximization occurs when there is a maximum difference between the total revenue coming into the business and total costs being paid out.
Lowering the price, marketing campaign, innovative products, better service.
e.g. Virgin Australia

Front 6

Maximize Growth

Back 6

Internally (organically) or Externally

Internal - more employees, increasing sales, innovative products, new equipment or more outlets

External - merging or acquiring other businesses
e.g. Merger - Qantas and Jetset Travel
e.g. Acquisition - Coca-Cola and Mount Franklin Water

Front 7

Increase Market Share

Back 7

Market Share refers to the business's share of the total industry sales for a particular product.
e.g. ACP Magazines
Increasing market share = more profit
Promotion is used to inform, persuade and remind a market about its products.

Front 8

Improve Share Price

Back 8

Shareholders are the owners of the companies.
Need to maximize the returns of their shareholders. This is achieved by keeping the share price rising and paying back healthy dividends.

Front 9

Interpersonal Skills

Back 9

Managers get their work done with and through other people.
Ability to relate to people, being aware of and appreciating their needs, and showing understanding.
Needs to develop positive relationships with employees.

Front 10

Communication Skills

Back 10

Getting employees to understand and want to achieve the business's goals.
Effective communicators can influence people.
Managers who are effective communicators can share their thoughts and plans with others.

Front 11

Strategic Thinking

Think: Pie

Back 11

Allows a manager to see the business as a whole. Lets the manager see the 'big picture'.
Thinking about a business's future direction and what future goals the business wants to achieve.

Front 12

Vision Skills

Think: direction

Back 12

Vision is the clear, shared sense of direction that allows people to attain a common goal.
To share the vision, managers will have to display effective leadership qualities.
Leadership is the ability to influence people to set and achieve specific goals.

Front 13

Problem-Solving Skills

Think: action

Back 13

Problem solving means finding and then implementing a course of action to correct an unworkable situation.

Front 14

Decision-Making Skills

Think: options

Back 14

Decision-making is the process of identifying the options available and then choosing a specific course of action to solve a specific problem.

Front 15

Flexibility and Adaptability to Change Skills

Think: proactive

Back 15

Successful managers are those who anticipate and adjust to changing circumstances.
They must be flexible, adaptable and proactive rather than reactive. Those who are unprepared or passive in the face of change will not succeed.

Front 16

Reconciling Conflicting Interests of Stakeholders

Back 16

Senior managers must attempt to satisfy as many stakeholders expectations as possible.

Stakeholder’s expectations can be compatible or incompatible.

The triple bottom line refers to the economic, social and environmental performance of a business.
Reconciling the conflicting interests of stakeholders requires competent, informed, ethical and socially responsible managers.