Continuation Of Unit 2

Front 1

Lean Management (Production)

Back 1

Encompasses a whole range of techniques for reducing waste and cutting the cost of the production process

Front 2

Just In Time (JIT)

Back 2

Keeps the cost of holding inventory to a minimum by planning production so that raw materials, components and work in progress are delivered daily or more often

Front 3

Advantages of JIT

Back 3

- Improved cash flow

- Less risk of wastage, shrinkage and obsolescence

- More production space available

- Better relationships with suppliers

Front 4

Disadvantages of JIT

Back 4

- Become very dependant on suppliers

- May loose discounts from bulk buying

- Breakdowns cause major problems

- Firm will be less responsive to changes in market conditions

Front 5

Product development lead time

Back 5

Refers to the length of time between the first emergence of the product concept and its launch into the market

Front 6

Total quality management (TQM)

Back 6

Involves getting all employees to focus on quality, so that every team or department sees the user of the particular product as a consumer who must be satisfied.

Front 7

Quality control

Back 7

ways of ensuring that quality is maintained. Traditional quality control means inspecting and checking for defects.

Front 8

Quality assurance

Back 8

Takes into account customer needs and involves businesses in examining every aspect of design, development, production and marketing. there may be a zero defects policy.

Front 9

Benefits of TQM

Back 9

- Generates improved products and services, reduced costs and more satisfied customers.

Front 10

Drawbacks of TQM

Back 10

- There are significant costs of implementation, excessive retraining is required

- Expectations about employee commitment levels are unrealistic.

Front 11

Budget

Back 11

Financial budget which forecasts costs and revenues and maps project changes

Front 12

Sales (or income) budget

Back 12

Sets out expected sales revenue

Front 13

A production (or expenditure) budget

Back 13

Sets targets for cost, and may include wages

Front 14

Historical based budgeting

Back 14

uses last years budget as a basis and if required an adjustment is made for the coming year

Front 15

Zero Based budgeting

Back 15

Sets budgets to zero each year and budget holders have to argue their case to receive any finance

Front 16

Variences

Back 16

Can be favourable or adverse. A favourable variance is one where actual figures are better than budgeted ones. A adverse variance is where the actual figures are worse than the budgeted ones

Front 17

Sales forecast

Back 17

Involves estimating future sales revenues, this may involve some guesswork but this should be informed as best available information

Front 18

Working capital

Back 18

The money needed to pay day to day bills (short term expenses)

Front 19

What do you use working capital for

Back 19

- Employee training costs

- Any raw materials or stock of inputs

- bills (petrol, electricity)

- Wages

Front 20

managing supplier credit

Back 20

Pay suppliers later, this increases working capital because you will have more money to pay day to day bills

Front 21

Managing customer credit

Back 21

Giving incentives for customers to pay sooner, e.g offering discounts if they purchase the good on the spot

Front 22

Holding appropriate levels of inventory

Back 22

JIT stock control may allow destocking, save money and free working capital for other things

Front 23

Contingency Finance planning

Back 23

Have a back up financial plan just in case a business suffers a cash shortfall

Front 24

Factoring

Back 24

Passing debt to someone else in return for a proportion of its value.

Front 25

Cash

Back 25

Is notes, coins and money in the bank, its important to businesses because they need to pay their day to day bills

Front 26

Profit

Back 26

Is the difference between total revenue and total costs (the money left over)

Front 27

Why is cash important in the short run

Back 27

If a business does not pay its bills time and time again it will not survive, even in the short run.

Front 28

Why is profit important in the long run

Back 28

A business can make a loss and still survive, but not in the long run, it must be profitable

Front 29

Poor management of cash flow

Back 29

The business does not manage the cash flow properly, meaning they have more money going out than coming in, cant pay bills so they fail

Front 30

Overestimation of sales

Back 30

Your sales prediction is too high this leads toy you ordering more materials than you need increasing costs, decreasing profit which leads to failure

Front 31

Poor inventory control

Back 31

Business has too much stock, they have so much money tied up in stock, this reduces working capital, this may lead to failure

Front 32

Changing market conditions

Back 32

A change in market conditions such as a economic recession could decrease the demand for a businesses product, this would mean less sales so less profit therefore leading to failure

Front 33

Attitude of lenders to releasing funds

Back 33

if a lender is bad they wont offer finance to the business so they will have less cash to pay their day to day bills which could lead a business to failure.

Front 34

Overtrading

Back 34

Occurs when a business, especially a new business, rapidly expands, taking orders they cannot support with their working capital, this can have serious reprecussions

Front 35

Organisational structure

Back 35

A formal way of outlining the way that authority. responsibility and information will flow in a business.

Front 36

Hierarchy

Back 36

Is the number of levels in an organisational structure

Front 37

The chain of command

Back 37

Shows the way authority passes information through the heirarchy

Front 38

The span of control

Back 38

Refers to the number of people in an organisation for whom one person is responsible.

Front 39

Advantages of a tall structure

Back 39

- employees can be closely supervised

- Good promotion prospects

- Clear management structure

Front 40

Disadvantages of a tall structure

Back 40

- Employees may feel restricted

- High management costs

- decisions take longer

Front 41

Advantages of a flat structure

Back 41

- Better cummunication

- Decision making is easier

- Reduces labour costs

Front 42

Disadvantages of a flat structure

Back 42

- less chance of staff promotion

Front 43

Centralisation

Back 43

All decisions are made at the head offices

Front 44

Decentralisation

Back 44

Most decisions are taken by the individual branches of an organisation

Front 45

Advantages of centralisation

Back 45

- Senior management have more control

- Decisions are made for the good of the business

- standard procedures mean cutting costs

Front 46

Disadvantages of centralisation

Back 46

- Branch managers have little responsibility

- few promotion opportunities

- Workers don't feel involved in decisions

Front 47

Advantages of decentralisation

Back 47

- Workers are empowered to make decisions

- Workers tend to be more motivated

- branches can respond to change quickly

Front 48

Disadvantages of decentralisation

Back 48

- Senior management lack understanding of day to day decisions

- Large numbers of managers are needed - may be expensive

Front 49

Induction training

Back 49

Training program to familierise new recruits with the systems used in the business and the layout of the business site

Front 50

On the job training

Back 50

Instruction at the place of work on how a job should be carried out

Front 51

Off the job training

Back 51

all training undertaken away from the business e.g work related college courses

Front 52

Autocratic leadership

Back 52

style of leadership that keeps all decision making at the centre of the organisation

Front 53

Paternalistic leadership

Back 53

style based on the approach that the manager is in a better position that workers to know what is best for an organisation

Front 54

Democratic leadership

Back 54

Leadership style that promotes the active population of workers in making decisions

Front 55

Laissez faire leadership

Back 55

Leadership style that leaves much of the business decision making to the workforce

Front 56

Benefits of autocratic leadership

Back 56

- useful where quick decisions are needed and the scope of discussion must be limited

Front 57

Drawbacks of autocratic leadership

Back 57

- Demotivates staff who want to contribute and accept responsibility

Front 58

Benefits of paternalistic leadership

Back 58

- Useful when workers are young or inexperienced

Front 59

Drawbacks of paternalistic leadership

Back 59

- some workers will be dissatisfied with the apparent attempts to consult while not having any real power or influence

Front 60

Benefits of democratic leadership

Back 60

- useful in businesses that expect workers to contribute fully to the production and decision making processes, thereby satisfying their higher order needs

Front 61

Drawbacks of democratic leadership

Back 61

- consultation with staff will be time consuming

Front 62

benefits of Laissez faire leadership

Back 62

- useful when managers are too busy or too lazy to intervene

Front 63

Drawbacks of Laissez faire leadership

Back 63

- workers may not appreciate the lack of structure and direction of their work- could lead to a loss of security

Front 64

When to use Autocratic

Back 64

Times of crisis where decisive action might be need to limited damage to the business

Front 65

When to use paternalistic

Back 65

Situations where managers are concerned for workers interests but feel managers know best

Front 66

When to use democratic

Back 66

Situations that demand a new way of thinking.

Front 67

When to use lassez faire

Back 67

In research institutions where researchers are likely to arrive at solutions when not constricted by narrow management control

Front 68

Theory X managers

Back 68

assume their employees are lazy and prefer to be told what to do

Front 69

Theory Y managers

Back 69

Assume that human beings want to work and will commit themselves to work effectively without strict controls

Front 70

Motivation

Back 70

A reason for acting or behaving in a particular way

Front 71

4 motivational theorists

Back 71

- Taylor

- Mayo

- Maslow

- Herzburg

Front 72

Herzburg 2 factor theory

Back 72

Motivation factors

- incentives to encourage staff to work harder

Hygiene factors

- Things that need to be put in place to prevent demotivation

Front 73

Piecework

Back 73

a payment to a worker for each unit produced

Front 74

benefits of piecework

Back 74

- Encourages greater effort and faster working

Front 75

Drawbacks of piecework

Back 75

- Falling quality and safety levels as workers rush to complete units

Front 76

Comission

Back 76

Payment to a sales person for each sale made

Front 77

Benefits of comission

Back 77

- encourages staff to sell more units

Front 78

Drawbacks of comission

Back 78

- Try to hard to convince people to buy stuff

Front 79

Bonus

Back 79

one off payment in recognition of the contribution made to the firm or for meeting a target

Front 80

Benefits of bonuses

Back 80

- encourages workers to be more productive

Front 81

drawbacks of bonuses

Back 81

- demoralising if the target is too difficult to achieve

Front 82

Profit share

Back 82

Bonus for staff based on the profits of the business- usually a proportion of a basic salary

Front 83

Benefits of profit share

Back 83

- lead to higher worker effort

Front 84

Drawbacks of profit share

Back 84

- reward is not closely related to individual effort

Front 85

Performance related pay

Back 85

Bonus scheme for above average work performance

Front 86

Benefits of performance related pay

Back 86

- improves performances if they are seeking increases in financial rewards

Front 87

drawbacks of performance related pay

Back 87

- fails to motivate staff who are not driven to earn extra income

Front 88

Delegation

Back 88

Passing authority down from a superior to a subordinate

Front 89

benefits of delegation

Back 89

- boosts confidence, makes workers feel valued

Front 90

Drawbacks of delegation

Back 90

- work only comes when boss is busy

Front 91

Consultation

Back 91

action or process of formally consulting or discussing

Front 92

Benefits of consulting

Back 92

- workers feel more part of organisation

Front 93

Drawbacks of consulting

Back 93

- time and cost of carrying this out

Front 94

Empowerment

Back 94

Giving workers the right to make decisions

Front 95

benefits of empowerment

Back 95

- boosts confidence of subordinates, they feel valued

Front 96

drawbacks of empowerment

Back 96

- employees may abuse the power given to them

Front 97

Team working

Back 97

organised so that groups of workers undertake units of work

Front 98

benefits of team working

Back 98

- motivates workers as social esteem needs are more likely to be met

Front 99

drawbacks of team working

Back 99

- not everyone is a team player

Front 100

Flexible working

Back 100

being prepared to take a number of different tasks, irregular work hours

Front 101

Benefits of flexible working

Back 101

- Employees have greater freedom to work when it suits them

Front 102

Drawbacks of flexible working

Back 102

- may lead to isolation from other workers

Front 103

Job enrichment

Back 103

organising work so employees are encouraged and allowed to use full abilities

Front 104

benefits of job enrichment

Back 104

- Raises workers motivation levels

Front 105

drawbacks of job enrichment

Back 105

- principles cant be applied to all varieties of workers

Front 106

Job rotation

Back 106

increasing the flexibility of workers and the variety of work they do

Front 107

Benefits of job rotation

Back 107

- may relieve boredom

Front 108

drawbacks of job rotation

Back 108

- does not increase empowerment or responsibility for work being performed

Front 109

Flexible employment

Back 109

is accepting a range of employment patterns, including part time, full time, temporary and permanent jobs, varying hours worked to suit the situation, sometimes working from home.

Front 110

Flexible working

Back 110

being prepared to take on a range of different tasks within the production process

Front 111

benefits of a flexible workforce

Back 111

- Reduces labour costs

- employees may be more motivated and work more productively

Front 112

Drawbacks of a flexible workforce

Back 112

- not everyone likes part time working

- employees may be less motivated and work less productively compared to full time or permanent staff

Front 113

natural wastage

Back 113

Not replacing the departed employee, this reduces labour costs and avoids redundancies