Unit 1:
What is the objective of a social enterprise?
This business pursues the triple bottom line (People Social, Profit Economic, Planet Environmental) objectives
What is the difference between redundancy and dismissal?
Redundancy:
When a job is no longer required, the employee doing this job becomes unnecessary through no fault of their own
Dismissal:
Being dismissed or fired from a job due to incompetence or breach of discipline
What factors affect demand? (3)
Changes in consumers income
Changes in the prices of substitute goods and complementary goods
Changes in population size and structure
Fashion and taste changes
Advertising and promotion spending
What are 3 problems that can occur if there is not proper inventory management?
Insufficient stocks to meet demand and changes in demand
Out of date stock
Stock wastage
Excessive storage costs
Late deliveries
Low discounts from suppliers Opportunity cost implications.
What does working capital measure?
Liquidity
The money needed to pay for raw materials, day to day running costs, such as the employees, credit offered to customers
Name two benefits of companies encouraging intrapreneurs and intrapreneur culture
For the company: there is less competition because
Injecting creativity and innovation in the business
Developing solutions to market changes and trend changes
Creating a competitive advantage
Low labour turnover
What is an accurate definition of workforce planning?
the analysis and forecasting of the numbers of workers and the skills/quality of those workers that will be required by a business organisation to achieve its objectives
The marketing department is in charge of .........? (6 things)
Market Research
Product Design
Pricing
Advertising
Distribution
Customer Service
Packaging
What is outsourcing?
Using an outside agency to carry out some business functions
When a business contracts out activity to a third party
What are trade payables?
Accounts payable or creditors are shown on the statement of financial position - they are one of the current short term liabilities.
Amounts owed to a supplier for goods or services bought on account rather than for cash and who have not yet been paid
Name three drawbacks of changing the structure of a business?
Legal costs and formalities
Some loss of control and ownership by original owners
Profits will be shared
What is the difference between morale and welfare?
Employee morale:
Overall outlook, attitude and level of satisfaction of employees when at work
Employee welfare:
Employee’s health, safety and level of morale and when at work
What is product positioning?
The consumer perception of a product or service as compared to its competitors
The image of a product or business in a consumers mind
What are the disadvantages of operating full capacity? (3)
Firm does not have any flexibility whatsoever which will affect long term sustainability
Staff may always feel under pressure due to the workload which will raise stress levels
May result in high labor turnover
Regular customers or clients who wish to increase their orders maybe will wait for a long period of time - operational flexibility
Does Not take into consideration that machinery is working all the time and there might be insufficient time for maintenance and repairs
Production is rushed and under pressure so quality could NOT improve
There is no time to improve labour skills
What are three budget limitations?
Focused on short term
Lack of flexibility
Unnecessary spending:If managers have underspent their budgets - they might spend so the same level of budget can be justified for the next year
Training on budgets: Setting and keeping to budgets is not easy and all managers with delegated responsibility for budgets will need extensive training
May not account for external changes
Name three ways ethics affects business activity
Not exploiting consumers – high prices and/or low-quality goods/service.
Not exploiting low cost foreign labour
Not taking advantage of child/slave labour
Not expecting excessive hours/paying low wages
Not using production methods that are potentially damaging to the health of employees
Not using production methods that lead to environmental damage or suffering to animals/local residents
Not exploiting suppliers with poor/delayed payments.
Not purchasing cheap, unethical raw materials
What are the most accurate and specific advantages of work life balance? Name 3
Lessen the danger of overworked employees affecting quality of service/reputation and profits
Reduce employee stress/burnout/conflict between work and family
Reduce negative effects of work life conflict
Cost implications of overworked staff - absenteeism, reduced commitment and performance
Duty of care for employees/families/society PLUS the value to the employer
Can be a USP in terms of recruitment and retention
What are four ways to achieve CRM?
Targeted marketing
Customer service and support
Communication regularly with customers
Using social media
Three benefits of outsourcing
• Enables business to focus on key issues relating to competition and expansion
• Opportunities for more flexibility
• No ongoing commitments of wages, pensions
• Reduced operating costs - the business is not paying for additional capital
• Enables specialists to provide services
A method of costing in which all fixed and variable costs are allocated to products, service or divisions of a business
Why would corporate objectives be important in a business?
objectives become part of senior level management strategies
Set the context for divisional/departmental objectives and effective plans of action can be developed
Ensures that the business is focused and does not drift – clear corporate objectives given such as growth, profit/sales maximisation.
Present a clear set of guidelines and parameters for middle, junior management actions and strategies.
Without these clear corporate objectives a business can drift and cease to compete and flourish.
Give meaning and purpose for all engaged in the business.
What are the three roles of Managers according to Mintzberg?
INTERPERSONAL ROLES:Dealing with and motivating staff at all levels of the organisation
INFORMATIONAL ROLE:Acting as a source, receiver and transmitter of information
DECISIONAL ROLES: Taking decisions and allocating resources to meet the organisations objectives
What are three ways to extend a product life cycle?
• selling in new geographical markets, e.g. exporting the product.
• creating a version of the product targeted at different segments.
• repackaging the product to be more eye-catching.
• rebranding with a new name and image.
• relaunching the product with a promotional campaign.
• finding new uses for the product, e.g. Lucozade.
• adding value by including more features, e.g. specification of a
smartphone.
• using reduced (penetration) price or offers to discount the price.
• advertising to try to gain a new audience or remind the current
audience.
Three problems with changing production methods?
Costs of hardware, programs and employee training
Hardware failure and breakdowns can occur, which can be complex and time-consuming to solve
Quality assurance is still needed
What are limitations of break even charts to a business?
Based on forecasts/estimates
Assumes a constant price
Assumes fixed costs remain constant as output rises
Assumes a constant variable cost per unit
Assumes the fixed costs from one product can be allocated accurately