You need the resources to achieve the goals and they must be challenging
R – Realistic:
Something the business owner and employees are willing to work towards
T –Time bound:
Must have deadlines attached otherwise commitment is too vague
Business Goals
Financial
Increase… Profits
Increase… Market share
Maximise… Growth
Improve… Share price
Maximise Profits
Profit is what is left after the costs of producing and supplying the product (expenses) have been deducted from money earned from sales (revenue)
REVENUE – EXPENSES = PROFIT
Profit maximisation occurs when there is a maximum difference between the total revenue (number of sales multiplied by by the price) coming into the business and total costs paid out
Goals Overview
Grocery Market Share
Increase market share
Market share refers to the business’s share of the TOTAL industry sales for a particular product. It is measured as a percentage (%) of the total industry e.g. Woolworths has 39% share of the packaged grocery market
Market gains often translate into more customers and larger profits
Below is a table of manufacturers that compete in the Tomato Sauce Market in Australia
Copy the table below
Calculate the Market Share (%)
Create a pie chart, based on the data
The Tomato Sauce market is estimated at $110 million
Maximise growth
Most businesses want to grow or expand – this can be achieved internally (organically) or externally.
Internal growth could involve employing more people, increasing sales, introducing innovative products, purchasing new equipment or establishing more outlets. Eg Mc Donald’s has an ambitious growth program by selecting a large number of sales for future expansion
External growth is achieved by merging or acquiring other businesses. A merger is when two businesses join to become one. Acquisition is when one business purchases another.
Review Q’s
In the following examples, identify which financial goal the business is trying to achieve.
The business owner wishes to increase revenue so they conduct a large sale.
A board of directors announces that the company’s profits are forecast at 23 percent over the next twelve months and the dividend will rise by 28 cents per share.
A manager decides to undertake an extensive promotional campaign in an attempt to attract new customers.
Senior executives knew there was only one way to expand the business and that was by buying the opposition.
Review Q’s
‘The main goal of a business is to maximise profits’.
Define the term ‘profit maximisation’.
Recount under what circumstances a manager may be prepared to accept reduced profits in the short term.
In your opinion, discuss whether maximising profits should be the only goal of a business.
Discuss specific examples of business goals, the strategies to achieve them and the dependence/conflict between goals
Debate ‘Businesses are only interested in maximising profit’
Improve share price
A share is part ownership of a public company. Shareholders therefore are the real owners of companies.
There are 2 reasons a person would buy shares:
They purchase them in the hope of selling them for a higher price
Owning shares in a company entitles an investor to a part of the company’s profits which is distributed in the form of dividends (a return)
Companies need to maximise the returns of their shareholders. This is achieved by keeping the share price rising – constantly improving the share price – and paying back healthy dividends
Activity Scenarios
Clothing store
Altering prices
New Business
Setting lower prices in the short-term to build customers
Grocery store setting
New supplier
NON-FINANCIAL GOALS
Social Goals
&
Environmental Goals
(& Personal Goals)
SOCIAL GOALS
Why should businesses have social Goals?
Businesses operate within the community and so should have responsibilities to the community
Businesses develop social goals and adopt strategies that benefit communities. These include:
Community Service:
Sponsoring community events and programs.
Financially support educational, cultural or welfare activities
SOCIAL GOALS
2. Provision of Employment:
Some small businesses are committed to employing family members that are unemployed. Other businesses are committed to retaining employee’s even through financially difficult periods.
3. Social Justice:
Businesses adopt policies that protect the rights of employees and the community, providing fair and equal treatment.
Use of the Environments raw materials to produce products
Pollution from operations
Use of water and power/energy supplies in regular operations
The demand for increased productivity and business desires for profits have increased the impact on the environment.
This demand cannot be sustained by the environment.
ENVIRONMENTAL GOALS
There are parts of society that demand economic growth should not occur at the expense of the environment. There needs to be a balance between economic and environmental concerns — in other words, sustainable development.
Societal and government pressure has led to businesses considering sustainable development in their operations.
What new opportunities does this provide for business?
Contrast the importance of goals with management skills
ENVIRONMENTAL GOALS
Westpac Article
PERSONAL GOALS
Business owners have their own personal goals for the organisation. These goals motivate the owner and may underpin the business owners actions. They may also influence both ethical and unethical business behaviour.
Goals may include :
Increase income
Improve financial security
Establish a sustained family business
Achieving a mix of business goals: Conflicting nature of goals
It is difficult for a business to achieve all its financial goals simultaneously because the links between goals make some of them incompatible – ie they conflict with each other.
An example is whether the business chooses to maximise profits or increase market share – there may be a compromise or a trade off between goals.
Conflicting nature of goals
GOAL #1
GOAL #2
SHORT-TERM OUTCOME
LONG-TERM OUTCOME
Identify three examples of goals that will conflict:
STAFF INVOLVEMENT
All businesses want maximise an employees output and a way to do that is through “Staff Involvement” and recognising the importance of:
INnovation MOtivation MENtoring
TRAINING
Acronym:
“STAFFINMOustache’s are MEN in TRAINING”
With RHAC as the business create a S.M.A.R.T. goal for each Business Goal, and a strategy to achieve each one (or better yet, strategies that would achieve multiple goals.
How would you get staff involved?
PEPSI Co Challenge video
Draw up 4 columns in your book
Use the following titles for each column
Profit
Market share
Growth
Share price
Students are to identify Pepsi Co’s goals for each of these area’s
REVISION -Topic 1 & 2-
Lesson 10
TOPICS TO REVISE
Final Management Notes
Business Management
Management Skills
Extended Response
Nature of Business
Role of Business
Terminology
Business terms
Exam/question terms
PERSONAL GOALS
Think of yourself as a product. When you are applying for jobs you are essentially trying to sell your personal ‘brand’ to someone.
Why do you do this? What goals are you trying to achieve?
What are some personal goals that owners could have for their business?
PERSONAL GOALS
Business owners have their own personal goals for the organisation although they may not be made public.
These goals motivate the owner and may underpin the business owners actions. These goals may influence both ethical and unethical business behaviour so are not always a positive influence.
Create new extended response question relating to the content we have studied in topic 2 (Nature of Management) – The question must incorporate two sections of information (E.g. Management Skills and purpose of Management , Management skills and business goals etc.)
EXTENDED RESPONSE PLAN
Create a plan on how you would answer the question.
The plan needs to outline at least 2 key things:
The structure of your response (essay type format)
The information you would put in your response, showing the connections between content.
Explain the benefits of quality management practices
ACTIVITY
Overview of this topic area.
Create groups of two. Each group is assigned a management style to gather information on
Students create a table on their style as follows:
CHARACTERISTICS OF MANAGEMENT STYLE
ADVANTAGES OF STYLE
DISADVANTAGES OF STYLE
ACTIVITY
Overview of this topic area.
After students have completed their task
10 Mins: match up students with the same management style to share information
15 Mins: students with different management styles match up together
BUSINESS STUDIES
Nature of management
L12
LESSON GOALS
learn about:
Management approaches
Classical approach
Scientific and Bureaucratic
Behavioural approach
Contingency approach
learn to:
Compare and contrast approaches to management
Explain the benefits of quality management practices
LESSON GOALS
Colour coding:
Management approaches:
Classical approach – RED for being authoritarian
Behavioural approach – BLUE for being democratic
Contingency approach – ORANGE for being flexible
VIDEO
Leadership styles.
https://www.youtube.com/watch?v=Mo5Qk0Ed6iA
CLASSICAL MANAGEMENT APPROACHES
TWO APPROACHES
Scientific: Having a scientific approach of researching a task in detail to find the most productive way of completing a task.
Systematise a job (Highly ordered/structured tasks)
Tight control
Bureaucratic: Managing through a strict hierarchy of authority and a clear set of rules to govern workers.
Rules and Processes
Hierarchy
Impersonal and Specialisation
CLASSICAL-SCIENTIFIC
BIO
Frederick W Taylor (Philadelphia)
1856-1915
Management Belief:
Productivity will be improved by three (3) things:
Preparing plans based on what needed to be done
Designing each task scientifically
Providing training and incentives for the workers.
Management Theories Classical-Scientific approach
An approach that studies a job in great detail to discover the best way to perform it. (Similar to the production line method of manufacturing).
Classical-Scientific approach
Taylor's four principles of scientific management are as follows:
Scientifically examine each part of a task to determine the most efficient method for performing the task.
Select suitable workers and train them to use the best work methods.
Cooperate with workers to guarantee they use the scientific methods.
Divide work and responsibility so that management is responsible for planning, organising and controlling the scientific work methods, and workers are responsible for carrying out the work as planned.
Classical-Scientific approach
Activity using Taylor's four principles of scientific management:
Your task is to develop a paper aeroplane. You will individually conduct step one of Taylor’s model and then we choose the best four and create teams to conduct steps 2 – 4.
Scientifically examine the task:
Select suitable workers and train them:
Ensure workers use the scientific methods:
Management plans, organising and controls, and workers make the product:
Henry Ford used these ideas, to develop his famous mechanised assembly line in 1913. This approach utilised an assembly line on a conveyor belt and a small team of workers who fitted the various components along the production line. The end result reduced the hours spent on the assembly of a car from 728 hours to just 1.5! http://www.youtube.com/watch?v=8PdmNbqtDdI McDonald's also uses Taylor's scientific management approach preparing burgers according to a set number of steps.
CLASSICAL-BUREAUCRATIC
BIO
Henri Fayol (Constantinople)
1841-1925
Management Belief:
Productivity will be improved by 3 things:
Preparing plans based on what needed to be done
Designing each task scientifically
Providing training and incentives for the workers.
CLASSICAL-BUREAUCRATIC
BIO
Max Weber (German)
1864-1920
Management Belief:
Productivity will be improved by 3 things:
Preparing plans based on what needed to be done
Designing each task scientifically
Providing training and incentives for the workers.
Group similar tasks together and allocate to business departments
Delegate responsibility for completing work
Establish activities required in order to achieve the goals?
Organising the resources (financial, human and physical) to achieve the business goals
Functions of management Part 2
Functions of management Part 3
Management as Controlling
Measure progress against the goal to determine goal is on track to completion
(Industry Standard
Taking corrective action – making changes – if needed to keep goals on track
Establish benchmarks/standards to measure goal progress against
Ensuring performance matches with the desired goal and making any required changes.
Control Methods:
Control Methods:
Quality control: Inspectors checking finished products, and detecting and removing any components or final products that do not meet the required standard. Can result in considerable waste as products are scrapped.
Quality assurance: Quality checks occur both during and after production in order to stop faults occurring in the first place. This is less wasteful than quality control. It is the responsibility of the employees working in teams, rather than of the inspectors.
Functions of management Part 3
Control Methods:
Control Methods:
Total quality management (TQM): A comprehensive form of control management. It focuses on empowering employees to think about quality in everything they do. Every employee sets out to satisfy customers, placing them at the centre of the production process.
Functions of management Part 3
Functions of management ACTIVITY
Management as Planning
How does Rouse Hill Anglican College do this?
Management as Organising
Management as Controlling
HOMEWORK
Questions 1-4, 6, & 8
Pg 176 – 177
&
Article Questions
Hierarchical Organisational Structure
How is RHAC structured?
Draw and label character-istics
HOMEWORK
Questions 1-4, 6, & 8
Pg 176 - 177
Leadership Styles
Read Pg174
Create table and discuss
Style
Pros
Cons
Authoritarian
Democratic
Leadership Styles
Style
Pros
Cons
Authoritarian
Strong organisation & leadership
When leader has the most knowledge
Employees can focus on their task and not worry about complex tasks
Can be beneficial in stressful situations where people just focus on their task
Can be viewed as bossy, controlling and dictorial.
People may dislike the decisions made
Lack of creative solutions
Leadership Styles
Style
Pros
Cons
Democratic
Encourages collaboration from all workers
Enables many ideas to be brought forward from people involved in the task/workplace
Realises that there isn’t just one (or a few) ways to do a task
Some workplaces need strict and clear lines of authority
BEHAVIOURAL
BIO
Elton Mayo (Adelaide)
1880-1949
Management Belief:
Discovered the ‘Hawthorne Effect’
Meeting peoples social needs has significant impact on productivity
Satisfaction is non-economic
Feeling part of a team increases satisfaction and output
BEHAVIOURAL
“MANAGERS CONTROL,
LEADERS EMPOWER”
Management Focus:
People should be the main focus of the way the business is organised. A manager needs to understand and work with people (who we know are highly divers).
FEELING LIKE PART OF THE TEAM
PRODUCTIVITY
SOCIAL NEEDS
Behavioural Management Theory
WORKER SATISFACTION
ECONOMIC NEEDS
‘Creating good staff is about more than just money’.
To be an effective manager you need to:
Teamwork
A ‘team’ allows people to interact regularly and coordinate their tasks in order to achieve a common business goal.
Work teams have created a ‘flatter’ organisational structure. Managers become facilitators rather than controllers. Staff have more responsibility.
Matching leadership and management styles
Autocratic
Classical styles
Democratic
Behavioural styles
Work teams
Good for a changing environment:
More responsive to change
Diverse opinions and ideas
Your Goal:
Question 1-11 (Odd # questions)
pg184
P. 189
CONTINGENCY APPROACH
Lesson 16
Contingency Theory
Managers need to be…
Adaptable and Flexible In their technique to solving problems
And need to borrow from various management approaches to handle each unique situation.
Paper Plane Business
Read instructions for activity (pg178)
Create a criteria for evaluating each business and its product
Form teams of 4
Write down everything you decide (E.g. Your roles, your organisational structure, your goals etc)
NOTE: You will be ‘peer-reviewing’ those in your group at the end of the activity.
PEER REVIEW
How did the person work with the team?
Were they a team player
Did they fulfill their role?
What did they do well (1 thing)
What could be improved (1 Thing)
What happened during the activity in regards to Planning, Organising, and Controlling. Did any leaders in your group emerge?
