Higher Business Management
Understanding Business – Business
Environment
1
Internal Pressures
P48
Issues that will affect the success of the business
that an owner can control.
n Finance available or change in financial position
n Ability of staff or change in staffing
n Information available
n ICT and technology availability
n Ability of management
n Changes in costs
n Employees are a business’s most important (and
expensive) resource!
2
Organisation Corporate Culture
•Values, beliefs and norms relating to the company or
organisation that are shared by all its staff.
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n
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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
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3
Corporate Culture
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Google video
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Google blog
Understanding Business
Activities – P5
4
An organisation benefits
from having a strong
corporate culture:
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o
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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
5
Several factors need to be
considered:
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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
6
Corporate culture Questions
1.
2.
3.
4.
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.
7
Motivated Employees
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Increased productivity and quality
Reduced absenteeism
Low staff turnover
Improved reputation
Improved customer service
Higher sales
What motivates employees?
8
Achieve a Motivated Workforce
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Effective communication
Training and development
Teamwork
Work environment
Support systems
 Counselling
 Grievance
procedures
 Return to work interviews
 Family Friendly policies
9
Industrial Action
o
Sit in
o
Overtime ban
o
Work to rule
o
Go slow
o
Strike
Impact:
•
•
•
•
Halts production
Sales lost
Poor reputation
Strained
relationships
• Unhappy workplace
10
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?
11
Nature of Decisions


What decisions do you make?
In pairs, create a list of decisions that you make
daily…
12
Managers and Decision Making
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

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Planning
Organising
Controlling
Commanding
Coordinating
Motivating
Delegating
Write a short
description of what
each word means P51
13
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)
Types of Decisions

Strategic - the long-term aims of
the business (owners)
For example:
o
o
what products the business will
produce over next 5 years
increase market share by 20% in
next 3 years
15
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
16
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
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Decision Making - Examples
o
o
o
What are your strategic
aims?
What is your tactical aims?
What are your operational
objectives?
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Management Decisions
Strategic – Long Term


Owner/senior management
Risky and can be difficult/expensive
Strategic
Tactical – Medium Term


Senior or middle management
Detail how strategic decision will be
achieved
Tactical
Operational – Short Term


Junior management, section heads or
individual workers
Practical problems
Operational
Decision Making - Examples
Create a 3 column table. For each
of the following organisations, give
examples of their decisions at each
level.
Strategic
Tactical
Operational
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
20
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.
21
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
22
SWOT Analysis
This is the first three steps of decision making
process (POG)
Create a
•
Strengths
SWOT
•
Weaknesses
analysis for
YOU!
•
Opportunities
•
Threats
It can be used to analyse a specific person,
product, department or organisation’s
performance.
23
Task
o
o
o
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
24
Structured Decision-making
Model - “POGADSCIE”
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Identify the PROBLEM
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Identify the OBJECTIVES
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GATHER information
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ANALYSE information
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DEVISE alternative solutions
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SELECT from alternative solutions
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COMMUNICATE the decision
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IMPLEMENT the decision
•
EVALUATE
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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
26
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
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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.
28
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
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De Bono’s Six Thinking Hats
Emotional views
giving gut feelings
about an issue
All positive
benefits of the
issue
All negative
Question what the
thoughts regarding
group thinks
an issue
about the issue
Creative
suggestions and
ideas about the
issue
Control and
organise the
thinking of an
issue
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Group Task
o
o
o
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.
31
IT and Decision-making
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•
•
•
•
•
BM Unit 1 - LO3
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?
32
ICT and decision making
n
n
n
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n
n
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Spreadsheets
Databases
WP
Presentation
Internet
Intranet
Email
VC
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Use p57 from textbook to
give an example of the
use of technology in
decision making
33
Factors Affecting the
Quality of Decisions
o
Quality and quantity of information used
o
Training of staff in decision-making
o
Risk-taking
o
The human element (personal interests?
Staff ability?)
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Why is Effective Decision Making
made Difficult?
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•
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•
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Finance may restrict
the best solution
Company policy restrict
options
Staff may resist change
Lack of technology
Indecisive or lack of
training
o
o
o
o
o
o
Political factors
Economic changes
Social factors
Technological
development
Environmental changes
Competitors’ activities
35
Successful Managers
n
n
n
Communicate effectively
Give guidance and
encouragement
Arrange necessary training
and development
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External Pressures
p25/26
Issues that will affect the success of the business that an
owner can control
n
n
n
n
n
n
n
Political factors
Economic factors
Social factors
Technological factors
Environmental factors
Competitive factors
Read pages 59 - 63
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External Pressures to Change
(the ‘PESTEC’ analysis)
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n
n
n
n
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 (e-mail, internet)
Environmental (green thinking, natural
disasters)
Competition (opening or closing of businesses)
38
External Factors PESTEC
n
Research online to find examples where
businesses have been affected both
POSITIVELY and NEGATIVELY from external
factors
n
Present findings electronically
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TASK – Go Activity on P63
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Effectiveness of
decisions
n
n
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Asking employees
Quantitative information eg
productivity rates or sales
figures
Employee absence rates
Customer satisfaction
surveys
40
Extension task
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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
41
Stakeholders
Internal
n
Shareholders/
Owners
n
Managers
n
Employees
External
n
Suppliers
n
Customers
n
n
Banks/lenders
Society/Local
Community
n
National Government
n
Local Government
n
Taxpayers
n
Donors (Charities)
42
Stakeholders’ Interests
n
Shareholders - dividends, capital growth
n
Managers - job security, fringe benefits
n
Employees - job security, pay and conditions
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Suppliers - regular orders, prompt payment
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Customers - low prices, high quality, good service
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Banks - ability to make payments for loans
n
n
Government - payment of taxes, compliance with
laws
Community - corporate responsibility
43
Stakeholders’ Influence
n
Shareholders - voting rights at AGM
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Managers - day-to-day decisions
n
Employees - possible industrial action
n
Suppliers - period of credit, level of discounts
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Customers - taking their business elsewhere
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Banks - granting of loans and rate of interest
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Government - legislation, equal pay, minimum wage,
etc
Community - protest movements, direct action
http://www.thetimes100.co.uk/case-study--the-rolestakeholders--11-329-2.php
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