Unit 3 AOS 1 Business Foundations
((Chapter 1))
Limited Liability – shareholders are only personally liable to the level of their original investment in
the company.
Unlimited liability – full liability of owner to the extent of their personal assets.
Social enterprise – private sector business that distributes profit to benefit the community rather
than individual shareholders.
SMART Objectives
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Specific – the objectives are set and are explicit.
Measurable – the outcome and objective can be measured.
Attainable/Achievable – the objective is one that can be reached.
Realistic/Relevant – objectives are goals that ca be reached within the time frame.
Timely – the objectives will be reached within a certain time period of time.
By applying this principal businesses are clear about what they would like to achieve and aim for.
Types of Business Objectives:
1. Financial Objectives – making a profit, growing sales, improving market share and
increasing productivity.
2. Marketing Objectives – To be able to recognise a niche in the market.
3. Social Objectives – provision of community services and facilities, contribution to
community causes at the local, state, national and world level.
Areas of Management Responsibility
Operations – involves the planning, organising, coordinating and controlling all the resources needed
to produce the goods or services provided by a business.
Finance – responsible for keeping and maintaining financial records such as sales revenue and
business expenses, paying creditors and employees, and monitoring cash flow.
Human Resource – managing the overall relationship the business has with its employees.
Sales & Marketing – responsible for developing strategies, such as market research, advertising and
branding, to create an ongoing relationship between the business and its customers.
Technology Support – using technology to increase the efficiency, productivity and costeffectiveness of the business.
((Chapter 2))
Stakeholders – individuals or groups that have direct or vested interest in the activities of an
organisation Stakeholder levels include (macro, operating and internal).
Stakeholders not all have a positive interest in the business, some may in fact be in conflict with the
organisation.
Corporate Culture – internal factor management that seeks management that seeks to influence
with a view to optimisation of business performance. (Refers to shared values and beliefs of people
within the organisation).
Official Corporate Culture – set of values and beliefs desired by the management of a business.
Real/Unofficial Culture – Culture that actually prevails in a business organisation.
Key strategies to develop the desired corporate culture
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Organisational mission, vision and values statements.
Form of management structure.
Choice of management style.
Implementation and design of policies and procedures within these.
Business documentation and forms of communication used within the business.
People within the business.
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Physical environment and material symbols.
Stories, narrative and rituals shared within the business.
((Chapter 3))
Types of Management Styles
Autocratic Management Style – where all decision making is centralised, there is little delegated
authority and communication is one way. (Management makes decisions and directly passes it
down).
Persuasive Management Style – Managers make the decisions, then persuade workers of the
benefits of those decisions. (Managers ability to interpret the decision made to influence others).
Consultative Management Style – Manager consults with employees when discussing an issue;
however, the ultimate decision is made by the manager based on the suggestions and input
received. (Takes into account on what employees think).
Participative Management Style – decision-making is performed as a team with management and
staff working together with the manager retaining responsibility and accountability. (style keeps
employees informed about issues that affect their work).
Laissez-faire Management Style – leadership style that leaves the majority decision-making and
running of the business operation to the employees. (Employees are empowered to determine their
own objectives, solve their own problems and make their own decision).
Management Skills Include
 Communication – creating and exchanging information between people that produce the
required responses.
 Delegation – passing of authority down the hierarchy to perform tasks or make decisions.
 Planning – a formalised decision-making process that is future orientated.
 Leading – someone who guides, instructs, directs and leads a group of other individuals with
the purpose of achieving the goals of the business.
 Decision-making – a multistep approach whereby a selection is made between a range of
different alternatives.
 Interpersonal – those skills used every day to communicate and interact with other people,
both individually and in groups.