Faculty of Business
HSC Business Studies Day
University of Wollongong
Monday 16 June 2014
Handout
Faculty of Business
Contents
Ian Walker – Effective Exam Techniques in Business Studies
Mohan Dhall - Operations/Marketing–Case Study Approach
Len Nixon - Finance and Case Studies
Michael Doherty - HR – Main Aspects and Case Studies
Faculty of Business
Effective Exam Techniques in Business
Studies
Ian Walker
Deputy, Smiths Hill High School, President Illawarra Business and Economics Teachers Association
Ian Walker
Preparing for the exam
Know the dot points
In order to be adequately prepared for the HSC exam it is essential students:
– have a thorough knowledge of the outcomes and content for each topic
Ö know the syllabus.
– understand the directive terms commonly used in the Business Studies exam
Ö know the Key Words.
– are familiar with the structure and requirements of the exam
Ö know what to expect.
– are familiar with the standard of answer required to get the marks you want Ö know what’s required.
– practice exam skills and test knowledge and understanding by completing the multiple choice , short response
Ö be prepared.
and extended response sections from previous papers.
Students can access this information from the following sources:
Students may also find useful
the student developed site:
www.boredofstudies.org
– Business Studies Syllabus
– Board of Studies (BOS) Glossary of Key Words
– 2001 – 2013 HSC Business Studies exams
– Standards Packages and HSC Exam Workbooks (2010-13) Notes from the Marking Centre 2001- 2013
They are available on the BOS site:
www.boardofstudies.nsw.edu.au
Ö go to Students Online and/or the Assessment Resource Centre (ARC).
The BOS website also provides links to other useful sites such as HSC Online.
HSC Exam Work Book for Business Studies
<real answers of all standards from real students in actual HSC>
The basic structure of the HSC exam in Business Studies is:– Section 1 Multiple Choice
20 marks
– Section 2 Short Response
40 marks
– Section 3 Extended Response
20 marks
– Section 4 Extended response
20 marks
Ö The Business Report
Ö The Case Study Question
Be aware that:
– All questions are based on the outcomes contained in the syllabus
– All the topics and all the content are examinable in all sections of the paper
– The two extended responses are likely to examine different outcomes and topics (dot points from the
syllabus). While it is likely that there will continue to be elements from 3 topics in the report question but only
one topic in the case study question don’t assume this will definitely be the case….. and do not try to predict
what topics will appear in each section.
– Student responses are marked against a standard rather than against other students. These standards are
based on the outcomes and are incorporated in the marking guidelines given to the HSC markers – examples
can be found elsewhere in this paper and on the BOS site.
Effective HSC Exam Techniques in Business Studies
____________________________________________________
1
Using time effectively
In all exams the effective and efficient use of the time available is an essential ingredient of success. The
examination committee makes suggested time allocations for each section (based on 1.8 minutes per mark) on the
front of the exam paper –
Section 1 – 35 minutes
2 – 1 hour 15 minutes
3 – 35 minutes
4 – 35 minutes
Most students feel they need more time for the extended responses and, consequently, try to “buy time” by
completing Sections 1 and 2 in less than the suggested time. This is usually possible. However, students should
avoid trying to save a specific amount of time ie don’t set new time limits that may result in not giving each
question due consideration – 60% of the marks are in Sections 1 & 2
If time is saved in Sections 1& 2 divide the remaining time equally between Section 3 and Section 4 – both are
worth 20 marks and require equal time. Never steal time from Section 4 in order to write more in Section 3.
Conversely, students who leave the exam room early because they are “finished” the exam must accept that they
are unlikely to achieve high marks. Adequate responses in the written sections require students to use all (or most)
of the available time….. Don’t leave early!
The 5 minutes reading time at the beginning of the exam is provided to give students the opportunity to briefly
review the paper. There are a number of approaches students may adopt for using this time effectively. Students
should decide (through practice and honest self-assessment) the approach that best suits them and stick to it.
Two examples:
Approach 1 focuses on the extended responses and suggests the following:
1. read the instructions on the front and at the beginning of each section to ensure there have been no changes to
the structure of the paper of which you have not been informed.
2. read Section 4 and make a preliminary choice of question at this time, thus saving time during the exam
3. read Section 3 and begin to think about the details and implications of the information provided in the business
scenario ie. begin planning in your head.
Approach 2 is based on concern about the potential negative impact on confidence of finding extended response
questions that are different from expectations or appear very challenging and difficult to answer etc.
Accordingly, this approach focuses on the multiple choice and suggests students complete the first few multiple
choice questions “in their head” in order to save time and diminish exam nerves.
Avoid not using reading time at all– staring at the clock waiting for the exam to begin is not effective use of time.
Finished early?
Check the paper as follows:
1. multiple choice questions/answers of which you were unsure. (see suggestions on following page).
2. any short response questions that you did not answer ~ make an attempt!! (use some business terminology)
3. short response of which you were unsure
4. check any calculations made in either Section 1 or 2
Effective HSC Exam Techniques in Business Studies
____________________________________________________
2
Section 1
MULTIPLE CHOICE
There is a tendency for some students to rush through the multiple choice in order to “buy time” for the extended
responses. While this may be understandable it is not good strategy. Do not undervalue this section of the paper –
it is worth 20 marks, the same as either of the extended response questions. Further, marks in this section do not
rely on the impression made on a marker but on whether the answer to each question is correct. Work through
them carefully and methodically to maximize the potential mark – you will “buy some time” but don’t pre-plan to
save a specific amount of time.
A suggested approach to multiple choice questions:
– Always do this section first – it asks questions from most topics & stimulates your mind on the subject at hand.
– Read each question carefully – ensure you understand any stimulus material and what the question is asking.
– Go with your first thought
ie. 1. read the question and, before looking at the four alternatives, try to decide on an answer.
2. look at the four alternatives – if your answer is amongst them it is probably the correct answer.
3. give due consideration to the other alternatives but only change your first choice if you are absolutely
convinced the answer you have selected is incorrect and the other alternative is correct.
– If you are unsure of, or don’t know, an answer ~ go for a 50/50
ie. eliminate obviously incorrect answers so that your “educated guess” has a greater probability of success.
– Do not leave any questions out – it has to be A , B , C or D
– Develop a simple “code” - to assist you in reviewing this section if you have time at the end of the exam.
ie. write an appropriate symbol on the question paper next to each question indicating your level of
confidence in the answer chosen. If you have time at the end of the paper only check those questions
of which you were unsure and/or had to guess the answer.
An example of symbols you could use:
99
confident this is correct
9
pretty sure this is correct
?
had to guess from a 50/50 choice
8
aaaargh … total guess
Using this code you would only review your answers to the questions marked with “?” and “8”.
Of course, you can review them all if you wish, but be very careful if you decide to change an answer you
were initially confident was correct.
Effective HSC Exam Techniques in Business Studies
____________________________________________________
3
The Written Sections
The Business Studies exam has a significant written component. The style of writing required reflects the nature of
the subject itself and is different from the style of writing required in other subjects.
Students writing in the Business Studies exam must keep in mind:
– the purpose
~ maximising the mark awarded for the knowledge and understanding of Business
Studies acquired in the course - (you have to demonstrate what you know and can do)
– the circumstances
~ a 3 hour examination incorporating multiple choice , short responses and extended
responses. (lots of content in your brain ; exam conditions ; challenging paper ; not much time)
– the audience
~ HSC markers - teachers from around the state who mark the papers after school in
2 x 2 hour sessions each night from 4pm to 9pm; or from 9.00am to 5.00pm in the
Since 2011 all written responses
have been scanned & marked
“on screen”
case of subjects being “day marked”…….
They want to give you marks – make it easy for them!!
– the subject
~ Business Studies has specific terminology and concepts which you are expected to use
to show that you know and understand Business Studies
– the style
~ of questions asked and of writing expected (or that will be most effective in
maximising the mark)
Use a black or dark bluee pen
Written responses are “impression marked” using a standards referenced approach. ie. marked according to
the overall standard of the answer compared to the standards set out in the marking guidelines and the
impression it makes on the marker….. do whatever you can to make a good impression
Short response questions are each marked once,
Extended responses are each marked twice, by different markers ….. the average mark is recorded.
To maximize marks in the written sections students must write effectively using the following basic approach:
– Answer the question
ie follow the directive terms and answer the question asked (not the question you wanted them to ask).
Only information relevant to the question will be awarded marks. While marks are not deducted for including
irrelevant (or even incorrect) material, it does not gain any marks – and it makes a poor impression.
….. meet marker expectations by writing about the dot points from the syllabus relevant to the question
– go for quality - the exam is designed to encourage “quality not quantity”.
In short responses: concentrate on writing short, concise answers using appropriate business language.
In extended responses: work on the principle that “a quantity of quality is best” ie. answer questions in as
much detail as possible but leave out anything irrelevant to the question.
– stick to the time limits
Use correct business terms throughout
The BOS says: “responses will be marked on the structure and organisation of
responses, the quality of the arguments and explanations, and the relevance of
the content to the question asked.”
Effective HSC Exam Techniques in Business Studies
____________________________________________________
4
Section 2
SHORT RESPONSES
This section contains a number of questions, usually with internal parts, with a total mark value of 40. The total
marks for the question and the marks for each part are indicated next to the question. Study past exam papers
carefully to become familiar with the nature of the questions asked and the changes that are occurring over time.
Answers are written in a specific answer booklet. The number of lines provided for the answer gives some
indication of the length of answer expected. Try to answer in the allocated space but you can write more if you
need to and will not be penalised. There is a section for this in the answer booklets. Many questions have some
form of stimulus material which you are expected to use and/or make reference to where appropriate. The
stimulus material is designed to stimulate thinking by providing information (often implied) and clues that students
are meant to understand and interpret in answering the question.
To maximise marks in this section it is really important to:
follow the directive term ie. Answer the Question!
The list of BOS “Key Terms” is
included at the end of this paper
concentrate on writing short, concise answers using appropriate business language
ie. Get to the point! .... to ensure you can include enough detail in the time and space available.
It is not necessary to write in full, correct sentences in this section where the directive term does not require it.
Using the correct / relevant business term is essential to get full mark value in this section.
The following examples are designed to illustrate the different depth of answer required by different directive
terms. In each example the directive term is in italics.
identify = recognise and name
Q. Identify two methods of improving accounts receivable management.
A. factoring and discounts for early payment.
describe = provide characteristics
and features
Q. Describe two methods of improving accounts receivable management.
A. 1. sell the accounts receivable to a financial institution (this is called factoring)
2. offer a discount to debtors who pay trade credit debt early or on time
explain = make the relationship between things evident
Q. Explain two methods of improving accounts receivable management.
A. 1. Selling accounts receivable (called factoring) to a financial institution that collects the trade credit
debt will reduce accounts receivable and increase cash in the business.
2. Discounts for early payment encourage debtors to pay trade credit debt early or on time, thus
reducing accounts receivable and improving cash flow.
Organising your study notes using the ALARM format will assist
In some exams financial reports may be set out in a way that is different from those studied in class. If this
situation arises, don’t panic or to assume you will be unable to answer the question. It is a matter of applying the
basic principles and formulae to the information provided – the financial information is the same regardless of
how it is set out.
It is usually possible for students to “buy time” in this section. However, do not rush, and try not to leave any
questions out – make some attempt, especially if you can use a relevant business term.
Effective HSC Exam Techniques in Business Studies
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5
A Short Response example
(Question 24 10 marks)
Stimulus Material
ABC Ltd has restructured and twenty-five employees will be retrenched. Management has not consulted
employees about the changes. Employees are considering industrial action.
Take the time to understand what the stimulus material is telling you. The examiners expect you to make assumptions based
on the stimulus material and the questions they ask will seek to have you apply what you know and understand to the stimulus
they provide. An example of the assumptions you could make from the stimulus material for this question follows:
Public company
Large enterprise
New business plan
Efficiencies / cost cutting
Flattening management
structure
Lack of negotiation & democratic decision-making
(radical perspective) likely to lead to employee
dissatisfaction / industrial unrest
Employees to
lose jobs
ABC Ltd has restructured and twenty-five employees will be retrenched. Management has not consulted
employees about the changes. Employees are considering industrial action.
Ineffective change
management strategy
Unionised workplace prepared to
take overt industrial action
In the section below each part (internal question) of Question 24 is followed by:
the Marking Guidelines used by HSC markers to mark that question and
the Notes from the Marking Centre that summarise the type of answers students made to those questions.
Students should note how the directive terms from the BOS Glossary of Key Words used at the beginning of each
question, are reflected in the marking guidelines. In addition, note that lower order skills such as “outline” and
“describe” attract significantly less marks than the higher order skill “evaluate”.
The Notes from the Marking Centre make it clear that using relevant business terminology and concepts and
following the directive term (ie answering the question) is essential to get full mark value for your response.
Question 24 (a) Outline ONE type of covert industrial action employees might take in response to the
proposed retrenchments. (2 marks)
Outline = sketch in general terms
Outcomes assessed: H3.3, H4.1, H4.2
MARKING GUIDELINES
Criteria
Marks
‡ Sketches in general terms ONE type of covert industrial action employees might take in response
to the proposed retrenchments
2
‡ Names a relevant covert action
1
NOTES FROM THE MARKING CENTRE
a) Most responses sketched in general terms one type of covert industrial action employees might take in response
to the proposed retrenchments at ABC Ltd. Increased levels of absenteeism and increases in the incidence of
sabotage with associated disruptions to production were common types of covert action outlined.
Weaker responses named a relevant covert action.
Implication: A single word answer such as “absenteeism” would have received 1 mark. For 2 marks, an answer
such as – “dissatisfied employees are likely to take more days off work, increasing absenteeism” – was
required.
Effective HSC Exam Techniques in Business Studies
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6
Question 24 (b) Describe the radical perspective on industrial conflict being used by ABC Ltd. (2 marks)
Describe = provide characteristics & features
Outcomes assessed: H3.3, H4.1, H4.2
MARKING GUIDELINES
Criteria
Marks
‡ Identifies and provides characteristics and features of a radical perspective on industrial conflict
being used by ABC Ltd
2
‡ Sketches in general terms a radical perspective on conflict
‡ Identifies an action that is clearly related to a radical perspective on industrial conflict OR
‡ Identifies a radical perspective on conflict
1
NOTES FROM THE MARKING CENTRE
b) Descriptions of a radical perspective on industrial conflict commonly related to an ‘us versus them’ mentality, or
an approach that recognises conflict between employer and employees as being inevitable, or the employer
using wealth and power to exploit employees.
Weaker responses either sketched in general terms a radical perspective on conflict, or identified an action that
was clearly related to a radical perspective on industrial conflict.
Implication: An answer like “not consulting with employees” is likely to have received 1 mark. For 2 marks,
students required an answer such as: “By making a decision to retrench without consulting, ABC Ltd is taking
the radical perspective that employers and employees can’t work together – an ‘us versus them’ approach.”
Question 24 (c) Evaluate an alternative perspective on industrial conflict ABC Ltd could use to avoid
conflict with employees. (6 marks)
Evaluate = make an informed judgement
Outcomes assessed: H3.3, H4.1, H4.2
Criteria
MARKING GUIDELINES
Marks
‡ Makes an informed judgement of how an alternative perspective may help management avoid
industrial conflict with employees
5–6
‡ Provides why and/or how an alternative perspective may help management avoid industrial
conflict with employees OR
‡ Provides detailed characteristics of an alternative perspective on industrial conflict
3–4
‡ Sketches in general terms an alternative perspective on industrial conflict OR
‡ Sketches in general terms actions that may avoid industrial conflict
‡ Names an alternative perspective on industrial conflict OR
‡ Sketches in general terms an action that may avoid industrial conflict
2
1
NOTES FROM THE MARKING CENTRE
c) Better responses made an informed judgement of how an alternative perspective may be used by management
to avoid industrial conflict with employees. Evaluations related to either a pluralist or unitary perspective being
used by ABC Ltd. Those candidates who evaluated the pluralist approach recognised that stakeholders (unions,
shareholders, managers, staff), have legitimate although differing interests in a dispute and will act in the pursuit
of that interest.
Those candidates who evaluated the unitary approach saw employees and employers as equal in the partnership
with employers working together with employees to come to mutually agreeable solutions using cooperation and
collaborative decision-making processes. Candidates saw value in both these approaches as ways to reduce the
incidence of industrial disputes and increase harmony in the workplace as they result in checks and balances to the
power of competing parties.
Weaker responses either named an alternative perspective on industrial conflict, or sketched in general terms an
action that may avoid industrial conflict.
Effective HSC Exam Techniques in Business Studies
____________________________________________________
7
Sections 3 & 4
EXTENDED RESPONSES
Both Section 3 and Section 4 require an extended response. Questions are answered in separate exam booklets.
Each question is worth 20 marks.
Extended responses are “impression marked” using a standards referenced approach. The marking criteria (the
standards against which student performance in each question will be measured) are established by the Exam
Committee when the exam is set. The Marking Guidelines written by the Exam Committee are given to the HSC
markers when they commence marking.
SECTION 3 is a compulsory question in that it has no internal choice. Students are required to write a business
report based on a brief business scenario that describes some of the features of a fictitious business.
SECTION 4 has an “either/or” internal choice. It is an extended response that requires students to use a case
study (or case studies) to answer a question focussed on one or more of the topic areas. While there is no
requirement in this section to write a business report there are significant benefits of using that style. Used
effectively, business report style maximizes potential marks because it is easy to read and understand, and
maximises the amount of information you can include in the limited time available.
The syllabus does not specify an accepted format for a business report. This is largely because formats vary
between businesses. However, there are some generally accepted features of business reports which,
incorporated into your extended responses, will enhance your answer and the impression it makes on the marker.
Students are encouraged to adopt this business report style (outlined in the next section). Of course, students who
have high order essay writing skills in the traditional prose style may feel more comfortable maintaining that
approach. Certainly, no student is penalised in marking for not using business report style (provided their
response takes the form of a report to the business and answers the question).
Regardless of whether you use business report style or a more traditional prose style:
1. write in short, concise sentences and keep the paragraphs relatively short ……… ie Use the KISS principal.
2. leave a line between each paragraph…… especially if your writing is untidy and/or difficult to read and/or
you are using a prose style. Try and make it easy for the marker.
Note.
Everything in the exam answer booklet is read and marked!! So, if you do a plan (or you are writing out
an expansion of the business scenario, or the dot points from the syllabus relevant to the question), do it
on the inside cover of the answer booklet rather than on scrap paper or the question paper. If you run out
of time, at least the marker can see what you intended to write about and your understanding of the
scenario or syllabus - you are likely to receive some credit.
For similar reasons, don’t use “white out” in either of the writing sections. If you think you have made a mistake or
have decided not to include some information, simply cross-out the relevant words/sentence(s)/paragraph(s) but
ensure it can still be read. If it is relevant, it may enhance your mark; if its not, you won’t lose any marks…….
Everything in the exam answer booklet is read and marked!!
You don’t lose marks (for errors; or irrelevant or missing information); you gain marks (for those
parts of your response that are relevant and correct answers to the questions).
Meet marker expectations by writing about the dot points from the syllabus relevant to the question.
Effective HSC Exam Techniques in Business Studies
____________________________________________________
8
Business report style
A business report is supposed to be easy to read to enable busy managers to read it quickly. It is the “easy to
read” aspect that makes this approach attractive in the exam situation.
1. write in short , concise sentences and keep the paragraphs relatively short ……… ie Use the KISS principal.
2. leave a line between each paragraph…… especially if your writing is untidy and/or difficult to read and/or
you are using a prose style. Try and make it easy for the marker.
The following general features of business report style can be applied to the writing of your extended responses:
Executive Summary or introduction that outlines the information and issues that are included in the report. For
exam purposes you must keep this relatively brief - focus on the main sections you have identified in the
question and that you will focus on in your response. Try to avoid simply restating the question.
The executive summary will be most effective if you include here a brief overview of the intended
outcomes followed by the recommendations you intend to include to achieve those outcomes
ie. go for ‘the big picture” …… to attract marker attention
use a heading at the beginning of each part of the response. Underline or highlight the heading
eg. Funding Alternatives for Global Expansion
use sub-headings where appropriate
underline key terms or points
use relevant and appropriate business language (defining them where appropriate) and concepts
list [using dot points , numbers or letters] where appropriate.
Any use of a list should follow an introductory sentence ……
eg. An industrial dispute is a disagreement or conflict between management and employees. The main causes of industrial
disputes are:
™
wages
™
working conditions
™
management policy
™
government policy
™
trade unionism
You may then choose to explain each dot point in more detail, select specific points to explain in more detail, or
move on ……… it depends on the question you are answering.
Each dot point in the list may contain more detail within it ie. you may choose to define or explain each term. If
you do this it is probably a good idea to underline the term to make it stand out from the explanation. eg:
™
wages – the remuneration paid to employees in the form of wages, salaries , penalty rates …….
™
working conditions – including working hours , overtime , holidays , sick leave entitlements ……
Effective HSC Exam Techniques in Business Studies
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9
Use diagrams, tables , charts etc. where appropriate. Ensure that they follow an appropriate introductory
sentence; are large & clearly labeled; and explained (if necessary).
eg. Because of the dynamic nature of the business environment the marketing process must be a continuous cycle. This
should ensure it remains flexible and responsive to the changing nature of the market. Such a marketing process can be
seen in the following diagram :~
THE MARKETING PROCESS
Organising the planning process
Ø
Analysing market opportunities
Ø
Selecting target markets
Ø
Developing the marketing mix
Ø
Managing the marketing effort
The use of appropriate abbreviations is accepted. However, it is a good idea that you use the full, correct
term with the abbreviation in brackets on the first occasion the term is required in your response. Use the
abbreviation thereafter.
eg. The Australian Competition and Consumer Commission(ACCC) was established by the federal government to ensure
markets in Australia remain competitive and that the rights of various stakeholders are protected. The ACCC has
responsibility for….
In the Report Question it may be a good idea to make up an acronym for the scenario business so that it is not
necessary to write the whole name every time it is used
eg. Kingland Office Supplies (KOS)
Do not Ö include irrelevant information. While it is tempting to include as much as you have learnt as possible, if
it does not contribute to answering the question, then it won’t get you any marks and it doesn’t make a good
impression on the marker…… it may appear that you didn’t really know what the question was asking.
Ö use the first person (“I” or “we”) , as in , “I think that…” or “We have studied….”.
Ö use a conversational / anecdotal style …… avoid the vernacular (ie use formal language and business terms)
It is not necessary to do a situation analysis or a SWOT analysis unless it is relevant to the question. Quite
often they are not done well and, therefore, do not create a good impression on the marker. A better
strategy is to make reference to them without actually including them eg. “The recommended strategy is
designed to address the inventory control issues identified as a significant weakness in the SWOT analysis”
Enhancing “the impression”.
Students will enhance the impression their answer makes on a marker by demonstrating a clear “feel” for business
beyond the “standard text book approach”. This is especially important when interpreting the business scenario
and in making recommendations for strategies ….. they must be relevant and appropriate to that business, in that
market, at that time ie. they must make sense!..... and, have a clear chance of being successful. Accordingly, if you
have time, when asked to “recommend”, also “justify”; when asked to “outline a range of alternatives”, also
“recommend” what you think is the most appropriate of those alternatives.
Effective HSC Exam Techniques in Business Studies
____________________________________________________
10
Section 3
The Business Report Question
To read and understand a business scenario and then to write a specific business report related to that business,
under exam conditions, is quite a challenge. To maximise your chances of successfully meeting that challenge (ie.
to get a reasonable mark), you must develop a consistent and effective approach to the question.
The good news is:
(a) the instructions under the scenario give the basic structure of the report ie the headings to write about
(b) the “dot points in the syllabus” (and your texts) tell you the content to write about under each heading
(c) the directive term tells you the approach to take and depth to write, under each heading
The first things to do with this type of question is to work out:
1. what is the information telling me about the business ie. what assumptions can I draw from the scenario?
Look for information about
~ type of business / size / workforce / product(s) / industry etc.
~ market (consumer or business?); competitors
~ business performance (past, present, and in comparison with competitors)
~ problems
internal
(weaknesses)
}
external
(threats)
}
~ strengths and opportunities
}
Influences from
the business
environment
~ current management strategies and future plans
Remember, much of the information you need to answer the question will be implied by the evidence in the
scenario rather than directly stated. You will be expected to interpret the information provided using your
accumulated knowledge and understanding of business.
2. what is the question asking me to do ie. what do I have to do to get marks in this question.
You will get information about this in two places:
(i) the instructions under the scenario
(ii) the rubric
The marking guidelines issued to markers will reflect the requirements of the question, the rubric and the directive terms used.
eg. In the 2013 HSC Section 3 Q.26 the scenario and instructions were as follows :
Answer the question in the Section 3 Writing Booklet. Extra writing booklets are available.
In your answer you will be assessed on how well you:
Ŷ demonstrate knowledge and understanding relevant to the question
Ŷ apply the hypothetical business situation
Ŷ communicate using relevant business terminology and concepts
Ŷ present a sustained, logical and cohesive response in the form of a business report
The rubric
The business
scenario
Kingland Office Supplies operates in a large NSW city in a highly competitive market. A paid manager is
UHVSRQVLEOHIRUWKHGD\öWRöGD\UXQQLQJRf the business. The owners are concerned about the low profitability of
the business.
Investigations by the owners indicate the following problems:
‡FXVWRPHUVILQGWKHSURGXFWPL[XQDSSHDOLQJ
‡SRRUPDQDJHPHQWRIFDVKIORZ
‡SRRUDFFRXQWVUHFHLYDEOHWurnover compared to similar businesses.
The manager has also identified low prices offered by larger competitors as a cause of the low profitability.
You have been employed as a consultant by the owners. Write a report to the owners recommending marketing
and financial management strategies to improve the performance of the business.
Section 2
Effective HSC Exam Techniques in Business Studies
Section 1
____________________________________________________
11
The instructions give students the basic structure of the business report and the type of information required:
Executive Summary / Introduction
Provide a brief overview that could include:
the nature of the business and its market
the implications of the identified marketing and financial management problems
the nature of the desired improvements in performance
a statement that the report will recommend a coordinated strategy that incorporates elements of both
marketing and financial management strategies that will be effective in delivering the desired improvements in
performance
Section 1
Marketing Strategies
Recommend (“provide reasons in favour”) of marketing strategies to address the identified problems.
This is based on Syllabus topic 2 :
Marketing ~ marketing strategies.
The relevant dot points are:
x
x
market segmentation, product/service differentiation and positioning
products – goods and/or services
–
–
x
x
pricing strategies – skimming, penetration, loss leaders, price points
price and quality interaction
promotion
–
elements of the promotion mix – advertising, personal selling and relationship marketing, sales promotions, publicity
and public relations
–
the communication process – opinion leaders, word of mouth
place/distribution
–
–
–
x
x
x
packaging
price including pricing methods – cost, market, competition-based
–
–
x
branding
distribution channels
channel choice – intensive, selective, exclusive
physical distribution issues – transport, warehousing, inventory
people, processes and physical evidence
e-marketing
global marketing (not relevant to this question)
In this section students needed to provide reasons in favour of marketing strategies that are appropriate to
Kingland Office Supplies addressing its identified problems and improving business performance. “Appropriate”
would mean those alternatives best suited to a one city private company operating in a highly competitive market
dominated by national businesses (eg. Office Supplies) with considerable market power.
It could begin with a basic “text book” outline that essentially lists the range of marketing strategies available (as
per the dot points), followed by an explanation of the strategies that are most relevant/appropriate to the
identified problems and then the recommendation of the ‘best’ strategy. It’s a good idea to also justify (support
the recommendation with reasoned argument) in order to have the best chance of achieving the top mark range.
Effective HSC Exam Techniques in Business Studies
____________________________________________________
12
Section 2
Financial Management Strategies
This is based on Syllabus topic 3:
Finance ~ financial management strategies.
The relevant dot points are:
x
x
x
x
cash flow management
– cash flow statements
– distribution of payments, discounts for early payment, factoring
working capital management
– control of current assets – cash, receivables, inventories
– control of current liabilities – payables, loans, overdrafts
– strategies – leasing, sale and lease back
profitability management
– cost controls – fixed and variable, cost centres, expense minimisation
– revenue controls – marketing objectives
global financial management (not relevant to this question)
In this section students needed to provide reasons in favour of financial management strategies that are
appropriate to Kingland Office Supplies addressing its cash flow and accounts receivable turnover problems to
improve business performance. “Appropriate” for these problems is more about internal financial management
procedures but an effective answer would also look at cost controls given that the business is a price taker in the
highly competitive market situation in which it is operating.
This section could also begin with a basic “text book” outline that essentially lists the range of financial
management strategies available (as per the dot points), followed by an explanation of the strategies that are
most relevant/appropriate to the identified problems and then the recommendation of the ‘best’ strategy. Again,
it’s a good idea to also justify (support the recommendation with reasoned argument) in order to have the best
chance of achieving the top mark range.
It should be apparent that a student who has a reasonable understanding of the syllabus content and the
directive terms should be able to construct a reasonable (“generic” ?) response to any question, almost regardless
of the business scenario. However, to access the higher mark ranges students must be able to apply what they
know and understand to the business scenario ie. to write a generic response enhanced by real understanding
and “feel” for business, specifically the business and the market in the scenario.
Learn the dot points
A “Generic Plus”
approach
This is essentially the ALARM approach…… provide the ‘lower order’ content enhanced by the ‘higher order’
application of knowledge and understanding to real world and scenario business situations.
The marking guidelines issued to the HSC markers for this question are included on the next page. Note the links between the
rubric, syllabus and glossary of key words (the directive terms) in the marking guidelines. In addition, it should be apparent
that, in the top mark band, “sustained” has been added to the description of business report from the rubric and markers
would expect detailed reasons in favour for students to access the top mark band….. ie. your response needs to be sustained,
logical and detailed in all aspects to get a mark >16.
Effective HSC Exam Techniques in Business Studies
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13
Question 26
Criteria
Outcomes assessed: H2.1, H3.3, H4.2, H5.1, H5.3
glossary
MARKING GUIDELINES
Syllabus
‡3URYLGHVUHDVRQVLQIDYRXURIPDUNHWLQJVWUDWHJLHVWRDGGUHVVWKHEXVLQHVVSUREOHPVLGHQWLILHGLQWKHK\SRWhetical
situation
‡3URYLGHVUHDVRQVLQIDYRXURIILQDQFLDOPDQDJHPHQWVWUDWHJLHVWRDGGUHVVWKHEXVLQHVVSUREOHPVLGHQWLILHGLQWKH
hypothetical situation
‡0DNHVHIIHFWLYHXVHRIWKHLQIRUPDWLRQSURYLGHGGHPRQVWUDWLQJH[WHQVLYHNQRZOHGJHDQGXQGHUVWDQding
relevant to the question
‡3UHVHQWVDVXVWDLQHGORJLFDODQGFRKHVLYHEXVLQHVVUHSRUWLQWHJUDWLQJUHOHYDQWEXVLQHVVWHUPLQRORJ\DQGFRQFHSWV
‡3URYLGHVUHDVRQVLQIDYRXURIPDUNHWLQJVWUDWHJLHVDQGSURYLGHVFKDUDFWHULVWLFVDQGIHDWXUHVRf financial
management strategies
OR
‡3URYLGHVUHDVRQVLQIDYRXURIILQDQFLDOPDQDJHPHQWVWUDWHJLHVDQGSURYLGHVFKDUDFWHULVWLFVDQGIHDWXUHVRI
marketing strategies
‡0DNHVVRPHXVHRIWKHLQIRUPDWLRQSURYLGHGGHPRQVWUDWLQJNQRZOHGJHDQGXQGHUVWanding of the question
‡3UHVHQWVDORJLFDODQGFRKHVLYHEXVLQHVVUHSRUWDQGXVHVUHOHYDQWEXVLQHVVWHUPLQRORJ\DQGFRQFHSWV
‡3URYLGHVFKDUDFWHULVWLFVDQGIHDWXUHVRIVRPHPDUNHWLQJVWUDWHJLHVDQGVNHWFKHVLQJHQHUDOWHUPVVRPHILQDQFLDO
strategies
OR
‡3URYLGHVFKDUDFWHULVWLFVDQGIHDWXUHVRIVRPHILQDQFLDOPDQDJHPHQWVWUDWHJLHVDQGVNHWFKHVLQJHQHUDOWHUPV
some marketing strategies
‡,QFOXGHVIHDWXUHVRIDEXVLQHVVUHSRUWDQGXVHVVRPHEXVLQHVVWHUPLQRORJ\DQGFRQFHSWV
‡6NHWches in general terms some aspects of marketing AND/OR financial management
‡0D\LQFOXGHVRPHIHDWXUHVRIDEXVLQHVVUHSRUWDQGXVHVEDVLFEXVLQHVV
‡8VHVEDVLFEXVLQHVVWHUPLQRORJ\
‡0D\PDNHUHIHUHQFHWRPDUNHWLQJOR financial management
Marks
Syllabus
17-20
rubric
13-16
9-12
5-8
1-4
Answers could include:
Marketing strategies:
‡0DUNHWVHJPHQWDWLRQSURGXFWVHUYLFHGLIIHUHQWLDWLRQDQGSRVLWLRQLQJ
‡3URGXFWV– goods and/or services
– branding
– packaging
‡3ULFHLQFOXGLQJSULFLQJPHWKRGV– cost, market, competition-based
‡3ULcing strategies – skimming, penetration, loss leaders, price points.
Financial management strategies:
‡&DVK-flow management
– cash-flow statements
– distribution of payments, discounts for early payment, factoring
‡:RUNLQJFDSLWDOPDQDJHPHQW
– control of current assets – cash, receivables, inventories
‡3URILWDELOLW\PDQDJHPHQW
– revenue – marketing objectives.
[Students may take an alternative approach, which if correct, should be rewarded.]
The following Notes from the Marking Centre provide students with an overview of student responses to this question.
Question 26
Candidates showed strength in these areas:
x
providing reasons for marketing strategies such as branding, product differentiation and product mix, and pricing
methods and/or pricing strategies in relation to the problems identified in the hypothetical situation
x
providing reasons for financial strategies such as cash flow management, working capital and profitability
management to address the issues identified in the hypothetical situation
x
using business report format and referring to the stimulus.
Candidates need to improve in these areas:
x
focusing on the issues of the hypothetical business rather than addressing all dot points from the syllabus
x
recognising that a SWOT analysis is not always appropriate in a report question
x
recognising that additional case study material that is not related to the stimulus is not necessary.
Effective HSC Exam Techniques in Business Studies
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The report question on the Specimen Paper
The question style has remained
similar in the subsequent HSC exams
The report question in the latest syllabus represents something of a departure from the previous style of question.
While the scenario remains and you are expected to write from the perspective of a consultant, there is a less
obvious structure inherent in the question. This could be interpreted as giving students more flexibility in how they
answer the question. However, if you are unsure about how to approach the question then the “generic plus”
approach will provide a structure for your response. Using the dot points highlighted below would give you more
than enough to write about.
Keep the language objective, in the third person – it is a
business to business report.
The written report is formal while the verbal presentation
to management by the consultant might be less formal
and incorporate a more personal perspective.
Question 26 (20 marks)
In your answer you will be assessed on how well you:
Ŷ demonstrate knowledge and understanding relevant to the question
Ŷ apply the hypothetical business situation
Ŷ communicate using relevant business terminology and concepts
Ŷ present a sustained, logical and cohesive response in the form of a business report
Public Company
Small, light product –
cheap to transport
High tech product
High value-added
Potential
growth
markets
- aging
populations
Prine Ltd is a leading Australian manufacturer of hearing aids. One of the business’s new hearing aids has
been successfully launched in Australia and Prine Ltd now plans to expand to Europe and North America.
The senior managers of Prine Ltd are seeking advice on the following aspects of their international expansion:
‡PDLQWDLQLQJSURGXFWLRQTXDOLW\
Operations
‡RSWLRQVIRUJOREDOPDUNHWLQJ
Marketing
‡ILQDQFLDOLVVXHVWREHFRQVLGHUHG
‡LQWHJUDWLRQRIWKHLUJOREDODQGORFDODFWLYLWLHV
Finance
Integrating business functions
You have been employed as a consultant to prepare a report for Prine Ltd.
Put forward for
consideration or action
Introduction & Conclusion
Support an argument or
conclusion
In your report, propose and justify effective operational, marketing and financial strategies that Prine Ltd could
implement to achieve success in the global market.
Section 1
Section 2
Section 3
The structure for a question such as this could start with a brief overview that canvasses the options for expansion
into Europe and North America (eg. export / licensing / direct investment) and a brief discussion of the
importance of integrating global and local activities. Recommend the most appropriate expansion strategy for
the business. This then forms the basis of the remainder of the response (eg. If export is recommended then the
operational/marketing /financial strategies can be tailored to the recommended expansion strategy).
Section 1
Operational Strategies
Provide an overview of the options and then propose and justify the strategy option you believe will be most
effective.
The syllabus provides a broad range of strategy options for you to consider. The dot points in bold are perhaps
most relevant to the question….. but not all would necessarily be included in your response.
operations strategies
x
x
x
performance objectives – quality, speed, dependability, flexibility, customisation, cost
quality management
“maintaining production quality” is identified in the scenario
- control
- assurance
- improvement
global factors – global sourcing, economies of scale, scanning and learning, research and development
Effective HSC Exam Techniques in Business Studies
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15
Section 2
Marketing Strategies
Provide an overview of the options and then propose and justify the strategy option(s) you believe will be most
effective.
The syllabus provides a broad range of strategy options for you to consider. The dot points in bold are of most
significance to the question and provide a structure for this section of your response.
marketing strategies
x
x
x
place/distribution
–
distribution channels
–
channel choice – intensive, selective, exclusive
–
physical distribution issues – transport, warehousing, inventory
e-marketing
global marketing
– global branding
– standardisation
– customisation
– global pricing
– competitive positioning
“options for global marketing” is identified in the scenario
Section 3
Financial Strategies
Provide an overview of the options and then propose and justify the strategy option(s) you believe will be most
effective.
The syllabus provides a broad range of strategy options for you to consider. The dot points in bold are of most
significance to the question and provide a structure for this section of your response.
financial management strategies
x global financial management
– exchange rates
“financial issues to be considered” is identified in the scenario
– interest rates
– methods of international payment – payment in advance, letter of credit, clean payment, bill of exchange
– hedging
– derivatives
As the question asks you for strategies that could be implemented to “achieve success in the global market” you
do have a lot of choice in the approach you ultimately take, but it is essential that you
x apply the hypothetical business situation
x demonstrate clear knowledge and understanding of the issues facing an Australian business seeking to
expand into the global market and
x ensure that the strategies from operations, marketing and finance are clearly coordinated
ie. each function contributes to a logical overall strategy adopted by the business.
On the next page are the Marking Guidelines for this question. Note that below the guidelines are dot points
from the syllabus under the heading “Answers could include”. This is the sheet markers would receive prior to
marking responses to this question. They would be expecting to see at least some of these dot points addressed in
your response.
Although the Specimen Paper and the two subsequent HSC papers
have featured a single higher order directive term and focused on
strategies, students should not assume that this question style will
be replicated in every HSC exam.
Effective HSC Exam Techniques in Business Studies
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16
Criteria
x
Marks
Demonstrates comprehensive knowledge and understanding related to the question, using relevant
terminology, concepts and information provided
Puts forward for consideration, with detailed supporting arguments, effective operational, marketing and
financial strategies that Prine Ltd could implement to achieve success in the global market
Presents a sustained, logical and cohesive response in the form of a business report
x
x
x
Demonstrates knowledge and understanding related to the question, using relevant terminology, concepts
and information provided
Puts forward for consideration, with some supporting arguments, effective operational, marketing and
financial strategies that Prine Ltd could implement to achieve success in the global market
Presents a well-organised response in the form of a business report
Demonstrates some knowledge and understanding related to the question using some relevant terminology,
concepts and information provided
Provides characteristics and features of effective operational, marketing and financial strategies that Prine
Ltd could implement to achieve success in the global market
Presents a response using features of a business report
Demonstrates limited knowledge and understanding using limited terminology, concepts and information
Provides some characteristics and features of operational and/or marketing and/or financial strategies
Includes some features of a business report
Refers to business information
May refer to operational and/or marketing and/or financial strategies
Uses basic terminology
x
x
x
x
x
x
x
x
x
x
x
17-20
13-16
9-12
5-8
1-4
Answers could include:
Answers could include information not specifically drawn from the syllabus which still has validity in terms of the question asked.
Operations strategies
x
performance objectives – quality
x
quality management
o
control
o
assurance
o
improvement
x
global factors – economies of scale
Marketing strategies
x
place/distribution
o
distribution channels
o
channel choice – intensive, selective, exclusive
o
physical distribution issues – transport, warehousing, inventory
x
global marketing
o
global branding
o
standardisation
o
customisation
o
global pricing
o
competitive positioning
Financial management strategies
x
global financial management
o
exchange rates
o
interest rates
o
methods of international payment – payment in advance, letter of credit, clean payment, bill of exchange
o
hedging
o
derivatives
Effective HSC Exam Techniques in Business Studies
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17
Section 4
The Case Study Question
This section has an internal choice (an either/or). The two choices are meant to be equal in difficulty and to test
the same basic outcomes. The two choices may be based on different topic areas from the syllabus.
Students must use a case study (or case studies) to answer this question (this requirement is stated in the rubric).
Failure to do so means you are unlikely to be awarded a mark in the top mark ranges – the marking guidelines
included below demonstrate the importance of case studies to the mark you receive.
(Note: In each topic in the syllabus the content section begins with: “Students learn to: examine contemporary
business issues ……… investigate aspects of business using hypothetical situations and actual business case studies….”
i.e. case studies are an integral part of the course.)
Students are not required to use a business report or business report style for this question (but do it anyway –
make it easy for the markers). There is no stimulus material provided in this question.
There was a significant change in the nature of this question from the 2008 HSC paper onwards that has been
continued in the current syllabus / HSC. Previously, the questions used two directive terms, effectively providing a
clear structure for the answer. Since 2008 only one directive term has been used. Anecdotal evidence suggests
many students have found it more difficult to structure their answers, especially given the “higher-order” nature of
the directive terms.
Moreover, “How” and “Why” are not key terms from the BOS Glossary of Key Words. The following extract
from the Glossary provides the justification:
It is important to note that examination questions for the HSC will continue to use self-explanatory
terms such as 'how', or 'why' or 'to what extent'. While key words have a purpose, they will not set
limits on legitimate subject-based questions in examination papers.
Specimen Paper:
Question 27 (20 marks)
How does an understanding of the influences on operations contribute to business success?
OR
Question 28 (20 marks)
Evaluate the effectiveness of human resource management in achieving the goals of business.
2012 Paper
Question 26 (20 marks)
Why are ethical behaviour and government regulation important in marketing?
OR
Question 27 (20 marks)
How can different sources of funds help a business achieve its financial objectives?
2013 Paper
Question 27 (20 marks)
Assess strategies that management may use to respond to influences on operations.
OR
Question 28 (20 marks)
Assess strategies that management may use to respond to key influences on human resources.
Effective HSC Exam Techniques in Business Studies
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The marking guidelines for the Specimen Paper provide a clue as to how to deal with this situation:
The Question 27 marking guideline in the 17-20 band interprets “How” as:
x
Provides an informed judgement of how an understanding of the influences on operations contributes to business success
The Question 28 marking guideline in the 17-20 band uses the definition of “evaluate” from the Glossary of Key Words:
x
Provides an informed judgement, based on criteria, of the effectiveness of human resource management in achieving the
goals of business
ie. the marking guidelines suggest both questions ask you to evaluate.
Advice: If a directive term like “How” is used in one question interpret it as being the same order of skill as the
term used in the other question.
It is reasonable to assume that the questions in this section will continue to include only one directive term and, it
appears, one topic in future HSC papers.
The instructions in the case study question are relatively brief. Again, to get a reasonable mark you must develop
a consistent and effective approach to the question that enables you to provide an effective structure for your
response.
It is especially important to choose carefully when deciding which of the two questions to attempt. Ensure that you
can answer effectively and in detail, including supporting your response with appropriate case studies.
The good news is:
¾ the instructions give you the basic structure of the report, i.e. the headings to write about
¾ the syllabus dot points (and your texts) tell you what to write about under each heading
¾ the directive term tells you how much depth to write in under each heading
¾ your case study (or studies) give you the opportunity to expand on your basic generic
Question 27 from the 2008
HSC is used to illustrate this
below. Further, an attempt
has been made to
demonstrate the links
between the rubric, the
syllabus, the key terms and
the marking guidelines
response and to demonstrate to markers your understanding of business and ability to apply business concepts.
Using case studies
In the present course it is extremely difficult to find a single case study that can be used to illustrate “all dot points
in the syllabus”. Accordingly, you are encouraged to develop a number of key case studies that cover a broad
range of the syllabus and augment these with a broad range of brief studies (or examples) that illustrate a
relatively limited range of points in the syllabus – try to get at least one example to illustrate every dot point in
the syllabus ... then go out and jump a tall building in a single bound.
If you are using a single case study (or a case study that is a significant part of your response) write a brief
profile of the case study business when you first introduce it in your answer. The profile should include such
information as name, business entity, location, prime function, market and size (depending on the requirements of
the question). For example:
Kebachi Seafood Exports Pty Ltd is a small private company acting as an export agent for commercial fishers along the
NSW coast. It exports high-quality fresh tuna to the restaurant market in Japan for use in sushi and sashimi. Kebachi has a
processing plant and business premises located close to Mascot Airport and employs four full-time and ten casual employees.
(Note: the first two sentences would be a sufficient profile in many responses.)
Such a profile puts the business in context for the marker – especially important if you are using a local case
study or a case study that is not well known. Learn your profiles like you would quotations in English.
Effective HSC Exam Techniques in Business Studies
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19
You can use your case study/case studies in a number of ways:
x
to illustrate each point
x
to illustrate all the points at the end of each section
x
a number of case studies to illustrate a single point.
Note in the marking guidelines that there are less criteria in each mark range and the relative importance of
elements from the rubric.
The Board of Studies requires the Examination Committee to set questions that test the outcomes in the syllabus
using the content in the syllabus. A thorough knowledge of the syllabus content provides the basis for
demonstrating what you know, understand and can do and, in the extended response questions, provides a basic
framework on which you can build your answers……
ie. the dot points relevant to the question tell you what to write about.
Learn the dot points
The case study question on the Specimen Paper
Attempt either Question 27 or Question 28
In your answer you will be assessed on how well you:
Ŷ demonstrate knowledge and understanding relevant to the question
Ŷ apply relevant business case study/studies and contemporary business issues
Ŷ communicate using relevant business terminology and concepts
Ŷ present a sustained, logical and cohesive response
The rubric makes the importance of case
studies and knowledge of contemporary
business issues clear.
Question 27 (20 marks)
How does an understanding of the influences on operations contribute to business success?
OR
Question 28 (20 marks)
Evaluate the effectiveness of human resource management in achieving the goals of business.
These are relatively open questions that give students lots of choice in the approach they will use and the content
they will include. Of course, lots of choice may mean that some students have less certainty about how to answer
the question. Again, the marking guidelines and, especially, the “Answers could include” in the Specimen Paper
give an excellent pointer as to the approach examiners expect you to take…..
“Answers could include information from many areas of the syllabus OR not specifically drawn from the syllabus but
have validity in terms of the question asked”.
Therefore, to provide a sound base for your answer to these questions you will need to:
x learn the dot points
x include relevant business case study/studies
x make some reference to contemporary business issues
Effective HSC Exam Techniques in Business Studies
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20
In particular, it is apparent you are likely to have to demonstrate in these types of questions a clear
understanding of such things as:
x influences on business and various business functions …. contemporary business issues
x the competitive environment
eg. sales, revenue, profit, growth, productivity, share price, reputation,
x the indicators of business success
meeting or exceeding targets ……. (see
x the effectiveness of business strategies
Demonstrating a “feel” for business is likely to be beneficial in
determining the impression made on the marker
Using Question 27 as an example
Answers could include:
information from many areas of the syllabus OR not specifically drawn from the syllabus but have validity in
terms of the question asked.
The question:
Influences on business operations
How does an understanding of the influences on operations contribute to business success?
x
Globalisation
Extract from Syllabus Topic 1 Operations
x
Technology
Link
influences
x
Quality expectations
between
x globalisation, technology, quality
x
Cost-based competition
the dot
expectations,
x
Government policies
points and
cost-based
competition, government policies,
x
Legal regulation
what
legal
regulation,
environmental sustainability
x
Environment sustainability
markers
x
Corporate social responsibility
are asked
x corporate social responsibility
to consider
- the difference between legal compliance
x
Supply chain management
in applying
and ethical responsibility
x
Overcoming resistance to change
the
- environmental sustainability and social
x
Outsourcing
marking
responsibility
x
Product or service design
guidelines
Success of a business could be assessed by a range of factors
x
Operational goals/objective
x
Financial goals/objectives
x
Marketing goals/objectives
x
Human resource goals/objectives
If you’re “making a judgement based on
criteria” (ie. evaluating), here is a sample of
the criteria used to judge business success
And again:
…… in this question it is essential to know your case study / studies and use them effectively. If you do not, it is
unlikely you can access the higher mark ranges, even if you write an outstanding generic response.
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Demonstrates comprehensive knowledge and understanding related to the question, using relevant terminology, concepts
and business case study/studies
Provides an informed judgement of how an understanding of the influences on operations contributes to business success
Presents a sustained, logical and cohesive response to the question
17-20
Demonstrates knowledge and understanding related to the question, using relevant terminology, concepts and business
case study/studies
Provides a sound judgement of how an understanding of the influences on operations contributes to business success
Presents a cohesive response to the question
13-16
Demonstrates some knowledge and understanding related to the question, using some relevant terminology, concepts
and business case study/studies
Sketches in general terms how an understanding of the influences on operations contributes to business success
Presents a response with some structure
Demonstrates limited knowledge and understanding using limited terminology and may refer to business case
study/studies
Makes general statements about the influences on business operations
Presents a response with limited structure
Uses basic knowledge and terminology
May refer to some influences on business operations
Effective HSC Exam Techniques in Business Studies
____________________________________________________
9-12
5-8
1-4
21
BOS Glossary of Key Terms
Account
Account for: state reasons for, report on. Give an account of: narrate a series of events or transactions
Analyse
Identify components and the relationship between them; draw out and relate implications
Apply
Use, utilise, employ in a particular situation
Appreciate
Make a judgement about the value of
Assess
Make a judgement of value, quality, outcomes, results or size
Calculate
Ascertain/ determine from given facts, figures or information
Clarify
Make clear or plain
Classify
Arrange or include in classes/ categories
Compare
Show how things are similar or different
Construct
Make; build; put together item or arguments
Contrast
Show how things are different or opposite
Critically
(analyse/evaluate)
Add a degree or level of accuracy depth, knowledge and understanding, logic, questioning, reflection
and quality to (analysis/evaluation)
Deduce
Draw conclusions
Define
State meaning and identify essential qualities
Demonstrate
Show by example
Describe
Provide characteristics and features
Discuss
Identify issues and provide points for and/ or against
Distinguish
Recognise or note/ indicate as being distinct or different from; to note differences between
Evaluate
Make a judgement based on criteria; determine the value of
Examine
Inquire into
Explain
Relate cause and effect; make the relationships between things evident; provide why and/or how
Extract
choose relevant and/ or appropriate details
Extrapolate
Infer from what is known
Identify
Recognise and name
Interpret
Draw meaning from
Investigate
Plan, inquire into and draw conclusions about
Justify
Support an argument or conclusion
Outline
Sketch in general terms; indicate the main features of
Predict
Suggest what may happen based on available information
Propose
Put forward (for example a point of view, idea, argument, suggestion) for consideration or action
Recall
Present remembered ideas, facts or experiences
Recommend
Provide reasons in favour
Recount
Retell a series of events
Summarise
Express, concisely, the relevant details
Synthesise
Putting together various elements to make a whole
Effective HSC Exam Techniques in Business Studies
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22
It is important to understand the “value” attached to these verbs in terms of the “depth” required in your answer and the
marks attached. Based on Blooms Taxonomy of thinking skills there are higher standards, expectations and marks applied to
higher order thinking skills.
The diagram below links the BOS terms to Blooms taxonomy.
appreciate; evaluate; assess; justify; critically
analyse/evaluate
propose; predict; recommend; synthesise
examine; distinguish; analyse; compare; contrast;
extrapolate; calculate; deduce; investigate; discuss
extract; demonstrate; construct; apply; interpret
classify; summarise; explain; recount; clarify; account
identify; name; list; define; outline; describe; recall
Effective HSC Exam Techniques in Business Studies
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23
ALARM©: A LEARNING AND RESPONDING MATRIX
The ALARM© Model of organising learning and study notes was developed at Freshwater High School and is designed to
assist students to:
ÐÐÐÐ explicitly organise learning (subject content & concepts) from simple to complex (lower order to higher order thinking)
ÐÐÐÐ understand and appreciate subject content
To answer the question
ÐÐÐÐ connect learning to responding effectively in assessment tasks
ÐÐÐÐ build skills & confidence in organising content to respond effectively to short & extended response questions
There are two basic formats for the matrix in ALARM©:
1. Linear matrix
2. Cell matrix
Both approaches encourage students to organise notes basically in line with the Board of Studies Glossary of Terms from
lower order (lower marks) to higher order (higher marks).
The simple versions:
1. Linear Matrix
TOPIC:
 Name/Define
Each area of content
What is it?
 Describe
Features & characteristics
 Explain
Purpose
What is it meant to achieve?
What is the impact?
Cause & effect
 Analyse
How/Why does it work and/or
achieve its purpose?
Implications
+ve’s & –ve’s
Benefits & Costs
Advantages/Disadvantages
Interdependence of functions
 Evaluate
Make a judgment….
based on criteria
Effectiveness
Did it / will it … work?
(achieve intended outcome)
 Recommend
Reasons in favour
What will work best?
Why?...... Justify
Match strategy to purpose &
context
 Appreciate
Significance
The Big Picture
Importance
Effective HSC Exam Techniques in Business Studies
____________________________________________________
24
2. Cell Matrix
TOPIC:
Name/Define
Describe
Explain
Analyse
Evaluate
Recommend
Appreciate
Each area of
content
What is it?
Features &
characteristics
Purpose
What is it meant
to achieve?
What is the
impact?
Cause & effect
How/Why does it
work and/or
achieve its
purpose?
Implications
+ve’s & –ve’s
Benefits & Costs
Advantages/Disad
vantages
Interdependence
of functions
Make a
judgment….
based on criteria
Effectiveness
Did it / will it …
work?
(achieve intended
outcome)
Reasons in favour
What will work
best?
Why?...... Justify
Match strategy to
purpose & context
Significance
The Big Picture
Importance
Responding
In order to maximise the marks earned in an exam or assessment task it is important that students learn to:
ÐÐÐÐ deconstruct the question to determine what you are being asked to do
ÐÐÐÐ demonstrate learning relevant to the question … use the directive term and content (syllabus) knowledge to write an
answer in the appropriate depth focussed on the specific requirements of the question.
The ALARM© Model for organising notes means that you can identify the things
you have to write about in order to meet the requirements of the question…..
LEARNING
The pattern of
learning helps
shape the pattern
of response
and
To answer the question
RESPONDING
Name & Define
Appreciate
Describe
Name & Define
Explain
Describe
Analyse
Explain
Evaluate
Analyse
Recommend
Evaluate
Appreciate
Recommend
Appreciate
….. The Big Picture
For an effective response move
what is learned last at the highest
level to begin the response
MAKE AN IMPRESSION
….. The Big Picture
To adequately respond to a question you should include all the lower order elements prior to the directive term used in the
question.
This is essentially the “generic plus” approach …….show the marker you know the dot points / content then give them the
higher order analysis/evaluation/application of the case study &/or scenario.
A brief example follows:
Effective HSC Exam Techniques in Business Studies
____________________________________________________
25
Deconstructing the question…..
relate the implications of
the actions the biz takes to address issues &/or deliver outcomes
o cope w
Analyse strategies available to managers to
with change in the external environment.
the content
effectively maintain competitiveness
 Introduction
In a globalised business environment change is inevitable. The changing external
environment means business need to change the internal environment and implement
strategies to maintain competitiveness in the longer term. The business must be
proactive in scanning the external environment, monitoring change, assessing its
implications and developing coordinated strategies across all business functions. This
must be managed effectively in order for the desired outcomes to be successfully
delivered.
 Name/Define
Ð
Ð
external / internal business environment
change
Ð
drivers of change (list)
- effect businesses differently
- both opportunity and threat
Each area of content
What is it?
 Describe
Features & characteristics
 Explain
Purpose
What is it meant to achieve?
What is the impact?
Cause & effect
Ð
Ð
Ð
Ð
 Analyse
How/Why does it work and/or
achieve its purpose?
Implications
+ve’s & –ve’s
Benefits & Costs
Advantages/Disadvantages
Interdependence of functions
Ð
- effect of change on business
- competitiveness ……… price/quality / reliability
- viability / success …… growth / market share / profit / share value
change >>>> opportunity &/or threat
strategies to address change (brief overview) nb World Best Practice
the business must be proactive ……  scan / monitor
 assess impact
 plan …… flexibility
 communicate ….. honest/transparent
 innovate & invest - structural change
- technology
- processes
- layout
- work practices
ie. the business must change to address change
nb. importance of biz/workplace culture
purpose of strategies …… reduce costs / increase flexibility / increase
productivity
positives
negatives
× efficiency
resistance to change
× productivity
downsizing …. residual resentment
Ø costs
enhance competitiveness etc
implications for all business functions
Prepare thoroughly.
Effective HSC Exam Techniques in Business Studies
Be the best you can be.
Good luck!
____________________________________________________
26
Faculty of Business
Operations/Marketing-Case Study
Approach
Mohan Dhall
Director of PLC Sydney Extension Centre, teacher, author and university lecturer
6/10/2014
AN OVERVIEW OF OPERATIONS
AND MARKETING
U O W
B U S I N E S S
S T U D I E S
©
S T U D E N T
C O N F E R E N C E ,
2 0 1 4
M O H A N D H A L L
P L C S Y D N E Y
2013 HSC - OPERATIONS
• 35 marks in total across three different sections:
• 6 multiple choice questions:
• Q1, Q5, Q8, Q14, Q17 and Q18
• 9 marks of short answers
• Q23 (a), (b) and (c) Operations strategies
• One Extended response (Section IV)
• Question 27 (20 marks)
Detail matters as well as the capacity to apply Operations
case studies to questions from a management perspective
© Mohan Dhall
2
2013 HSC QUESTION
1 Which business function transforms raw materials
and resources into finished goods or products?
(A)Finance
(B) Human resources
(C)Marketing
(D)Operations
© Mohan Dhall
3
1
6/10/2014
2013 HSC MARKETING
• About 25 Marks
• 7 multiple choice:
• Qs 2, 7, 9, 11, 12, 15 and 19
• 8 marks short answer (Q25)
• One of the two topics covered in the Business report
section – about 10 marks out of 20.
© Mohan Dhall
4
ROLE OF OPERATIONS MANAGEMENT
• Strategic role of operations management
Operations is intrinsically and intricately linked with
each of the the other key business functions. This is
crucial to understand.
Management perspectives are important.
© Mohan Dhall
5
ROLE OF OPERATIONS MANAGEMENT
• Cost leadership
• Two aspects apply
• Efficiency – cost-minimisation
• Note the relationship between supply costs and cost leadership
• Delivering product to the market in a price-competitive manner
• Case studies:
• International
• WalMart: “Save money. Live better.”
• Australian
• Big W, K-Mart, CostCo
© Mohan Dhall
6
2
6/10/2014
ROLE OF OPERATIONS MANAGEMENT
• Good/service differentiation
• Distinguishing between goods and services
• Goods and/or services in different industries
• The different levels of processing: intermediate and final
goods
• The interaction between goods and services
• Interdependence with other key business functions
• Strategic role of operations management and
integrated/systems view of business
• Operations as:
• Added value and transformation
• As a ‘solution’
© Mohan Dhall
7
2013 HSC
2
An overseas factory sells 200 000 teddy bears a year to toy
stores across Australia. What type of market is the overseas
factory targeting?
(A)
(B)
(C)
(D)
Consumer
Intermediate
Niche
Resource
9
What is the most likely reason that a business would use price
skimming?
(A)
(B)
(C)
(D)
To encourage export sales
To achieve market share quickly
To gain high profits when demand is strong
To reverse the decline stage of the product life cycle
© Mohan Dhall
8
INFLUENCES ON OPERATIONS
• Globalisation
• PepsiCo
• Technology
• Black Milk Clothing
• Quality expectations
• Rolex
• Cost-based competition
• Big W, Walmart, TATA Motors
• Government policies
• Multigate
• Legal regulation
• Environmental sustainability
• Legal regulation
• Alcohol and tobacco retailers – CUB and British American Tobacco
• Environmental sustainability
• Westpac
© Mohan Dhall
9
3
6/10/2014
INFLUENCES ON OPERATIONS
Globalisation:
•
•
•
•
How business operations are structured
How businesses source their supplies (SCM)/distribute their products
How global businesses compete
IP issues
•
•
•
•
Technologies used in manufacturing processes for sourcing (B2B)
Technologies used in creating services, accessing markets (B2C)
Technologies used to manage inventory
Technologies used to manage quality
•
ISO definition of Quality: “the totality of features and characteristics of products (goods)
and services that bears its ability to satisfy stated or implied needs”
Technology
Quality expectations
Must distinguish between quality for goods and quality of services
•
•
•
Goods: Design (including functionality, materials, innovation), fitness for purpose,
durability
Customisation, reliability and competence of the service provider, overall levels of
professionalism and standard of care
Services: peoples, processes and physical evidence
© Mohan Dhall
10
INFLUENCES ON OPERATIONS
Cost-based competition (note: cost-leadership)
Relies on efficiencies, scale, waste minimisation, use of
technologies
Government policies and legal regulation (Compliance or
regulatory costs)
• Health and safety – products and businesses based on
• Workplace Health and Safety (WHS), environmental laws,
transport laws, anti-discrimination laws, fair trading laws
(including implied conditions such as fitness for purpose and
merchantable quality)
Environmental sustainability
• Principles of ESD
© Mohan Dhall
11
INFLUENCES ON OPERATIONS
Corporate social responsibility (CSR)
• The business dilemma:
• What is the purpose of business?
• What is the nature and effect of compliance?
• The difference between legal compliance and
ethical responsibility – Including
environmental
sustainability and social responsibility
• Case study:
• Westpac vs Cootes Transport
© Mohan Dhall
12
4
6/10/2014
OPERATIONS PROCESSES
An overview of the processes
Inputsintothe
transformationprocess:
WHATINPUTS
• Labour,rawmaterials,
energy,information,
technologies
• Transformedresources
• Material,information
customers
• Transformingresources
• Humanresources,facilities
Operationsprocesses
andtransformingfactors
• Influenceofthe4V’s
• Sequencingandscheduling
processingactivities
• Roleoftechnologyin
processing
• Plantandofficelayout
• Monitoring,controllingand
improvingprocesses
Outputs:
Finalgoodsandservicesthat
aresoldtomarkets:
(intermediateandconsumer)
• Customerservice
• Warranties
© Mohan Dhall
13
OPERATIONS PROCESSES
A: Inputs
1. Transformed resources
• Materials, information, customers
2. Transforming resources
•
Human resources, facilities – agents of
transformation/change/value-adding
© Mohan Dhall
14
OPERATIONS PROCESSES
B: Transformation processes The influence of the 4 V’s:
• Volume: business issue – how much to make? (Senge’s Fifth Discipline and lead time
lags), capacity management
• Variety – a mature product strategy, ‘mix flexibility’, diversification
• Variation in demand – analytics (KPIs) and demand predictions
• Visibility (customer contact) – what, if any, influence customers have on
transformations processes – responsiveness of processing
Case study: KFC
2013 HSC
17 Which of the following combinations would result in the lowest
production cost per unit?
(A)
(B)
(C)
(D)
Limited customer contact, limited product variety and low volume
Limited customer contact, limited product variety and high volume
Extensive customer contact, extensive product variety and low volume
Extensive customer contact, extensive product variety and high
volume
© Mohan Dhall
15
5
6/10/2014
OPERATIONS PROCESSES
Sequencing (what order)
and scheduling (when and for how long):
• Process and resource management tools
• Gantt charts, critical path analysis (CPA)
© Mohan Dhall
16
2013 HSC
8 What does a critical path identify?
(A)The lowest cost path to complete all tasks in a
project
(B) The highest cost path to complete all tasks in a
project
(C)The longest time required to complete all tasks in
a project
(D)The shortest time required to complete all tasks in
a project
© Mohan Dhall
17
OPERATIONS PROCESSES
Technology
• Production (manufacturing) technologies: CIM, CAD, CAM, Robotics
• Service technologies: ICTs, laptop and desktop computers and
associated software. Note technologies are used in a huge range of
service industries:
• Professional: medical, engineering, architecture
• Trades: plumbing (optical fibre technology), carpentry (laser cutting)
Task design
• Overlaps with HR: analysing what needs to be done (creates a
job/duty statement), leads to an analysis of the desired skills, abilities,
attributes, qualifications and experiences
Process layout
• (Aside: note the bias of the syllabus towards goods manufacture)
• Process layout is a reference to plant
• There are various forms of layout relevant to production: process
(functional layout), product (for mass production of standardised
goods), fixed position layout
• Services layout includes office layout and how services are conducted
and carried out
© Mohan Dhall
18
6
6/10/2014
OPERATIONS PROCESSES
C: Outputs
• Customer service
• Operations processes - implications
• Outsourcing
• Warranties
• A quantitative (measurable) assessment of operations
processes
• Effect on inputs and processes
• Case study:
• The recall of 8.1 million Toyotas following slipping mats and
sticky accelerators being linked to 19 accident deaths. Honda
recalling 437,000 vehicles due to faulty airbags.
• See also: VW (Skoda and Audi)
© Mohan Dhall
19
SPECIMEN PAPER AND 2012 HSC
SPECIMEN PAPER
11 Which of the following is an output from the operations processes of a
business?
(A) Gantt charts
(B) Customer service
(C) Human resources
(D) Sequencing and scheduling
2012 HSC
2 A factory manager is deciding the best order in which to complete tasks.
Which operations process is being carried out?
(A)
(B)
(C)
(D)
Monitoring
Scheduling
Sequencing
Task design
© Mohan Dhall
20
2012 HSC AND 2013 HSC
7 In winter, the number of beach lifeguards employed by a local council is
reduced. What has influenced the transformation process in this situation?
(A)
(B)
(C)
(D)
Variation in demand
Variation in visibility
Variety
Volume
2013 HSC
14 Which of the following includes two examples of transforming resources?
(A)
(B)
(C)
(D)
Materials and energy
Information and customers
Task design and technology
Human resources and facilities
© Mohan Dhall
21
7
6/10/2014
OPERATIONS STRATEGIES
Performance objectives (all quantifiable)
• Quality
• design quality, service quality and consistency, quality standards and conformance
rates
• Speed
• The notion of ‘lead times’ is relevant. This implies supply chain management controls,
flexible processing (in response to demand) and reduction of processing and delivery
bottlenecks
• Dependability
• Flexibility
• Market responsiveness and service customisability
• Customisation
• Both goods and service providers aim to standardise their operations as far as
possible. The proportion of standardisation is linked with cost savings
• Cost
• Cost leadership (expense minimisation) and therefore low-cost delivery of product to
markets is most likely to maximise profitability
New product or service design and development
• Involves research and development (R&D), product design,
product/market testing, product refinement/adjustment, delivery to
market and ongoing adaptation.
© Mohan Dhall
22
OPERATIONS STRATEGIES
Supply chain management (SCM)
• Logistics (note in order of processes this should be
dealt with LAST)
• Involves distribution (channels)
• Involves transportation modes
• The role, if any, or warehousing
• E-commerce
• E-procurement (B2B)
• E-tailing (B2C)
• Global sourcing
• Global web
• Make-or-buy and vertical integration
© Mohan Dhall
23
2012 AND 2013 HSC
2012 HSC
11 Which of the following is an essential aspect of logistics?
(A)
(B)
(C)
(D)
Undertaking a skills audit
Checking the quality of all output
Materials handling and packaging
The creation of a budget for new machinery
2013 HSC
5 A company’s policy is to purchase from lowest cost suppliers regardless of their
location.
What is this policy an example of?
(A)
(B)
(C)
(D)
Global sourcing
Global branding
Economies of scale
Research and development
© Mohan Dhall
24
8
6/10/2014
OPERATIONS STRATEGIES
Outsourcing (the most underrated strategy and most widely used)
• Advantages
•
•
•
•
•
•
Cost saving/efficiency
Increased ability to process – functional/capacity increases = growth
Flexibility
Through Service Level Agreements (SLA’s) – specified standards
Access to process/knowledge experts
Strategic benefits (eg British Airways ticketing with WNS)
• Disadvantages
•
•
•
•
•
•
Possible loss of privacy
Cost of outsourcing
Negotiating SLA’s
Loss of control of business processes
Cost of organisational redesign
Loss of corporate memory
Case studies: Mattel and Apple – breaches to SLA’s..?
Insourcing trend - cosourcing
© Mohan Dhall
25
OPERATIONS STRATEGIES
Inventory management (stock management)
• Advantages and disadvantages of holding stock
• Warehousing and attendant costs, JIT and the interaction between
the two (they are NOT mutually exclusive)
• LIFO (last-in-first-out), FIFO (first-in-first-out), JIT (just-in-time
• Assumptions: Periodic period (rather than perpetual), matching
principle is CRUCIAL
18 A business is experiencing increasing costs for its stock over
time. It is seeking to maximise its profit for the current financial
period.
Which strategy should it adopt to value its inventory?
(A) First in first out
(B) Just in case
(C) Just in time
(D) Last in first out
© Mohan Dhall
26
OPERATIONS STRATEGIES
Quality management
• International quality principles (ISOs)
• Dynamic NOT static processes
• TQM: Product excellence and Sigma Six: Process excellence
• Both are old…and new again
• Control (QC)
• Predetermined quality - random sampling
• Assurance (QA)
• Pre-determined quality standards
• International Standards Organisation (ISOs)
• Improvement (QI)
• Continuous not discontinuous
© Mohan Dhall
27
9
6/10/2014
OPERATIONS STRATEGIES
Overcoming resistance to change
• Financial costs*
•
•
•
•
purchasing new equipment
redundancy payments
retraining
reorganising plant layout
• Inertia
• Psychological resistance to change
• Case studies
• David Jones and e-commerce, News Limited, Fairfax and
newspapers
* Note the implied bias towards manufacturing
© Mohan Dhall
28
OPERATIONS STRATEGIES
• Global factors
• Global sourcing:
• K-Mart and Bunnings
• Testrite
• Economies of scale:
• CostCo, Walmart
• Scanning and learning:
• Ladbrokes and Tom Waterhouse
• Research and development (R&D)
• Case study: CSL
© Mohan Dhall
29
HSC QUESTIONS 2013 (Q23 – 9 MARKS)
Casey owns and operates an independent discount fuel and convenience store.
(a) Outline ONE way that ecommerce could assist Casey with supply chain management. 2
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
(b) Explain ONE performance objective that is relevant to the operations function of the business. 3
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
(c) Is supply chain management important to Casey’s business? Justify your answer. 4
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
© Mohan Dhall
30
10
6/10/2014
HSC 2012 –REPORT WRITING
Question 25 (20 marks)
Sunshine Fruit Juices employs 100 people in its Queensland
factory and supplies juice to large supermarket chains in Asia
and North America. Customers have recently complained that
the product has been damaged and bottles have been
wrongly labelled. An increase in industrial disputes has also
occurred due to a number of recent workplace accidents and
demands from employees for higher wages.
You have been employed by Sunshine Fruit Juices to prepare a
report for management on the issues outlined above. In your
report, recommend strategies for human resources and
operations that the firm could implement to improve its business
performance.
© Mohan Dhall
31
2013 HSC REPORT SECTION
Kingland Office Supplies operates in a large NSW city in a highly
competitive market. A paid manager is responsible for the daytoday
running of the business.
The owners are concerned about the low profitability of the business.
Investigations by the owners indicate the following problems:
• customers find the product mix unappealing
• poor management of cash flow
• poor accounts receivable turnover compared to similar businesses.
The manager has also identified low prices offered by larger competitors as
a cause of the low profitability.
You have been employed as a consultant by the owners. Write a report to
the owners recommending marketing and financial management
strategies to improve the performance of the business.
© Mohan Dhall
32
HSC QUESTIONS - SECTION IV
20 marks
Attempt either Question 27 or Question 28
Allow about 35 minutes for this section
Answer the question in a SEPARATE writing booklet. Extra
writing booklets are available.
In your answer you will be assessed on how well you:
• demonstrate knowledge and understanding relevant to
the question
• apply relevant business case study/studies and
contemporary business issues
• communicate using relevant business terminology and
concepts
• present a sustained, logical and cohesive response
© Mohan Dhall
33
11
6/10/2014
Question 27 (20 marks)
How does an understanding of the influences on
operations contribute to business success?
HSC 2013 Question 27 (20 marks)
Assess strategies that management may use to
respond to influences on operations.
© Mohan Dhall
34
12
Faculty of Business
Finance and Case Studies
Len Nixon
Author, university lecturer, teacher, HSC marker, and chief judge for HSC Business Studies
Finance
Role of financial management
x
x
x
strategic role of financial management
objectives of financial management
– profitability, growth, efficiency, liquidity, solvency
– short-term and long-term
interdependence with other key business functions
Influences on financial management
x
x
x
x
x
internal sources of finance – retained profits
external sources of finance
– debt – short-term borrowing (overdraft, commercial bills, factoring), long-term borrowing
(mortgage, debentures, unsecured notes, leasing)
– equity – ordinary shares (new issues, rights issues, placements, share purchase plans), private
equity
financial institutions – banks, investment banks, finance companies, superannuation funds, life
insurance companies, unit trusts and the Australian Securities Exchange
influence of government – Australian Securities and Investments Commission, company taxation
global market influences – economic outlook, availability of funds, interest rates
Processes of financial management
x
x
x
x
x
planning and implementing – financial needs, budgets, record systems, financial risks, financial
controls
– debt and equity financing – advantages and disadvantages of each
– matching the terms and source of finance to business purpose
monitoring and controlling – cash flow statement, income statement, balance sheet
financial ratios
– liquidity – current ratio (current assets ÷ current liabilities)
– gearing – debt to equity ratio (total liabilities ÷ total equity)
– profitability – gross profit ratio (gross profit ÷ sales); net profit ratio (net profit ÷ sales);
return on equity ratio (net profit ÷ total equity)
– efficiency – expense ratio (total expenses ÷ sales), accounts receivable turnover ratio (sales ÷
accounts receivable)
– comparative ratio analysis – over different time periods, against standards, with similar
businesses
limitations of financial reports – normalised earnings, capitalising expenses, valuing assets,
timing issues, debt repayments, notes to the financial statements
ethical issues related to financial reports
Financial management strategies
x
x
x
cash flow management
– cash flow statements
– distribution of payments, discounts for early payment, factoring
working capital management
– control of current assets – cash, receivables, inventories
– control of current liabilities – payables, loans, overdrafts
– strategies – leasing, sale and lease back
profitability management
– cost controls – fixed and variable, cost centres, expense minimisation
– revenue controls – marketing objectives
Len Nixon – Finance
2
Cost Control
Reven ue control
Role of
Finance
Work in g
Capital
Current of Asse ts
Control of
Liabilities
Strate gie s
Financial
Strate gie s
Cashflow
Statement
Cash flow
Len Nixon – Finance
Profitability
Straegic
Role
Contributes to
achieving the
goals of the
bus ines s
LIqu idity
Solvency
Profitability
Efficie ncy
Growth
Obje ctives
of finan cial
Manage ment
Mark eting
HR
Operations
Monitoring
and
Controlling
Budge ts
Financial
Financial Risk s Statements
Profitability
Gearing
Liquidity
Efficie ncy
Limitation
of finan cial
re ports
Ratios
Global
Influe nces
Governme nt
Finnancial
Ins titutions
Economic outlook
Availability of
fu nds
interest rates
ASIC
Bank s and
NBFI's
Normalsied
earnings
Influe nces
Debt
Short Term
Long Term
Process ess
Savings
Shares
Financial re ports
Planning and
implementing
Ethical
issues
Finance
Interdepende nce
Internal
External
3
Efficiency
Len Nixon – Finance
Financial objective:
Minimisation of costs and an
indicator of how assets are
contributing to generating revenue
and profits
Profits and Losses Surplus or deficit
generated from business activities
Financial objective: Profitability
Strategies
Objectives
Long term Goals
Mission Statement
Vision
Current assets and current liabilities
Ability to pay short debts
Financial objective: Liquidity
The perimeter of the cycle is the flow
of funds. These are funds to finance
strategies such as marketing, HR and
operations.
Source of finance-Debt and or Equity
Financial objective: Solvency
Financing decision
The role of Financial Management – to ensure there is sufficient finance to meet the financial needs of the business
4
Growth
Increase
Market share
Efficiency
Decrease
expenses
Liquidity
Control
cashflow
Solvency
Ability to pay
off long term
debt
Short term
Within a year
Len Nixon – Finance
Solvency____________________________________________________
Liquidity ___________________________________________________
Efficiency__________________________________________________
Growth ___________________________________________________
Profitability________________________________________________
Profitability
Increase
Net profit
Long term
e.g. 5 years
Strategic or
long-term
goal.
e.g. to
increase
Profitability
There are a number of financial objectives to be established in order to achieve
the business’s strategic or long-term financial goal.
Objectives of financial management
Role of financial management – continued
Interdependence with other key business functions
Operations
Human Resources
5
____________________________________________________
____________________________________________________
Outline how finance is related to human resource and marketing
Marketing
Finance
All these functions or activities must interact with each other if a
business is going to achieve the business’s strategic, tactical and
operational goals and objectives. In other words, they are
dependent on each other.
The key business functions are:
x Human Resources
x Marketing
x Finance
x Operations
Len Nixon – Finance
6
Finance – Internal and external sources of funds
Scenario – Doors R Us
Doors R Us is a manufacturer of doors for Australian and global construction and
home markets.
In 2014, the management of Doors R Us decided upon adopting a new strategic goal
of increasing the business growth. The business wanted to increase its market share
currently 35% to 50%.
To achieve this goal requires the business to purchase new machinery to increase its
productive capacity and reduce its costs of production.
In addition, management had recently completed a strategic review of human
resources and it marketing activities revealing a need for additional training of
existing staff and the recruitment of additional operational, marketing and sales staff.
However, such changes required funding. Given the business’s current state of
its balance sheet as shown in table 1, the business had previously funded its
assets through debt and equity.
Identify three financial statements
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Doors R Us Balance Sheet
As at the 30th of June 2014
Current Assets
Cash
Accounts Receivable
Stock
Non Current Assets
Plant and Machinery
Furniture and Fittings
Delivery Vans and Cars
Total Assets
(000)
10
25
10
2000
75
300
2420
Current Liabilities
Accounts Payable
Commercial Bills
(000)
25
20
Non Current Liabilities
Mortgage
975
Total Equity
Shares
Profit
1000
400
Total Liabilities
2420
From a solvency point of view, that is Total Liabilities/ Total Equity (1020/1400) the
solvency ratio is .72%. This means for every $1 of equity the business is only using
.72cents of debt. Given the industry average is usually $1 to $1 the business has used
equity as the primary means of funding its business activities. From a financial
management perspective, the business has been very conservative relying
significantly on equity finance as the primary means of financing its activities.
Len Nixon – Finance
7
Problems to be solved.
Financial questions to be asked by Doors R Us Management?
x
Will the funds come from within the business (internal) or from outside the
business (external)?
x What sources will be used debt or equity or a combination of both?
x What type of finance is appropriate to purchase the current and non current
assets and pay expenses required by the business? The matching principle
x Will the finance be long term or short term in terms of time?
x What is the cost of using the various types of finance?
x How will the choice of finance affect existing solvency, efficiency, liquidity
and profitability?
x What the risks associated with using the various types of finance?
x Will leasing and factoring as a better option in regard with respect to
managing the business’s cashflow better?
Financial questions needing to answered
1. What type of finance to use?
Sources of finance
Internal - Eq
External - D
Debt
Current Liabilities (external debt)
Short Term means _______________________________________________________________
1.
Type ___________________________________________________________
Cost ___________________________________________________________
Source _________________________________________________________
Use ___________________________________________________________
2.
Type ___________________________________________________________
Cost ___________________________________________________________
Source _________________________________________________________
Use ___________________________________________________________
Len Nixon – Finance
8
3.
Type ___________________________________________________________
Cost ___________________________________________________________
Source _________________________________________________________
Use ___________________________________________________________
4.
Type ___________________________________________________________
Cost ___________________________________________________________
Source _________________________________________________________
Use ___________________________________________________________
Long Term – (External) Non-Current Liabilities
Long term means__________________________________________________
1.
Type ___________________________________________________________
Cost ___________________________________________________________
Source _________________________________________________________
Purpose
________________________________________________________________
2.
Type ___________________________________________________________
Cost ___________________________________________________________
Source _________________________________________________________
Purpose___________________________________________________________
3.
Type ___________________________________________________________
Cost ___________________________________________________________
Source _________________________________________________________
Purpose _________________________________________________________
Len Nixon – Finance
9
4
Type ___________________________________________________________
Cost ___________________________________________________________
Source _________________________________________________________
Purpose
________________________________________________________________
Financial Management issues
The use of short and long-term debt will affect:
x
Profitability - ______________________________________________
x
Solvency ___________________________________________________
x
Efficiency __________________________________________________
Important financial management principle
The matching the terms and sources of finance to the purpose
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Equity – internal and external equity
Internal Equity – relates to an Unincorporated business structures such as
_______________________________________________________________
Sources of funds
__________________________________________________________
External Equity sources – relates to Incorporated business entity such as
Type ___________________________________________________________
Cost ___________________________________________________________
Source _________________________________________________________
Purpose
___________________________________________________________
Len Nixon – Finance
10
Propose a set of finding strategies Doors R Us management could use to
purchase new equipment and also to fund a training and development program
together with recruiting new staff.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
____________________________________________________________________
Advantages and disadvantages of using debt finance
Advantages
Disadvantages
Advantages and disadvantages of using Equity finance
Advantages
Disadvantages
Other Financial institutions
Australian Securities Exchange _________________________________________
Insurance companies’ __________________________________________________
Superannuation Funds_________________________________________________
Unit trusts__________________________________________________________
Len Nixon – Finance
11
Len Nixon – Finance
S
Profitability
Efficiency
Solvency
Liquidity
Financial Implications
Of strategies
on Financial objectives
12
Leads to
The connection between external INFLUENCES on a business’s Financial Statements PROCESSES, RATIO and COMPARATIVE ratio
analysis, the management’s response FINANCIAL STRATEGIES and the financial implications of these strategies.
Increased prof______________
Increased growth
Increased market share
Need to finance operations through
debt and equity - Solvency
Len Nixon – Finance
x
x
x
x
Case Study
For example, assume global demand for
building products increases.
For Doors R US, being an Australian
company, this trend represents an
opportunity to sell more of its products
overseas.
The financial implications for the business
are the following:
Because of the removal of many barriers by
owing to the removal of regulations, many
Australian businesses have been able to
raise funds in European and USA debt and
equity markets.
There are a number of management issues
to be considered when undertaking such a
strategy. This include:
x Interest rates
x Interest rate __________________
x Exchange rate __________________
x The bigger pool of funds available
x The length time of the loan
x Sec______ required against the loan
Businesses can access funds from overseas
x Debt markets
x Equity markets
At present, Australian interest rates are
lower than many of its trading partners
such as Japan and USA.
13
This is the cost of borrowing funds.
Note that interest rates are an expense and
hence will affect financial efficiency of the
business together with net profitability.
Influences on financial management –
Global market influences – global economic outlook, availability of funds and interest rates. These external influences are out of the
direct control of management but can affect a business in the following areas:
x Growth
x Liquidity
x Solvency
x Profitability
x Efficiency
Global economic outlook
Availability of funds
Interest rates
Len Nixon – Finance
Maintaining
Record system
Indentifying
financial risk
Establishing
financial controls
Addressing present
financial needs
Developing
Budgets
Determining
financial needs
The financial planning cycle – To ensure the business’s flow of funds is achieved and all the financial objectives have been managed
effectively and efficiently a planning process must used
Processes of financial management
Planning and control
14
Len Nixon – Finance
Ratio
Formula
Calculation
Wages = Human Resources
Rent = Operations
Franchise Fees = Operations
Cost of Goods Sold = Operations
Advertising = Marketing
Sales generated = Marketing
Direct Links
Interpretation
Ratio Analysis of Part and Parts PTY Ltd Financials
15
Len Nixon – Finance
Current Assets
Industry Average
0.75:1
Current Liabilities
Gearing
Total Debt
Industry Average
1:1
Total Equity
Profitability
Gross Profit
Industry Average
Total Sales
Gross Profit : 80%
Net Profit
Net Profit: 40%
Total Sales
Return on Owner’s Equity:
58%
Net Profit
Total Equity
Efficiency
Total Expenses
Industry Average
40%
Total Sales
Liquidity
16
Poor management of cashflow
Accounts Receivable Turnover is 65 days while the industry
average is 34 days
Expenses ratio is high compared to the industry average
Len Nixon – Finance
How to answer the ?
Look at the verb – what do you need to do?
Executive summary- Only use stimulus material
Headings- taken from the stimulus
1.Cashflow, 2.Accounts Receivable(Liquidity and efficiency) 3. Expenses( efficiency
Problem
Recommendations
Implications
Recommend financial management strategies to improve the
performance of the business.
x
x
x
Investigations revealed the following problems:
Its owners are concerned about its low profitability and liquidity.
Financial strategies
Report
Queenland Office Supplies operate in a large NSW city in a highly
competitive market.
What do you need to do?
x Look at the verb- “ make a judgement of value, quality,
outcomes, results or size
x Know the relevant parts of the syllabus
x Include the case study influences
17
Assess strategies management may use to respond to influences on
finance
Extended Response
Problems
Problems
Problems
Ac counts
Re ceiv able
Stock /
Inv entory
Ca sh
Types
Current
As sets
Solutions
Solutions
Solutions
Ca lcula te d
CA/CL
Problems with the current
asse ts will have and effect
on the business's cashflow
cycle
Len Nixon – Finance
Poor credit
policies
Cleric al
problems
High
Ac ounts
Re ceiv able
Turnov er
Age
ac counts
Storage
Transport
Insurance
Costs
Too much
or
Too little
Us e of
funds
Wor king capital manage ment
Liquidity
Problems and Solutions
Fa ctoring
Ca sh only
Discounts
Credit
restrictions
J.I.T
Stock ta kes
Tw o Bin
method.
Ca sh
Budgets
Ba lance
Sheet
found in
Liquidity
Financial
Objective
ability to
pa y short
term de bts
Ba nk Bill
Credit
Ca rd
Ac counts
Pa yable
Ba nk
Ov e rdraft
Current
Liabilities
The use of all t hese
type s of finance will be
a cost or expense t o
the business.
Their use will decreas e
profit s
Sourc es
Ba nks
Fina nce
Companies
La rge
Companies
18
Financial Management
Curr ent Ass ets = Current Liabilit i
Financial management
strategies
Types of
short te rm
de bt
Place
4P
strate gies
Ta rget
Market
Product
Market Segmentation
Marketing
resea rc h
Marketing
Issues and
strate gies
Len Nixon – Finance
Pric e
Profit may increa se or
de cre ase ow ing to s ales.
This is the outc ome of
good or poor mark eting
de cisions
De termined by
Sales
revenue
Ca lcula tions
Gross Profit
Margin
Ne t Profit
Margin
Re turn on
Equity
J. I. T
Stock ta kes
Tw o Bin
Method
Solutions
and Costs
Storage
Ordering
Transport
Ra tes of
intere st
(borrow ed
funds)
Expenses
Ex pens es directly affe ct
the EFFICIENCY of a
Business
Ba d Debts
(A/C
Re ceiv able
Fina ncial
Administration
Huma n
Re source s
Fixe d
Costs
Manage ment
Cost ce ntre s
Cost control
More efficient
manage ment
of mark eting
Employment
relations and
opera tions
Stra te gies and
Solutions
Outlays to ge nerate
rev enue and profit
arising from
Se lling
Marketing
Outflow
Cost control
These transactions a re to be found in a business's Profit and Loss Statement
Known as a Statement of Financial Performance
Liquidity
issues
Too much
Not enough
Stock
Problems
Ope ning
Inv entory +
Purchase s
less e nding
stoc k
Good and poor
manage ment c entres
on the purc has e of
stoc k
Cost of
goods s old
Profit
Terms, Definitions, Problems and
Re v enue inflow
Influenc ed by
Sa les obj ectiv es
Pric ing policy
Promotion
Financial manage men t iss ues related to
Profitability
19
Va riable
Costs
1800
0
+
2000
Cash
Out
Surplus
/
shortag
e
1900
0
+400
0
2200
0
Feb
2000
Len Nixon – Finance
Receipt of cash
from credit sales
2000
0
Cash In
Jan
2000
0
5000
April
1000
1600
0
1700
0
5000
May
5000
1700
0
Credit sales
Accounts Receivable
2100
0
1000
1600
0
Mar
4000
20
Other Strategies
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Distribution of payments
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Discounts for early payment
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Factoring
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Management Strategies to overcome potential cashflow problems
Strategies to manage cashflow
Outflow of cash
for stock
purchased
The example below represents a summary of
a cash in and cash out for a clothing store
and the cyclical flow of funds
Cashflow Management
Cashflow the problem
Faculty of Business
HR – Main Aspects and Case Studies
Michael Doherty
Author of revised HSC Business Studied text, lecturer, teacher, HSC marker, presenter at a range of
HSC student workshops
1. Role of Human Resource Management •
strategic role of human resources The management of human resources assists in achieving a business’s longer-­‐‑term goals. How will the business achieve its vision and mission through the human resource processes to ensure that it continues to grow and maximise its return on human capital. Much of the recent industrial disputation at Qantas has been due to strategic decision-­‐‑making aimed at reducing labour costs eg. off-­‐‑shoring of jobs and •
redundancies that will keep the business operating in the longer term. interdependence with other key business functions The link between human resources, operations, marketing and finance It’s really the people that make Google the kind of company it is. We hire people who are smart and determined, and we favour ability over experience. Although Googlers share common goals and visions for the company, we hail from all walks of life and speak dozens of languages, reflecting the global audience that we serve. We strive to maintain the open culture often associated with start-­‐‑ups, in which everyone is a hands-­‐‑
on contributor and feels comfortable sharing ideas and opinions. Our offices and cafes are designed to encourage interactions between Googlers within and across teams, and to spark conversations. Source: http://www.google.com/about/company/facts/culture/ 1 •
outsourcing Human resource functions -­‐‑ many organisations are electing to outsource to an external specialist/s (domestic contractors) in areas such as recruitment and training & development. Globally, the use of specialist contractors is an ongoing business practice and includes Business Process Outsourcing (BPO) in activities such as customer service (India and the Philippines). The emergence of Knowledge Process Outsourcing (KPO) in India involves staff completing tasks related to administration. Global Outsourcing Advantages •
Economic benefits e.g. jobs, skill development to the host country •
Cost savings •
Quality improvements •
Maintains competitive advantage •
Access to knowledge Disadvantages 2 •
Costs •
Communication •
Co-­‐‑ordination •
Quality control •
Lack of intellectual property control •
Variations in employment relations 2. Key influences •
stakeholders -­‐‑ employers hire workers according to awards and enterprise agreements and have rights and obligations under industrial legislation eg. WHS -­‐‑ employees contribute to production in return for remuneration and also have rights and obligations in the workplace. Some, including older workers and women seek flexible conditions. The demand for casual workers (now accounts for 20% of the workforce) continues to rise. -­‐‑ employer associations represent the views of employers in various forums such as the Fair Work Commission (FWC) eg. minimum wage discussions. They also lobby government on behalf of their members. -­‐‑ unions represent the views of workers in seeking better pay and conditions. There has been a major decline in membership since the 1970s and now less than 20% of workers belong to unions (mostly in the public sector). -­‐‑ government organisations operate at both a federal and state level (dual industrial relations system). FWC (Federal) established under statutes as an independent body with the authority to carry out a range of functions eg. minimum requirements of enterprise agreements. Industrial Relations Commission (IRC) (State) deals with NSW awards and issues and enforces the Industrial Relations Act 1996 mostly for government employees. Government at both levels is heavily involved as a legislator eg. Fair Work Act 2009 and Paid Parental Leave and also as an employer. -­‐‑ society has concerns about job security, increased casualisation of the workforce, implications of an aging pool of workers, flexibility and globalisation (including the off-­‐‑shoring jobs). •
legal – the current legal framework The Federal Government’s role in industrial relations legislation is determined by the Constitution. Legislation relates to its own employees and those of the territories. It has in recent times also been involved in ongoing attempts to decentralise industrial relations. 1980s Decentralisation of IR and enterprise bargaining via ‘Accords’
1990s
Workplace Relations Act 2000s
Fair Work Australia Act
'ʹWork Choices'ʹ and the individual
3 The State Government’s role in industrial relations is via the Industrial Relations Act 1996 (NSW). This Act maintained the importance of awards and the role of the IRC. The IRC has the capacity to settle disputes, set remuneration and employment conditions as well as interpret and enforce awards and agreements at this level. -­‐‑ employment contract – common law (rights and obligations of employers and employees) Employers have a duty of care for employees, a responsibility to pay them the agreed amount but maintain the right to dismiss them if they do not fulfil their obligations. Employees on the other hand have a duty to obey reasonable commands, a responsibility to work with competence and act in good faith. The government’s influence in the process of determining employment contracts extends to its role in the establishment of the industrial tribunals – the FWC (federal) and IRC (state) and/or challenging issues when it acts as an employer. However, the prevailing political party will also exert its influence upon the industrial relations system (including employment contracts) according to its beliefs. The Federal Liberal/National coalition has said that it will not seek changes to the role of the FWC and/or workplace relations until after its first term in government. It has released a discussion paper that gives an indication of the direction it may eventually take. It included: Union Access to workplaces Greater use of Individual Flexibility Arrangements Paid Parental Leave Scheme Productivity improvements Bullying Review of Fair Work laws Productivity 4 -­‐‑ minimum employment standards -­‐‑ minimum wage rates and awards Modern awards establish one set of wages and conditions for employees across Australia for work in the same industries and occupations. The award includes minimum wages, penalty rates, types of employment, flexible working arrangements, hours of work, rest breaks, classifications, allowances, leave and leave loading, superannuation, redundancy entitlements, and procedures for consultation. The Minimum Wage Panel at FWC determines the National Minimum Wage for those outside of the award and/or agreement process and any increase on an annual basis. It is currently $640.90 or $18.70 per hour. -­‐‑ enterprise agreements These are collective agreements made at an enterprise (workplace) level that cover terms and conditions between employers and employees. Overall the agreement (when finalised) must be better than the relevant modern award. 5 The process of negotiating enterprise/collective agreements and the negotiation of individual contract Enterprise/Collective Agreement •
Individual Contract These are collective agreements made at •
an enterprise (workplace) level •
minimal cover via the award Made between employers and their •
employees (or their representatives) •
Those earning more than $100 000 have Most conditions will be established through the employment contract Overall employees must be better than •
Usually applies to executives/managers the relevant modern award -­‐‑ other employment contracts Full-­‐time Contractors Other contracts Part-­‐time Casual -­‐‑ occupational health and safety/workplace health and safety An Australian Government statutory agency established in 2009, with the primary responsibility of improving work health and safety and workers’ compensation arrangements across Australia. The commonwealth, state and territory governments jointly fund it. 6 -­‐‑ workers compensation In NSW it is administered by WorkCover NSW whose aim is to work in partnership with the state community to achieve safe workplaces, effective return to work and security for injured workers. After a history ridden with cost blowouts, changes have been introduced eg. not insuring workers travelling to and from work. Under statutory law an employee may claim a lump sum payment that is limited to a specified amount. However, employees can also seek redress through common law in the event that the employer is proven to have been negligent in their responsibility to provide a safe working environment. -­‐‑ anti-­‐‑discrimination and equal employment opportunity (EEO) The Australian Human Rights Commission is an independent statutory organisation that w orks to protect and promote the human rights of all people in Australia. It is responsible for administering the following federal laws: •
Age Discrimination Act 2004 •
Disability Discrimination Act 1992 •
Australian Human Rights Commission Act 1986 •
Sex Discrimination Act 1984 •
Racial Discrimination Act 1975 The Anti-­‐‑Discrimination Act 1977 (NSW) makes many types of discrimination illegal within the state; eg. racial, sexual preference, colour and age. It operates under the guidance of the Anti-­‐‑Discrimination Board of NSW. EEO on the other hand aims to make it possible for everyone to have equal access to available employment by ensuring that workplaces are free from discrimination and harassment, and providing programs to assist people to overcome disadvantage. Equal Opportunity for Women in the Workplace Act 1999 has been replaced by the Workplace Gender Equality Act 2012 and aims to promote and improve gender equality and outcomes for both women and men in the workplace. 7 ExxonMobil Australia (EMA) is a group of companies engaged in the exploration and production of oil and gas, petroleum refining and supply of fuels (including natural gas), as well as other chemical products. ExxonMobil has a global commitment to promoting opportunities for women. In recognition of its efforts, EMA has been named an Employer of Choice for Women by the Workplace Gender Equality Agency each year since The advantages of a 2001. At EMA a supportive workplace is reflected in initiatives such as 15 diverse, culturally weeks paid parental leave for the primary caregiver and prioritised access to competent workforce for a global business flexible (days can be swapped at short notice) childcare services. This is credited with the company’s high return to work rate of 96 per cent of staff and lower rates of absenteeism. •
economic -­‐‑ business cycle At the top of the cycle there will be a greater need for workers as businesses expand to meet increases in consumer demand. At the bottom of the cycle unemployment w ill increase and there will be fewer opportunities for wage increases. Workers will experience less movement between jobs as businesses respond to lower levels of consumer demand by cutting production. -­‐‑ globalisation Competition has meant that many businesses seek to reduce costs to maintain profitability. Cost reduction may include ‘offshoring’ jobs to lower wage cost countries. An increase in multicultural workforces has also become apparent and will mean that individual differences in the workplace such as observance of religious holidays will need recognition by employers/governments. •
technological IT, CAD and CAM and a service based economy utilise a more technological based approach to business operations and this has placed demand on workers to upskill. This structual change has 8 created ‘new’ jobs for some but difficulties for others. It has also provided flexibility, such as people working from home (telecommuting). •
social -­‐‑ changing work patterns Perhaps the most significant changes observed recently have been the casualisation, contracting out and aging of the workforce. Other changes include the increased particpation of women and the movement of workers between both jobs and careers. The need to recognise the right for women to return to work after having a child is recognised by private firms and the government. At the moment primary carers of newborn or adopted children are able to claim 18 weeks at the National Minimum Wage. In January, 2013 this was extended to fathers/partners who receive 2 weeks paid leave. The Federal Coalition Government however proposes the following scheme: •
•
•
•
•
A women on average weekly earnings of $65 000 per year would get about $32 500 during her 26 weeks of leave. A woman’s superannuation entitlements would also be met whilst on baby leave. Fathers receive 2 weeks paternity leave at their actual salary. Salary is capped at $150 000 ($100 000). 3000 of Australia’s largest companies (turnover >$5 million) imposed with a 1.5% levy to pay for the scheme. -­‐‑ living standards Australian workers have amongst the highest living standards of people anywhere in the world. The UN generated Human Development Index (HDI) is a measure of how well a country’s people are living using assessments of life expectancy, education, adult literacy levels and GDP per capita. Currently, Australia is placed 5th on a list of 173 countries. Much of the efforts of Australian workers over the years have sought to maintain a good quality of life and strive for a positive work/life balance. •
ethics and corporate social responsibility Some of the ethical and legal issues in the workplace include; __________________________________________________________________________________________ 9 The benefits of ethical practice include; __________________________________________________________________________________________
__________________________________________________________________________________________
Businesses exhibiting corporate social responsibility in HRM •
Foxconn Technology in Taiwan is a contractor for Apple, Dell and HP •
Claims of Code of Conduct violations against Foxconn include use of child labour, forced overtime, unsafe working conditions, exposure to hazardous and toxic chemicals •
Worker suicides and industrial deaths •
Foxconn has increased worker salaries, reduced overtime, and introduced independent audits •
Clubs are looking for family-­‐‑friendly measures to make work/life balance easier for working mothers •
Women comprise 54% of clubs’ workforce •
Provisions include breastfeeding rooms, flexible hours, childcare, prenatal leave and paid maternity leave •
Strong recognition by members (113 currently) of the role of women within the industry and their desire to keep them Plan 10 2. Processes of Human Resource Management 3. Strategies in Human Resource Management •
leadership style Leadership style refers to ways that managers communicate with their employees to inspire and motivate them to work together to achieve an organisation’s goals. 11 •
job design – general or specific tasks Job specialisation (where production is broken down into distinct tasks that are performed by individual employees) is quite specific and often results in employee boredom and dissatisfaction. To counter this effect, three job design approaches more general in nature, have been used and are driven by intrinsic rewards — the good feeling that one gets from doing something well. 1. Job rotation: employees switch, for a period of time, from one job to another. This provides variety and gives them a more comprehensive view of the organisation or the production process. 2. Job enlargement: employees are given more things to do within the same job. This provides greater variety and challenges. 3. Job enrichment: employees are given more control and independence over how they do their work. This makes the job more interesting and challenging and provides motivating opportunities for self-­‐‑satisfaction. •
recruitment – internal or external, general or specific skills Internal – Promotion and referrals External – Internet including social media and media eg. newspapers General skills include flexibility and versatility, social confidence, a positive attitude, motivation, and an ability to work as a team or independently as required. Specific skills however are required for some jobs such as science, technology and engineering. •
training and development – current or future skills __________________________________________ current __________________________________________ __________________________________________ future •
performance management – developmental or administrative The performance management (developmental) model improves individual performance through establishing objectives such as reaching sales targets that are consistent with achieving the organisation’s goals. The performance management (administrative) model assesses the progress of the business in 12 meeting its strategic plan and where necessary identifying the areas for improvement, such as establishing new goals or employee performance. •
rewards – monetary and non-­‐‑monetary monetary
pay, fringe benefits
non-­‐‑monetary
job, environment
performance pay
___________ group team performance
individual
•
rewards -­‐‑ individual or group, performance pay Some employers choose to establish reward systems that recognise individual performance and behavior. Managers must determine how to measure the completion of goals. Companies may use 13 the improvement of profitability, production or customer service as a way to measure these goals. Employees who realise that the group performance is tied to financial rewards are often more apt at working together to achieve common goals. Performance pay refers to remuneration that is based on distributing rewards according to individual employee performance. This performance is usually measured against a number of pre-­‐‑determined goals. Recently, Victorian teachers were informed of the intention to include performance-­‐‑based targets in their new pay agreement. The proposal would see them assessed against goals set with their principals in addition to national teaching standards. Teachers would be placed in one of four categories: exceeding criteria; meeting criteria; needing improvement; or not meeting criteria. •
global – costs, skills, supply Issues such as high domestic labour costs, a skills shortage (especially apparent in some industries), and a relatively small labour pool have made businesses re-­‐‑think the management of human resources. Dhaka'ʹs is home to most of Bangladesh’s 5000 garment factories. Many Australian and global clothing retail businesses outsource production to these factories. The supply of workers, relatively low skill base required and the comparatively cheaper production costs make Dhaka an attractive source of such products. However, many of the production facilities would struggle to meet Australian workplace health and safety standards. Source: http://www.abc.net.au/4corners/stories/2013/06/25/3785918.htm Other activities such as basic accounting and legal work, including the processing of insurance policies, are being outsourced to countries such as India. It has a large pool of English-­‐‑speaking, highly literate and tertiary educated workers able to provide the type of services desired by Australian businesses at a much lower rate than if the work was done in Australia. The Australian financial institution ANZ
currently relies on such back-office support in
Banagalore, India where it currently employs
5000 people in IT. They are involved in the
delivery of its operations services including
sourcing, accounts payable and human
resources.
14 workplace disputes •
The main causes of disputes are: __________________________________________________________________________________________ Types of industrial action include: •
workplace dispute resolution processes involve: Resolution
negotiation
Discussions may result in an agreement but may be protracted mediation
Neutral third party eg. FWC grievance procedures
Included in awards courts/
tribunals
Conciliation/arbitration Grievance Procedures Under changes to the Fair Work Act that came into effect on January 1, workers who believe they are being bullied at work can apply to the Fair Work Commission for an order to stop the bullying. Failure to comply with a commission order can result in penalties of up to $10,200 for individuals and $51,000 for corporations. http://www.smh.com.au/small-­‐‑business/insurance/managing-­‐‑bullying-­‐‑risk-­‐‑20140428-­‐37dds.html 15 Case studies of an industrial dispute and its resolution Source: http://www.smh.com.au/business/qantas-­‐‑dispute-­‐‑heads-­‐‑to-­‐‑umpire-­‐‑more-­‐‑pain-­‐‑possible-­‐‑
20111122-­‐‑1nrgj.html Source: http://www.smh.com.au/business/industrial-­‐‑relations-­‐‑tension-­‐‑flare-­‐‑20130718-­‐‑2q782.html 4. Effectiveness of Human Resource Management •
indicators -­‐‑ corporate culture ___________________________________________________________________________ -­‐‑ benchmarking key variables ___________________________________________________________________________ 16 -­‐‑ changes in staff turnover ___________________________________________________________________________ -­‐‑ absenteeism __________________________________________________________________________________________ -­‐‑ accidents __________________________________________________________________________________________ -­‐‑ levels of disputation ___________________________________________________________________________ -­‐‑ worker satisfaction ___________________________________________________________________________ 17