+
Business Management
Part 3 – Management process
+
Students learn about –
Management process

Coordinating key
business functions and
resources

Operations




Goods and/or services
The production process
Quality management






Identification of the target
market
Marketing mix

Cash flow statement
Income statement
Balance sheet
Human Resources




Marketing

Finance
Recruitment
Training
Employment contracts
Separation
Ethical business behaviour
+

How the task of management is done.



Introduction
Strategies



Establish specific goals.
Determine strategies to achieve goals.
Definition – the actions that a business takes to achieve specific goals.
Strategies involve:
 What has to be done.
 Who is to do what.
 When it is to be done.
 What resources will be needed.
Management strategies need to ensure the key business functions are
performing efficiently and effectively to support and implement the
business’s overall intentions.

Operation – strategy focus is to improve production processes.

Marketing – determine appropriate markets and decide on price, product
features, promotion and channels of distribution.

Finance – financial requirements, budget allocation and financial record
keeping.

Human resources – recruiting, training, employment contracts and separation
of employees
+
Who undertakes key business
functions

In small businesses the key business functions are carried
out by a few employees or outsourced.

Outsourcing is the use of external sources or businesses
to undertake business functions or activities for the
business.

In large businesses whole divisions or departments staffed
by many people perform one specific function.
Activity
Develop a learn the lingo page
and copy all of the words in
bold.
+
Key Business Functions
Source Chapman & Devenish Bus Studies in Action Prel Course
Page 195
+
Interdependence of the key
business functions

The key business functions are interdependent.

Interdependence refers to the mutual dependence that
the key functions have on one another.

In the same way that players in a hockey team must work
together to win a game so must too must the key business
functions work in a coordinated and collaborative way to
achieve business goals.
+
Coordinating key business
functions and resources

All business functions should:

Work towards the fulfillment of the business’s goals.

Be coordinated so they have a common purpose.

In large businesses the key business functions are separated
into different divisions or departments headed by separate
managers.

In small businesses work areas are not separated but often
overlap.
• See figure 8.4 page 197
+
Operations

Operations refers to the business processes that involve
transformation or more generally ‘production’.

Operations management consists of all the activities in which
managers engage to produce a good or service.

For example when buying a loaf of bread from the supermarket
the bakery will have undertaken a number of processes:






Buying ingredients
Mixing and blending them
Baking
Cooling
Wrapping the finished loaf
Delivering the loaves to the retail outlets.
Activity –
Demonstrate the
concept of operations
by describing the
materials you would
need and the process
you would undertake to
bake a cake.
+
The operations management
function

Has considerable influence on:

The quality

The cost

And The availability
Of the business’s goods and/or services.
Source
http://www.udonrice.com/image/gmp_haccp13.jpg
+
Goods and / or services

Operations management is responsible for transforming inputs
into goods.

Tangibles are goods that can be touched. They are handled
and stored before being sold to the consumer. For example
bread, clothing or a car.

Intangibles include services that cannot be touched like a
training course. These can not be stored and the customer may
need to be present when the service is being delivered, for
example a haircut.

Many businesses today produce a combination of both
manufactured goods and services. For example when a
customer enters a contract with an internet provider they
receive a service, their broadband connection, plus the modem
and other goods necessary for the connection.
+
The production process

The three key elements of the production process in any
business are:

Inputs – resources used in the process of production.

Processes/transformation. Transformation – the conversion
of inputs (resources) into outputs (goods or services).

Outputs – the end result of a business’s efforts – the service
or product that is delivered or provided to the consumer.
Source Chapman &
Devenish Bus
Studies in Action
Prel Course Page
203
+
Inputs

The six categories of inputs:
Activity –
Complete the table using
page 202 of text.
Name
Definition
Manufacturing
example
Material
inputs
Raw materials consumed or
converted by the
transformation process.
Use water and steel A bank consumes
to produce building computer software
products.
and paper.
Capital
equiment
Labour
Information
from a
variety of
sources
Time
Money
Service example
+
McDonald’s
Game
Source - http://fast-foodnutrition.findthebest.com/sites/default/files/530/media/images/m
cdonalds_101.jpg

A popular online game is the McDonald's game. This game allows you to manage some
of the inputs that McDonald's would use, from its suppliers through to its consumers. Use
the McDonald's game weblink in your eBookPLUS to play the game, then answer the
following questions.Identify the elements of this operations system.

State whether the business in this game offers a service or manufactures a product.

Propose which aspects of the game an operations manager would have responsibility
for.

Explain what happened when you lost control of your materials or ran out of inputs.
Outline what you needed to do to solve this problem.

Clarify how problems in your supply chain affected the profit trend.

Propose which operations management strategies you could use to improve
productivity in the game. Share your answer with the rest of the class.

Outline some of the ethical issues that are raised within the game. Identify which of
these apply to operations management.
+
Processes / transformation

Transformation implies physical changes but also includes
the conversion of resources into services. Complete table
using page 203.
Inputs supplied by
existing resources of
external supplier
Clothing factory
Private hospital
Transformation
process
Outputs – either goods
or services
+

Transformation processes in manufacturing
businesses.



One type – take basic resources and transform to a
final product for consumers.
Other types involve step like transformation.
 Some processes assemble components from
manufacturers.
 Other processes manufacture components into
elaborately transformed manufactures (ETMs)
manufactured goods that are highly processed
and valued.
 Simply transformed manufactures (STMs) are
manufactured goods that are intermediate by
nature and have the ability to be further
processed in a wide range of processes.
Transformation process in service businesses.


Transformation processes
The are less physical and take the form of
knowledge, inputs and expertise.
They differ from manufacturing for two reasons;
1.
2.
Outputs can not be physically held in stock. For
example a bank can perform transactions in
advance.
Rely on interactions with customers to determine
output. For example bank needs customer to
indicate whether require a car loan, a deposit or
a withdrawal.
Source Chapman & Devenish Bus Studies in Action Prel Course
Page 204
+
Outputs

The service or product that is delivered or provided to the
customer.

In many cases businesses carry out manufacturing and
service operations. For example Ford Australia manufactures
and sells cars.
+
Quality management

Quality management is the strategy a business uses to
make sure its product meets customer expectations.

A quality product should have a degree of excellence and
should achieve its stated purpose. It should be reliable, easy
to use, durable, well designed, delivered on time, include
after sales service and have an agreeable appearance.

Three quality approaches are:

Quality control

Quality assurance and

Total quality management
+
Quality control and quality
assurance

Quality control involves the use of inspections at various
points in the production process to check for problems
and defects. For example tip top use an automated product
inspection and banks can inspect teller accuracy, speed or
courtesy.

Quality assurance involves the use of a system so that a
business achieves set standards in production. For
example Tip Top’s quality systems are certified to the ISO
9002 standard (ISO stands for International Organisation for
Standardisation).
+ Total quality management

Total quality management is an ongoing, business-wide commitment to
excellence that is applied to every aspect of the business’s operation.

TQM aims to create defect-free production process and maintain a customer
focus in operations.

TQM can improve price competitiveness and improve product quality
allowing attainment of competitive advantage.

Approaches used to achieve TQM:

Employee empowerment – use of quality circles – groups of workers
who meet to solve problems relating to quality. At Chrysler quality circles
discovered heating rubber seals before installation could prevent car
door leaks.

Continuous improvement – involves an ongoing commitment to
achieving perfection involving constant evaluation of and improvement in
the way things are done.

Customer focus – the business should answer – What does the customer
require?
Activity –
Read snapshot Putting Quality First – W Edwards Deming page 211.
Complete Questions 1 - 4
+
Marketing

For a business to make a profit it needs to create and market
products that consumers will purchase.

Marketing is a total system of interacting activities designed
to plan, price, promote and distribute products to present
and potential customers.

Successful marketing involves bringing the buyer and seller
together and making a sale.

Businesses should continuously strive to not simply meet but
exceed customer expectations.

The marketing concept is that a customer’s needs and wants
are met while achieving the business’s goals.
Activity Complete Exercise 8.5
Revision questions 1, 5, 8 and 9 page 218
+
Identification of the target market

A target market is a group of customers with similar
characteristics who presently or may in the future
purchase the product.

Three broad approaches can be adopted when selecting a
target market.
Source Chapman & Devenish Bus Studies in Action Prel Course Page 219
+
Mass marketing and market
segment approach
Source Chapman &
Devenish Bus Studies in
Action Prel Course Page 221

Mass marketing approach – seeks a large
range of customers.


The business develops a single marketing mi
and directs it at the whole market. For example
basic food items, water, gas and electricity.
Market segment approach – occurs when
the total market is subdivided into groups
of people who share one or more common
characteristics.


Common elements or dimensions are
demographic, population characteristics,
geographic, where people live, lifestyle,
people’s attitudes and values and behavioural,
loyalty to a product.
Once the market is segmented, one segment
becomes the target market.
+
Niche market

A niche market is a narrowly selected target market
segment.

It is a segment within a segment.

For example a newsagent has rows of magazines each appealing
to a specific niche market – male, female, young, old, highincome, low income, urban, rural, outdoor lifestyle.

magazine
Activity
Complete Exercise 8.6
Page 224
Questions 1 and 7
Source Chapman & Devenish Bus Studies in Action Prel
Course Page 223
+
Marketing mix

Marketing mix refers to the combination of the four elements of
marketing, the four Ps – product, price, promotion and place – that
make up the marketing strategy.
Source Chapman &
Devenish Bus Studies in
Action Prel Course Page
225

Once the four P’s are established the business must determine the
emphasis it will place on each variable. This is determined by where the
product is positioned or its stage in the product life cycle (introduction,
growth, maturity and decline).

For example a product being marketed with an image of exclusivity and
prestige requires a marketing mix totally different from a no-frill
generic.

A product can be goods or services and
consists of both tangible and intangible features.
+

Product

A product is a combination of these variables:
 Quality
 Design
 Name
 Warranty and guarantee
 Packaging
 Labelling
 Exclusive features

A intangible benefit of utmost importance is customer service.
This involves service at the time of sale as well as after-sales service.
Product positioning is the development of a product image
compared with the image of the competing products.


Products like Rolex and Ferrari can immediately evoke an image of the
product’s quality.
Many businesses invest considerable resources in the positioning of their
product thus when customers purchase products they both the tangible
and intangible benefits.

Product packaging involves development of a container and the
graphic design for a product. Packaging helps preserve, inform,
protect and promote the product.

Product branding is the brand and associated brand logo.


A brand is a name, term, symbol or design that identifies a specific
product and distinguishes it from its competitors.
A brand logo is a graphic representation that identifies a business or
product. For example the ‘golden arches’ symbol used for McDonalds.
http://www.replika-klockor.com/wpcontent/uploads/2011/02/Rolexwatches.jpg
Activity
Outline the image
the following
products convey.
a) No frills tomato
sauce
b) Rolex watch
c) Dolly magazine
d) Sportsgirl
clothing and
accessories.
Price
+

A business must select the most appropriate pricing method
suitable to its product and market conditions.

A price too high could mean lost sales.

A price too low can give the impression of a ‘cheap and nasty’
product.
Source
Chapman &
Devenish Bus
Studies in
Action Prel
Course Page
227

One of four methods is usually chosen:

Cost plus margin – cost of production plus a percentage.

Market price – determined by customer demand and
production supplied.

Competitor’s price – below, equal or above competitor.

Discount price – reduced price to stimulate demand.
Activity –
Exercise 8.7
Question 13
Page 230
Promotion

+Promotion refers to the methods used by a business to inform,
persuade and remind customers about its products.

Promotion aims to:

Attract new customers by raising awareness.

Increase brand loyalty by reinforcing the image of the product.

Encourage existing customers to purchase more of the product.
Source Chapman & Devenish Bus Studies in Action Prel Course
Page 228

The main forms of promotion:

Personal selling – sold by sales
individual
assistant to meet
customer needs.

Sales promotion – Use of items like
or coupons to attract interest.

Publicity – A free news story to enhance the image, highlight favourable
features and reduce any negative images.

Advertising – print or electronic media to attract, create demand and
communicate essential information.
free samples
Activity - Complete Outback Trekkers launch – live on the internet.
Questions 1 – 3 page 229
Place
or
distribution
+

Channels of distribution (place) is a way of getting the
product to the customer.

This process usually involves a number of intermediaries such as
a wholesaler or retailer.

There are three main types of distribution channels:
1.
Producer to customer – no intermediaries.
2.
Producer to retailer to customer – used for bulky or perishable
items like furniture or fruit.
3.
Producer to wholesaler to retailer to customer – most common
method for distribution of goods.
Activity – Recommend a
distribution channel for
the sale of:
- a daily newspaper
- a washing machine
- an imported motor
vehicle.
Source
http://thumbs.dreamstime.com/thumb_535/1283639560MQZ1G
K.jpg
Finance - Accounting
+

Businesses need to be led by managers with a good understanding
of accounting and financial management.

Accounting is a financial tool involved with the recording and
analysis of all the business’s financial transactions.

Accounting provides information that is useful, accurate
presented in a clear and concise way. The information
encourages:





Prudent decision making (prudent means showing care and
thought for the future).
Planning that is purposeful.
Confidence in business management.
Accountability.
The financial transactions are summarised into financial statements.
The main ones are:



Cash flow statement – information about the liquidity of the business.
Income statement – detail the income received and the expenses incurred
by the business in the course of a period of trading.
Balance sheet – detail the financial stability of the business in terms of what
it owes and what it owns.
Source
http://www.google.co
m.au/imgres?imgurl=
http://accountantscher
mside.com.au/wpcontent/uploads
+

Accounting is useful as it provides information in statements
about:






Finance
Financial position
Cash position
Cash flows
Profitability and return on investment
Trends in earnings, borrowings, sales to indicate the risks the
business faces.
Finance refers to how a business funds its activities. This
includes:



Where it gets the money to trade.
Why it chooses to use certain lenders.
The costs, risks and benefits of different lenders.
Activity
1. Distinguish
between
accounting
and finance.
1. Identify the
main
accounting
reports and
statements.
+
Cash flow statements

A cash flow statement shows the movement
of cash receipts (inflows such as money
from sales) and cash payments.

Cash flow statements assess liquidity – the
amount of cash a business has access to
and how readily it can convert its assets
into cash so that debt can be paid.
Activity
Exercise 8.9
Complete questions 5, 8 and 9
Page 239.
Source Chapman & Devenish Bus Studies in Action Prel
Course Page 252
+
Income statement or statement of
financial performance

The income statement is a summary of the income earned
and the expenses incurred over a period of trading.

It helps users of information see:




How much money has come into the business as revenue.
How much has gone out as expenditure.
How much has been derived as profit.
The main classifications of items in the
income statement are:



Revenues
Cost of goods sold (COGS)
Expenses
+
Components of income statement

Revenue – income from sales.

Net sales – the amount of revenue a business has earned from sales when the effects of sales
returns are deducted.

Gross profit – the sales less cost of goods sold.

Cost of goods sold (COGS) is the value of stock that a business has sold to its customers.


Gross profit = Sales – COGS
COGS = Opening stock + Purchases – Closing stock

Opening stock is the value of stock or inventory that the business
has at the start of the financial year.

Closing stock is the value of stock on hand at the end of the financial year.

Expenses – costs. They are broken into three types:

Selling – relate to the process of selling the good or service.

Administrative – costs related to the general running of the business.
Financial – costs associated with borrowing money and minimising risk.


Expenses can be:
 Operating – occur in the normal course of trading.


Non-operating – unusual, unexpected and unpredicted items that are favourable or unfavourable.
Net profit – the difference between the gross profit and operating and non-operating
expenses
+
Steps in completing income statement
1. List the sales for the period.
2. Calculate the cost of goods sold
(COGS).
3. Calculate the gross profit.
4. Itemise all other expenses under
categories of administrative, selling
and financial).
5. Calculate the net profit.
The reports provide insights into how the
business is earning and spending, the
gross profit shows the mark-up.
Activity - Complete Exercise 8.10
Questions 1 – 9. Page 244
Net sales calculation
Sales
Less discounts allowed to customers
Less returns of sold items
Net sales
COGS Calculation
$
100 000
2 000
3 000
95 000
$
Opening stock (stock at start of period) 2 500
Purchases (during the period)
10 250
Closing stock (stock at end of period) 3 400
COGS (2500 + 10250 – 3400)
9 350
Source
Chapman &
Devenish Bus
Studies in Action
Prel Course
Page 240
+
Balance sheet or statement of financial position

A balance sheet is a statement of the business’s assets and liabilities (financial position) at
a particular time using the heading ‘as at’ to pinpoint when it was created.



It shows the overall financial stability of the business.
It helps owners:
 Watch debt and equity levels.
 Compare their overall financial position with that of previous periods.
 Assist with the process of financial decision making.
Balance sheet items


On the left hand side are assets – what the business owns
On the right hand side are liabilities and owners equity – what the business owes.
Activity
Complete Exercise 8.11
Questions 1 – 10
Page 247

Assets - items of value to the business.
 Current assets – items whose value is expected to be used up or turned over within 12 months like bank
savings, cash on hand, accounts receivable (debtors), prepaid expenses, inventories (stock).
 Non-current assets – items with an expected life of 3 – 5 years or longer like buildings, land, machinery,
technology, vehicles, furniture, fixtures and fittings.
 Intangibles – things of worth that have no physical substance – goodwill, trademarks, designs, copyright.

Liabilities – items of debt owed to outside parties.
 Current liabilities – debts expected to be repaid in the short term (12 months or less) like bank overdrafts,
credit card debts, accounts payable (creditors) and accrued expenses.
 Non current liabilities – long term debts like mortgages, leases, debentures and retirement benefit funds.

Owners equity (or capital) – funds contributed by the owners to establish and build the business. A liability from
the point of view of business because it is a type of debt the business carries.
+ T format – the format for the balance sheet is called the ‘Tformat’ because you can draw a line down the middle and
separate the report into two halves by using the letter T.
The balance
sheet
equation is:
Assets =
Liabilities +
Owners
Equity
Activity
Complete
Exercise
8.12
Questions
1–3
Page 249
Source Chapman & Devenish
Bus Studies in Action Prel
Course Page 245

+
Human Resources
Employees can make or break a business so management of staff has to be the top priority of
every business.

Human resource management (HRM) – the effective management of the formal relationship
between the employer and the employees.

Businesses that are successful maintain a balance between:



Concern for success (expansion or profit) and
Regard for their employees
For a business to make best use of its employees it should:




Take care to hire the best people.
Develop cooperative and effective working relationships.
Motivate staff to do their best in the workplace.
Provide employees with opportunities for training and development.
The four main elements of
the human resources
cycle / staffing process
Source Chapman &
Devenish Bus Studies in
Action Prel Course Page 252
+
Stage 1 – Acquisition
Planning, Recruitment, Selection

Human resource planning is the development of
strategies to meet the business’s future staffing
needs.

Job analysis is the next step. Job analysis is a
systematic study of each employee’s duties, tasks
and work environment.


A job analysis examines:
 Actual job activities
 Equipment used on the job
 Specific job behaviours required
 Working conditions
 Degree of supervision necessary
Graphic Designer
Job description – This full-time
position involves creating
flyers, brochures, posters,
catalogues, advertising,
stationery and web pages
along with book interior and
cover designs.
Job specification – The
successful applicant will have
excellent design skills and can
format supplied text both
quickly and accurately. A
thorough knowledge of Abode
The job analysis consists of two parts:
CS3 studio software package
 Job description – a written statement describing the
for the Macintosh is vital.
employee’s duties, tasks and responsibilities
GoLive, PowerPoint, or web site
associated with the job.
design experience, as well as
 Job specification – a list of the key qualifications
good English skills would be
needed to perform a particular job in terms of
education, skills and experience.
very advantageous.
+
Recruitment and Selection

Recruitment is the process of attracting qualified job applicants from which
to select the most appropriate person for a specific job.

Internal recruitment involves filling job vacancies with present employees
rather than looking outside the business.

External recruitment involves filling job vacancies with people from outside
the business.

The main sources of employees available to a business include:

Employee selection is choosing the most suitable applicant for the vacancy.
This involves identifying the skills, qualification and experience of the
applicant to those in the job specification to find the closest possible match.






Advertisements in the media
Private employment / recruitment agencies
Schools, TAFE colleges or universities
Public employment agencies
Internal searches
Activity
Selecting the most appropriate candidate involves the following options:
Complete Exercise 8.14
 Written application – curriculum vitae or resume
Questions 2, 9 and
 Testing – psychological or personality tests and aptitude tests
13 and extension 3
 Interviews – face to face questions
 Background checks – verify accuracy of experience and past performance Page 261
Stage
2
–
+
Training and development
 Training is teaching staff to perform their job more efficiently and effectively by
boosting their knowledge and skills.
 Development is the process of preparing employees to take on more
responsibilities in the future.
 Ongoing training for all employees can be promoted by the business becoming a
learning organisation. A learning organisation is aware of its actions and its
environment and tries to improve its understanding of the relationship between the
two. All employees are involved in developing knowledge and insights that allow Source
the business to continually grow and improve.
http://www.dfcentre.com/?Program
 Training needs must be identified well in advance of any proposed technological
es_%26amp%3B_Projects:Training_
ctivities
implementation. This ensures change happens at a pace consistent with the
capabilities and expectations of the workforce.
 The most common training methods:
 Formal off-the-job training – like classroom activities
 Informal on-the-job training – like coaching
 Action learning – learning by experience
 Competency based training – identify skill strengths and areas where further
training is required.
 Corporate universities – partnerships between business and academic
institution.
 Training technologies – computer based training.
Activity
Read
Investment in
training at
Delta
Industries
Questions 1-3
Page 264
+
Stage 3 - Maintenance

Maintenance is the provision of working
conditions to encourage employees to remain
with the business.

Employers need to offer productive and efficient
employees – compensation – appropriate for the
job performed and attractive enough to keep
existing employees satisfied.

Compensation refers to payments or benefits or both
an employee receives in exchange for their labour.

An award outlines an employee’s minimum pay
and conditions.

The remuneration package is the combination of
monetary and non-monetary benefits.


Monetary benefits – pay rates
Non-monetary benefits include – conditions and
fringe benefits including a car or cheap housing loan
Activity
Complete Exercise 8.15
Questions 13 & 8 and
Extension 4
Page 266
+
Employment contracts

An employment contract is a legally binding formal agreement between an employer and an employee.

There are three different types of employment contract:
Award – an employee’s minimum pay and conditions.
Advantages
Disadvantages
Set a minimum for pay and conditions
Can be inflexible and not suit all
Cover all employees performing a similar job
Prevent recognition and individual initiative
Enterprise Agreement – a negotiated agreement between between an employer and a union or a group
of employees.
Features
Replace an award or agreement as an add on agreement to an award.
Must comply with all NSW laws regarding employment rights and entitlements.
Must be in writing and signed by each party.
Usually for a fixed term, but remain in force until rescinded
Advantages
Consultation with and involvement of employees encouraging involvement and empowerment.
Possibility of improved pay and conditions, tied to workplace performance.
Greater flexibility by agreeing on conditions that suit employer and employee
Disadvantages
More time consuming as agreement meetings required.
More administration as agreement must comply with all existing laws.
ActivityDistinguish
between an
enterprise
agreement
and a
common law
contract.
Common
law
contracts
+
Advantages
Disadvantages
Flexible to suit individual
and business needs.
One party could be
exploited.
Individual initiative
rewarded.
Court case expenses if
either party sues for
compensation.

Common law contract – exists when employers and
employees have the right to sue for compensation if either
party does not fulfil their part of the contract.

For example an agreement with your business studies
teacher ‘classroom (employment) package’ that includes
more homework in return for the right to attend only 2
Business Studies lessons each week. This is a common law
contract.

They are common among professional and managerial
employees. Contracts are signed individually and are secret.
+


Rights and responsibilities
Employers responsibilities:

Provide work and tasks for employees.

Pay award or contract wages and reimburse expenses.

Meet requirements of industrial relations legislation for
example equal employment opportunity.

Duty of care – bound by Occupational Health and Safety
Acts to provide reasonable care for health and safety of
employees.
Employees’ responsibilities:

Obey lawful and reasonable commands of employer.

Use skill and care to carry out work activities.

Act in good faith and in the interests of the employer.
+
National Employment Standards

Minimum employment conditions known as the National Employment standards commenced on January 1, 2010.

Legislated by the federal government and apply to permanent and fixed full-time and part-time employees.

Superannuation for employees 18 – 69 paid more than $450.00 before tax in a calendar month or under 18 and work 30
plus hours in a week.

The 10 standards are:
1.
Hours of work – 35-38 hours fulltime.
2.
Parental leave – 12 unpaid parental leave on birth or adoption of a child.
3.
Flexible working for parents – if caring for a child under school age entitled to reduced hours, different start and
finish times or home-working arrangements if worked for employer for more than 12 months.
4.
Annual leave – 4 weeks generally.
5.
Personal, carer’s and compassionate leave – 10 days for fulltime employees.
6.
Community Service leave – unpaid leave to provide community service like jury duty or SES volunteer work.
7.
Public holidays – Not required to work, if work may be entitled to penalty rate or other compensation.
8.
Information in the workplace – supplied with ‘Fair work information statement’ when commence work
outlining the National Employment Standards.
9.
Notice of termination and redundancy – entitled to minimum notice of termination of employment.
10.
Long service leave – entitled to after a qualifying period.
Activity Select what
you
consider to
be the three
most
important
standards.
Justify your
answer.
+
Changing employee expectations

Employees want challenging work, greater responsibility
and autonomy.

Employees are aware of occupational health and safety
issues and the effects of stress due to long working hours.

Women seek increased increase equity and require a
balance between work and family.

Workplace democracy is the move towards increasing the
influence of employees in decisions affecting their
organisation and their jobs.

Fair Work Act 2009. This legislation covers nature of
employment contracts and agreements, unfair dismissal,
dispute settling methods, protection of human rights in
employment and employer responsibilities for tax
payments.
+


Legal responsibilities when
employing staff
Equal employment opportunity (EEO) and anti-discrimination. Two of the
most important pieces of legislation are:
1.
Anti-Discrimination Act 1977 (NSW). Unlawful to discriminate against any
employee on the basis of race, sex, marital status, disability, sexuality or age.
2.
Affirmative Action (Equal Employment Opportunity for Women) Act 1986
(C’wealth) Businesses are to promote equal opportunity for women by
establishing affirmative action programs.
Occupational Health and Safety (OH & S) refers to the responsibility the
employer has to ensure the workplace is safe for employees and that steps
are taken to minimise harm. The Act has four main aims:




To ensure the health, safety and welfare of employees.
To protect other people in the workplace like visitors.
To promote a working environment for employees adapted to their physical and
psychological needs.
To provide a simple framework for protection of employees.
Activity Complete Extension 4 and 5. page 275.
+
Separation

Separation is the ending of the employment relationship.

Two broad categories: Voluntary and Involuntary


Voluntary separation – occurs when an employee chooses to leave the
business of their own free will.
 Retirement – when an employee decides to give up full-time or
part-time work, since the 1990s no official age is set.
 Resignation – a voluntary ending of the employment relationship.
Reasons include – a promotion within another business, boredom,
to start their own business, for a change lifestyle.
 Redundancy – voluntary and involuntary. Redundancy is when a
particular job a person is doing is no longer required to be
performed usually due to technological changes, a merger or
takeover. Voluntary redundancy occurs when the business wishes
to reduce the size or nature of its workforce.
Involuntary separation
Involuntary separation
+

Involuntary separation occurs when an employee is asked to leave the business against
his or her will.

Retrenchment – when a business dismisses an employee because there is not
enough work to justify paying him or her.

A dismissal is when the behaviour of an employee is unacceptable and then
becomes necessary for a business to terminate the employee’s employment
contract.



Summary dismissal is when an employee commits a serious breach of their
employment contract. For example drunk at work.

Dismissal on notice is when an employee is not performing satisfactorily.
Redundancy
Unfair dismissal occurs when an employer dismisses an employee for
discriminatory reasons. Examples include:

Absence from work due to illness.

Either belonging or not belonging to a trade union

Race, colour, sex, sexual preference, age, disability, marital status, family
responsibilities, pregancy, religion, political opinions held or ethnicity.
Activity
Complete
Ex 8.17
Questions
5, 8 and
Extension
3.
Page 279
Ethically
and
socially
+
responsible business
behaviour

The majority of businesses want to be seen as responsible corporate
citizens.

Socially responsible businesses want to structure production
methods to fit environmental regulations. They consider raw material
usage, packaging, waste treatment and energy consumption.

Businesses want to engage in ethical business practices – to act
honestly and morally.

Many businesses today are concerned with triple bottom line – they
no longer simply focus on making profit (economic) but rather
recognise that environmental and social performance are also
important.
Activity Read snapshot Honesty is the best policy.
Complete Questions 1 and 2. Page 280
+
Ethical business behaviour

Ethics are standards that define what is acceptable and
unacceptable behaviour.

Business ethics is the application of moral standards to business
behaviour such as:


Fair and honest business practices.

Decent workplace relations.

Conflict of interest situations.

Accurate financial management.

Truthful communication.
Activity – (Pages 283 - 284)
Summarise ethical issues –
Fairness and Honesty
Respect for people
Conflict of interest
Financial management
Truthful communication
A Corporate Code of Conduct is a set of ethical standards for
managers and employees to abide by.

Activity - Complete Exercise 8.18 Question 10 and Question 14.
Pages 285-286
Socially responsible business behaviour


+Social responsibility refers to a business’s management of the social, environmental,
political and human consequences of its actions.
A socially responsible business tries to achieve two goals:



Expanding the business.
Providing for the greater good of society.
Social responsibility is good business. It may have short term costs but turns out to be in
the company’s interest in the long run.
Activity – Read Corporate social responsibility – everyone wins.
Complete questions. Page 287.

Milton Friedman amongst others believed a business’s sole responsibility is to survive by
making a legal profit.

Today society is more informed and better educated resulting in higher expectations of
business practices and greater awareness of social responsibility.







Employers demand improved working conditions.
Consumers want reliable safe products.
Businesses need to be accountable and responsible for their actions.
Governments pass legislation which influences business behaviour.
Conservationists desire careful consideration of our environment.
Businesses expect high ethical standards.
Activity Complete Exercise 8.19
Question 5 and 6.
Page 289.
A sustainability report/social audit is a report that details what a business has done and is
doing concerning the social issues that affect it.