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Business
Management
Yr 11 Business Studies
9.2 Preliminary topic
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Syllabus:
You need to……
P2. explain the internal and external influences on businesses
P4. assess the processes and interdependence of key business functions
P5. examine the application of management theories and strategies
P6. analyse the responsibilities of business to internal and external
stakeholders
P7. plan and conduct investigations into contemporary business issues
P8. evaluate information for actual and hypothetical business situations
P.9 communicate business information and issues in appropriate formats
P.10 apply mathematical concepts appropriately in business situations
Syllabus Specifics: Nature Of
Management
•
Features features of effective management
•
Skills of management
•
interpersonal,
•
communication,
•
strategic thinking,
•
vision,
•
problem-solving,
•
decision-making,
•
flexibility,
•
adaptability to change,
•
reconciling the conflicting interests of stakeholders
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Specifics cont.
•
Achieving business goals
• profits,
• market share,
• growth,
• share price,
• social,
• Environmental
• achieving a mix of the above goals
• staff involvement
• innovation,
• motivation,
• mentoring,
• training
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Learn the Lingo
See www.studyismybuddy.com
New tab = 11 BUS Business
Management
Complete the Learn the Lingo
Activity sheet
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Topic To Discuss
You will learn about
1.
the nature of management
2.
management approaches
3.
the management process
4.
management and change
You will learn to

examine contemporary
business issues

investigate aspects of
business using hypothetical
situations and actual business
case studies
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1. The nature of management

Ever been shopping and spent all your money on the first
things you saw only to be disappointed when you came
across something you would have liked more?
OR

Ever left your assessment task to the last minute only to find
you didn’t have all your information resources or the internet
was down?
In these cases…..you did not manage either
your money or time very well! These cases
reveal that you have actually been practicing
the art of management for a number of years!
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Management vs
Managers
Activity

Divide a blank page into 4 quadrants

Label each quadrant one of the
following
•
Good management
•
Poor management
•
Good Manager
•
Poor Manager
•
Write at least 5 words that best
describes your understanding /
experience for each of the quadrants.
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What Is Management?
 Traditional
definition:
Is the process of coordinating a business’s resources
to achieve its goals.
 Contemporary
definition
Is the process of working with and through other
people to achieve the goals of the business in a
rapidly changing environment.
Crucial to this process is the effective and efficient
use of limited resources.
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What is a Manager?
A manager is someone
who coordinates the
business’s limited
resources in order to
achieve specific
goals.
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The Contemporary Manager is …
1
5
2
4
3
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(a) Activity– “Business as Usual”

In groups of 3, come up with a business

Answer the following questions and present your information on 3-5 PowerPoint
slides








What is the business name?
What do you sell/offer? (good or service)
What is the size of your business (S,M,L)
What industry (primary etc) are you in?
Are you local, national or global? Why?
What is its legal structure (eg sole trader etc)?
Name ONE external factor that is impacting (good or bad) the business’s growth
In your first year you make $500,000 in sales. What would be your next move for
your business and why?
Be as creative as you can!
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1.Working With And Through
Others
 Management
 Those
is a social process
managers who DO NOT interact and
communicate well with employees fail to
achieve high levels of commitment from
staff
+ 2. Getting The Most From Limited Resources
- Efficiency

All businesses face the problem of limited resources or scarcity.

Managers therefore need to coordinate the resources more efficiently

Efficiency compares the resources needed to achieve a goal (the costs)
against what was actually achieved (the benefits)

The most efficient coordination of resources occurs when the benefits are
greater than the costs
Remember…………

Efficiency = benefits > costs
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3. Coping With A Rapidly Changing
Environment
 This
is ONE of the most important tasks of all
managers
 Successful
managers are those who anticipate
and adjust to changing circumstances
+ 4.Balancing Efficiency And Effectiveness

Managers must usually balance both the efficiency and
effectiveness of their decisions.

The key to achieving a competitive position in today’s
challenging business environment is having the correct
balance between efficiency and effectiveness
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5. Achieving The Goals Of The Business
- Effectiveness
 Without
goals, the
business would quickly
lose direction


Employees would not
understand the ultimate
purpose of their work
Managers would not be
able to measure
performance
 Effectiveness
measures
the degree to which a
goal has been achieved
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Effective Management = the
ability of managers to achieve the
business’s goals
AND
The goals of a business can only be
achieved if manager’s have the right
skills and expertise.
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What Skills Do Managers Need To
Operate Effectively?

Interpersonal (people)

Communication

Strategic Thinking

Vision

Problem Solving and Decision making

Flexibility and adaptability to change

Reconciling the conflicting interests of stakeholders
QLD Young Manager of the Year 2009: Barbara Miller
http://www.youtube.com/watch?v=PayMHRBtyrg
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Interpersonal Skills

This is the ability to relate to people, being
aware of and appreciating their needs and
showing genuine understanding

People skills include the ability to
communicate, motivate, lead and inspire

A manager who lacks empathy
(understanding) is arrogant, opinionated,
unable to communicate or who has difficulty
relating to people will not be able to develop
positive relationships with his/her employees.
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Communication Skills

Communication is one of the easiest and at the same time most
difficult of management skills.

Effective communication is the key – getting employees to
understand and want to achieve the business’s goals.

Managers who are effective communicators and who are able to
share their thoughts and plans will find it easy to influence others.

Communication can non verbal as well – a message that is not
written or spoken.

It mainly consists of body language such as posture, facial, expressions,
placement of limbs and proximity to others. Managers need to be aware
of the power of body language – it can contradict or it can truly indicate
how an employee is feeling/thinking.
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
Strategic Thinking Skills
Strategic thinking involves thinking about a business’s future direction
and what future goals the business wants to achieve.

Strategic thinking allows a manager to see the business as a whole and to take a
broad, long term view.

The ability to think strategically lets the manager see the ‘big picture’ which
enables him/her to





Visualise how work teams and individuals interrelate
Understand the effect of any action on the business
Gain insights into an uncertain future
See the business in the contexts of events and trends, identify any opportunities and threats
Managers at all levels need to exercise this skill. It can be learned through
practice.
An example of a lack of strategic thinking :‘Everything that could be invented has now been invented.’
U.S. Patent Office circa 1900
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3M Post It Notes

Many years ago, the company, 3M, was working on developing a new kind of adhesive / glue in its
laboratory. They were trying to develop something to be used in their famous line of Scotch Tape products.
They came up with a glue that simply did not conform to the specifications and functions they required but
had other characteristics. It's said that for a number of years, despite efforts by the research scientist
involved, nobody at 3M was particularly interested in the use of the product or could even see how such a
research "failure" could be transformed into a profitable product.

Enter Art Fry, a product development researcher. Here's a summary, from "Art Fry and the invention of
Post-it® Notes" from the 3M site.

Many 3Mers know the famous story of how Fry came upon the Post-it® Note concept out of frustration at
how his scrap paper bookmarks kept falling out of his church choir hymnal. In a moment of pure "Eureka,"
Fry realized that Silver's adhesive could make for a wonderfully reliable bookmark. The broader concept
of the Post-it® Note soon followed, along with paper tapes and labels using Silver's adhesive.

But there remained skeptics within 3M as attempts were made to launch this new product. Engineering
and production people told Fry that Post-it® Notes would pose considerable processing measurement and
coating difficulties and would create much waste. Fry's response demonstrated the approach of the true
innovator: "I said, 'Really, that is great news! If it were easy, then anyone could do it. If it really is as tough as
you say, then 3M is the company that can do it.' “

The PostIT Note was born.

It's worth pointing out the temporary failure of strategic thinking here. The value of the adhesive, and how
it could be used to create a new and innovative product were not evident to the 3M staff. It took someone
like Art Fry (and others at 3M who championed the idea) to see the OPPORTUNITY that the adhesive
provided.

The use of strategic thinking provided 3M with a hugely successful product that couldn't have happened.
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Vision skills

Vision is the clear, shared sense of direction that allows people to
attain a common goal

A manager without a clear vision for the business is like a person
who attempts to lead a bushwalk without any idea of where the group
wants to go, without a compass or even a map

To share their vision and inspire others, managers will have to
display effective leadership qualities. Leadership is the ability to
influence people to set and achieve specific goals.
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Leaders are visionaries with a
poorly developed sense of fear
and no concept of the odds against
them. ~Robert Jarvik
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Problem Solving & Decision
Making skills

When confronted with a problem, many of us search for an
answer or jump at the first workable solution.

Management requires a more systematic problem solving
approach or process.

Problem solving means finding and then implementing a
course of action to correct an unworkable situation.

Not all problems require it, and one of the most important
skills of a manager is the ability to decide which problem
they should give their full attention.
+ Problem Solving & Decision Making
skills cont.
A problem solving process
Methods in gathering
relevant information about a
problem include talking to
people or completing a
questionnaire/survey.
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Who Dunnit?

You can ask yes and no questions only

There is a small room. There is a window in the room that is
open. There is a table in the room. There is broken glass on
the floor. There is also water all over the floor. There are two
dead bodies on the floor. What happened?
+ Problem Solving & Decision Making
skills cont.

The task of solving problems requires making decisions

Decision making is the process of identifying the options
available and then choosing a specific course of action to
solve a specific problem

Not all decisions are effective.

With the changing environment it is difficult to accurately
predict the full effect of any decision
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Flexibility and adaptability to
change skills

Over the next 10-20 years, the Australian business
environment will dramatically change! How managers
perceive and react to these changes will have consequences
for their business.

Managers must therefore be flexible, adaptable and
proactive rather than reactive.

With today’s markets being highly competitive,
technologically driven and rapidly changing – there is an
increasing need for all managers to have this skill.
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Reconciling the conflicting
interests of stakeholders

Recap: stakeholders are groups and individuals who interact with the
business and have a vested interest in its activities

Stakeholders require something different and place competing
demands upon the business e.g

Employees require safer work conditions or a wage increase. This will cost the
business money. If the business wishes to retain a high dividend for its
shareholders than the only way employees receive a higher wage is via the
company increasing the price of its products. The impact of this is customers
are dissatisfied.

Reconciling the conflicting interests of stakeholders requires
competent, informed, ethical and socially responsible managers.

Some businesses use a process of stakeholder engagement – where
the business shares information and seeks input from
stakeholders, involving them in the decision making.
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
(a) Activity: Do you have the skills?
Continuing on from your ‘Business as Usual’ businesses (an in the
same groups), develop the following:
A
job description for the Manager of your business
AND
A


job description for an Employee of your business
Use the job description template provided – see
www.studyismybuddy.com
Look up seek.com.au or my career.com as reference for skills
required when looking at job applications for a manager/employee
NOTE: A good job description must be a brief concise document of
8-15 short sentences or points - not lots of detail of how each
individual task is done.
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Achieving Business Goals
What are goals?
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What is a goal?
A goal is a desired outcome or
target that an individual or
business intends to achieve
within certain time frame.

+
What are some of your goals?

Make my Business Studies teacher proud by achieving an
ATAR of 90 in the 2012 HSC!

After school, travel to Europe with my best friend on a one
way ticket, work our way around, eventually saving up for our
ticket home in 2014.

Go to Uni, work my way up to become Marketing Manager
and earn $200k by the age of 25 years
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In class activity: Your Goals
 Describe
 Identify
2 personal goals you have
when you want to achieve them
 Outline
what planning will be required to
achieve these goals
Write your 2 goals on a piece of paper
and keep it in your diary!
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Setting Goals

Goals need to be specific and challenging

Eg’ Increasing sales this year’ is not specific BUT

‘Increase NSW sales by 5% in the next 12 months’ is a specific
target over a desired time frame
NOTE

A business’s goals will alter over time due to changes in the
internal and external business environment
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Use S.M.A.R.T when preparing
effective goals

S – Specific :
What is it that the business wants to happen

M – Measurable:
Progress can be measured and change evident

A – Achieveable :
Goals need to be achievable yet challenging

R – Realistic :
Something the business owner and employees are willing to
work towards

T –Timebound:
Must have deadlines attached otherwise commitment is too
vague
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Detailed planning increases the
likelihood of successfully achieving your
goals

Goals are important and benefit managers by:
1.
Serving as targets – decisions are made more easily if one
understands what the business is trying to achieve
2.
Measuring sticks –goals act as a benchmark against which the
business can measure its performance. The outcome can be
compared to the planned goal.
3.
Motivation – good quality goals represent a challenge or an
aim. Employees gain satisfaction when they achieve a
challenging goal
4.
Commitment – getting an employee to achieve a goal OR even
participate in the goal setting process provides a personal
stake in the success of the business
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Business Goals - Financial

There are
achieve
4 financial goals that a business is attempting to
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Maximise Profits

Profit is what is left after the costs of producing and supplying the
product (expenses) have been deducted from money earned from
sales (revenue)

Revenue – Expenses = Profit

Sales - Cost = Profit

Profit maximisation occurs when there is a maximum difference
between the total revenue (number of sales multiplied by by the
price) coming into the business and total costs paid out
OR
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Increase market share

Market share refers to the business’s share of the total industry
sales for a particular product. It is measured as a percentage
(%) of the total industry e.g Woolworths has 60% share of the
packaged grocery market

Increasing market share is an important goal for businesses
that dominate the market because small market gains often
translate into large profits
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Activity: ‘A piece of the pie!’
Below is a table of manufacturers that compete in the Tomato Sauce
Market in Australia
• In excel, create a table (like the one below) AND
• Use the graph function in excel to develop a pie chart, based on the
data in the table
Manufacturer
Share (%)
Masterfoods
43%
Cerebos (Fountain brand)
20%
Heinz
20%
Private Label
15%
Other
2%
TOTAL
100%
Total Tomato Sauce market is estimated at $110million
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Maximise growth

Most businesses want to grow or expand – this can be achieved
internally (organically) or externally.

Internal growth could involve employing more people,
increasing sales, introducing innovative products, purchasing
new equipment or establishing more outlets. Eg Mc Donald’s has
an ambitious growth program by selecting a large number of
sales for future expansion

External growth is achieved by merging or acquiring other
businesses. A merger is when 2 businesses join to become one.
Acquisition is when one business purchases another
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Improve share price

A share is part ownership of a public company. Shareholders
therefore are the real owners of companies.

There are 2 reasons a person would buy shares:

1.
They purchase them in the hope of selling them for a higher price
2.
Owning shares in a company entitles an investor to a part of the
company’s profits which is distributed in the form of dividends (a return)
Companies need to maximise the returns of their shareholders.
This is achieved by keeping the share price rising – constantly
improving the share price – and paying back healthy dividends
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Activity:
Financial Goals – summarise the
4 main goals
+ Business Goals - Non Financial
 There
are 3 non financial goals
Social
All businesses operate
in a community and
many adopt strategies
to benefit the
community
1. Community
service eg events,
programs
2. Provision of
employment –
employing family
members
3. Social Justice –
employees and
community
members are
treated fairly
Environmental
Economic growth
must be achieved
sustainably – and
there must be a
balance between
economic and
environmental
concerns – i.e
sustainable
development. This
has come from
society’s increasing
awareness of
environmental
issues
Personal
Can be goals of a
higher income,
improved
financial security
–these are goals
of owners and
managers and
are not usually
made public.
They do motivate
the business
owner and
underpin the
viability of the
business
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Achieving a mix of business goals :
Conflicting nature of goals

It is difficult for a business to achieve all its financial goals
simultaneously because the links between goals make some
of them incompatible – ie they conflict with each other.

An example is whether the business chooses to maximise
profits or increase market share – there may be a
compromise or a trade off between goals.
+
Staff involvement

Staff involvement is a goal that all businesses should give
priority as employees are a business’s most important resource.

It is involving employees in the decision making process and
giving them the necessary skills and rewards.

It is sometimes referred to as employee empowerment or
employee participation – as employees are encouraged to
accept responsibility for their work.

There are 2 advantages: 1. increased employee motivation and 2.
solutions to organisational problems.

A work environment that maximises employee involvement and
satisfaction has high levels of labour productivity

It will only be successful if a business provides employees with
the necessary expertise:




Staff innovation
Motivation
Mentoring
Training
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Staff innovation

With markets and competition becoming more global,
Australian businesses are being forced to become more
innovative

Businesses should encourage an innovative business culture
by recognising and encouraging employees and their
innovative ideas e.g a reward system

The innovative activities of staff are often referred to as the
entrepreneurship within the business. Employees who take
on the entrepreneurial roles within the business are called
intrapreneurs
+ Motivation

Why do some employees work harder than others?

What motivated you to return to Year 11 after completing Year 10?

Good managers should also be good motivators

Motivation refers to the individual, internal process that directs,
energises and sustains a person’s behaviour. It is what drives a
person to behave a certain way.

There are a number of techniques that can be used to develop a
business culture that fosters employee involvement
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Mentoring and Training

Students often talk about their school experiences and it is common
to hear them refer to individuals who influenced them.

Many businesses have introduced formalised mentoring programs
(especially for new employees) with the aim of providing advice,
guidance and help with their socialisation. A mentor is usually a
more experienced person who helps develop a less experienced
employee.

Employees in a business must be trained and retrained. Employee
training refers to the process of teaching staff how to perform their
job more efficiently and effectively by boosting knowledge and
skills.

Employees are then able to continually upgrade their skills,
developing into multiskilled employees.
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2. Management Approaches
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3. Management Process
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4. Management and Change