Unit 3 outcome 2b revision pp

Unit 3 Business Management

Outcome 2 Part B

Revision 2014

SAC DATE Monday April 28th

This assessment task addresses the following key knowledge as outlined in Unit 3: Area of Study 2: (Study design)

key management roles: •  planning: long, medium and short-‐term •  organising: resource and task alloca:on techniques •  leading: importance of leadership quali:es, including interpersonal, informaJonal and decision-‐

making •  controlling: financial and non-‐financial processes and control systems •  different styles of management, including autocra:c, persuasive, consulta:ve, par:cipa:ve and

laissez-‐faire, and their appropriate applica:on to various management situa:ons •  key management skills as appropriate to the process of effec:ve management •  the rela:onship between management styles and skills.

The key skills that this assessment task addresses include the ability to:

• accurately use relevant management terms • analyse business information and data • Analyse major aspects of the internal environment of large-scale organisations • apply knowledge and concepts to practical and/or simulated situations

POLC The key management roles are:

POLC -‐ Planning •  Planning is the process of defining objecJves and determining methods or strategies which will be used to achieve those objecJves.

•  This is the primary management role. It provides the key to both the short-‐term and long-‐term success of an organisa:on.

Levels of planning — strategic, tacJcal and operaJonal

•  Strategic (long-‐term) planning is planning for the following three to five years. This level of planning will assist in determining where in the market the organisa:on wants to be, and what the organisa:on wants to achieve in rela:on to its compe:tors. It is conducted by senior management.

•  TacJcal (medium-‐term) planning is flexible, adaptable planning, usually over one to two years. It assists in implemen:ng the strategic plan and allows the organisa:on to respond quickly to changes. The emphasis is on how the objec:ves will be achieved through the alloca:on of resources. It is generally conducted by middle management.

•  OperaJonal (short-‐term) planning provides specific details of the way the organisa:on will operate in the short term. Management controls the day-‐to-‐day opera:ons that contribute to achieving short-‐term ac:ons and objec:ves. Examples of opera:onal plans are daily and weekly produc:on schedules. Conducted by frontline/supervisory team.

Planning process •  Step 1. Define the objec,ve. What is it the LSo wants to achieve? May be redefining or modifying exis:ng objec:ves or seTng new ones.

•  Step 2. Analyse the environment. Managers aUempt to work out exactly where the organisa:on currently stands. A common analysis technique is known as a SWOT analysis (an acronym for strengths, weaknesses, opportuni:es and threats). This iden:fies and analyses the organisa:on's internal strengths and weaknesses, and also opportuni:es in, and threats from, its external environment

•  Step 3. Develop alterna,ve strategies. In response to the ques:on ‘How will the organisa:on get there?’, managers develop several strategies and then agree to put one into ac:on.

•  Step 4. Implement an alterna,ve. The strategy which has been agreed upon needs to be put into place.

•  Step 5. Monitor and seek feedback on the implemented strategy. Management must set targets and check whether they are met. If objec:ves are not met, then the planning process would need to be repeated. Any plan formed should be a living document, regularly reviewed and revised if necessary.

SWOT ANALYSIS

POLC -‐ Organising •  Organising is the process management goes through when it aUempts to arrange resources (such as staff) to match up with tasks, in order to achieve the objec:ves of a large organisa:on.

The organisa:on process •  Determining the work ac1vi1es. The work ac:vi:es required to achieve management

objec:ves must be determined. Work ac:vi:es are then usually broken down into smaller steps.

•  Classifying and grouping ac1vi1es. Once the work ac:vi:es of a business have been broken down into smaller steps, similar ac:vi:es can be grouped together. This improves efficiency by enabling the most appropriate alloca:on of resources. It is common prac:ce, for example, to group ac:vi:es into departments or sec:ons, and to allocate employees and supervisors to each sec:on or department.

•  Assigning work and delega1ng authority. The next step in the organisa:on process is to determine who is to carry out the work and who has the responsibility to ensure the work is done. Delega:on also involves ensuring the person who has been given responsibility does carry out the processes. Effec:ve delega:on can increase produc:vity and efficiency, and increases job sa:sfac:on for the employee.

Leading •  Is the moJvaJon of employees. •  Its also providing direcJon to ensure work is completed on :me.

•  Ensuring organisaJonal objecJves are met. Examples •  Management must ensure tasks are delegated to staff that are competent to complete them.

•  Includes training staff and providing direc:on to drive business success.

•  Recognising good performance, correc:ng poor performance and ensuring enthusiasm in the workplace is high.

Leadership Quali:es – Interpersonal, Informa:onal, Decision Making

•  Interpersonal – A manager is seen as the figurehead of the organisa:on. They set the example and their behaviour reflects the organisa:on as a whole. A successful leader is one that moJvates their staff to constantly improve their performance.

•  Informa:onal – Managers need to monitor and collect all informa:on the organisa:on receives to ensure they have up to date knowledge about the industry in which they operate and have knowledge of the economic condi:ons that may affect the organisa:on.

•  Decision Making – They must show leadership by making decisions that improve the businesses performance and brings about change.

Controlling •  Controlling sees management measuring the performance of the LSO. •  This could be in financial terms, resource alloca:on and efficient use of resources, business processes and procedures or human resources.

•  Management develop standard processes, procedures and outcomes for workers to follow to ensure consistent results across the LSO.

Examples •  Interim progress reports, inspec:ons, tes:ng, audi:ng, examining financial reports or direct observa:on.

Controlling Controlling process There are three steps in the control process: •  Establish the standards the business hopes to achieve. •  Monitor and evaluate business performance. •  Make changes when necessary to ensure objec:ves are achieved.

EXAM/SAC HINT

•  Management Roles can only be POLC. •  DO NOT CONFUSE them with management skills or management funcJons.

SKILL: Apply knowledge and concepts to practical and/or simulated situations LETS PRACTICE: KOKO BLACK PTY LTD

•  The first Koko Black salon opened in 2003 employing over 230 people.

•  The vast majority of Koko Black's finished product range is designed and handmade in Melbourne.

•  Product range includes fine chocolates, ice cream, desserts, pastries, drinks, and extensive ranges of seasonal speciali:es.

•  Wherever possible Koko Black's products are handmade using local ingredients. •  Technology is u:lised where necessary but the intensive nature of the product means focus

is on handmade design and quality. •  Koko Black is a niche manufacturing business, producing its own product from raw

ingredients and selling via their own retail outlets, online site and direct to corporate clients.

Koko Black would like to expand their business into Asia

•  This expansion will require a new General Manager to focus on the roles of planning and organising. Define each of these roles and analyse how these roles will assist Koko Black to achieve its objec:ve of expansion.

•  Planning – define •  5 step planning process will need to be discussed (include the following) •  Strategic planning will be required. •  SWOT analysis needs to be undertaken to help determine whether Koko Black should proceed with expansion plans.

•  Planning decisions need to be made (& alterna:ves evaluated) eg :me frame for seTng up new stores, loca:on, how expansion will be financed.

•  Other levels of management would be required in the tac:cal planning & opera:onal planning ensuring these more detailed levels of planning result in strategies that will achieve specific objec:ve of expansion.

•  Organising – define •  Organisa:onal process •  Management will need to organise the structure of the Asian branches and how they will operate.

•  Determine what will be needed. •  Establish staff in produc:ve working environments eg seTng up new stores.

•  Assign responsibili:es to staff. •  Delegate authority. •  Communicate among different levels and departments. •  Accumula:on of shopfiTngs, equipment and stock.

Management Styles

Management Styles •  Autocra:c

•  Persuasive

•  Consulta:ve

•  Par:cipa:ve

•  Laissez-‐faire

Management Style Selec:on of management style????? Depends on a number of factors: (situa:onal variables) •  The managers personality. •  Managers skills. •  The skill level of employees. •  Nature of workforce eg hospital, farm, factory, design studio. •  Time that is available. •  Any changes to the internal, opera:ng or macro environments.

Autocra:c Management style Features •  Managers make all the decisions quickly •  No consulta:on with employees •  Management gives direc:ons to employees and does not allow feedback

•  One way or top down communica:on •  Ojen found in businesses that have a very hierarchical structure as power is centralised.

•  Informa:on is given on need to know basis.

Autocra:c : Advantages

•  Efficient use of :me (fast) as there is no discussion and instruc:ons are clear & concise.

•  Clearly defined procedures & policies •  Provides more stability & consistency as decisions are only made by management.

•  Works well in emergency/crisis/ urgent situa:ons where quick response is necessary.

•  Provides clear direc:ons and confidence to inexperienced employees.

Autocra:c: Disadvantages

•  Poor rela:ons between management and the employees. •  Employees can feel threatened and anxious. •  No employee input and employee’s ideas are not sort by management, which could benefit the LSO.

•  Employees are not able to develop skills & competencies to enable them

•  Employees may resent being ordered around •  Morale may suffer because employees do not feel valued or trusted. (Consequence decreased produc:vity)

Persuasive Management Style

Features •  Managers make all the decisions but take the :me to explain the reason behind the decision. (Sell)

•  No consulta:on with workers. •  One-‐way or top down communica:on. •  Control is centralised.

Persuasive: strengths •  Employees are likely to respond more posi:vely to having a decision explained to

them. •  Suitable to use in circumstances that need quick decisions made. •  Provides clear direc:ons and confidence to inexperienced employees. •  Enthusias:c approach can excite and mo:vate employees. •  Suits situa:ons where the decision to be made is at a high level and does not

require discussion – eg if a branch of a business is to be shut down workers will be informed and reasons explained but will not be involved in the decision.

•  Managers gain some trust/support. •  Workers more likely to accept nega:ve situa:ons.

Persuasive: weaknesses •  Employees can feel lej out as their opinions are not sought. •  Morale may suffer because employees do not feel valued or trusted. •  Employees do not contribute ideas that could benefit the organisa:on. •  Employee talents & ideas not u:lised. •  Employee frustra:on may occur if they do not agree with management decision and cannot comment.

•  Manager with poor communica:on skills may not do jus:ce in explaining good decision.

ConsultaJve management style Features •  Manager recognises the importance of good personal rela:onships among

employees and consults with staff on certain issues before making a decision. •  Two-‐way communica:on process, with employees sharing their ideas with a

manager who is willing to listen. •  This type of manager believes that mo:va:ng employees will help achieve

performance objec:ves. •  Also believe in enhancing personal rela:onships by offering job security,

providing social ac:vi:es and offering fringe benefits. •  Seeks opinions of employees, holds informa:on-‐sharing mee:ngs and

recognises good performance. •  Employee-‐centred management style. •  This management style is most effec:ve when a new opera:ng procedure is to

be introduced or some organisa:onal change implemented. Provides an opportunity for employees to have some input at the :me of decision making.

ConsultaJve -‐ Strengths

•  Asking for sugges:ons from employees allows for a greater variety of ideas, and should improve the quality of management decisions.

•  Employees begin to have some ownership in the way in which the organisa:on is run, so they take more of an interest in it. This is reflected in their levels of mo:va:on and commitment, which increase substan:ally.

•  When decisions are discussed and fine-‐tuned before implementa:on, tasks are completed more efficiently and with beUer results.

ConsultaJve -‐ Disadvantages

•  The :me taken to consult all the relevant employees can slow the en:re process.

•  Some issues to be decided are simply not suitable for a widespread consulta:on process. If the process is not consistent with each decision made, staff can become uncertain and confused about their role.

•  When a number of ideas are shared, some are bound to be ignored or overlooked in the final decision. This may cause conflict or resentment.

ParJcipaJve management style Features: •  A where the manager not only consults with employees but also gives them some

responsibility in the management of the process. •  Manager shares the decision-‐making authority with employees. The degree of sharing can

range from the manager outlining a solu:on, with the possibility of changes being suggested, to allowing the team to ini:ate, implement and monitor its own solu:ons.

•  Par:cipa:ve managers recognise the strengths and abili:es of employees and ac:vely involve them in all the stages of the decision-‐making process. This style is frequently prac:sed in those organisa:ons that have flaUer management structures and work teams, and especially where there are diverse groups to be coordinated. The contribu:on of the employee is valued; in turn, employees have a commitment to the organisa:on's objec:ves via their own input.

•  This par:cipa:ve management style is most effec:ve when an organisa:on is opera:ng in an environment undergoing rapid change. Individual employees accept responsibility for, and can implement, changes. This makes the organisa:on more responsive to change. Ac:vi:es such as brainstorming generate a range of opinions and ideas, and these may lead to beUer decisions being made.

•  Two way communica:on. •  Power is decentralised.

Par:cipa:ve -‐ Advantages

•  Communica:on is a two-‐way process. •  Employer/employee rela:ons are posi:ve and there is reduced likelihood of industrial disputes. Employees are more likely to accept management decisions.

•  Mo:va:on and job sa:sfac:on are op:mal because employees feel they have played an ac:ve role in alloca:ng tasks and implemen:ng ac:ons to meet objec:ves.

•  Employees have a greater opportunity to acquire more skills. •  There are opportuni:es for employees to put forward ideas. This power-‐sharing approach encourages the development of work teams, and employees display high levels of commitment.

•  There is a high level of trust, ojen resul:ng in improved employee performance

Par:cipa:ve -‐ Disadvantages

•  Reaching decisions and introducing tasks can be :me consuming when differing views have to be considered. The quality of decisions may also suffer because compromises are made rather than decisive, clear direc:ons given.

•  The role of management, and the control of the manager, may be weakened and undermined, with employees given too much power in some cases.

•  Internal conflict can arise with so many views and opinions being shared. More involvement may bring about disagreement.

•  The importance of the organisa:onal structure may be minimised, leading to an informal system that could result in a complete collapse in management.

•  Not all employees may want to contribute.

Laissez-‐faire management style Features •  Where employees are responsible for workplace opera:ons. Management has no central role and power.

•  Management has no role in the day-‐to-‐day running of the organisa:on. Management will set the objec:ves, but the employees take full responsibility to implement the means of achieving them. In so doing, employees are responsible for their decisions and accountable for the results.

•  Decentralised organisa:onal structure, with employees opera:ng individually or in small groups to complete projects.

•  Most effec:ve for crea:ve work or research, with employees who are highly talented or qualified in the tasks to be performed and where minimal supervision and direc:on is required.

Laissez-‐faire -‐ Advantages

•  Employees feel a sense of ownership, which can promote outstanding results.

•  There is con:nual encouragement for crea:vity, which is conducive to a dynamic working environment.

•  In a flat structure, communica:on is completely open and ideas are both discussed and shared.

Laissez-‐faire -‐ Disadvantages

•  There is a complete loss of control by management. No control or direc:on means there is poten:al for misuse of the organisa:on's resources, including :me and money, because these have been placed in the hands of the employees.

•  This style can breed personal conflicts, whereby individuals do not cooperate or wish to implement only their own ideas. In these cases, management is not there to direct or nego:ate.

•  The focus on mee:ng organisa:onal objec:ves can be easily eroded. Management may find themselves with a failed organisa:on and nothing to manage.

Management Skills •  Communica:on skills involve the ability to create and exchange informa:on between people to ensure

that the required response is produced. •  Delega1on—the process of passing authority down the hierarchy to perform tasks or make decisions.

Responsibility remains with the person delega:ng. •  Decision-‐making and problem-‐solving—the systema:c approach (mul:-‐step approach) to finding and

implemen:ng a course of ac:on to overcome a problem or correct an unsa:sfactory situa:on. •  Nego1a1on—the process by which one party seeks to obtain something wanted from another party,

ending either in a resolu:on or a compromise. •  Team leadership—the ability to func:on as a coach or mentor to team members, encouraging team

members to contribute, and build a cohesive and trus:ng team. •  Time management—the process of planning and exercising conscious control over the amount of :me

spent on a par:cular task, in order to increase effec:veness or efficiency. •  Stress management—the skill required by a manager to reduce their level of stress or anxiety and that

of their subordinates. •  Analy1cal skills—the ability to examine the elements of something or study the nature of a given

situa:on or set of circumstances. •  Technical skills—the ability of a manager to perform par:cular tasks, such as accoun:ng skills, skills in

the use of computer technology, and skills in human resources prac:ces and law. •  Emo1onal intelligence—a set of competencies that allow managers to perceive, understand and

regulate emo:ons in themselves and others.

Problem solving Problem solving means finding and then implemen:ng a course of ac:on to correct an

unworkable situa:on. There are six steps in a typical problem-‐solving process. •  1. The first step is to clearly idenJfy what the problem is and what has caused it. The

problem might be an industrial dispute or a need to develop a more socially responsible organisa:on.

•  2. Gather relevant informaJon. All of the facts and informa:on that are relevant to the problem must be gathered. Some methods to use might be simply talking to people or comple:ng ques:onnaires or surveys.

•  3. Develop alternaJve soluJons. Management will need to develop alterna:ve solu:ons so that the problem can be solved with an open mind. A list of possible solu:ons should be made, including the seemingly ridiculous ones.

•  4. Analyse the alternaJves. Ajer analysing each of the alterna:ves for their advantages and disadvantages, the best op:on should be chosen.

•  5. Choose one alternaJve and implement it. The solu:on to the problem will then be implemented and subsequently evaluated.

•  6. Evaluate the soluJon. If the solu:on does not work, the process would have to start again.

Management styles: When would you use???

Management Style When you would use: example

Autocra:c style? Instant dismissal

Persuasive style? Change in procedure due to a change in legisla:on.

Consulta:ve style? Change in procedure or policy

Par:cipa:ve style? Enterprise bargaining

Laissez-‐Faire style? Research

The rela:onship between management styles and skills

•  Manager develops their own management style based on experience, knowledge & personality.

•  The specific skills that relate to different management styles Management styles Skills needed

Authoritarian/Persuasive Communica:on, Decision making

Consulta:ve/Par:cipa:ve Communica:on, nego:a:on, problem solving

Laissez-‐Faire Delega:on, Communica:on, People skills

PAST VCAA exam ques:ons Ques:on 2B 2013

ZX Bank is a large retail bank that operates in all states in Australia. In response to a recent market survey of its customers, it is considering opening its branches on Saturdays and Sundays. Currently, the bank’s employees feel that their expecta1ons regarding condi1ons of employment and work-‐life balance are being met. The employees have been asked about the proposed change in opening hours and 70 per cent said that they would prefer not to work on weekends but, if they had to, they would expect higher pay rates on those days. The Human Resource Manager has responded, saying that an increase in pay rates might make opening on weekends unprofitable. The bank execu1ves are hoping to reach an agreement with the employees that keeps pay rates at current levels. Both sides believe that it is important to discuss this issue further.

To resolve the issue regarding the proposed change in opening hours and the employees’ expectaJons of higher pay rates on weekends, the bank execuJves will need to apply a range of management skills. Describe two management skills and jusJfy their use in this situaJon. (4 marks)

PAST VCAA exam ques:ons QuesJon 3 (2013) Alice Smith has read the biographies of many great business leaders. She would like to follow in the footsteps of these successful leaders. Alice has just taken over as the CEO of The Traveller’s Helpmate, a business that publishes print and online travel guides. Her observa1on is that her staff are professional, highly educated and independent. In private conversa1ons, some staff have said that they felt underappreciated by the previous CEO as posi1ve feedback was rarely provided. a.   Define the following leadership qualiJes that Alice will need in order to be an effecJve leader.

(3 marks) • interpersonal • informaJonal • decision-‐making

2013 QuesJon 3A – Examiners report

Few students were able to define all three leadership quali1es. While most students appeared to have a general idea of what leadership quali1es were, they were unable to explain all three to a sa1sfactory standard. The interpersonal leadership quality involves liaising or dealing with people. The informa1onal leadership quality involves gathering and communica1ng or sharing data and knowledge, and the decision-‐making leadership quality involves making choices in order to solve problems or take up opportuni1es.

The following is an example of a high-‐scoring response. •  Interpersonal – Interpersonal refers to having people and social skills such as communicaJon, emoJonal

intelligence (the ability to recognise and understand feelings) and so on in order to operate effecJvely in a social secng.

•  InformaJonal – InformaJonal refers to obtaining the required knowledge and being effecJve in the communicaJon of this knowledge. For example, being able to communicate an appropriate answer to an employee if they have a quesJon.

•  Decision-‐Making – Decision-‐Making is the ability to idenJfy and evaluate possible available opJons in response to a situaJon, and choose the course of acJon that is the most appropriate and effecJve.

PAST VCAA exam ques:ons

Ques:on 2B 2012 exam By nature, Ms Glass is a consulta:ve manager. Iden:fy two characteris:cs of this management style, and explain one advantage and one disadvantage of using this style. (4 marks)

Ques:on 2C 2012 exam Ms Glass has iden:fied that she will have to use the management roles of organising, leading and controlling.

Define each role and explain how the use of these roles will contribute to the success of her new na:onal parcel delivery service. (6 marks)


Ques:on 2B & 2F, 2011 exam Freda Campbell is seTng up a new business in Melbourne that will manufacture and sell furniture.

b. Many large-‐scale organisa:ons use a mul:stage planning process in order to achieve their objec:ves. Explain each of the steps in this process. (5 marks)

f. Describe and jus:fy two management skills, other than communica:on, that Freda could use while establishing her business. (4 marks)


Ques:on 2, 2010 exam Wonderful Toys Company manufactures wooden blocks that were found to contain small amounts of lead paint that can be poisonous to children. The company recalled all of this product. What management style could Wonderful Toys use in this crisis? Explain why you have chosen this management style. Refer to two features of this style in your explana:on. (5 marks)

Unit 3 outcome 2b revision pp

Education

Transcript of Unit 3 outcome 2b revision pp