Business Studies

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Business Studies by Mind Map: Business Studies

1. The Blake Mouton Grid

1.1. It looks at different styles of leadership.It considers 2 particular dimensions of leadership: being concerned for people within the organisatin and being concerned for people within the organisation and being concerned for peoplke within the organisation and being concerend about completing the task abd acheving the companys objective,

1.2. Authors Dr Robert R.Blake and Dr Jane Mouton

2. The Tannenbaum and schmidt continuum

2.1. It is a leadership model that was developed by Robert Tannebaum and Warren Schmidt. They produced a model which suggested that rather than simply being autocratic or democratic, a leader might have a style which falls in between these two extremes.

2.2. Authors Robert Tannenbaum and warren Schmidt

3. Equations

3.1. Expected value = (probability 1 * outcome 1)+(probability 2 * outcome 2)

4. Decisions

4.1. Strategic Decisions

4.1.1. This looks at data to make decisions

4.1.2. They will - (1)Identify objectives (2)Collect information and ideas (3)Analyse information and ideas (4)chose course of action/ideas (5)communicate and carry out decisions (6)Outcome and results

4.2. Scientific Desision making

4.2.1. It involves -Data mining and big data to source relevant data to inform decisions. - Application of software logic and predictive models to analyse scenarios. - Forecasts to consider the possible implications of business decisions

4.2.2. - More widespread availability of data - Greater sophistication of data analytics & skills / experience of data analysts -Management expectation that data will be used wherever possible, particularly where a decision is significant to the business

4.3. Tactical Decisions

4.3.1. These are medium term decisions about how to implement strategy e.g. what kind of marketing to have, or how many extra staff to recruit.

4.4. Program Decisions

4.4.1. These are standard decisions which always follow the same routine. As such they can be written down into a series a fixed step which anyone can follow. They could even be written as a computer program

4.5. Non Programmed Decisions

4.5.1. These are non-standard and non-routine each decision is not quite the same as any previous decisions.

4.6. Operational Decisions

4.6.1. These are short-term decisions (also called administrative decisions) about how to implement the tactics e.g. which firm to use to make the deliveries

5. Models

6. Why pay a business leader more than the lowest in the organisation?

6.1. Level of responsibility - They are set strategic directory of the business and answer to shareholders and investors.

6.2. The skills and knowledge that they have is needed for there job which is not need in the lowest position.

6.3. Pay may be linked to performance so leaders are only rewarded with pay.

6.4. There are scales of pay so john Lewis is 75:1- so the pay leaders will be restricted.

7. Why not to pay a business leader more than the lowest in the organisation?

7.1. If the lowest in the business (which most likely is the cleaner) wasn't there then it would effect the rest of the workers as they would be getting annoyed that the area that they are working in isn't clean. Therefore if they weren't there then the business would not work as easily as employees would be stressed and annoyed.

7.2. Depends on the skills and knowledge The leaders shouldn't be paid loads, if the business doesn't perform for example Fred Goodwin the leader RBS.

7.3. Depends on the leadership style - If they are a good leader will they not get staff involved e.g. democratic or use the Blake mouton grid.

8. Management and Leadership and Decision Making.

8.1. Types of leaders/ managers

8.1.1. Autocratic managers

8.1.1.1. Autocratic managers are authoritarian; they tell employees what to do and do not listen much to what workers themselves have to say.Autocratic managers tend to use one - way, top- down communication. They give out orders and dont want any feedback.

8.1.2. Paternalistic Leaders

8.1.2.1. This type of leader acts like a farther. They do what is best for their staff .They believe that staff should be cared for and should be cared for properly.

8.1.3. Democratic leaders

8.1.3.1. They listen to employees ideas and ensure that people contribute to decisions.

9. Issues in understanding forms of business

9.1. Why might the shares of a successful company fall in price?

9.1.1. Because their success is less than before, leading to dampened expectations; or because a new competitor makes the future looks less encouraging.

9.2. Why might a company hold a right issue?

9.2.1. Because it wants to raise extra share capital to finance expansion without needing to get into debt to banks.

9.3. Why might a firms market capitalization jump up when a rival makes a takeover bid?

9.3.1. The bid pushes up the share price of the company being bid for, which in turn will boost its market capitalization.

9.4. Why might business ownership affect business behaviors?

9.4.1. Ownership might affect whether the objectives are long term or short term

9.5. Why might short-termism produce unethical behaviors?

9.5.1. Business people may be encouraged to take shortcuts to boost profit, such as painting over cracks that really need to br mended.

9.6. How do directors decide on the right level on dividends to pay out?

9.6.1. They look at the profit for the year, work out how much capital they'll need in the coming year, and then see what dividend level they can afford.

10. External factor affecting a business

10.1. Why might Aldi and Lidl struggle when the UK economy starts to generate higher real incomes?

10.1.1. Because their sales boom in the 2010-2014 period may have been to downloading, as people switched to lower suppliers, therefore the reverse may happen as the economy recovers.

10.2. Why might a rise in competition mean a fall in standards?

10.2.1. Usually consumers benefits from competition, but with complex products such as pensions, supplies may complete to see who can exploit ("rip- off") customers the most effectively

11. Decision Trees

11.1. Symbols

11.1.1. Decision Point= square box

11.1.2. Options flow out on lines

11.1.3. Chance Nodes = alternative (circle)

11.2. Definitions

11.2.1. Net Gain - Are the expected values of a source of action minus the costs associated with it.

11.2.2. Expected value - The financial outcomes from a specific source of action adjusted to allow for the probability of it occurring.

11.3. Pros

11.3.1. Managers can plan ahead for decisions

11.3.2. Probabilities and therefore can be weighed up against financial values

11.3.3. Logical process not hunch

11.4. Cons

11.4.1. Although is the highest expected value that should be chosen, is it always the right choice - external environment

11.4.2. Training needed for manager

11.4.3. Availability of data

11.4.4. Only estimates