VCE Business Management Unit 3 AOS 1 summary

• These notes cover key concepts in VCE Business Management Unit 3 AOS 1.
• The concepts are explained with relevant examples.

Types of Businesses

• Sole Trader: Owned and operated by one person who retains all profits but has unlimited liability.
• Partnership: Two to twenty owners share liabilities and profits based on their agreement.
• Private Limited Company (Pty Ltd): Has private shareholders and offers limited liability.
• Public Listed Company (Ltd): Listed on the Australian Securities Exchange (ASX) with unlimited shareholders.
• Social Enterprise: A business that reinvests its profits into social causes.
• Government Business Enterprise (GBE): Government-owned and provides essential services.
• National Australia Bank (NAB) stands as a Public Listed Company (Ltd) listed on the ASX.

Business Objectives

• Profit: Achieved when a business's revenue exceeds its expenses.
• Market Share: Represents the percentage of sales a business controls within its industry; For example, NAB held 14.6% of the home loan market.
• Efficiency: Involves reducing waste and streamlining operations, such as implementing digital banking.
• Effectiveness: Relates to achieving specific business goals, like attaining high customer satisfaction.
• Market Need: Meeting the demands of customers by offering products or services they require.
• Social Need: Supporting sustainability and ethical practices, exemplified by NAB's alignment with the UN Sustainable Development Goals (SDGs).
• Shareholder Expectations: Meeting demands by providing returns and dividends.

Stakeholders & Conflicts

• Owners seek profit and dividends and might conflict with employees demanding higher wages.
• Managers want business success but their objectives can conflict with customers over fees or service issues.
• Employees desire job security and fair pay, potentially conflicting with automation initiatives.
• Customers expect quality and fair prices which may conflict with businesses using hidden fees or inflated pricing.
• Suppliers expect timely payments, which may conflict with a business's cost-cutting measures or contract negotiations.
• The Community expects ethical business practices but this can conflict with profit-driven decisions made by the organization.
• NAB charged wrongful fees from 2007-2019, resulting in conflicts with customers.

Management Styles

• Autocratic: The manager makes all decisions without input from others, offering speed but can be controlling.
• Persuasive: The manager makes decisions but explains the reasons to gain trust, although still without seeking input.
• Consultative: The manager seeks opinions from employees but ultimately makes the decision, striking a balance.
• Participative: The team is involved in the decision-making process, fostering collaboration.
• Laissez-Faire: Employees are empowered to make decisions independently.
• NAB utilizes a participative style to promote a collaborative culture and empower employees.

Choosing the Right Management Style

• Autocratic or Persuasive styles are most suitable for urgent tasks.
• Consultative or Participative styles work best for complex problems.
• Laissez-Faire is appropriate when employees are highly skilled.
• The manager's preference also shapes the choice, based on their leadership inclinations.
• NAB generally adopts a Participative style but uses a Persuasive approach for risk management.

Management Skills

• Communication involves clear messaging to both employees and customers.
• Delegation is the effective assignment of tasks to others.
• Planning entails setting strategies and goals for the business.
• Leadership involves motivating and guiding teams toward success.
• Decision-Making is the process of assessing options and choosing the best course of action.
• Interpersonal skills focus on relationship building and teamwork.
• NAB invests in leadership training focused on teamwork, feedback, and coaching.

Relationship Between Management Styles & Skills

• Autocratic styles rely on decision-making and planning skills.
• Persuasive styles require strong communication and interpersonal abilities.
• Consultative styles depend on communication and decision-making skills.
• Participative styles need leadership and delegation skills.
• Laissez-Faire styles benefit from delegation and planning skills.
• NAB's Participative style necessitates robust leadership and communication skills.

Corporate Culture (Official vs. Real)

• Official Culture: Consists of the stated values, mission, and policies, often emphasizing ethics and inclusion.
• Real Culture: Encompasses the actual behaviors within the workplace, potentially revealing past issues.
• Culture Alignment: Refers to efforts to align real culture with the official culture, for example, NAB improved its ethics and removed sales-based bonuses.
• The CEO of NAB resigned in 2019 due to misalignment of company culture.

Key Skills for VCE Business Management

• Identify & Define: Demonstrate knowledge of business terms, like defining "Management Style" as a decision-making approach.
• Interpret & Discuss: Clearly explain business information.
• Compare & Evaluate: Weigh the pros and cons of different strategies.
• Analyse Case Studies: Utilise theory to analyse real businesses (like NAB).
• Apply Concepts: Demonstrate the use of management knowledge in various business scenarios.

Final Takeaways

• NAB is a Public Listed Company employing a Participative management style.
• Objectives include profit, market share, efficiency, and customer satisfaction.
• Key Stakeholders include Shareholders, employees, and customers.
• Potential conflicts arise between profit goals and wages, as well as between customer satisfaction and costs.
• The corporate culture has undergone ethical reforms to address past issues.

Notes covering key concepts in VCE Business Management Unit 3 AOS 1. The notes explore types of businesses, including sole traders, partnerships and companies. Business objectives such as profit and market share are also discussed.