Foundations of Business Management Past Paper Revision Slides-Exam[1] PDF

# Foundations of Business Management: Chapter 9-16 ## Exam Information - Date: 24 October - Time: 8:30-10:30 - Scope: 40 marks - MCQ, 60 marks long questions - Chapter 9-16 - Venues: as per YOUR exam timetable ## Chapter 9: Attracting and Retaining the Best Employees ### Cultural Diversity in Hu...

# Foundations of Business Management: Chapter 9-16 ## Exam Information - Date: 24 October - Time: 8:30-10:30 - Scope: 40 marks - MCQ, 60 marks long questions - Chapter 9-16 - Venues: as per YOUR exam timetable ## Chapter 9: Attracting and Retaining the Best Employees ### Cultural Diversity in Human Resources - Today's workforce is highly diverse, with employees bringing various beliefs, expectations and behavioral norms to the workplace. - Managers must be aware of these differences. - Examples: European businesspeople may offer a kiss on the cheek as a greeting; Latin Americans tend to stand closer to people with whom they are talking than North Americans prefer. - Cultural (or workplace) diversity - differences among people in a workforce owing to race, ethnicity and gender. - Although cultural diversity presents a challenge, managers should view it as an opportunity rather than a limitation. ### Advantages of Cultural Diversity | Economic measure | Description | |---|---| | Cost | The cost of poorly integrating workers increases with diversity. However, companies that handle diversity well can create cost advantages over those that do a poor job. Companies can also reduce costs by hiring culturally sensitive and trained workers. | | Resource acquisition | Companies develop reputations as being favourable or unfavourable employers for women and ethnic minorities. Those with the best reputations will attract and retain the best personnel. | | Marketing edge | For multinational organisations, the insight and cultural sensitivity that come from an international perspective should improve marketing efforts. The same rationale applies to marketing subpopulations domestically. | | Flexibility | Culturally diverse employees often are open to a wider array of positions within a company and are more likely to move up the corporate ladder rapidly.| | Creativity | Diversity of perspectives and less emphasis on conformity to norms of the past should improve the level of creativity. | | Problem solving | Differences within decision-making and problem-solving groups potentially produce better decisions through a wider range of perspectives and more thorough critical analysis of issues. | | Bilingual skills | Cultural diversity in the workplace is valuable in the global marketplace. Employees with knowledge about another country and who can communicate in that language can prevent embarrassing mistakes due to a lack of cultural sophistication. Thus, many companies seek job applicants with a background in cultures in which the company does business. | ## The Legal Environment of HRM ### Constitution of the Republic of South Africa 1. All South Africans have the right to fair labour practices. 2. All workers have the right to form, join and participate in trade unions and strike. 3. All employers have the right to form, join and participate in employers' organisations. 4. All trade unions and employers’ organisations have the right to organise. 5. All trade unions, employers’ organisations and employers have the right to participate in collective bargaining. ## Chapter 10: Motivating and Satisfying Employees and Teams ### Herzberg's Motivation-Hygiene Theory - Motivation-hygiene theory: the idea that satisfaction and dissatisfaction are separate and distinct dimensions. - Motivation factors: job factors that increase motivation, although their absence does not necessarily result in dissatisfaction. - When motivation factors are present, they act as satisfiers. - Hygiene factors: job factors that reduce dissatisfaction when present to an acceptable degree but that do not necessarily result in high levels of motivation. - When hygiene factors are absent, they act as dissatisfiers. ## Chapter 11: Building Customer Relationships Through Effective Marketing ### Eight Major Marketing Functions | Function | Description | |---|---| | Exchange functions: All companies - manufacturers, wholesalers and retailers - | Buy and sell to market their merchandise. | | 1. Buying | Includes obtaining raw materials to make products, knowing how much merchandise to keep on hand and selecting suppliers. | | 2. Selling | Creates possession utility by transferring the title of a product from seller to customer. | | Physical distribution functions: These functions involve the flow of goods from producers to customers. | | | 3. Transporting | Involves selecting a mode of transport that provides an acceptable delivery schedule at an acceptable price. | | 4. Storing goods | Often necessary to sell them at the best selling time. | | Facilitating functions: These functions help the other functions to take place. | | | 5. Financing | Helps at all stages of marketing. To buy raw materials, manufacturers often borrow from banks or receive credit from suppliers. Wholesalers may be financed by manufacturers, and retailers may receive financing from the wholesaler or manufacturer. Finally, retailers often provide financing to customers. | | 6. Standardisation | Sets uniform specifications for products or services. Grading classifies products by size and quality, usually through a sorting process. Together, standardisation and grading facilitate production, transportation, storage and selling. | | 7. Risk taking | Even though competent management and insurance can minimise risks - is a constant reality of marketing because of such losses as bad-debt expense, obsolescence of products, theft by employees and product-liability lawsuits. | | 8. Gathering market information | Necessary for making all marketing decisions. | ### Utility: The Value Added by Marketing - Utility: the ability of a good or service to satisfy a human need. - There are four kinds of utility: 1. Form utility: utility created by converting production inputs into finished products - for example, conversion of raw materials into a phone. 2. Place utility: utility created by making a product available at a location where customers wish to purchase it. - Example: A pair of shoes shipped from a factory to a department store. 3. Time utility: utility created by making a product available when customers wish to purchase it. - Example: Christmas decorations that are manufactured in April but not displayed until October, when consumers start buying them. 4. Possession utility: utility created by transferring title (or ownership) of a product to a buyer - e.g new car. ## Chapter 12: Creating and Pricing Products That Satisfy Customers ### Consumer Product Classifications - Three categories of consumer products: 1. *Convenience product*: a relatively inexpensive, frequently purchased item for which buyers want to exert only minimal effort. - Examples: bread, petrol, newspapers. 2. *Shopping product*: an item for which buyers are willing to expend considerable effort in planning and making the purchase. - Examples: appliances, bicycles, mobile phones. 3. *Specialty product*: an item that possesses one or more unique characteristics for which a significant group of buyers is willing to expend considerable purchasing effort. - Examples: sports cars, original artwork. ## Chapter 13: Distributing and Promoting Products ### Physical Distribution - Physical distribution: all those activities concerned with the efficient movement of products from the producer to the ultimate user. - It combines several interrelated business functions, the most important of which are: - Inventory management - Order processing - Warehousing - Materials handling - Transportation ### Inventory Management - Inventory management: the process of managing inventories in such a way as to minimize inventory costs, including both holding costs and potential stockout costs. - Holding costs: the expenses of storing products until they are purchased or shipped to customers. - Include: - The money invested in inventory - The cost of storage space - Insurance costs - Inventory taxes - Stockout costs: sales lost when items are not in inventory. ### Order Processing - Order processing: activities involved in receiving and filling customers' purchase orders. ### Warehousing - Warehousing: the set of activities involved in receiving and storing goods and preparing them for reshipment. - Warehousing includes the following activities: - Receiving goods - Identifying goods - Sorting goods - Dispatching goods to storage - Holding goods - Recalling, picking and assembling goods - Dispatching shipments ### Materials Handling - Materials handling: the physical handling of goods, in warehouses as well as during transportation. - Unit loading: a method of materials handling in which several smaller cartons, barrels, or boxes are combined into a single standard-size load that can be moved efficiently by forklift, conveyer, or truck. ### Transportation - Transportation: the shipment of products to customers. - Carrier: a business that offers transportation services. - Types of carriers: - Common carrier: a transportation business whose services are available to all shippers. - Examples: railroads, airlines. - Contract carrier: do not serve the general public and the number of businesses they can handle at a time is limited by law. - Private carrier: owned and operated by the shipper. ### Types of Advertising by Purpose - Primary-demand advertising: advertising whose purpose is to increase the demand for all brands of a product within a specific industry. - Example: the South African Sugar Association. - Selective-demand (or brand) advertising: advertising that is used to sell a particular brand of product. - It is by far the most common type of advertising, and it accounts for the majority of advertising expenditures. - Institutional advertising: advertising designed to enhance a business's image or reputation. - Example: Telkom sponsored the South African Olympic team in 2016 and ran advertisements. ### Major Steps in Developing an Advertising Campaign 1. Identify and analyse the target audience. 2. Define the advertising objectives. 3. Create the advertising platform. - An advertising platform includes the important selling points or features that an advertiser will incorporate into the advertising campaign. 4. Determine the advertising appropriation. - The advertising appropriation is the total amount of money designated for advertising in a given period. 5. Develop the media plan. - A media plan outlines an advertisement timetable and which media will be used. 6. Create the advertising message. 7. Execute the campaign. 8. Evaluate advertising effectiveness. ## Chapter 14: Exploring Social Media and e-Business ### Photos, Videos, and Podcasts - Media sharing sites: allow users to upload photos, videos, and podcasts. - Photo sharing: provides a method for a company to tell a compelling story about its products or services through postings on either the company’s website or a social media site. - Example: Cape Union Mart posts photos of the latest fashions on its Facebook page. - Videos: can tell stories. - Example: Mr Price Home posts do-it-yourself décor videos on its YouTube channel. - Podcasts: digital audio or video files that people listen to or watch online on tablets, computers, smartphones, or other mobile devices - Podcasts offer the convenience of being available for download at any time. ### Measuring and Adapting a Social Media Plan (slide 1 of 2) - Quantitative social media measurement: using numerical measurements, such as counting the number of website visitors, number of fans and followers, number of leads generated and the number of new customers. - Key performance indicators (KPIs): measurements that define and measure the progress of an organisation towards achieving its objectives. ### Measuring and Adapting a Social Media Plan (slide 2 of 2) - Qualitative social media measurement: the process of accessing the opinions and beliefs about a brand that primarily uses sentiment analysis to categorise what is being said about a company. - Sentiment analysis: a measurement that uses technology to detect the mood, attitudes, or emotions of people who experience a social media activity. ### Defining E-Business - E-business (electronic business): the organised effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs through the facilities available on the internet (all bus activities and services conducted using the web). - Not to be confused with e-commerce - buying and selling activities conducted online (online transactions ONLY). - Mobile marketing: communicating with and selling to customers through mobile devices. - Many companies have apps to make mobile transactions faster and more convenient for customers. - Example: Starbucks offers an easy-to-use app for customers to pay for their lattes or espressos directly from a smartphone or tablet. ### Combining e-Business Resources - While all businesses use four resources (human, material, informational and financial), these resources are typically more specialised when used in an e-business. | Resource | Description | |---|---| | Human Resources | Website designers, Programmers, Web masters | | Material Resources | Computers, Software, High-speed internet connection lines | | Informational Resources | Customer tracking systems, Order fulfillment and tracking systems, Online content-monitoring systems | | Financial Resources | Investors interested in supporting e-business firms, Electronic payment from customers | ## Chapter 15: Using Management and Accounting Information ### A Business's Information Requirements (slide 1 of 2) - Many businesses are organised into five areas of management: 1. Finance 2. Operations 3. Marketing 4. Human Resources 5. Administration ## Chapter 16: Mastering Financial Management ### The Need for Financial Management - Financial management: all the activities concerned with obtaining money and using it effectively. - Proper financial management must ensure that: - Funds are available when needed now and in the future, obtained at the lowest possible cost, and used as efficiently as possible. - Financing priorities are established in line with organisational goals and objectives. - Spending is planned and controlled. - A business's credit customers pay their bills on time, and the number of past due accounts is reduced. - Bills are paid promptly to protect the business's credit rating and its ability to borrow money. - The funds required to pay the business’s taxes are available to meet tax deadlines. - Excess cash is invested in conservative, marketable securities. ### Careers in Finance - Typical job titles in finance include: - Chief financial officer - Financial manager - Consumer credit officer - Financial analyst - Financial planner - Insurance analyst - Investment account executive - Managers and employees in the finance area must: - Be honest - Have a strong background in finance, accounting, or mathematics - Know how to use a computer to analyse data - Be an expert at both written and oral communication ### Sources of Unsecured Short-Term Financing (slide 2 of 3) - **Trade Credit:** a type of short-term financing extended by a seller who does not require immediate payment after delivery of merchandise. - It is the most popular form of short-term financing because most manufacturers and wholesalers do not charge interest for trade credit. - **Promissory Notes Issued to Suppliers** - **Promissory note:** a written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date - Promissory notes usually require the borrower to pay interest. - A promissory note offers two important advantages to the business extending the credit: 1. A promissory note is legally binding and an enforceable contract. 2. A promissory note is a negotiable instrument. ### Venture Capital, Angel Investors, and Private Placements (slide 1 of 2) - **Venture capital:** money invested in small (and sometimes struggling) businesses that have the potential to become very successful. - Generally, a venture capital firm consists of a pool of investors, a partnership established by a wealthy family, or companies with money to invest. - In return for financing, these investors generally receive an equity or ownership position in the business and share in its profits. ### Venture Capital, Angel Investors, and Private Placements (slide 2 of 2) - **Angel investor:** an investor who provides financial backing for small business startups or entrepreneurs. - Unlike venture capitalists, angel investors are often focused on helping a business or an entrepreneur succeed rather than earning huge profits. - Angel investors often provide more favourable financial terms when compared with venture capitalists and financial institutions. - **Private placement:** occurs when stock and other corporate securities are sold directly to insurance companies, pension funds, large institutional investors, or mutual funds ### Corporate Bonds (slide 1 of 3) - **Corporate bond:** a company's written pledge that it will repay a specified amount of money with interest. - Interest rates for corporate bonds vary with the financial health of the company issuing the bond. - Specific factors that increase or decrease the interest rate that a company must pay when it issues bonds include: - The company's ability to pay interest each year until maturity - The company's ability to repay the bond at maturity - Most corporate bonds are registered bonds. - **Registered bond:** a bond registered in the owner's name by the issuing company. - **Maturity date:** the date on which a corporation is to repay borrowed money. ### Corporate Bonds (slide 2 of 3) - **Types of Bonds** - **Debenture bond:** a bond backed only by the reputation of the issuing company. - **Mortgage bond:** a corporate bond secured by various assets of the issuing company. - **Convertible bond:** a bond that can be exchanged, at the owner's option, for a specified number of shares of the corporation’s common stock.