UNIT 4 - AOS 4 Flashcards Preview

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Flashcards in UNIT 4 - AOS 4 Deck (58)
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1
Q

Define Quantitative Measures

A

Objective measures based on collected numeric data, such as the number of complaints, money etc

2
Q

Define Qualitative Measures

A

Subjective measures based on the opinions of a group.

3
Q

Define Financial Indicators

A

Performance indicators based on financial statements and profitability

4
Q

Define Non-Financial Indicators

A

Performance indicators that are not necessarily evident in the financial statements of an organisation.

5
Q

Define Efficiency:

A

The best use of the resources of an organisation in order to achieve organisational objectives.

6
Q

Define effectiveness:

A

The extent to which the organisation chooses the appropriate objectives and achieves said objectives.

7
Q

Define KPI’s

A

Are a specific set of criteria that measure the efficiency and effectiveness of a businesses performance. KPI’s can be used to evaluate the performance before and after the implementation of a change to see if a change has been successful in achieving business objectives.

8
Q

KPI - Number of Sales

A

Measured as a count.
Sales increase profit if cost is kept level.
A business may sacrifice short term profit to increase sales and rid themselves of stock.

9
Q

KPI - Percentage of Market share

A

Is the % of the businesses sales compared to the entire marketplace.
An increase is a sign o a successful business.

10
Q

KPI - Net Profit Figures

A

The earning performance of a business.

Therefore indicates its capacity to use its resources to maximise profit; which indicates successful performance.

11
Q

KPI - Rate of Productivity Growth

A

Is the change in productivity - productivity is:

Compares the number of outputs produced with the number of inputs going into production.

12
Q

KPI - Rate of Staff Absenteeism

A

Is the rate in which employees fail to attend work on a given day. If it is high then it is a reflection of job dissatisfaction or personal issues. - Leads to money and productivity costs.

13
Q

KPI - Level of Staff Turnover

A

Number of quitters. If high it means staff are unsatisfied with their workplace which threatens morale and productivity. Costs are associated with turnover.

14
Q

KPI - Number of Workplace Accidents

A

An unsafe workplace impacts productivity by; reducing morale, hindering production and costs. This can be reversed through better safety.

15
Q

KPI - Level of Wastage

A

All organisational wastage (TIMWOOD). Businesses that reduce waste are more profitable and efficient.

16
Q

KPI - Customer Complaints

A

If a customer complains then they are not satisfied with an aspect of the business.
Successful organisations maximise satisfaction therefore reducing complaints. Complaints usually indicate that improvements are needed ‘somewhere’.

17
Q

Define Change

A

Refers to a planned or unplanned response to internal or external pressure on the business.

18
Q

Incremental Change

A

Small continuous changes that occur regularly in a business.

19
Q

Concept of Change:

A

Refers to transitioning individual employees, working teams, functions or the whole business in to a new state of operations.
Once identified, change must be committed to as it is easy to lose focus on change.
A business should also look at how change may affect stakeholders and plan accordingly.

20
Q

Define Driving Force:

A

Are forces that initiate/support change - therefore pushing a business towards a desired state.

21
Q

Managers - Driving Force

A

Are the decision makers of a business. They will therefore push for changes that benefit the business. Managers will use KPI’s as a basis to initiate change.

22
Q

Employees - Driving Force

A

May be innovative and contribute ideas to assist with the change process. Employees may also make demands as a way of initiating change. Employees in a positive and supportive work culture will better support change.

23
Q

Competitors - Driving Force

A

Affects in the following ways:
- Creation of competition forces a business to change in order to stay relevant.
- Same for competitors prices
- Same for competitor adopting more efficient practises or technology
This is all in pursuit of a competitive edge.

24
Q

Legislation - Driving Force

A

A business must change in order to comply with legislation.

25
Q

Pursuit of Profit - Driving Force

A

If profit isn’t high enough, then changes will be made to fix this.

26
Q

Reduction of Costs - Driving Force

A

Rising costs impact profit - high costs will therefore drive a change that aims to minimise costs through strategies.

27
Q

Globalisation - Driving Force

A

Globalisation means that a business need to be able to compete on a global level - which makes it a driving force and allows for expansion.

28
Q

Technology - Driving Force

A

All businesses should take advantage of this to remain competitive.
Technology is changing in manufacturing, communication and services

29
Q

Innovation - Driving Force

A

Is a process whereby something that exists is improved upon. It can be driven by technology and globalisation. A business will take advantage of innovation to become more competitive.

30
Q

Societal Attitudes - Driving Force

A

A business must take note of changing attitudes, morals and values.

31
Q

Managers - Restraining Force

A

If a manager makes a hasty or unplanned decision or is indecisive, then they are resisting the change. This may be caused by a lack of consultation or a bad relationship with employees.

32
Q

Employees - Restraining Force

A

Employees may worry that the change will negatively affect them due to a lack of training or uncertainty. Additionally if employees aren’t valued or consulted they may resist change.

33
Q

Time - Restraining Force

A

If a change is too quick then it might not be accepted or it may be poorly planned. This can be as a result of; financial pressure, competitive pressure or poor training.

34
Q

Organisational Inertia - Restraining Force

A

Is an unenthusiastic response to change from management - this may be due to push back from themselves or employees.

35
Q

Legislation - Restraining Force

A

Must conform to laws.

36
Q

Financial Considerations - Restraining Force

A

Must consider the short and long term costs of implementing a change.
Do a cost benefit analysis.
Retraining, redundancy’s, new equipment and reorganisation.

37
Q

Define Force Field Analysis

A

Is the process of identifying and analysing the forces that drive and those that resist a proposed change. For a change to occur, Lewin states that the driving forces must outweigh and break through the status quo and restraining forces.

38
Q

Steps for Lewin’s Thing

A
  1. Define the target of change
  2. Identify and weigh the driving and restraining forces
  3. Analyse the forces that can be changed.
  4. Develop an action plan based off of this
39
Q

Benefits of Force Field Analysis

A
  • Helps weigh up the for’s and against’s and the importance of these factors to decide whether a plan is worth implementing.
  • Help communicate a change to stakeholders.
  • Helps identify challenges so that a business can strengthen supporting forces or eliminate opposing ones.
  • Helps a business characterize the nature of a change, if it is positive or negative from the perspective of the that will be affected.
  • Analysis will help develop a timeline and a list of required resources.
40
Q

Define Competitive Advantage

A

Is what makes the business better than anyone in the industry.

41
Q

Steps to choosing the right porter strategy

A
  1. Complete a SWOT analysis
  2. Complete a five force analysis to understand the nature of the industry the business is in.
    - Supplier power
    - Buyer power
    - Threat of substitutes
    - Threat of entrants
    - Competitive rivalry
  3. Compare the two to determine the right strategy.
42
Q

Lower Cost Strategy

A

Is where a business looks to gain a competitive advantage by reducing its costs in both primary and support activities of its operations. A business will do this by still maintaining the value of its product and charging at industry level. This cost reduction then becomes a focus within a business to gain its competitive advantage.

43
Q

Lower cost achievement

A

wtf is lower cost achievement

44
Q

Advantages and Disadvantages of Lower Cost

A
Adv:
Higher profits due to lower cost
Increased market share - change
Dis:
Competitors may follow suit
Focusing on this may come at the expense of quality/value
lower price may insinuate lower quality.
45
Q

Differentiation strategy

A

Involves making your product different from those of your competitors, thereby making it more attractive to customers. This allows a business to stand out from its competitors and potentially charge a premium price, thereby gaining a competitive advantage. Additionally customers are attracted to this, increasing sales.

46
Q

To be successful at differentiation a business must:

A

Conduct good market research and be innovative
Be able to deliver high quality products
Have an effective sales/marketing team to communicate the benefits

47
Q

Differentiation can be achieved by:

A
  • procurement of premium inputs
  • patents
  • marketing and the effectiveness of this
  • innovation
  • training employees to a higher standard
48
Q

Differentiation Advantages and Disadvantages

A
ADV
Able to change to a premium price
Product is unique and unreplaceable by competitors
DIS
Extra costs
Potentially small profit margin
Prices scaring away customers
Competitors being copycats`
49
Q

Similarities of lower cost and differentiation

A

Both aim to gain a competitive advantage.

Both aim to maximise profit.

50
Q

Differences of lower cost and differentiation

A

Low cost is reducing expenses whilst charging industry average prices, however differentiation has higher expenses which are passed on to the customer in their unique product. Differentiation makes the product unique whilst lower cost makes it cost less with no frills.

51
Q

Similarities of Lewin and Porter

A

Both involve an analysis of…

Both consider external forces

52
Q

Differences of Lewin and Porter

A

Lewin is reactive, Porter is proactive

Types of analysed forces

53
Q

What are Porters Generic Strategies?

A

Porters generic strategies is a theory that a business can implement to allow it to gain a competitive advantage within an industry. It is therefore a proactive theory and has two underlying concepts:

  • it is applicable to any business in any industry
  • a business needs to identify, focus and build on its strengths; which allows it to gain this competitive advantage.
54
Q

Transformational change

A

significant changes that often impact the entire business.

55
Q

driving forces for change

A

pursuit of profit, technology, legislation, managers, societal attitudes, globalisation, reduction of costs, competitors, employees, innovation

56
Q

restraining forces for change

A

managers, financial considerations, legislation, organisational inertia, time, employees.

57
Q

Financial KPIs

A

net profit figures, percentage of market share, rate of productivity growth, number of sales

58
Q

non financial indicators

A

level of staff turnover, rate of staff absenteeism, number of workplace accidents, level of wastage, number of customer complaints.