Higher Business Management Core Notes

Just in case you have ‘misplaced’ your notes for the upcoming prelims for Higher Business Management, may I remind you that the Education Scotland core notes can be viewed or downloaded from these hyperlinks:

Business Enterprise Core Notes
Business Decision Areas 1: Marketing and Finance Core Notes
Business Decision Areas 2: Human Resources and Operations Core Notes

Trading, Profit and Loss Account - Presentation

Here is a useful presentation created by my colleague Mr Arthur, I added some content, but the credit is all his.

http://www.slideshare.net/Marcus9000/trading-profit-and-loss-account

Trade Unions - Higher Business Management

A small question that may crop up in any exam could be about The Role of Trade Unions.

Trade unions are organisations that represent people at work.

q Their purpose is to protect and improve people's pay and conditions of employment.

q They also campaign for laws and policies which will benefit working people and working conditions.

q Trade unions exist because an individual worker has very little power to influence decisions that are made about his or her job.

q By joining together with other workers, there is more chance of having a voice and influence.

q This is known as collective bargaining.

Revision Flashcards - Quizlet

Using flashcards for revision is an excellent study tool. I have made several for my students to use on Quizlet (www.quizlet.com)

Here are my flashcards for Higher Business Management

http://quizlet.com/1717229/higher-business-management-marketing-flash-cards/

These flashcard revision sets can be printed out or shared for everyone to use. Pupils can also revise online using a series of games to aid their motivation. I have been using Quizlet since 2009. Many other departments in my school have started using Quizlet also.

The Role and importance of Operations Management

THE ROLE OF OPERATIONS

I would say that Operations' Role is to make sure that the right resources in the right quantities are being purchased to ensure production.

This obviously would then help satisy consumer demand.

Or you could even mention that Operations is the process of transforming raw materials into the finished product.

THE IMPORTANCE OF OPERATIONS

Operations is a core activity of the business, It could not function without it. It also attempts to minimise waste and this would lead to an overall reduction in costs (less reworks, less raw materials being bought in).
Operations is important because it creates the products which are going to be sold to end users (consumers).

Higher Business Management - Understocking and Overstocking

Deliveries arriving too early or too late cause problems for firms. The same goes with having too much stock or indeed having too little.

This is called understocking and overstocking. Often an exam question will ask you to talk about the advantages and disadvantages of both.

Understocking

• Cannot cope with unexpected changes in demand
• Production line may have to stop – therefore firm is paying an idle labour force
• Cannot meet customers’ orders so they may choose to go elsewhere
• Increased administration costs if firm is frequently re-ordering

Overstocking

• High costs of storage and maintenance
• High insurance costs
• Possible need for security measures
• Large amount of space needed
• Money is tied up in stock which could be used elsewhere
• Stock may deteriorate or become obsolete
• Safe disposal incurs extra cost

This answer was taken from the 2005 Higher BM paper, so remember to expand!

How ICT can aid stock control

Stock control has to be managed properly as storage and security are issues as well as ensuring you have the right quantity to meet customer demand. ICT is now often used in stock control systems.

ICT can have different uses in Stock Control:

• Scanning bar codes means stock records are updated immediately on receipt or issue of stock
• Managers can identify best sellers and non movers easily
• Managers can obtain the total stock figure at any time of the day
• Can identify which products sell best at certain times of the day or year
• Computer can be linked to the supplier resulting in product being automatically recorded when re-order level is reached
• Spreadsheets could be used to record information and totals and balances will be calculated using formulae
• Fax/email allows accurate orders to be placed

Quality Methods

A common exam question is based on describing the different Quality Methods available to organisations. Here are some key points for each:

Benchmarking

• Copying the best techniques used by other organisations
• Products/services taken apart and re-engineered.
• Can result in a better product than the original.
• However if it takes time, competition may have moved on from what was the original best practice.

Quality Circles

• Small groups of employees from different departments and at different levels of management who meet to discuss and solve quality issues.
• Improves the workforces motivation as they feel more valued as their opinions are taken into consideration.
• Suggestions are made to management for approval

Quality assurance

• Products are checked at various stages during production
• Unacceptable products are discarded

TQM (Total Quality Management)

• No errors tolerated
• Treat everyone in the production chain as a customer therefore creating a Quality Chain.
• Based on Kaizen philosophy (Continuous improvement)
• All staff involved and committed to ensuring high quality (unlike Quality Circles where only small groups are targeted)
• Work processes scrutinised
• Constant strive to make processes more efficient and reduce waste
• Focus on teamwork
• Training provided

BSI

• A national standard for certain products
• When a business meets the standard its product can carry the BS Kitemark
• Other quality standard symbols also exist (Lion marks on eggs)

Quality Control

• Product quality checked at the end of the production process
• Traditional method
• Use of Quality Inspectors
• Can result in high wastage and reworks

Higher Business Management - Methods of Production

There are FOUR basic methods of production:

• Job production
• Batch production
• Flow production/mass production
• Just in time production

Job Production

Job production: one single item is made at a time, eg a ballgown for the Queen. The ballgown will be made to the Queen's specification. This is usually a one-off order that may be repeated at a later stage.

Job production is always very costly as it requires highly skilled workmanship and expensive materials.

Advantages of job production

Disadvantages of job production

greater job satisfaction flexibility quality of product is very high

very expensive economies of scale do not apply could be very time consuming.

Batch Production

Batch production: similar items are made in blocks or batches. This could happen on small scale or large scale. The manufacture of the England rugby team jerseys is an example.

Other examples are: school uniform, construction of similar houses for a new development.

Advantages of batch production

Disadvantages of batch production

unit cost may be lowered workers can specialise some variety in production less skilled workers needed

work is repetitive and workers may be less motivated the need for storage place can increase costs. management of moving batches between stages can be problema

Mass Production/Flow Production

A large quantity of the same product is made at a high speed, and as cheaply as possible. A good example is the manufacturing of television sets. Other examples are a clothing line for a departmental store, toys, canned food etc.

Advantages of mass production

Disadvantages of mass production

unit cost low due to large output specialisation of workers less skilled workers standard of quality can be maintained

repetitiveness can lead to unmotivated workers huge capital outlay to buy machinery breakdown in machinery can cause big problems.

Just in time production

Just in time production (JIT) is applied when stocks of raw materials are kept to a minimum.

The aim is to get the raw materials just in time when they are needed for the production process.

Advantages of JIT

Disadvantages of JIT

Keep stock of raw materials as low as possible Low stock of raw materials saves costs until you need the stocks

Can cause delays in production if stock is not on time Must have a highly organised system for ordering raw materials Shortages of stocks can result in serious delays of production

Higher Business Management - Product Life Cycle Extension Strategies

An easy way to gain marks is to think about the 4 Ps of the Marketing Mix and how we could alter/change each of these in order to keep a product selling.

Product

¨ Change/alter the products packaging

¨ Change the products name (ie Marathon became Snickers!)

¨ Re-launch the product

¨ Find a new use for the product

¨ Develop a range of the same product in different sizes or shapes (ie iPod Nano etc)

Price

¨ Lower the price to increase sales. Customers should will buy in greater volume

Place

¨ Change the market for the product (Brother Typewriters were phased out due to laptops and word processors. Now the typewriters are being sold in Developing Countries.)

¨ Change the distribution channels (ie buy and sell online – eCommerce)

Promotion

¨ Increased advertising of the product will increase awareness, or persuasive advertising techniques, might mean consumers may purchase more of the product or service

¨ Use promotional techniques to stimulate demand such as BOGOF (Buy One Get One Free)

Cash Budget Mnemonic

I have been working on some Mnemoics for study and I have one for cash budgets and their uses.

MEAT

Cash budgets can Motivate employees as they can see how the firm is performing.

They can be used to control Expenditure in order to keep a positive cashflow.

Cash budgets can be used to take corrective Action by arranging a loan to ensure the firm does not go bust.

They can also be used to set Targets for managers, employees and departments to meet.

Higher Business Management - Empowerment

"Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity."

General George Smith Patton, Jr.

Empowerment is a term coined to mean giving more responsibility to employees. It is a form of delegation.

This has both advantages and disadvantages:

Advantages

• decision making should be quicker as it is the employees at the centre of decision making
• staff motivation is increased as they feel valued and important
• staff are better suited for potential promotion
• the workforce become more skilled
• the workforce's problem solving skills increase

Disadvantages

• Managers may not trust staff to make decisions
• it can be expensive to train staff
• not every employee wishes responsibility
• there are financial implications as staff will have to be paid for some extra responsibilities

The harshest critics of Empowerment believe it is more work for less money!
For more reading or information on the theory and concept of Empowerment, look up the works of Management Guru Rosabeth Moss Kanter.

Higher Business Management - Staff Appraisal

An appraisal is an annual review between employee and employer. It is used to help identify strengths and weaknesses and allow for training.

Sometimes employee performance may not be up to standard. Therefore there are different measures a line manager may take. These include:

• arrange appropriate training for the underperforming employee
• setting targets for the employee
• look to best use employee's skills
• ensure they meet more often to see how things are going
• positive feedback may be given to the employee

Higher Business Management - What you should be studying

Ok so we can't be in school but thanks to the wonders of modern technology you can still revise and look at topics.

As you know our second NAB will be coming up very soon - so the final two topics for you to look at in Operations are:

• Methods of Production
• Quality

I will post some questions for you very soon for you to attempt - but also go over to my forum for more interactive questions at www.mrmcgowan.proboards.com

Remember the weather will not be taken into account when you sit your exams in May!

Higher Business Management - AOK Learning

On Monday I attended a very valuable CPD course on Higher Business Management delivered by AOK Learning and a well known figure in Business Education nationally Anne Bradley.

The course covered many aspects that are helpful to new teachers or new to Higher, plus there were great insights into some areas that even teachers who had taught the Higher over several years could take away and think about.

Everything was covered: from the actual syllabus itself and a discussion on the order of teaching the course, to preparation for NABs, creating and editing Prelims, and how to get pupils to answer the Case Study question a bit better than perhaps they do.

Oh and we spent some time on the dreaded Command Words! Dreaded because sometimes no matter how many times we highlight it to pupils, they get nervous in the exam and just write everything they know!

It was a worthwhile course and was very thorough.

Higher Business Management Revision

Just a reminder to look over the SQA Command Words and to analyse the previous 3 years of final exam papers.

You will see certain questions that seem to crop up time and again, while there is always one or two questions that appear that will have only been briefly covered in class or appear in only a few lines in the core notes.

This is where your reading and case study work come in handy.

Get used to the key terms and be able to think on your feet!

Internal Organisation

Here is some information and study material from the Times 100 website for the topic of Internal Organisation:


http://www.thetimes100.co.uk/theory/theory--internal-organisation--230.php

Exam Tips for Higher Business and Higher Administration

Here are some tips and mnemonics for my classes to use in my two Higher classes.

HIGHER BUSINESS MANAGEMENT

TCP

Time (how long does it take? Is communication and decision-making affected?)
Cost (financial cost? training cost?)
People (Managers, Customers, Employees)


HIGHER ADMINISTRATION

TTT
Time - (how long does it take? Is communication and decision-making affected?)
Technology - (impact? cost?)
Training - (do employees need training? What type? Impact and effect?)

DDDD
Discipline - (are workers organised and productive?)
Distractions - (what types of things put them off?)
Deadlines - (what happens with targets and deadlines?)
Delegation - (what happens with work for subordinates or even superiors?)