Business objectives and stakeholder objectives ome Need for and importance of business objectives ‘An objective is an aim or a target to work towards. All businesses should have objectives. They help to make a business ‘successful ~ although just setting an ‘objective does not ‘guarantee success, There are many benefits of setting objectives: » They give workers and managers a clear target to work towards and this helps motivate people » Taking decisions will be focused on: ‘Will it help achieve our objectives?’ > Clear and measurable objectives help unite the whole business towards the same goal, » Business managers can compare how the business has performed to their objectives - to see if they have been successful or not. So setting objectives is very important for all businesses - small or large, newly formed or well established. Different business objectives Objectives are often different for different businesses. A business may have been formed by an entrepreneur to provide ‘employment and security for the owner or his/her family. It could have been started to make as big a profit as possible for ‘the owner, On the other hand, the business might have a more charitable aim in mind - many of the leading world charities are very large businesses indeed. The most common objectives for businesses in the private sector are to achieve: » business survival » profit » returns to shareholders » growth of the business » market share » service to the community. Bec teEHOLDER OBJECTIVES 5 BUSINESS OBJECTIVES AND STAK' cconomy is moving pews Pe nas recently been set up, of when the € When a busi A neession, the objectives of the business w be more concerned with su i fll be more concerne¢ tives of the busi ic : than anything else. New competitors Can 250 make a busi es feel te jan anythit . : Tar agers of a business threatened in this way et id decide to lower pi ? vive, even ‘hough this would lower the profit on each item sold, order to survive, fit aS ea 3 business is owned by private individuals rather than the govern pease sg usualy the case that the business f operated withthe aim of mat & Profitistotalincome of | The owners will each take a share of these profits. Prof : Tine) pay a return to the owners of the business for the capital invested and taken : »» provide finance for further investment in the business. fit it am fit at all, the owners are likely to close the business, ifs business try to make as much profit as possible? Tt is often assum this will be the case. But there are dangers to this aim. Suppose a business up its prices to raise profits. It may find that consumers stop buying its q Other people will be encouraged to set up in competition, which will redu profits in the long term for the original business. Ttis often said that the owners of a business will aim for a satisfactory profits which will avoid them having to work too many hours or pay too mu tax to the government, Returns to shareholders Shareholders own limited companies (see Chapter 4). The managers of compa will often set the objective of ‘increasing returns to shareholders. This is to discourage shareholders from selling their shares and helps managers keep thei Returns to shareholders are increased in two ways: » Increasing profit and the share of profit paid to shareholders as dividend: » Increasing share price ~ managers can try to achieve this not just by mal Profits but by putting plans in place that give the business a good chanc growth and higher profits in the future. Growth The preg tuners and managers of a business may aim for growth in the size of the si ness - usually measured by value of sales or output ~ in order to. » make ots mote secure if the business is larger » increase the salaries and status of managers as the busine ” open up new possibilities and help to spread the risks ofthe hectness by moving into new products and new markets 7 » obtain a higher market share from growth in sales » obtain cost advantages, called economies of scaly These are considered in more detail in Chapter 19° from business expansiot nly if the business's customers are satisfied with t Provided. For this re; it ustomers’ needs as a very high priority, "Sh*t be important toDitferent Market share — If the total value Of Sales in a market is $100 million in one year ‘and Company A sold $20 million, then Company A's is 20 per cent. Market share == emecompany sales 199 Total market sales 9 Increased market share gives a business: >» good publicity, as ft eould claim that it is becoming ‘the most popular >» increased influence over suppliers, as they will be very keen to sell toa business that is becoming relatively larger than others in the industry >» increased influence over customers (for example, in setting prices). Providing a service to the community - the objectives of social enterprises ‘are opefated by private individuals - they are in the private sector — but they do role have profit as an objective. The people operating the social enterprise often set three objectives for their business: »» Social: to provide jobsland support for disadvantaged groups in society, such as the disabled or homeless. Environmental: to protect the environment. >> Financial: to make ajprofit to invest back into the social enterprise to expand the social work that it performs. ‘An example of a social enterprise is RangSutra in India. This helps very poor village communities develop skils in craft work and clothing products and helps them market their produtts at a fair price. ura produets,RangSuiras t for both the producer They ensure a fair price to the producer as well as quality products to the arned from sales go back to ensure a better lite for their communities, as the are also the owners of RangSutra, eres Ras ea eertheraaeOBJECTIVES CTIVES AND STAKEHOLDER ss objectives could change objective forever! Here af ight change its objectives Why busine Tt is most unusual for a s of situations in which & business to have the same some example: business mil ess set up recently has survived for three years and the owner now 4 A busin to work towards higher profit. 2 outeiness has achieved higher market share and now has the objective of ning higher returns for shareholders ‘ Grunge operates in a county fecing a serious econdlll short-term objective of survival. earn 3A profit-makin recession so now has the Activity 5.1: Which objective for which business? 4 brief details of four businesses: + Aamaltfirm of builders Wich has noticed new businesses being set upin tng building industry sari gs falihed business i the rapidly expanding computer industry. Wi 7 tuned by two young and ambitious entrepreneurs. ' = Azege took publisher which dominates the market in textbooks in your Sova ‘ ; ' I Aciup of people who are concerned about the lack of clean water provided fa communities. 4 Explein the most likely main object B In each example, explain the decisions 1 objectives tive of the managers of each of these business hat could help the business to achieve ‘oups and their objectives llowing groups of people ar i i“ Beas srouns of 'S 1 involved in business activity in one way @ aed the stakeholders ofthe business as th Setun, Some ofthese groups ae internal ta Vit = and others are external - they are gi ant to business? eecs. "ey aut capital in to set up and expand the business. pil take a share of he profs ifthe business succeeds. business does not attract enough customers, imay lose the money they invested, yare risk takers. are employed by the business, have to follow the instructions of managers and need training to do their work eftectvely imay be employed on full- or part-time contracts jon a temporary or permanent basis. FIs not enough work fer all workers, some may fe redundant retrenchment| and told to leave business, {are also ernployces of the business and control work of other workers. take important decisions ir successful decisions could lead to the business nding fey make poor decisions, the business could fa fe important to every business. They buy the s that the business produces or the services that business proves. ut enough customers, a business will make fs and will eventually fal most successful businesses often find out what umers want before making goods or providing cas - this is called market researc esponsible for the economy ofthe country. igsas laws to protect workers and consumers, Immunity is greatly affected by business acinvty ample, dangerous products might harm the tion. Factories can produce pollution thet ss rivers, the sea and air quality Bs also create jobs and allow workers to raise Aiving standards. Many products are beneficial to ty, such as medicines or public transport fe finance for the business's operations Objectives of public sector businesses ‘Most likely objectives forthe stakeholder group ‘share of the profits co that they gain a rate of return nthe money put into the business growth ofthe business so thatthe value of their investment increases regular payment for their work tract of employment job security - workers do not want to look for new Jobs frequently job that gives satisfaction and provides motivation high salaries because ofthe important work they do ib security - this depends on how successful they are ‘grovth of the business so that managers can Control a bigger and better known business. This ‘ives them more status and power Safe and reliable products well-designed products of good quality reliability of service and maintenance wants businesses to succeed in its country Successful businesses will employ workers, pay ‘axes and increase the country's output expects all firms to stay within the law. business activity laws atfect Jobs for the working population production that does not damage the environment safe products that are socially responsible ‘expect the business to be able to pay interest and repay capital lent - business must remain liquid Objectives of public sector businesses In Chapter 2 we explained that the government owns and controls many businesses and other activities in mixed economies. These were in the public sector. What are the likely objectives for public sector businesses and organisations? » Financial: Meet profit targets set by government - sometimes the profit is reinvested back in the business and on other occasions it is handed over to the Government as the ‘owner of the organisation,aR —— pusiness OBJECTIVES AND STAKEHOLDER oBset ality targets set by and education services will De ir them, and state-owned train an uality targets. ain areas - espe fe to the public and meet au yealth servict laid down foi ability and pun tin cert ide a servic For example, h ive targets ill have reli ate employmen ss employers. » Service: Provi government. expected to achi postal services wi »» Social: Protect oF cre’ ‘with few other busine rectives (private sector) cially poor re eT y change over time Provide a senice to the ‘community 5 Workers Confct can occur jagers have set the Beige et the objective of increasing ret lions ol shareholders. However, th Sea Bist ctherojecn oa BeseConflict of stakeholders’ objectives In the previous section we assumed that businesses could set one objective and aim for that, However, life is not that simple and most businesses are trying to Satisfy the objectives of more than one group, as the diagram below shows. TET MBusiness stakeholders Olle isa large cil company operating in your country. The following stakeholder groups are interested in the work ofthis company Owners ofthe company. They are likely to want the business to work towards as much profit as possible Directors (senior managers of the company appointed by the owners). They will be interested in growth of the business as their salaries are likely to depend on this. Workers. They will want as high a wage as possible with security of employment “Local community. It willbe concerned about jabs too, but it wll also be worried about pollution from the ol refinery Consumers. They will want reasonably priced products of appropriate quality - or they ‘may buy goods from competitors } In practice, these stakeholder objectives could conflict with each other. For example: J + itcould be that 2 cheap method of production increases profits but causes more pollution a decision to expand the plant could lead toa dirtier, noisier local environment + decision to introduce new machines could reduce the jobs atthe refinery but lead to higher profits + expansion could be expensive, reducing payments to owners, and this could reduce short-term profits Activity 5.3 ead the case study above. 2 Define ‘stakeholder group’ Explain one other possible conflict of objectives between Oilco's stakeholders. Managers therefore have to compromise when they come to decide on the best objectives for the business they are running. They would be unwise to ignore the real worries or aims of other groups with an interest in the operation of the business. Managers will also have to be prepared to change the objectives over time. Growth could be the best option during a period of expansion in the economy, but survival by cost cutting might be better if the economy is in recession.JECTIVES OLDER OB. 5 BUSINESS OBJECTIVES AND STAKEHOL rs and their aims, sence Income re sob secriy ‘Sa satstying Convo! q rol fetum on capi stakeholde! BUSINESS STAKEHOLDERS Goods and services Seats Si Quality Saar Increasing nati Good valve safe product ‘outpal Employment Taxes Tecently announced a set of objectives to Beardie the negative impact of manufacturing and the driving f @Smiuch as possible. Ithas the following obj fee ever better cars Toyota is developing electric and hybiil eee ared energy, which is the same technology used in diets Hydrogen-powered vehicles, such as the Mire are also) Blo Toyota's stratecy for promoting Toyota's plan is to reduce global 2 By 90 per cent by 2050, global average Eantfactaring Toyota wants to reduc ilsties to zero by 2050. This will compared to its 2010 all carbon) © achieved througf public sector busine Jffoyots othermam objective over he nor fow yours w sales growth in the emerging markets of Asia, Africa and South America. Although profit J ate important, Toyota sets quite low earnings targets, preferring to focus J on growth in a competitive market, However, China's emission and fuel | conomy rules have been making it harder for Toyota to achieve its obj fselling 2 million vehicles a year in China by around 2025. In order to meet these regulations, Toyota will need to sell a large number of smaller cars and hybrid cars, Why did Toyota set objectives for the next few years? Why do you think developing new models seems to be more important than making as much profit as possible? Which stakeholder groups will be affected - posi gativel ‘Toyota working towards these objectives? Do any of these 3s jth each other?IVES mT ISINESS OBJECTIVES AND STAKEHOLDER ossect! Exam-style questions: Short answer and data response ' her partner Sunil decided to start a business selling flowers ¢ They agreed on the business objectives they would sets ‘wer shops in their town and there is much competitig { had very little cash to start their shop. However, five nr being set up, it is still open. Business objectives have changed. Th plans to open two or three more shops - perhaps by taking over so smpetitors. The business now employs five workers and uses sevet fer growers as suppliers. ‘business objective. eral other and suppliers. Outline two likely business objectives for S and S Blooms when the business was first established. Explain two likely reasons why Sunita and Sunil have changed the business objectives of S and S Blooms. Do you think that setting business objectives for S and S Blooms will make sure that the business is successful? Justify your answer. The Big Pit Mining business (BPM) owns and operates coal and gold mine ‘in several different countries. It employs thousands of workers. Most of tl Wwork in very dangerous conditions for low pay. Waste from the mines is off ‘dumped in local rivers. ‘Making higher profits and raising returns to our shareholders are our most important objectives; said the Managing Direct ‘of BPM to his other senior managers recently. ‘Shareholders are our most ‘important stakeholder group; he added. 2 Define ‘stakeholders’. b Identify two objectives that the managers could set for BPM, apart. from profits and returns to shareholders. E Beata ee Bea vereasons why BPM i profit as an objective. 0 open a new mine might stakeholder groups. matt afer © Do you agree with the Managing Director when h | said that shareholdef are the most important stakeholder group? Justify your answer /ou have learned Meme aL Ltn tee eats es Ea) Coane y COM Cr eee DCC eee tT pe ab BU O LEU Cn te he een esUnderstanding business activity: end-of-section case study sor large pines that sells new and second- : Ks uncle gid ener ths oor lehas always wanted to work or Same money to stort hs on this by opening his own busines B0se between opening his own shop thes or buying a franchise from = Fetal business. To open his own 1p will take 3 ot of effort to find > ithe shop fittings needed. Buying 2 sshop willbe expensive. However, By will help Derek with a (ot of the ich as finding 2 suitable shop fo buy a franchise ¢. d for that T will need Boo0. $50000 wil be nested HL rent ny shop 0000 to buy clothes B EO see you to diecuse Exam-style questions: Case study 1 Explain fur personal characteristics that Derek needs tobe a successl entrepreneur b Derek has to decide which typeof business organisation to choose he sete up his on busines. Consider the advanlages and dladvantaesa the liana types of business organisation. Recommend which ane Derek seen oo Js your choice 2 Sole trader * Partnership * Private limited company. 1 2 - Identity two stakeholders in Derek's now business. Explain why each sakehole is interested in his business. [8] 1 Consider the advantages and disadvantages to Derek of buying a franchise from abi clothes retail business instead of setting up his own lates oer When apton do you think he should take? Justi your chan tal} ceseeee Be Cet134 ee People in UT Chapters Fae tur Ro , Cauca We teens oe ou cue ad CeCe Creu ae cyee nt A RT Motivating employees Ceca ey * why people work and what motivation * the benefits of a well-motivated workforce: labour productivit Rouen RU Ou ee Cen ean ue eee ene) * financial rewards as a method of motivation, for example, wage, salary. ee een) * Non-financial methods of motivation, for example, job enrichment, job CL a Grace are recommend and justify appropriate methods of motiva Peetasenc * ho Why people work People work for a variety of reasons. The main reason why most people work is because they need to earn money to buy food and the basic necessities for life. But some work is voluntary and does not yield any money. This chapter considers a wide range of for work and how businesses can make use of this motivation to encourage their workers to work more effectively. The reasons why people work are summarised in the diagram below. Security Money nse of secuty, Ve, knowing Socal needs (afiliation) Esteem needs (self-importance) feeling important, feling at the jb you dos importan Job satisfaction feeling that you have jone a good job Benefits of a well-motivated workforce High productivity - high output per worker - @ workforce that is motivated to work effecti Profits. A well-motivated workforce gives ber in a business usually comes from ively and from this comes increased nefits to a business, including: » high output per worker - which helps to keep costs low and increase profits » willingness to accept change, for example, new methods of working » two-way communication with management, for example, suggestions for improving quality(EES 6 MOTIVATING EMPLOY! ; a loyal workforce - this reduces the cost of recn a vel > (ow labour ture eave 3 park i spsentecisM ~ reducing the dis QW rates OF strike action ~ avoiding dama om ld recognise that the value oftheir employees O/T nd the quality of it, depends on how we 1 Employees are a business's greatest asset: ruption caused by absence ge to ‘customer relations. ‘All businesses shot ‘of how much they produce al they are to work effectively. igh productivity Increased | veetlmotiated Bert oe vie more effectvey) lower/n profit: us do not werk very ‘ow voue lec output ee ‘Well-motivated and unhappy workers Human needs - Maslow’s hierarchy Maslow ‘ Abraham Maslow studied employee motivation. He proposed a hierarchy of shown in this diagram. succeeding to your fll potential, feeling being promoted and given more that you have dane 2 good job ct jst responsibilty for ancal and personal reward bay er having status and recognition being given recognition for achivement, independence eee 2 job well done friendship, a sense of belonging work colleagues who pao! support you at work inst danger, n aginst poverty safety/security needs ay food, es, recreation, shelter Physiological needs to meet weekly bills Maslow’s hierarchy of needs » Most business managers now reco gnise that if employees are h going to be n the higher levels in the hterachd must’ ; ne will not be the single route to i Productivity as was thought by Taylor (see next section). iden for the ing, in the hierarchy must be achieved bi ext level. For example, once social Vvate the employee, but the opportu Maslow also suggested tha it each level an employee can be motivated by the eds are met, this will no longer mo‘to gain the respect of fellow workers and to gain esteem could motivate the " employee to work effectively. If this is true, then there are important messages _ for management in the way employees are managed. There are problems in that some levels do not appear to exist for certain individuals, while some rewards appear to fit into more than one level, For | example, money allows basic needs to be purchased, but high pay can also be a ‘status symbol or indicator of personal worth. » Managers must identify the level of the hierarchy that a particular job provides and then look for ways of allowing the employees to benefit from the next level Up the hierarchy. For example, workers in agriculture who work on a temporary basis, when required, will probably have their physiological needs fulfilled, but security needs may be lacking. If they were offered full-time jobs, they might feel more committed to the business and work more effectively for it. Activity 6.1 Miguel works as a farm labourer for @ rich landlord. He has a small house on the state and is allowed to grow his own food on a piece of land next to his house. He {Brows enough food to feed himself and his family and is paid @ small wage, which pays for the other needs of the family such as clothes, shoes and medicines. * Pierre works in a car factory on the assembly line. He works in a team with other ‘workers welding the car body together. He is also a member of the company football team. He is well paid and his family can afford quite a few luxuries. = Anya has a degree in Business Management and professional qualifications in human resources management. She is the Human Resources Manager of 3 large ‘company. She has her own office with her name on the door and is in charge of the fest of the human resources staff. She works long hours but feels itis worth it if the Fight employees are recruited to the company. Identify which of Mastow’s needs are being satisfied for each of these employees, Explain the reasons for your choices. Motivation theories ien people work for themselves, for ‘example, entrepreneurs, they tend to work hard ‘and effectively as they see the direct benefits of their efforts. However, once people iork for someone else then they may not work as effectively. ‘One of the tasks of anagement is to encourage the workforce to contribute fully to the success of the ‘business. To this end, many studies have been carried out to discover what makes smployees work effectively. Two of the main theories are outlined below. -W. Taylor rederick Taylor started his working life as a labourer in a factory in America nthe 1880s. He rose to become chief engineer. During this time he conducted iments at the steel company where he worked, into how labour productivity could be increased. Taylor based his ideas on the assumption that all individuals motivated by personal gain and therefore, if they are paid more, they will ork more effectively. He was looking at workers who worked in factories. He oke down their jobs into simple processes and then calculated how much output should be able to do in a day. If they produced this target output, they puld be paid more money, Taylor saw employees rather ike machines - when ‘were working hard, their productivity would be high and therefore the ir costs would be low for each unit produced.6 MOTIVATING EMPLOYEES i ivi it the company where ideas resulted in big productivity gait © ; gens other businesses adopted is ideas. But there are several Taylor's : ors ideas: worked ant criticisms of Tayl »» His ideas were too simplistic — not just money. s» You can pay an employee more in some way, there will be no in will be no productivity gains. : » A practical problem arises if you cannot easily measure employees are motivated by many things are unfulfilled by at work and money, but if they crease in their effectiveness an employee's ou Activity 6.2 rom the following list ofjbs, say what you cou the employees are working oar production worker «Shop assistant waiter © teacher dre there any jobs on the list for which output is difficult t wy itis difficult to measure the output in each case. Ifyou cannot measure workers’ output, how can you P work harder or more effectively? Does this present problems for modern economies workforce work in service sector jobs? id measure to find out how effe + police officer = soldier baker. o measure? If so, exp .s today where the majority off Herzberg lerick Herzberg’s motivation theories were based on his study of the rs and accountants in the USA. According to Herzberg, humans have needs; one is for the basic needs, which he called ‘hygiene’ factors id the second is for a human being to be able to grow psychologi called ‘motivational’ needs or ‘motivators. personal growth/development advancement/promotion work itself ‘Hygiene’ (or ‘maintenance’ factors F status , security work conditions : company policies and administration ; relationship with supervisor relationship wth subordinates salaryMotivation theories According to Herzberg, the ‘hygiene’ factors must be satisfied; if they are not Satisfied, they can act as demotivators to the worker. However, they do not act as motivators, as once satisfied the effects of them quickly wear off. True motivators are found in other factors, as shown in the table on page 66. => Case study capuebacoiande ae Company A employs 100 workers taking telephone orders and making calls to potential} eustomers, The company thinks i teats its workers well. The offices they werk in are J well it, warm but not too hot the salary is similar tothe payin other similar jobs, the} supervisors are polite and keep checking the work of the employees. The workers are told what todo and have no opportunities for promotion. There isno recognition of ‘workers who have done welt in their jobs. The management is worried because the ‘workers do not seem to be particularly happy and have not increased their productivity. There is high labour turnover Activity 6.3 id the case study above ‘4 Why do you think the workers might not be happy in their jobs? 1b Suggest ways the management might use to increase the motivation of their employees. People often say that money is the main motivator. It may not be. Surveys show that the other factors discussed on page 71 may be much more important to people than money alone. The lack of these other motivators is often a reason why employees leave a job and seek employment elsewhere, Motivation theories Taylor (1911) Money isthe main mobvator Masiow (1954) Herzberg (1958) Hierarchy of needs “Hyalene’ and ‘motivation’initions to learn is payment for jusually paid weekly isthe amount lemployce for one ion - financial rewa Methods of motivat ays in which rethods of paym oyees to encourage the .d methods are: » commission > Salary > profit sharing. » bonus There are many W: employees. The m incentives to empl the most frequently use Wages : i : sre often paid every week, sometimes in cash and sometimes dire a bank account. » The worker gets some money. Wag in a warehouse or factory. »» If the employee works longer than their normal hours, they can usually overtime. This is their regular amount per hour plus an extra amount. incentive to work additional hours when required by the business. aid on a regular basis and does not have to wait long fs tend to be paid to manual workers, such as those Wh However, there are some drawbacks: » As the wages are paid weekly, they have to be calculated every week, takes time and money. » Wages clerks are often employed to perform this task. When calculating the wages to be paid, they can be worked out in a numb different ways. They can use time rate or piece rate. Time rate is payment by the hour (payment for a period of time). For example, employee is paid $10 per hour and they work for 40 hours, then they will be pai » This makes it easy to calculate the worker's wages and the worker knows) exactly how much they will be paid for working a certain period of time. Possible limitations » The hours worked are often recorded on a time-sheet whi - ich must be filled used to calculate the wages by the Accounts department. This system tal » Good and bad workers get paid the same amount of money, » pies Suervisors are needed to make sure the workers keep working and lucing a good quality product. This i: i Baraat 3 oth aly on is is expensive because more supa » A clocking-in system is need i Beasts ded to determine the number of hours worked! Time rate is often used where it is diffi e is difficutt to mi for example, a bus driver or hotel receptionist, on Piece rate output of the wo‘Methods of motivation ~ financial rewards additional money paid according to how many products have been produced. Piece rate can be applied to bonus systems where employees who produce more 8 set target of output can be rewarded. Piece rates can only be used where Possible to measure the performance of an individual or a team. '» The advantage with this system is that it encourages workers to work faster, and produce more goods. Possible limitations Workers may concentrate on making a large number of products and ignore uality, producing goods that may not sell very well because they are of a poor | Quality. This usually requires a quality control system and this is expensive. TF poor quality goods are produced, this could damage the reputation of the business, Workers who are careful in their work will not earn as much as those who rush, | which may not be seen as fair. Friction between employees may be caused as | some will earn more than others. Tf the machinery breaks down, the employees will eam less money, Because of tthis, workers are often paid a guaranteed minimum amount of money. aries Salaries are paid monthly, normally straight into a bank account. They are not jaid in cash. It is usual for office staff or management to be paid salaries. "A salary is calculated as an amount of money per year for the job performed iby the worker. It is divided into 12 monthly amounts. This means it is easy to, “calculate salary costs for the business. he employer has the money in their bank account for longer than if they were | paying their workers’ wages, as salaries are paid only once a month. b The payment has to be calculated only once a month instead of at least four “times a month - as with wages. ble limitations rkers may prefer to be paid weekly. lo payment for extra time worked - workers may be reluctant to work longer. uses nus is a lump sum paid to workers when they have worked well. It can be at the end of the year or at intervals during the year. iuses do not have to be paid ~ a business can decide to pay a bonus just individual worker who has performed well or to all of its employees if the ss has exceeded certain targets. A bonus is paid in addition to the standard oF salary. Being paid a bonus can have a positive motivating effect. Workers N consider themselves to be ‘recognised’ and ‘special’ if they are paid a bonus. limitations es can become ‘expected’ every year and if they are not paid ~ perhaps use the business has had a poor year - then employee disappointment can lffcult to manage. ly one or a small number of workers are paid a bonus, then bad feelings can d as other workers resent this and question why they did not receive one. FfPe 6 MOTIVATING EMPLOYEES staff. The more sales t ate but applying only to tes staff to sell as many products as possible, Jes may increase. is paid Commission ia ions to learn These additional payments are often paid to sales Re - the more money they are paid ~ similar to piece ee staf, Tris encourages the ‘Stes made should be good for the business a5 al addition to the existing wage or salary Possible limitations are very persuasive and enc then the business may see its sales in jn as it gets a bad reputation. | for the sales staff because, if they have a bad courage people to buy goods: » If the sales staff ‘crease only in don't really want, term and then fall aga » It can be very stressful their pay will fall 1 2 ei Pay tebe too much competition between sales staff to ‘get: them customer’ who enters the shop! Profit sharing Employees receive a shar ofthe profit in addition to thelr basic wage of This additional payment should motivate the workers to work hard as they, id by the business. The rest of the profits receive a share of the profits earne be paid 2s dividends to the shareholders or retained by the business. js often used in the service sector where it is difficult to identify individual employee's contribution to the increased profits, but they will benefit from more productive work Possible limitations » Ifa business makes very low profits or even a loss, then no ‘profit share possible, leading to employee disappointment. > The profit share is usually calculated on the basis of an additional per of a workers existing wage or salary ~ so higher paid workers will rece higher profit share. This could cause bad feeling among lower paid work Consider that they have worked just as hard! 10d of finan Bonus commission METHODS OF PAYMENT‘Motivating factors ~ non-financial methods Fringe benefits Jn addition to these financial rewards, businesses may give other employee benefits. These usually vary according to the seniority of the job. Factory workers ‘may get discounts on the business's products, but they would not all have a company ar whereas a senior manager may have several non-financial rewards, such as a ase ‘car and expense account. These are sometimes called ‘perks’ or fringe benefits’ a job. Examples include: » company vehicle (car) » discounts on the business's products. » health care paid for » children’s education fees paid » free accommodation » share options (where company shares are given to employees) » generous expense accounts (for food and clothing) » pension paid for by the business » free trips abroad/holidays. Activity 6.4 tthe following jobs, say which methods of motivation would be most suitable and Why Remember to consider whether itis easy to measure their output ~ this may affect how you decide to reward their efforts} Car production worker 4 Shop assistant, b Hotel receptionist @ Managing director € Teacher f Toxi driver Motivating factors - non-financial methods ‘There are ways other than pay that can be used to motivate workers and make them More committed to their job and work more effectively. Many non-financial methods. ‘of motivation are focused on increasing the level of = the enjoyment from doing a job. However, there are some factors that will make employees unhappy ‘and these must be changed before the employees can be motivated in a positive way. For example, if the management of the business is not good and the employees are treated badly, giving them either fringe benefits or using non-financial motivation Will probably not motivate them. If rates of pay are perceived by the employees as very low relative to those of similar workers, this will be a source of dissatisfaction to "the employees. If these sources of dissatisfaction have been overcome, for example if _ feasonable wage rates are paid and employees are treated fairly at work, then other sources of job satisfaction can motivate employees. ompare a nurse with a machine operator in a factory. What do you think makes their Hobs satisfying? Cop Uist your ideas for each, Machine operator——— 6 MOTIVATING EMPLOYEES n theories (particularly Maslow and Herzberg) empl and consequently increase motivation. Make sure you ae able to choose suitable non fRoncetmetnods or | There are several [sitlerent ob __/ its employees. Job rotation Iananranstoleaa 7] Wotkers on a production tine may cary out simple Ba different tasks. Job) ee und and doing each specific ta rotation involves the workers swapping ro nly a limited time (for example, for one hour) and then changing around ‘This increases the variety in the work itself and also makes it easier for the managers to move workers around the factory if people are ill and their job Covering, However, it does not make the tasks themselves more interesting ob rotation involv | ‘workers swapping around and doing each spec tak for only a limited time putteg product packing boxes n are fntg bores bores fr storogerrarspo Key info “ Within the Pakistan State 5 [P50) there Sportal of every employee Weaknesses and strengths every fal da each person moves ented and taiing —_ j aver tothem to improve isadenstecre Job enrichment re mothated throughjoe Job enrichment involves looking at jobs and adding tasks that requi ation and this he i athe ‘uatonanthisheigs anid and/or responsiiiy, Aditional training may be necessary to enable te ei xeiepminiper carert to take on extra tasks. For example, employes may be given responsiblity reciideatecta ster: hol aa ofthe work. If managers can design jobs so that they provide sq a ling higher human needs, workers will often become more committed bees ey get more satisfaction from their jobs, again raising productivity. ape Ar periences atthe same receptonit employe Eva Wigene oan % das with telephone enquiries nl needwating factors = non-f Autonomous work groups or teamworking ‘Teamworking involves a group of workers being given responsibility for a particular Process, product or development. They can decide as a group how to complete the tasks or organise the jobs. The workers can become more involved in the decision making and take responsibility or this process. This gives a feeling of control over the jobs/tasks and the employees feel more committed, therefore increasing job satisfaction, ‘An example of this way of organising employees is on a ‘ar production line where particular parts of the assembly line are given over to teams of workers and they decide how to organise themselves. Often this leads to job = rotation and job enrichment. Working as a group helps Teese ecarpmertesseniy improve morale as well as giving a greater sense of how the procese: wl be cpl ated by te teom theses they make thedecsors belonging to the company. Training Improving a workers level of skills can have beneficial effects on motivation levels. First, workers can feel a great sense of achievement if they successfully gain and apply new work-based skills. Second, they could now be given more challenging and rewarding work to perform — and this is an important element of job enrichment. Workers can also feel as if they have been selected by management for wprocessof | training courses and this can give them a feeling that their good work has been recognised. Opportunities for promotion Many businesses prefer to fill posts of responsibility, for example, supervisors, team leaders, junior and senior managers, from within the existing workforce. This internal recruitment offers opportunities for advancement to existing workers. Not only does the business benefit from promoting workers who already ‘know how it operates’ but it also gains from better motivated workers. Employees offered promotion will feel recognised, have a higher status and will be given more challenging work to perform. All of these benefits are closely linked to the views of both Maslow and Herzberg, higher job/ Lieve. PETG Prestige and Chance to Fringebenefts Holdoys recognition use ceativity chance to take wissen responsibilty safe erironmer ‘MOTIVATING FACTORS ‘AT ALL LEVELS Job secu * “Independence tring Woting wii’ feresingand Tas uhh roe stimulating tasks seree of achievement romain ‘Chance forceaeematanaie 4 MOTIVATINg EMPLOYERS hetivity 66Exam-style questions: Short answer and data response 1 Joe owns a business which produces wooden furniture. He employs 20 workers in the Production department and three workers in the offices. Joe pays all hhis workers wages which are calculated by time rate, but he is thinking of changing to piece rate. He has a high labour turnover from the factory as his workers are not well motivated. a Define ‘piece rate’ (2) bb Identify two examples of non-financial benefits Joe could give to his employees. [2] € Outline two reasons why many employees leave their job at the furniture company. 4) d Explain two ways Joe can improve the job satisfaction of his employees. [6] € Do you think a wage calculated by piece rate is a suitable method of payment for all Joe’s employees? Justify your answer. (6) Sasha is a hotel manager. She has 30 employees and they are divided into teams working in the following departments: kitchen; restaurant; hotel Teception; housekeeping (room cleaning). Two of the hotel receptionists hhave been trained by Sasha in some aspects of hotel management. A modern hotel has recently opened two kilometres away. Sasha wants to improve the motivation of all the employees and is thinking of introducing a bonus. She thinks it will make the hotel more profitable. a Define ‘bonus. (2) bb Identify two reasons why people work. fal © Outline two levels in Mastow's hierarchy of needs experienced by the hotel workers. 4 d Explain two benefits to the hotel of having well-motivated employees. [6] e Do you think introducing a bonus is the best way to improve the motivation of the employees at the hotel? Justify your answer. (6) emai sva ati Dee eC about the reasons people work and why well-motivated employees Dac / about Mastow’s hierarchy: the concept of human needs Prema een ern) aucune about using financial and non-financial rewards as methods of motivation Pon uuu Che rca) NOW - test your understanding with the revision questions in the Student ‘etextbook and the Workbook.Organisational structure responsibilities within an form of an organisational art study above List three other tasks that you think Bill has tod@ to run Cosy Corner efficientlyes as businesses expand Tn Bill’ business there is no need for an organisational structure because he works alone. There is no need to outline the responsibilities and duties of other employees or to indicate their links with other workers ~ because there aren’t any! As he is the only manager, there can be no other management levels. This example shows the simplest form of business. What would happen to the organisation of Bill’s business if it expanded? Organisational structure changes as businesses expand ——E_ fifo dei ae 5 the end of another long day. He ay that he could nolonger doa ~©= TO description he store by himself, He was going to stant. He thought carefully about ‘Shop Assistant nt the assistant to perform. Bill previous job, working for a large ane important to make clear the tasks tro open the ehop in\ene morning Ber pense ‘to be responsible ff ordering all goods get done at all. son eee E Out ajob description (see right) fo/aueeryy oem the people who applied for the Tovbetgsnerye sieges arwintthejob would imove Bill © TO assist che manager in other ways @ two main advantages: dipreces Pie 1 job could see if they were Morking conditions: expected of them. remployee would know exactly ‘FAVS days = week esponsibilities were. Their work Bight hours a day PBill, not just repeat what he was Your weeks’ holiday - by negotiation, but not at sane tine a the manager ing job description Activity 7.2 the case study above. | Study the job description. Do you think Bills looking to recruit an experienced shop ‘assistant? What evidence is there to support your answer? b Make a list of the important tasks and responsibilities Bill still has to perform himset Bill’s business now has a very simple organisational structure. There are two people in the organisation and they are specialising in different jobs. Bill now manages the work of his shop assistant. |ed et Stages ofl rere lengthened. Events" ines needet Oe spe tec cro lta business reed to buy shares and b sill decided) ation was growing. She organisa ving, Bil ceeeay pia ructure, After discus seeded 3 clears Grew up the chart below. ness had i uray bus ; Barve managed ne Chiet Executive: Bill Muay Fanci vector Human. Moceirg Ds Imsvation ge oe “coat Mages Pachaing Manag | ical rganisation chart for many businesses. The most In fact, tis is atypical type of o important features are as follows. sation. ans that there are diferent levels in the organisation * Its aierarchy This means that rt eves in the organisa : of authority. People on the sa he tinedeges af aulvoniy. There ae live eels of hirarehy trom Chief Ex Bol ot departments, Each of thepe daparimerta ies aaa ee ere ere imacyeney fer eaten Deere coterny are ced orm one staan organisation. Because Cosy Corner Ltd is still quite a small business, the chai of command is quite businesses are likely to hay Bill decided to give a copy of this chart were several advantages in both informing everybody of it nbers of staff. He considered that nstructing the organisation chart as a hierarchy Advantages of an organisation chart » The chart shows how everybody is linked together in the organisation. Al employees are aware of which communication channel is used to reach with messages and instructions * Every individual can see their own position in the organisation. They Identify who they are accountable to and who they have authority ove Employees can see who they should take orders from, * TE shows the links and relationship bet organisation, ‘een different departments wid » Everyone is in a department and this giv es them a sense of belonging.Chain of command and span of control Chain of command and span of control Look at the two organisation charts below. There are two essential differences between them. » Business A has a tall structure and a long chain of command. » Business B has a wide structure and a short chain of command. AS a result of these two different structures, the e subordinates working directly under a manager) is wider in Business B than in Business A — in Business A this number is two and in Business B it is five. There is therefore an important link between the span of control and the chain of command, The longer the chain of command, the ‘taller’ will be the ‘organisational structure and the ‘narrower’ the span of control. When the chain of command is short, the organisation will have ‘wider’ spans of control. (the number of t + fiat ite fittt fit There is no perfect organisational structure. In recent years many organisations have made their structure ‘Wider’ and with a shorter chain of command. In some cases, this has been done by removing a whole level of management - called delayering. The claimed advantages of short chains of command are listed below. ‘Advantages of short chains of command » Communication is quicker and more accurate. Each message has fewer levels to pass through before reaching the intended person, » Top managers are less remote from the lower level of the hierarchy. These top managers should be more in touch with people below them as there are fewer management levels to get to know. » Spans of control will be wider. This means that each manager is responsible for more subordinates. Why is this an advantage? © If superiors have more people to manage, it will encourage managers to delegate more. This is because, as their department is larger, they cannot possibly do all the important work by themselves. © There will be less direct control of each worker and they will feel more trusted. They will be able to take more decisions by themselves. They may obtain more job satisfaction. However, wider spans of control, with more people to be directly responsible for, could mean that the managers lose control of what their subordinates are doing. The subordinates could make many mistakes if they are poorly trained.[mandy Nine, Make sre ou can choose 0 = ublecriaton shar | | Mustafa was Bored wit is wor cul banking firm. The business received ¢ for a particular business. zi 2 Hori mot have te to goto @ a services ut i ote clled Team A with ater colleagues, Hamed and tla faesed by Az who was unde he authority of Monarnmed. There ota rupr of leone operator, Tear Band Team. These two teams wg eam A Tey also ha their own supervisors who report ea To ged and cuperviors coud tate nto ake sure that all a All calls were recorded and were polite and helpful to customers, Telephone operators were only allowed to day s of large sums of mang Certain tasks for customers, Other jobs, such as transfers of larg ey, to be referred fo a supervisor or manager. Telephone operators had to aim to an ‘wonder Mustafa was bored with his work! sank branch. [cats each hour. No Activity 7.3 Fed the case study above 2 Draw the organisation chart for this telephone business. b Whats the span of control of the supervisors? © What would be the advantages and disadvantages of removing the supervisors) altogether? Your answer should include references to ‘chain of command * delegation span of control, Roles, responsibilities and inter-relations| between people in organisations e cic re Be oval as well as Chief Executive. He and fil Pefesene eceycone” WSsanetoewer areas he Sora Becerra Cogiayge lteter Current organisational charts shown below. Chiet Executive ins a er psiens franca Director Director ror ' : French Divsion Resources Food Financ a es Ressiog Acoutan Pot Drs ! Admins ey stration a a Officer | Factory Supervisors 1 ' Store rector 0 Human Manager Factory assis WorkersNt organisational chart, ~ In addition to the functional departments, there is also @ Ger businesses, are as follows. regional division responsible for the Cosy Corner stores nother countries, This department has the advantage of being able to use specialist knowledge to help itrun the stores abroad, such as knowledge of local cultures, ‘and customs, There are other departments which do not have atypical function and which employ specialists in particular areas. Examples from Cosy Corner plc bre the Economic Forecasting department and the Information Technology department, Some people include the Human Resources department in this group too. These departments report directly to the Board of Directors. (Meetings of the Board of Directors will be attended by the departmental directors and the Chief Executive.] The people in these departments are called because they provide specialist Advice and support to the Board of Directors and to line managers of the functional departments. Staff managers tend to be very well-qualified experts. Work of everyone Businesses organized in orkers feel more yay to thei Ganisation as a whole. There Aepartments. For example, chase new machinery, bt wenecessary money avaistie departments ae calles the authority to give orders ployees and to have their their department. They Bina clear tine of authoriy Activity 7.4 the ease study above What are the advantages and disadvantages ofthis tall organisational structure for Cosy Corner plc? B Give three examples of conflicts which may arise from this structure & Doyouthink this organisational structure increases motivation for its employees? fa. What are the benefits of having a regional division forthe business? he role and functions of management All organisations, including businesses, have managers. They may not be called agers because different titles can be used ~ leader, director, headteacher, and on, Whatever their title the tasks of all managers are very similar, no matter tthe organisation. If you are a student in a school or college or if you are in ime employment, the managers of your organisation will, at some time, have l the following functions. ning g for the future of the organisation involves setting aims or targets, for ‘The school will aim to increase its sixth form to over 200 students in 15 time’ or We should plan to increase sales of our new fruit juice range cent in three years! & aims or targets will give the organisation a sense of direction or purpose. ill be a common feeling in the organisation of having something to work eis a poor manager who does not plan for the future at all. ition to these aims, a manager must also plan for the resources which ded. For example: ‘To achieve our aim of increasing student numbers, form, we will need to build a new sixth form centre’ or ‘Increased “expenditure will be needed to increase sales of our fruit juices’ These_-— inich are designed to help the organisa amples of strategies are One the as set fOr i. achieve the i elegated to others in the rganising eveything, Tasks must be dlegat . mae aot ey jave the resources to be able to do thes manag ese people must ha it rganise people: Sn therefore the manager's responsibility to organi scressfuly 15 then resources effective can help to show who has the authority to do ‘an organisational chart ca e sure that specaisation occurs and that two me fobs. Tt alsa nls ame task, An effective manager will organise peoy pot end up doing the same ta resources very carefully indeed. Coordinating Coordinating means °br and organising but may BE re in the area without making contact erg eee in tne example, there is no point in the Marketi ron Sah i nless they have worked Fetoninated with) the Operations department. Its the Operations Rat: podus tte t ne, in the right quantities, herefore m at all departments in the eo tin eve the plans originally set by the mana Bit canols shove ths : gular meetings between the dierent ee team could have been eyelop and launch the new product ld be made up of people diferen nal form of organisa Many people think that more concerned with what to do - although this ma allisupervisors and workers are ke Guidance must be provided by Sure that the tasks are carried o. Controlling his is a never-ending task of mana Baluate the work of all individuals and Hatget, There is little point in plann heck that the original aims Hailing to do what is expected of thee, Corrective action. This is n Be important. There might workers ~ it is the then to correct the probien Doyou now have a clearer idea of wh, €8sy to define, but the list of t Important work that good m, fact, the task of managet vising people than just telli portant too. Managers have to make S and deadlines, Instructions? tis also their responsibility th) y People below them in the organisations S must try to measure a ‘Oups to make sure that they are managers then fail at certain groups W have to take sO though that ce other than ine! S are not being met are being met. If it seems t Yen managers n ly discipti be reasons f manager's job to iat necessaril 9 staff fOr poor performan out why target: at my anagers do? M, asks above fy tanag tanagement is not ‘este demonstrate the varied! wanagers should be di Ould be doing,it should also become clear From studying the list of points on pages 81-82, ee ie Without clear and effective why management is necessary to any organisation. Management, a business is going to lack > a sense of control and direction » coordination between departments, leading to wastage of effort » control of employees >> organisation of resources, leading to low output and sales. Th short, without management to take the business forward, the business will drift and eventually fail. , Activity 7.5 foi student ato sixth form collge. She recently took part ina work shadowing fxertse fo ind out what ttike to bea manager Work shadowing means that a Sludent follows a manager for» day or more to experience the work that they do. Naomi "ehadowed’ Sabrina Choolun, who is the manager of the sportswear section in Suresave le large deportment stor. Naoms kept the following dary for one dey 8:30 Ateed meeting with oter departmental hoads and Chief Executive to Bajos ergot for he nex two yours. Departmental heads told to pan thei crm stratagy to meet these Goals Two salt mombers alec to tur up for work Sabrina asked other staf Gover these absences by working longer shis day MMooting wath Sales Manager from big sports manufacturer Sabrina Gisoussed the range of goods ste may purchase next yoar fo meet the stores targets New member of taf dic not cope wel with awisward customer. When fuslomer had gone, Sabrina reminded the shop assistant ofthe correct [Procedure that hou be followed, Asked worker always fellow co policy in these mars Computer printouts of iivicdual staff sales figures were studied. One Gworkerin particular has failed to meet sales targets and it was agreed with Thm that further product training was necessary Emallrecenved ftom Sabrinas ine manager. Tere was a problem with nother department seling clothing including spor's clothes. twas our possible for cusiomers to find the sare goods in the store in 0 Gepartinents at ciferent prices! Sabrina needed to meet withthe ober Gepaftinental manager 1 agree on a common Vo the tasks that Sabrina carried ou, identity whether it was concerned wit: entroling ible to see a very important idea being used. This idea is called gation. This means giving a subordinate the authority to perform tasks. It is very important to remember that it is the authority to task which is being delegated - not the final responsibility. 1f the(on AND MANAGEM! 7 ORGANISATI manager 1, As we have seen, it b jing of Cosy Comer by hit e on other impor jetegation for the ob themselves of the runni centrate his tim Advantages of 4 vp Managers cannat do every J ‘taut for Bill to contro’ 2 By delegating, he was able t0 CO" mranagement functions vp Managers are less Likely to make mistakes i their subordinates. sini sere can measure the success of tHeY staff more easily. They ca anager pave done in performing the tasks delegated to them. f some of the tasks are .ges of delegation for the subordinate interesting and rewarding vertant and believes that trust is being pi Advanta >» The work becomes more > The employee feels more imp to perform a job well »» Delegation helps to tra organisation It gives t Jn workers and they can then make progress if hem career opportunities. Why might a manager not delegate? pespte the advantages of delegation, there are some mana there a gers who to delegate. Some may be afraid that the subordinates might fail and ti manger wats to Control everything by themselves. Also, there is a risk aac trdinates might do a better job than the manager! This could mal manager feel very insecure Jaret rs liye ond Se: nay nome | plagaton most mean: ena recs bape A There needs to bean i be an increase in trust in order to reduce control over worke ites wot Gre ons and prom tak Enoloyee cal incest ob ah sub re Vang gene Some managers an uctant 0 delegateLeadership Why is it important to have good managers? ‘A good manager should: » motivate employees » give guidance and advice to employees they manage » inspire employees they manage to achieve more than they thought possible » manage resources effectively and keep costs under control » increase profitability of the business. Organs and Coordate Command are) Cont and ase the (dcogste departments “Que athe: warkof departments Intetigeice Set-coridence Leadership ‘Studies on motivation have emphasised the importance of good management in ‘business and the need for leadership. There are many leaders in society - from politicians, religious leaders and captains of sports teams, to leaders of large businesses. Many people take on the role of being a leader and some are more effective than others. A good leader in a large business is someone who can inspire ‘and get the best out of the workforce, getting them to work towards a common goal. Styles of leadership There are different approaches to leadership that are adopted and these can be "summarised into three main " » autocratic leadership ‘» democratic leadership |» laissez-faire leadership. itocratic leadership Autocratic le is where the manager expects to be in charge of the Jness and to have their orders followed. They keep themselves separate Hrom the rest of the employees. They make virtually all the decisions and keepred to kno sployes ony what they Me tl ere tha 3, dowrard of tp to themselves. The’ y to comment on anything. pousiness is mal little or no opportunity inform th Communication in the ‘and the workers have Potential advantage > Quick decision making, for example, during 8 crs'S Potential disadvantage »» No opportunity for employee input into ke demotivating. yy decisions, which can be Democratic leadership : gets other employees involved in the decision-maki uussed before the final rovess, Information about future plans is openly discuss® Braces, Informatio cy by the leader. Communication fs both downward ani peremess,. | down, and upward or bottom-up. Possible advantage » Better decisions could result experience and ideas ~ as we from consulting with employees and using Il as being a motivating factor. situat Possible disadvantage B Unpopular decisions, such as making workers redundant, could not effec bbe made using this style of leadership. Laissez-faire leadership Laissez-faite is French for ‘leave to do. tends tom the broad objectives of the business known to employees, but then they al to make their own decisions and organise their own work. Communication: difficult in this type of organisation as clear direction is not given. The lead only a very limited role to play. Possible advantage » Encourages employees to show creativity and responsibility. Possible disadvantage >» Unlikely to be appropriate in organisations where a consistent and clear d ‘making structure is needed, for example, in providing customer service. The style of leadership used by a manager can vary depending on the emplg being dealt with and the problem to be solved, For example, managers ma be autocratic leades all ofthe time — it may be appropriate for them to lemocratic over some issues, whereas other i i imps crac ssues will need a decision imps Different situations often requite diferent styes of leadership, The way which a manager deals with a situation can have a very important impact 6 People and ow they react to the manager. It's important to remember he a good manager will adopt the style of leadership that best suits each sitle tearn anything Ihe leadership sive Mpewortd's biagest merce business — re of participation, jn and fun. Ma fyears studying Gnesse= He combines Btwath his understanding e's culture and Je needs to create Bure you know the hip sties and can isa group of who have joined o you think doxory as oryis bet? you tank bes tit tht tit Leadership styles Activity 7.6 fen Cosy Corner convenience sore startedit was small and Bill Murray he sole ‘Damen knewall ne employee by nome, He used a management sje which involved ating te workers wnat trey thought about his decisions and enenuraged them tel PiaPar dees abeut tne business. The business hes now grown int a large public Timed company with mony more employees Look back at the cas suyon pages 80-61 and consider te ferent leadership Hae epe cubis for Bll or his managers to use within tis public ited ery Which do you think vl be the best leadership styl for Bil and his managers fo use? Explain your answer Trade unions Employees generally share many of the same interests, such as improving they pay, having a pleasant environment in which to work, being treated fairly by their employer, being given proper training and working in a safe environment. Forming a Hs 2 way of helping employees to achieve improvements in these different aspects of their employment ~ a trade union is a type of pressure group. Today, trade unions are found in many different countries around the world from the USA to Papua New Guinea. Effects of employees being union members When 2 person starts work they may be asked by someone who represents 2 trade vrten if they want to join. Ifthe worket decides to join the trade union, they will pay an annual subscription (a yearly fee), Y 2M pat benefits does the employee receive in exchange fr paying thelt subscription? It varies from union to union, but generally includes many of the following benefits: »» Strength in numbers when negotiating with employers. 3» Improved conditions of employment, for example, rates oF Pay holidays and hours of work. vy Improved environment where people work, for example, health and safety, noise, heating. v» Improved benefits for members who are not working because they are sick, retired or have been made redundant. ec Beavers peheecme aatisfaction by encouraging taining. nancial mr pport ifa member thinks that they have be Ar ndant, have received unfair treatment, ‘cis not part of their job. by provided for union members such 1 of sporting facilities or clubs. Gals to influence policies for » Improved job » Advice and/o' unfairly dismissed or made red been asked to do something that w» Benefits that have been negotiated Be ate discounts in certain shops, provision OF seep nn » Trade unions often meet government of Biemioeamates,, | _ bene ofwoner, inion. oon ot wamployment where there is a closed shoP- there are disadvantages for an employee of trade union members However, ey >» It costs money to be a member. ’ Pa acre oi be required to take industrial action even if they don't adigg 3 trade unions Trade unions can have both advantages and disadvantages for employers too: ting the employees of Arinda, a state-owned Beeteres oie mae” meycan help improve communicati terrors >» Wage agreements will be easier to negotiate with a trade ur {plans to pratise the individual workers, Heompany. The trede unions However: »» trade unions can organise strikes if they do not receive the pay levels and Wor Ree eontee conditions they demand Beets » wages are likely to be higher - adding to bi ing to bu: e employees are trade union ee ae when ‘ons between workers and management, nion than with man | iston ng Avice i dsmied (unary ino beteen oe ‘or made redundant eee ; "employees and management + Improved pap Inprowed Advice if working iy untaily rated Serces su series suc Possibe influence on “ aes paneer Employment i mproved re uence on rpg rete Improved conditions josed shop ot enormeTrade unions ‘Chelsea Football Club has had several managers in recent years. One manager Was replaced because the club had not been winning many games and the elub’s owner decided to employ a new one. The manager who lost hs job did not tell the players what to do, he would ask them for their opinions on the game and which players the captain thought should play in the next games, ‘Tam a professional footballer and | know what I am talking about’ said one of the players The owner thought it was time for a new approach to managing and leading the players. In 2017 the club won the English Premier League. What type of leadership style did the replaced manager use? Why did the ovmer want a new manager with a new leadership style? How might the players have reacted to the new manager?ons: Short answe! Exam-style questi data response 7 1 Sasha owns a business which produces office cape c i Is in the Operations department and 15 workers in the ices. Sasha a democratic leadership style. Sasha says that being a good manag ‘important to the success ‘of the business. Very few workers leave each sees no need for any of her workers to join a trade union. a Define ‘democratic leadership. b Identify two other leadership styles Sasha could use. Outline two roles/functions Sasha undertakes as the manager of business. = j d Explain two reasons why having good managers is important to tt business. 4 ‘© Do you think Sasha is right to say that her workers do not need to joir trade union? Justify your answer, 2 The following organisation chart is for PPB Ltd. It is a private limi company which owns and operates a chain of supermarkets. The organisational chart shows the hierarchical structure of the busines: | Managing Orecor Finance Director | | Marketing Director Human Resources Director Operations! Adeparmentsl 3 departmental 10 supermarket mages ers (I for each spa ew ai igall 10 assistants 20 assistants 43 departmental managers S assistants 1000 assistant (100 for each supetn a Define ‘hierarchical structure’ a b Identify the span of control for the: a Operations Director * finance Director. © Outline two functions of th i 0 u 1e Managing Director. xplain two disadvantages to this business of having a tall Organisational structure, © Do you think more deleg Justify your answer, lelegatic legation would be a good idea for this business’Trade unions Revision checklist In this chapter you have learned. SMU Cue eon emcee en Rca rariy the meaning of hierarchical structures, span of control, chain of command PIS iy the roles, responsibilities and inter-relationships between people in Or Cee te UOC WC et Cue aC the different styles of leadership that management might use DRM hiner eu een rites STM Sibu Sou eS NOW — test your understanding with the revision questions in the Student etextbook and the Workbook.Recruitment s the process om identiying thatthe business needs to employ he point arrived atthe business Employee selection is candidates fr spect job and selecting an Individual for employmen based on the needs of the arganisation me upto Recruitment and selection es aacting and secting the best aides or vacances tat Wages and salaries | anse suey na Industrial relations There rust be effect ‘epresenaties ofthe manogeme Jwotorce Ths may land disputes but ao Bgeston for pro Besponsibiies of he Hum Recruitment, selection and training of employees en The work of the Human Resources department Recruitment and employee selection are the most familiar roles of the! Resources department, but there are several others such as training, meet requirements regarding employment, and being responsible for redundant dismissal. This chapter studies all these roles in detail Training programmes Involves assessing and fulfiling thet ‘eed of employees, This should bel future plans ofthe business Me (oes ean ight people | —_pasounces_——| Theta noelto make sa ape orate [whl the iaws on heath and safe =a ‘communication between eee fepartment