TOPIC 2

Chapter 5: Nature of Management​

Features of effective management

Management: process of coordinating a business’s resources to achieve its goals

Business resources:
1.​ Human resources: employees (most important asset)
2.​ Information resources: knowledge and data
a.​ market research, sales reports, economic forecasts, legal advice
3.​ Physical resources: equipment, machinery, buildings, raw materials
4.​ Financial resources: funds

Effective manager good at:

1.​ Planning: setting goals and methods to achieve them
2.​ Organising: structuring organisation to translate plans into action
3.​ Leading: influencing or motivating people to work towards achieving
objectives
4.​ Controlling: evaluating performance and taking corrective action to ensure
objectives are achieved

Skills of management

Interpersonal skills
Manager’s ability to liaise with people and build positive relationships with staff
●​ It is through other people that managers achieve business goals
●​ Effective communication with staff creates a positive workplace which improve
productivity/morale and sales

Communication skills
●​ Effective communication of biz goals and the strategies to achieve them are
crucial
●​ Managers who are effective communicators are able to share their thoughts
and plans → influence employees

Strategic thinking skills

Involves taking the broad, long-term view which allows managers to foresee potential
challenges and opportunities and make informed decisions which drive long-term
success
 ●​ Helps maintain a competitive position within a dynamic business environment

Vision skills
●​ Vision: shared sense of direction that allows people to attain a common goal
●​ important during times of constant change
●​ Without a vision, no sense of cooperation and commitment - achieving goals
impossible
●​ staff will enthusiastically contribute to making sure vision is realised
●​ Effective managers foster enthusiasm and commitment throughout the
business

Problem-solving skills
●​ Management requires a problem-solving process when confronted with
difficult and unfamiliar situations
●​ Problem solving: finding and implementing a course of action to correct an
unworkable situation
●​ decide which problem they should give their full attention to

Decision-making skills

Adaptability to change skills

Successful managers anticipate and adjust to changing circumstances to achieve a
sustainable competitive advantage
●​ Today’s markets are highly competitive and rapidly changing
●​ managers must be flexible, adaptable and proactive
●​ Managers that are passive and reactive will cause the business to fall behind
its competitors

Chapter 6: Achieving business goals

Business goals must be SMART
S - specific
M - measurable (quantifiable)
A - attainable (challenging but realistic)
R - relevant (based on current conditions in the market)
T - time bound (deadline should be set)

Business goals
●​ provide a business with direction + help managers measure results
●​ helps a biz realise its vision of where it wants to be in the future

Profit maximisation
The size of profit is a major indicator of the success of a business
 ●​ Businesses seek to have a maximum difference between total revenue and
total costs; it can do this by
○​ Increasing sales revenue
■​ Expanding market reach, improving product quality or marketing
strategies to attract more customers
○​ Cost reduction
■​ Eliminate unnecessary expenses, improving operational
efficiency and negotiating better deals with suppliers

Market share
Increasing the proportion of total sales in a market that the business controls
●​ An increase in market share indicates success
●​ For large businesses, small market share gains translate into large profits

Growth
Most businesses want to grow
●​ Firms can achieve growth internally through
○​ Employing more people
○​ Purchasing new equipment
○​ Establishing more outlets
●​ Or externally through expansion by:
○​ Merger - when two businesses join together to become one
○​ Acquisition - when one business purchases another business
●​ Some business owners wish to avoid growth in order to:
○​ Avoid the added pressure of expansion
○​ Keep control of the business
○​ Maintain personal contact with the customers

Social
On top of financial goals, many businesses develop social goals that benefit the
community such as
●​ Social justice
○​ Assisting disadvantaged people in the community
○​ Ensure fair trade practices

Environmental
Many businesses are focusing on sustainable development (achieving a balance
between economic and environmental concerns
●​ There is pressure on businesses from society (which is becoming increasingly
aware of environmental issues) to minimise their ecological footprint
○​ Environmentally friendly products
○​ Reduce GHG emissions and waste
Staff involvement
Employees are a business’s most valuable resource
●​ involve employees in the decision-making process
○​ By empowering employees with some authority to make decisions,
they will feel valued and will be motivated to raise their effort and
commitment to pursue business goals
●​ Benefits
○​ Increased staff morale
○​ Solutions to organisational and operational problems
●​ Results:
○​ Higher levels of output
○​ Improved labour productivity

However, staff involvement will only contribute to business success if the business
recognises the importance of:
1.​ Innovation
a.​ Employees are a source of innovative ideas
b.​ As today’s markets are highly competitive, businesses must be
innovative to maintain a competitive advantage
c.​ Businesses should promote an innovative business culture by
recognising and rewarding employees’ creativity and initiative
2.​ Motivation
a.​ A motivated staff leads to higher productivity and business success
b.​ Managers should create a business culture that fosters employee
welfare and involvement
c.​ Motivational techniques such as positive reinforcement and rewards
are more effective than punishments
3.​ Mentoring
a.​ Mentoring programs aim to provide advice, guidance and support to
employees
b.​ A mentor helps with the socialisation of new employees and ensures
that they are aware of what is expected of them
c.​ Employees are exposed to the business values which will strengthen
their commitment
4.​ Training
a.​ Employee training is the process of teaching staff how to perform their
job more effectively by enhancing their skills and knowledge
b.​ Due to technological advancements, a business must invest in their
human capital by training and retraining existing employees
c.​ Successful training results in a multiskilled workforce that is able to
adapt to a changing environment and improved labour productivity
Chapter 7: Management approaches
The management approach adopted by a business impacts all aspects of its
operations

Classical approach
-​ Role of management is to control employees and ensure they follow
instructions and adhere to rigid rules

Management as planning, organising and controlling

●​ Planning: set goals and plan the tasks that need to be performed in order to
achieve them
●​ Organising: coordinate resources and activities to translate plans into reality
○​ maximise productivity and efficiency in achieving biz goals
●​ Controlling: evaluating performance and taking corrective action if there is a
discrepancy between performance and goals → to ensure objectives are
being achieved

Hierarchical organisational structure

●​ A rigid hierarchical organisational structure maximises productivity and
efficiency
○​ Clear lines of authority
○​ Clearly defined positions and roles
○​ Centralised control with power and decision-making authority
concentrated in the hands of a small group of people
●​ Provides increasing authority at higher levels of the hierarchy
●​ Those in higher positions have greater accountability, authority and
responsibility
●​ Numerous levels of management slows down decision making

Autocratic leadership style

●​ makes decisions without consulting employees
○​ Does not seek input from employees
●​ Limits employee’s knowledge
●​ Controls employees closely
○​ Frequently checks employee performance

Behavioural approach
-​ Acknowledges that employee involvement in decision making leads to
productivity gains
-​ Ensuring employees feel valued + their needs are met → increases job
satisfaction and output

Management as leading, motivating, communicating

 ●​ Leading: managers must focus on meeting the needs of each employee to
build a high-performance team that effectively achieve biz goals
○​ Successful leaders:
■​ Good listening skills
■​ Empathetic
■​ Open-minded - seeks new ideas
■​ Communicates a vision
■​ Shows confidence in people
●​ Motivating: ensure employees feel that they are valued and important to the
biz
○​ Motivated workers are more productive
○​ Employee satisfaction → motivated employees
●​ Communicating: effective communication ensures confusion does not arise,
fewer conflict / mistakes occur and employees understand what the biz goals
are and have a desire to achieve them
○​ Open communication regarding the biz’s objectives, plans and financial
results → motivate employees to raise their level of effort and
commitment to achieving biz goals

Teams
●​ Teams approach leads to superior performance
○​ Teams approach harnesses diverse skills and perspectives → foster
innovation and effective problem solving
●​ Shift to teams approach has led to flatter organisational structures with fewer
levels of management
○​ Flatter structure → more appropriate for today’s highly dynamic and
competitive markets as they are more suitable for innovation and
adapting to change
○​ Gives greater responsibility and authority to employees

Democratic leadership style

●​ Managers consult employees and seek their input when making decisions
○​ Share decision-making authority with subordinates
○​ Manager actively seeks employee input and suggestions
●​ When employees are involved in the decision making process, they feel that
they are actively contributing to the firm’s success → increase their
commitment to the firm
○​ As employees feel that their suggestions are seriously considered, they
feel that they have a personal stake in the firm’s success
○​ Increased job satisfaction and staff morale

Contingency approach
-​ Emphasises the need for flexibility and the adaptation of management
practices to suit a particular situation
Adapting to changing circumstances
●​ no two situations are identical
●​ Each unique situation requires its own unique management response
●​ Managers must borrow and blend the most appropriate practices from a range
of management approaches to best suit the biz’s unique circumstances
Managers must be flexible in their technique to solving problems

Chapter 8: Management Process

●​ Management is responsible for ensuring the key business functions are
performing efficiently and effectively
●​ Each business function has its own specific goals which must connect to the
business’s larger goals (which are ultimately aimed at profit maximisation)

8.3 Operations

IS ALL ABOUT HOW YOU OPERATE YOUR BUSINESS

●​ Operations: area of management responsible for producing g/s

○​ How bizs make g/s
○​ Maximise efficiency of production process
○​ Quality management
●​ Concerned with creating, operating and controlling a transformational process that
takes inputs and produces outputs
●​ Operations management function influence:
○​ Quality, cost and availability of a biz’s g/s

Cost leadership
-​ Operations function accounts for largest part of biz’s expenses
-​ Many bizs try to gain a competitive advantage through cost leadership
-​ Operation managers aim to minimise costs

Goods vs services
Manufacturer Service organisation

Transforms inputs into goods (tangible Transforms inputs into services (intangible)
products) -​ Customer involved in production
-​ Little customer involvement in -​ Services tailored to individual
production customer
-​ Manufactured goods standardised

The production process

 ●​ elements of production process:
○​ Inputs
○​ Processes
○​ Outputs
●​ management of production process determine how efficiently and effectively biz
produces g/s to meet the needs of customers

Inputs
●​ Inputs: resources used in the transformation process

Transformed resources Transforming resources

inputs that are transformed in the Inputs that carry out the transformation
production process process (enable the value-adding / change
-​ Materials to occur)
-​ Machinery
-​ employees

Transformation processes
●​ conversion of inputs (resources) into outputs (g/s)
●​ physical changes and conversion of resources into services
●​ operations manager tasked with creating, operating and controlling the
transformation process

Manufacturing Service

-​ Transforms resources into final g/s -​ Operations processes are less

for consumers visible
VS -​ Outputs cannot be held in stock
-​ Step-like transformation across a -​ rely on interaction with customer in
range of processors and bizs determining output
-​ Having skilled employees: crucial
-​ Affects quality of service

Outputs
●​ Outputs: g/s that is delivered to the consumer
●​ Output must be responsive to customer demands

Quality management
Quality: degree of excellence of g/s and fitness for stated purpose (fit for purpose)
●​ A quality product: have high degree of excellence and achieve stated purpose
○​ reliable, durable, well designed, delivered on time, include after-sales service,
agreeable appearance
Quality management: business strategy to ensure its product are consistently of good
quality / meet customer expectations

Benefits of quality management practices

●​ Reduced waste and defects → reduce cost → improve productivity → profits
 ●​ UNIFORMITY of output
●​ Strengthened competitive position
●​ Improved reputation and customer satisfaction
○​ Increased customer loyalty + brand loyalty

Quality management strategies

Quality control
●​ REACTIVE strategy
●​ ensures a product adheres to set standards / meets customer expectations
●​ QC inspection involves examining a product and comparing it with specified
requirements to determine whether there is a conformity
○​ prevents problems being passed on to the customer - intervenes before
defective product can reach customer
○​ improves customer satisfaction by consistently delivering quality products,
●​ use of inspections at various points in the production process to check for defects
○​ Defective: not fit for purpose / do not meet standards
○​ minimised errors (which adversely affects customer satisfaction)
○​ benchmarks set before inspections
i.​ Actual performance compared to established criteria

Quality assurance
●​ PROACTIVE strategy
●​ Broad process that involves establishing standards and procedures to prevent
quality issues throughout production process
○​ aims to prevent quality failure through ensuring biz achieves set standards
throughout production process → prevent defects before they occur
ii.​ focus on processes involved in producing the output
QC aims to catch defects in quality AFTER they have occurred while QA aims to
prevent those defects from occurring in the first place.

Total quality management (TQM)

●​ improvement of an organisation’s output through continuous improvement of
internal practices by sharing responsibility among all the members of the business
○​ quality becomes a responsibility of ALL parties, departments and functions
- not just concern of QC personnel
i.​ Aim: create a detect-free production process and maintain a customer
focus in operations → improve customer satisfaction

Quality circles: employee empowerment

b.​ Teams of employees meet regularly to evaluate and improve processes,
design, quality → cost savings
c.​ Effective - leverages insights and expertise of on-the-ground workers who
have greater understanding of problems / areas for improvement than
management
 i.​ solutions from QCs - practical, innovative → enhance production
process
d.​ QCs encourage a culture of continuous improvement and teamwork
i.​ Prevents complacency → remain competitive / innovative

Advantages:
1.​ Cost reduction
a.​ Fewer product defects = save costs spent on customer support, product
replacements and repairments
2.​ Customer satisfaction
a.​ Better, more consistent product (error free interactions with customers) →
high customer satisfaction → increase market share
i.​ Existing customers recommend product

8.4 Marketing

Informing customer about product + persuading them to buy it → drive

sales

What is marketing
●​ activities designed to create interest in a product to convince present and potential
customers to buy it
●​ A system of activities designed to plan, price, promote and distribute products to
present / potential customers to generate sales

Market research
●​ Before identifying target market, must conduct market research
●​ Finding out what customers want
●​ Collecting vital information about a company's target market, and competition
○​ Assess viability of a product idea
○​ Gain insights into customer needs and behaviour
○​ Know what competitors are doing
●​ thorough research → successful

Target market
A business segments its market so it can improve the productivity and effectiveness of its
marketing resources by directing its marketing strategies to specific groups of customers
who are most likely to purchase the product rather than a mass market.
The aim of market segmentation is to increase sales and profits by better understanding and
responding to the desires of target customers
-​ Use marketing resources more efficiently
●​ select specific groups of customers on which to concentrate marketing efforts
○​ Target market: a group of customers with similar characteristics who are
most likely buyers of a company's product
 ●​ Importance:
○​ Identifying a target market essential in development of successful marketing
plan for a product
○​ Target market informs a product’s packaging, price and distribution
○​ Helps increase sales and profits by better understanding and responding
to desires of target customers

Mass marketing approach

Firm aims to reach the largest possible audience
-​ Firm mass-produces, mass-distributes and mass-promotes one product to all
buyers
○​ Electricity
○​ Water
○​ Gas

Market segmentation
●​ Most bizs divide market into segments and select one of these segments to
become the target market
○​ better direct marketing efforts towards particular segment of total market
○​ refine marketing strategies to influence consumer choice
●​ Aim: increase sales + profits by better understanding and responding to desires of
target customers
●​ Market segmentation: total market is subdivided into groups of people who share
one or more characteristics based on 4 dimensions:
1.​ Demographic - population characteristics (age, gender, education, income)
2.​ Geographic - where people live (urban, rural, climate)
3.​ Psychographic - personality characteristics (lifestyle, personality, interests)
4.​ Behavioural - loyalty to a product (purchase occasion, loyalty)
●​ ability to choose correct target market (important marketing function) because it will
influence the entire marketing plan
●​ primary target market: the market segment at which most of the marketing
resources are directed
●​ secondary target market: a smaller and less important market segment

Market segmentation
When the total market is subdivided into groups of people who share one or more
common characteristic
-​ Eg swimwear → children’s swimwear

Niche markets
●​ highly-specific segment of market
○​ A segment within a segment
Marketing mix
●​ After target market selected → develop marketing strategies to achieve marketing
goals
●​ Biz uses marketing mix to reach its target market
○​ Marketing mix:
■​ Product
■​ Price
■​ Promotion
■​ Place (distribution)

Product
●​ decide which product to market
●​ determine the product’s:
○​ Quality
○​ Packaging
○​ Design
○​ Exclusive features
●​ Customers buy products that provide intangible benefits (security, prestige,
satisfaction)

●​ Product packaging
○​ Influences consumer perception of brand
○​ positive first impression of product and lasting brand loyalty
■​ differentiate from competitors
■​ Reflects brand
■​ Create impression of luxury, quality
○​ Eco-friendly packaging
■​ conscious of the environmental impact of choices → growing
demand for sustainable packaging
■​ eco-friendly packaging attract growing number of
environmentally-conscious consumers + position them as
responsible and forward thinking → improve brand image
■​ willing to pay more for products with environmentally-friendly
packaging
●​ Recyclable packaging
○​ made from biodegradable materials resonates with
consumers who want to minimise their ecological
footprint
●​ edible packaging
●​ Product branding
○​ use of a unique name, design, and image to identify and differentiate a
product from competitors
■​ reinforce a distinct logo / name and packaging color
○​ Purpose:
■​ Differentiate from competitor products
■​ builds brand awareness
 ■​ fosters consumer loyalty
■​ Builds product loyalty (repeat purchases)

Price
●​ selecting the ‘correct’ price for a product is essential
●​ Must price a product right so it resonates with perceived value and brand identity
1.​ Cost-based: calculate total cost of producing a product and add mark-up
for profit
2.​ Market-based: price set according to market prices for similar products
3.​ Competition-based: choosing a price that is either below, equal or above
that of competitors
4.​ Value-based: customer-focused; based on perceived value of a product /
how much consumers believe a product is worth
1.​ Advantage: customer satisfaction
a.​ customer satisfaction as they believe they are getting their
money’s worth
2.​ Advantage: higher profit margins
a.​ By aligning prices with perceived value rather than just costs
→ achieve higher profit margins
3.​ Disadvantage: complex implementation
a.​ Determining perceived value: challenging and
resource-intensive
b.​ extensive market research → costly

Promotion
●​ The role of promotion is to inform, persuade and remind consumers about a
business’s products with the aim of:
○​ Attract new customers by raising awareness
○​ Encourage existing customers to purchase more of it

Promotion mix:
1.​ Sales promotion
○​ short-term activities used to spark interest and create demand for a product
○​ creates immediate incentives for customers to purchase g/s
■​ Creates sense of urgency → drives spikes in short-term sales
●​ discounts
●​ free samples
●​ Buy-one-get-one-free offers
●​ Limited-time offers
2.​ Personal selling and relationship marketing
●​ Personal selling: activities of a sale representative directed to a potential
customer with the goal of persuading the customer to purchase a g/s
○​ salesperson tailor sales pitch to specific needs, preferences of the
customer
○​ more personalised and effective promotional strategy
 ●​ Relationship marketing: strategy focused on building and maintaining
long-term relationships with customers rather than just pursuing immediate
sales
○​ customer loyalty → repeat purchases and positive word-of-mouth
■​ Which reduces costs with acquiring new customers
○​ Loyalty and rewards programs

3.​ Publicity and public relations

●​ publicity: free media coverage about a biz’s products
○​ Valuable as it carries more credibility and trust than paid advertising
○​ Enhance brand reputation
○​ Increase product awareness
●​ Public relations: activities aimed at creating and maintaining favourable
relations between a biz and its customers
4.​ Advertising
●​ Print or electronic mass media used to communicate a message about the
product
●​ Used to:
○​ Attract potential customers
○​ Create a demand for the product
○​ Communicate essential information
Social Media Advertising (SMA)
●​ advances in info and communication technology - impact how businesses
promote their products
○​ internet become effective advertising tool to deliver messages to
target markets (especially youth)
●​ advantages:
○​ Inexpensive
○​ Easy to use and monitor
○​ effective method of gaining exposure
●​ Social media channels have been behind the recent revolution in SMA:
○​ TikTok
○​ Instagram
○​ YouTube
○​ CELEBRITY / INFLUENCER ENDORSEMENT

Place
●​ Place: activity of getting products in front of the consumers who are most likely to
purchase them (target audience)
○​ Where the product should be available to customers
■​ brick and mortar stores
■​ Online
○​ strategically locate in high-traffic areas such as shopping malls, busy streets,
and near transportation hubs
●​ Distribution channel: getting the product to the customer
○​ This process usually involves a number of intermediaries (wholesaler or
retailer)
Channels of distribution:
1.​ Producer to customer
a.​ Simplest channel
i.​ farmer’s market
b.​ Used for services
2.​ Producer to retailer to customer
a.​ Retailer: intermediary who buys from producer and resells to customers
3.​ Producer to wholesaler to retailer to customers
a.​ common method for distribution of consumer goods
b.​ Wholesaler: intermediary who buys in bulk from producer, then sells in small
quantities to retailers
c.​ Producers use wholesaler when a large number of retailers sell the product
and the producer finds it difficult to deal with them all

Non-store retailing
●​ gaining popularity
1.​ E-commerce
a.​ buying and selling of g/s via internet

People
●​ everyone involved in the product of a business, whether in direct contact with
customers or not
●​ staff must be trained with appropriate skills, motivated to provide good service and
have positive attitude towards products they are selling
○​ Customers judge business by staff that serve them as much as by quality of
the product

Processes
●​ flow of activities that take place when there is interaction between customer and biz
○​ delivery of the product
○​ how customer finds out about product
●​ total purchasing experience is important for customer satisfaction

Physical evidence
●​ everything customer sees when interacting with biz
○​ features of product the biz is selling
○​ design and layout of a store/website
○​ Use of customer feedback
●​ Physical evidence assist with attracting target market

8.5 Finance
●​ Business managers must have a thorough understanding of accounting and finance
○​ Accounting: provide info on the financial affairs of a business
○​ Finance: concerned with where the business sources its funding

8.5.1 Accounting
 ●​ Accounting: process of recording, summarising, and interpreting financial
transactions and information
○​ summary of what has happened to business money (coming in and going out)
can be traced so informed financial decisions can be made
○​ provide valuable info about the trading period
●​ A manager can use these statements to get an accurate picture of biz’s financial
health
○​ enabling bizs to make informed decisions and report financial performance to
stakeholders.

3 accounting reports:
Name of statement / report Description

Cash flow statements Indicate the movement of cash receipts

(cash inflows and sales) and cash
payments (cash outflows and expenses)
resulting from transactions over a period of
time

Income statements Shows the revenue (sales) earned and

-​ Revenue statement expenses incurred over the accounting
-​ Profit and loss statement period with the resultant profit or loss
-​ statement of financial performance

Balance sheets Represent a business’s assets and

-​ statement of financial position liabilities at a particular point in time and
represent the net worth of the business

purpose of financial statements: summarise info in a way that is useful for interested
parties (stakeholders)
●​ Accounting provides information that is valuable to:
○​ managers
○​ Owners and shareholders
○​ Suppliers
○​ Lenders
○​ Competitors
●​ purpose of accounting: provide information that is useful and accurate, and
presented in a clear and concise form.
○​ This information will encourage:
■​ prudent financial decision making
■​ Planning that is purposeful
■​ Confidence in business’s management
■​ Accountability / stewardship

Accountability / stewardship
When a biz acts in the best interests of its owners.
-​ Full and complete disclosure, not hide truth
 -​ information in books of account which summarised in reports, is based on true and
actual transactions

8.5.2 Finance
●​ Finance: how a business funds its activities
○​ where it gets the money to trade
○​ costs, risks, terms and benefits of different types of borrowings
●​ All businesses borrow money at some time (usually when first set up)
○​ bizs must be strategic and careful when borrowing money, the type and
amount of borrowing must align with income patterns
●​ Borrowing: useful source of finance
○​ It comes at a price
■​ Cost of borrowing = interest
An understanding of both accounting and finance is necessary if business managers and
owners are to make informed decisions

8.5.3 Financial statements

●​ All business owners must make judgements about direction of the biz
●​ To help this, prepare financial statements
○​ Financial statements: reports that summarise transactions over a period of
time
●​ Main financial statements:
1.​ Cash flow statements
a.​ To know whether cash flow thorugh biz is sufficient to allow biz to pay
its debts on time
2.​ Income statements
a.​ To know whether biz is trading profitably
3.​ Balance sheets
a.​ To know financial status of the biz

8.5.4 Cash flow statements

●​ financial statement that indicates the movement of cash receipts and cash payments
resulting from transactions over a period of time
●​ vital for biz to assess whether money inflows can match money outflows
●​ Liquidity: company's ability to meet short-term debts using available cash or easily
convertible assets
○​ Biz is liquid if it has cash available to meet payments as they are due
Effective cash flow management
●​ vital for the information they give on timing of payments and receipt of income
●​ info on cash movements helps biz predict future cash flows and planning for
upcoming payments
●​ financial managers manage cash flow of the biz
○​ Cash flow: lifeblood of the biz
■​ management of cash flow: anticipating cash expenditure and ensuring
enough of income earned comes in form of cash
●​ biz must save enough money in the event of unexpected financial challenge
○​ money for contingencies put aside
■​ Contingencies: unanticipated events that can lead to financial
difficulty
 ●​ Cash flow statements allow biz to track inflows and outflows over period of time
○​ See cash deficits and surplus
■​ if there is a pattern of deficits, take remedial action

Cash flow statements for larger business

●​ format of cash flow statements used by large bizs and public companies is different
to small to medium-sized businesses
○​ Cash from operating activities
■​ Cash inflows and outflows relating to main activity of biz (provision of
g/s)
○​ Cash from investing activities
■​ Cash flows related to purchase and sale of non-current assets and
investments
○​ Cash from financing activities
■​ Cash flows related to acquisition and repayment of debt and equity
finance
8.5.5 Income statement
●​ biz earns income by selling g/s to customers
●​ To measure how successful a biz is at trading, financial report called income
statement is drawn up
○​ Revenue statement
○​ profit and loss statement
○​ statement of financial performance
●​ help calculate how much net profit made over period of time

Income statement shows:

1)​ The amount of income or revenue earned (sales)
2)​ The costs or expenses incurred in earning that revenue
3)​ Whether a profit or a loss has been incurred in the period under review

Income statement
Summary of income earned and expenses incurred over a period of trading
-​ see how much money has come into biz as revenue, how much has gone out as
expenditure and how much has been derived as profit
 ●​ expenses deducted from revenue to determine net profit
○​ Service businesses do not calculate COGS (do not show gross profit)
Features:
●​ Statement has heading that states period of time over which biz was operating for the
statement
○​ one year, half-yearly, quarterly
1.​ Revenue or income
a.​ Sales cash
2.​ Cost of goods sold (COGS)
a.​ COGS = opening stock + purchases - closing stock
3.​ Gross profit
a.​ Gross profit = sales - COGS
4.​ Expenses
5.​ Net profit
a.​ Net profit = gross profit - total expenses
●​ Revenue stated at top of the report

8.5.6 Balance sheets

●​ provides a snapshot of what a biz owns (assets) and owes (liabilities) and owner’s
equity on particular date
○​ Heading includes ‘as at’ = ‘at that point in time’
○​ Represents net worth (equity) of biz
■​ Shows financial health of biz
●​ Purpose: help biz owner monitor the debt and equity of the biz
○​ use balance sheet to evaluate biz’s overall financial position against previous
periods → assist in decision making
T-format
●​ Sum of items on ‘assets’ side = sum of items on liabilities and owner’s equity side

Balance sheet
Represents a biz’s assets and liabilities at a particular point in time, and represents the net
worth of the biz

Balance sheet items

left-hand side: assets (things the business owns)
right-hand side: liabilities and owner’s equity (sources of funds)

1.​ Assets
a.​ Assets: items of value owned by the biz
i.​ Current assets: assets that a biz can expect to consume, or turn over
(convert into cash), within 12 months
1.​ Cash
2.​ Accounts receivable (debtors)
3.​ Inventories (stock)
ii.​ Non-current assets: assets that have an expected life of longer than
12 months
1.​ Large physical items like
a.​ Buildings
b.​ Land
c.​ Machinery
d.​ Technology
e.​ Vehicles
 f.​ Furniture
b.​ Tangible and intangible
i.​ Intangible items: things of worth that have no physical substance
1.​ Goodwill
2.​ Trademarks
3.​ Designs
4.​ Copyright
5.​ Patents
a.​ A good name / reputation (goodwill) or an easily
identifiable logo has worth
b.​ Intangible assets are a resource that the firms owns
and must be recorded in the accounts

Assets
Items of value owned by the biz that can be given a monetary value

2.​ Liabilities (things a biz owes)

a.​ Liabilities: items of debt owed to outside parties and/or other organisations
(eg suppliers or the bank)
i.​ Loans
ii.​ Accounts due to be paid by the biz
iii.​ Mortgages
iv.​ Credit card debt
v.​ Accumulated expenses
b.​ Divided into current and non-current
1.​ Current liabilities: those in which the debt is expected to be
repaid in the short term (12 months or less)
a.​ Bank overdrafts
b.​ Credit card debts
c.​ Accounts payable (creditors)
d.​ Accrued expenses
2.​ Non current liabilities: long-term debt items (longer than 12
months)
a.​ Mortgages
b.​ Leases
c.​ Debentures

Liabilities
Items of debt owed to other organisations (eg suppliers, banks) and include loans,
accounts to be paid by the biz, mortgages, credit card debt and accumulated expenses

3.​ Owner’s equity

a.​ Owners give a biz money for it to acquire resources and begin operating
i.​ This money is called owner’s equity (capital)
b.​ As the biz operates, it should start to earn an income to cover its costs and
then later earn a profit
 i.​ The biz can choose to retain these profits to target money for a
particular project or it may put money into ‘reserves’ for distribution
later
ii.​ The biz can choose to repay the owners who invested their money in
the biz at the outset
c.​ Over time, a successful biz will have its owner’s equity amount increase in
value
i.​ Thus, the owner’s claim on the biz will also increase
1.​ This is the owner’s reward for risking their money

Owner’s equity
The funds contributed by the owner(s) to establish and build the biz
-​ Capital

The balance sheet equation

●​ The balance sheet is called the balance sheet because it should always balance
○​ Sum of items on the assets side must be equal to the sum of items on the
liabilities and owner’s equity side
Basic accounting equation:

Review Questions - Balance sheets, Liquidity, Gearing

107a)
Balance sheet for Giane Rooney as at 1/1/02
Assets Liabilities

Current assets Current liabilities

Accounts receivable $10,000 AMEX debt $5000
Cash in the bank $5000 Overdraft $5000
Inventory $5000

Non current assets Non current liabilities

Furniture $20,000 Mortgage $30,000
Intangibles $20,000
Car $10,000 Owner’s equity
Capital $30,000

$70,000 $70,000
8.6 Human Resources

●​ Employees are a valuable resources for a business

●​ Human resource management (HRM): effective management of relationship
between employer and employees
●​ Successful biz owners recognise that they rely on employees to achieve goals of
improved profit, growth and increased market share
●​ Biz must:
○​ hire right person for the right position
○​ Motivate staff
○​ Provide employees with opportunities for training and development
○​ Retaining excellent employees

Human resource cycle

1.​ Acquisition
a.​ Recruit people
2.​ Development
a.​ train and develop them
3.​ Maintenance
a.​ retain them (valuable resources)
4.​ Separation
a.​ employees will separate from biz
i.​ Voluntarily: retirement / resignation
ii.​ Involuntarily: retrenchment / dismissal

Human Resource Cycle / Staffing Process

HR department carries out:
1.​ Acquisition
2.​ Development
3.​ Maintenance
4.​ Separation
Desired outcome: productive + efficient workforce → competitive advantage
Element Activities

Acquisition ●​ Planning:
Hiring new employees ○​ staff audit - identify staffing needs
○​ job analysis - determine nature of position to be
filled
●​ Recruitment:
○​ attract people to apply for the position
○​ internal / external recruitment
●​ Selection:
○​ select and hire the most qualified people
○​ testing and interviewing

Development ●​ Induction and training:

Enhance employees’ ○​ teach employees new skills
skills and abilities ●​ Development:
○​ Improve skills, abilities and knowledge

Maintenance ●​ Monetary benefits:

Motivating employees ○​ reward efforts through financial compensation;
to remain with the biz pay rates
●​ Non-monetary benefits:
○​ rewards such as conditions; fringe benefits

Separation ●​ Voluntary:
Employees leaving biz ○​ leave on own accord
■​ Retirement
■​ Resignation
●​ Involuntary:
○​ asked to leave
■​ Retrenchment
■​ Dismissal
8.6.1 Recruitment
●​ Acquisition: attracting and recruiting the right staff for roles in a biz
●​ Before recruitment, HR manager undertakes job analysis (staff audit)
○​ determine exact nature of a job before recruit right person

Job analysis
●​ Job analysis: identify activities a job involves and attributes / requirements
necessary to perform it
●​ info used to develop a:
○​ Job description: a written statement describing the employee’s duties, tasks
and responsibilities associated with the job; includes
■​ job title
■​ purpose of the job
■​ responsibilities and activities to be performed
■​ Working conditions
■​ Performance standards
○​ Job specification: list of key qualifications needed to perform a particular job
in terms of education, skills, knowledge and level of experience + personal
attributes necessary; Includes
■​ Required levels of training / education and work experience
■​ Personal qualities and areas of expertise

Once job description and specification completed → recruitment and selection

Recruitment
The process of finding and attracting the right quantity and quality of staff to apply for
employment vacancies

Recruitment
●​ finding and attracting the right people to apply for a job vacancy using
advertisements, employment agencies and word of mouth
●​ select appropriate source (internal or external) and method of attracting potential
applicants to apply for the position
●​ Internal vs external recruitment methods
1.​ Internal recruitment
a.​ When biz appoints someone already within the biz to a `
b.​ Filling job vacancies with present employees, rather than looking
outside the biz
i.​ Promotion → take on greater responsibilities

Advantages Disadvantages

●​ Employees are already known to the ●​ Potentially no-one suitable from

 employer → easier choice within biz
●​ Applicants already familiar with biz, ●​ conflict / competition between
goals, culture and processes employees
●​ If position is higher → reward valued ●​ Lack of cultural diversity
employees
●​ Costs of advertising the position are
reduced

2.​ External recruitment

a.​ Filling job vacancies with people from outside the biz

Advantages Disadvantages

●​ wider range of applicants to choose ●​ costs associated with advertising the

from position
●​ Outside applicants bring new ideas ●​ field of applicants larger → process
and fresh approaches of selection more time-consuming
○​ Culturally diverse ●​ Qualified employees from within biz
●​ growth of the biz as it allows for an may resent outsiders coming in
increase in actual staff numbers

Methods of recruitment
●​ Many bizs use employment agencies to handle recruitment of staff
○​ agencies handle advertising of vacancies
○​ Expensive but effective method
■​ Agency does preliminary screening of candidates and presents
potential employees who fit all the criteria of experience, education
and training

Where to access / advertise new employees

1.​ Outsource recruitment process
a.​ hire recruitment agencies to find suitable employees
i.​ decrease time involved in searching for new employee
b.​ pay agency to interview applicants and recommend short list of potential
employees suitable for available position

Selection
●​ Once potential candidates selected → biz choose best person for job
●​ Employee selection: means by which employer chooses most suitable applicant for
a vacancy
○​ identify skills, qualifications and experience of each applicant and relating
them to those listed in the job specification
○​ Find closest possible match
●​ Selecting best candidate involves:
○​ Testing
○​ Interviews
* The cost of a poor recruitment decision is believed to be around 2-3 times the annual
salary of the person recruited

8.6.2 Training and development

●​ Aim: improve employee’s skills and abilities → improve work performance
○​ Necessary for biz growth
●​ New employees may need training and development depending on their level of
experience
●​ Existing employees need training and development to continually upgrade their skills
●​ Training: teach staff to perform their job more efficiently + effectively by boosting
specific skills for their current roles
●​ Development: the process of enhancing overall capabilities of employees and
preparing individuals for future responsibilities
●​ Effective T&D program is integral maintain a competitive advantage
●​ Due to rapid technological change and global competition
○​ Ongoing training for all employees is crucial

Benefits for the employee Benefits for the employer

-​ Opportunity for promotion and -​ Higher productivity through better

self-improvement job performance
-​ Improved job satisfaction through -​ Reduced costs due to less labour
better job performance turnover, errors, accidents,
-​ Employees feel valued absenteeism
-​ A challenge - chance to learn new -​ More capable workforce
things -​ Employees able to cope better with
-​ Improved chances of future business ‘crises’
employability

Development
activities that prepare staff to take greater responsibility in the future

Training
The process of teaching staff how to perform their job more efficiently and effectively by
boosting their knowledge and skills

Employment contracts
●​ Employment contract: legally binding, formal agreement between an employer and
employee that outlines the terms and conditions of employment. This contract sets
out the rights and responsibilities of both parties
●​ governed by provisions of the Fair Work Act 2009 (Cwlth)
●​ subject to 10 National Employment Standards
○​ Contract can't leave employees worse off than their minimum legal
entitlements

Minimum employment standards

●​ Employees entitled to a set of minimum employment conditions (NES)
○​ apply to full-time and part-time employees

National Employment Standards (NES)

1.​ Maximum hours of work
2.​ Parental leave
3.​ Flexible work for parents
4.​ Annual leave
5.​ Personal, carer’s and compassionate leave
6.​ Community service leave
7.​ Public holidays
8.​ Notice of termination and redundancy
9.​ Long service leave

Awards
●​ Cover a whole industry (retail industry, legal services)
●​ Matters included
○​ Minimum wages
○​ Penalty rates
○​ Procedures for dispute settlement
●​ Award: legally binding agreement that sets out the minimum wages and conditions
for employees within an industry

Advantages Disadvantages

Set a minimum for pay and conditions Prevent recognition of individual

initiatives because all employees are
guaranteed minimum pay and
conditions regardless of how
productive they are

Enterprise agreements
●​ cover a specific biz
●​ Allows employers and employees within a particular biz to negotiate working
conditions and rates of pay that improve on standards in award
●​ enterprise agreement submitted to FWC for approval
○​ FWC examines agreement to ensure employees will be better off overall
(BOOT test) by entering into the agreement than being covered by relevant
award

Advantages Disadvantages
 ●​ greater employee involvement ●​ More time consuming due to
and empowerment need to conduct agreement
●​ Possibility of improved pay and meetings at the individual
workplace level
conditions → better workplace
performance

Individual common law

●​ Some employees negotiate individual employment contracts that don’t have to
include award conditions
●​ Applies to highly paid professionals and are subject to a minimum level of pay
(high income threshold)

7. Outline the process of acquisition.

The acquisition process typically involves identifying a target company, conducting due
diligence to assess its value and risks, and negotiating terms before finalizing the purchase
through legal agreements. This process aims to enhance the acquiring company's market
position, financial health, or strategic capabilities.

8. Explain the relationship between a job analysis, a job description and a job
specification.
A job analysis is a detailed examination of a position to identify specific tasks,
responsibilities, and necessary skills, which then informs the creation of a job description
that outlines the duties and scope of the job. The job specification further details the
qualifications and competencies required from a candidate to fulfill the job description’s
roles.

10. Summarise the two activities in the employment process: recruitment and
selection.
Recruitment involves identifying and attracting potential candidates from a pool of applicants,
often using strategies tailored to the specific needs of the position. Selection entails
evaluating these candidates through various methods like interviews, tests, or assessments
to determine who is best suited for the job.

11. Distinguish between internal recruiting and external recruiting.

Internal recruiting involves filling job vacancies with current employees from within the
organization, promoting internal growth and development opportunities. External recruiting,
on the other hand, seeks candidates from outside the company, bringing in fresh
perspectives and possibly new skills that may not be available internally.

12. Discuss internal and external recruitment.

Internal recruitment is beneficial for boosting morale and retention by offering career
advancement opportunities to existing employees, but it may limit the pool of fresh ideas and
skills. External recruitment can be more costly and time-consuming but is essential for
introducing diverse talents and innovative approaches that are not present within the
organization.

8.6.4 Separation of human resources

●​ An employee may leave a business for many reasons

Separation
The ending of the employment relationship

Voluntary separation
●​ Occurs when an employee chooses to leave the biz of their own free will
3 types:
●​ Retirement
○​ When an employee decides to give up full-time or part-time work and no
longer be part of the labour force
●​ Resignation
○​ “Quitting” - voluntary ending of the employment relationships
○​ Reasons include
■​ Better offer with another biz
■​ To start their own biz
■​ Feelings of boredom with their present job
○​ Employee needs to give the employer sufficient notice of their intention to
resign
●​ Voluntary redundancy
○​ Redundancy: when a particular job a person is doing is no longer required to
be performed
 ○​ Voluntary redundancy: occurs when employees are informed of the situation
and given the opportunity to nominate themselves for voluntary redundancy

Involuntary separation
●​ Occurs when an employee is asked to leave the biz against their will
2 types:
1.​ Involuntary redundancy
a.​ Occurs because their job no longer exists
b.​ Employees who are retrenched are offered a redundancy package: a payout
of a sum of money (as stated in the contract)
2.​ Dismissal
a.​ When behaviour of an employee is unacceptable and it becomes necessary
for a biz to terminate the employment contract of an employee
i.​ Summary dismissal: when an employee commits a serious breach of
their contract; no notice is required
1.​ Eg drunk at work or has engaged in criminal activity
ii.​ Dismissal on notice: when employee is not performing the job
satisfactorily
1.​ Amount of notice (or payment in lieu of notice) depends on
whether employee is governed by a particular award / contract,
how long they have worked for the employer

Unfair dismissal
●​ Occurs when an employee is dismissed by their employer and they believe the action
is harsh, unjust, unreasonable
○​ Employee who believes they have been unfairly dismissed may lodge an
unfair dismissal claim with Fair Work Commission
●​ Employees must be given proper notice and employers must comply with procedures
established in law when dismissing staff

8.7 Ethical business behaviour

8.7.1 Business ethics

●​ Ethics: standards that define what is acceptable and unacceptable behaviour
●​ Business ethics: application of moral standards to biz behaviour
●​ Unethical practices ⇒ negative publicity and bad biz rep
●​ Bizs want to be seen as responsible corporate citizens especially as society’s
expectations of acceptable biz behaviour grows → rewarded with increased sales
○​ Biz objective incorporate corporate social responsibility and triple bottom
line
○​ CSR: managing biz in a way that the broader social welfare of community,
including its employees, customers, suppliers and the environment are taken
into consideration when making biz decisions
○​ Triple bottom line: not simply focused on making profit at all costs,
recognise environmental and social performance are important
8.7.3 Encouraging ethical business behaviour
How businesses can be socially responsible
●​ Minimise waste and pollution
●​ Protect the health and safety of customers
●​ Work with suppliers to ensure they have socially responsible policies
●​ Deal with employees honestly and fairly, and with respect

●​ To encourage ethical behaviour: devise corporate code of conduct

○​ corporate code of conduct: set of ethical standards for managers and
employees to abide by
○​ In an era acutely aware of the dramatic social and
environmental effects of corporate activity across the world,
such codes of conduct have become the focus of considerable
attention.
○​ Examples of CSR practices include the preservation of the
environment through low-pollution and energy-efficient
measures, the production of merchandise that is recyclable and
biodegradable, and the promotion of uniform treatment of
employees across labour markets, thus ensuring acceptable
working conditions irrespective of local market standards (such
as the refusal of child labour).

Chapter 9: Management and change

Managing Change Effectively (Process)

STEPS:
1.​ Identify the need for change (internal / external influences)
2.​ Set SMART goals
3.​ Identify resistance to change
a.​ Managers / owners
b.​ Employees
4.​ Strategies to address the resistance to change
a.​ Implement Lewin's Freeze Model
b.​ Force Field Analysis (Push / Pull factors)
c.​ Team leaders (agents of change)
d.​ Management consultants
5.​ Monitor, evaluate and control

9.1.1 Introduction
●​ Bizs only survive in today’s highly unpredictable biz environment if they effectively
manage change
 ●​ Bizs that embrace change will profit, those that resist change will be left behind
●​ Change: any alteration in the internal or external environments
○​ Eg change in consumer tastes, production methods, markets or products
sold, how employees perform

9.2 Responding to internal and external influences

●​ Bizs must keep responding to the neverending pressure for change
●​ Influences driving change can be external (outside) or internal (within the biz)
●​ Changes should be viewed as opportunities to take advantage of rather than
challenges to overcome

9.2.1 Internal influences

Management
Drive change Restrain change

-​ Poor financial performance → -​ if manager lacks the capacity to deal

management reviews processes, with change: makes hasty, poor
staff and systems decisions / indecisive → creates
-​ When biz faces a crisis, uncertainty
management must demonstrate -​ employees may lose
responsive decision making to confidence in management
reduce disruption to biz

Employees
Drive change Restrain change

-​ Biz should create a business culture -​ Fear of the unknown

that fosters employee creativity and -​ Fear of job losses → staff resist
innovation change
-​ Employees will rceommend changes -​ Employees worried they cannot
to production processes or products adapt to new procedures that disrupt
-​ Create need for change in all established work routines
functions (marketing to operations)

9.2.2 External influences

Competition
●​ Biz must monitor competition’s activities → make modifications to its existing biz
activities and plan new ones
●​ Competitors can drive a biz to change through:
○​ New competitor in the market which threatens to reduce market share of biz
→ biz must undergo change to stay relevant to customers
○​ Pricing policies of competitor
 ■​ One biz lowers price → other biz does the same
○​ Adoption of new tech → competitor change their products / processes
○​ Advertising campaigns - development of online presence

Legislation
●​ When new laws are passed, bizs must comply
●​ Any law passed may require a biz to change some aspect of its operations

Technology
●​ A biz that wants to be competitive must adopt technology
●​ If it is slow to exploit tech, it will fail as its competitors will capture a greater market
share and develop a sustainable competitive advantage
●​ Tech allows biz to operate more efficiently and effectively, cut costs and improve
productivity

Social
●​ Bizs must adapt to changes in societal attitudes and values
●​ Societal attitudes about what is ethical constantly change
●​ Improved communications tech has made the public more aware of biz operations
●​ Pressure from society forces bizs to implement procedures to preserve the natural
environment + ensure supply chain is ethical
●​ Society requires biz sell safe products and treat staff well
●​ also expected to return something positive to the communities in which they operate

9.3 Managing change effectively

●​ Ability to manage, embrace and adapt to change determines a biz’s competitive
advantage
●​ Successful managers adopt a proactive rather than reactive approach to change
○​ Proactive approach to change:
■​ process for anticipating potential changes that may affect an
organization in the future and strategising a response before they
occur
■​ change initiated by an organisation
■​ taking initiative to implement changes before these situations arise
○​ Reactive approach to change:
■​ responding to changes after they have already occurred
■​ change is unplanned or unexpected and occurs after the biz has been
affected by pressures from environment
●​ Change requires sound leadership and responsive management
●​ Long-term survival of biz depends on ability of managers to assess biz environment,
predict future trends and leverage change

Strategies to manage change effectively:

●​ Identify the need for change
●​ Set achievable goals
 ●​ Develop strategies to overcome resistance to change
●​ Use management consultants

9.3.1 Identifying the need for change

●​ Effective manager constantly monitors external and internal environment to
understand factors that impact the biz
○​ identify current trends and predict future ones
●​ Sharing vision with employees encourages them to understand why change is
necessary for long-term survival in a competitive world

9.3.2 Setting achievable goals

●​ Vision statement: states the purpose of the biz, indicates what the firm does and
states its key goals
●​ Reassessment of vision statement and biz goals is required if management detects
changes in the external biz environment
○​ Goals must be achievable

9.3.3 Resistance to change

●​ As managers drive change, there will be restraining forces working against the
change
●​ Resistance to change: common reaction among managers and employees
●​ Common reasons why change may be resisted:
○​ Financial costs
■​ financial cost of implementation of change (adoption of new tech -
expensive)
○​ Redundancy payments
■​ Employees who lose their jobs due to changes are entitled to
redundancy payment (money given to employees when they’re forced
out of work because their job skills are no longer relevant)
○​ Retraining
■​ When significant changes are introduced (eg new technology)
employees must be retrained
○​ Inertia
■​ Some managers and employees resist change due to fear of the
unknown
■​ People don’t want to abandon comfort zones / predictable status quo
(current conditions)
■​ Change → feelings of lack of control, fear of unknown and uncertainty
about the future → anxiety
●​ Made worse if there is poor leadership and management
during times of change

Driving forces
forces that support the change
 Restraining forces
forces that work against the change

Force field analysis

●​ determine which forces drive / resist a proposed change
○​ For successful change → increase driving forces / decrease restraining forces
●​ Driving forces: those that initiate, encourage and support the change
●​ Restraining forces: those that work against the change, creating resistance
○​ Current conditions (status quo)

●​ Bizs considering undertaking a new project or implementing change should consider

the forces that are exerting pressure
●​ Once management has identified reasons why change is being resisted (restraining
forces), managers need to implement strategies to reduce resistance

Strategies to reduce resistance to change

Creating a culture Create a supportive business culture that reduces fear of change
of change

Change agents -​ Biz identifies individuals who are influential in biz and enlist
their help to act as catalysts for change
-​ Change agents initiate, stimulate change
-​ Internal (manager / employee)
-​ External (consultants) tasked with overseeing the
change

Effective -​ Managers must communicate with stakeholders regarding

communication the need for change and progress of the change
-​ Without clear communication regarding the change →
resistance

Positive -​ Effective managers concentrate on the needs and welfare of

leadership employees → employees less afraid to accept risks involved
with change as they trust management

Management -​ Access their skills and expertise

 consultant

Change agent
A person or group of people who act as catalysts, assuming responsibility for managing
the change process

9.3.4 Management consultants

●​ Bizs seek advice from management consultants who provide:
○​ A wide range of biz experiences
○​ Specialised knowledge and skills
○​ An external, objective viewpoint
○​ Awareness of industry best practices
●​ help bizs improve performance and develop plans for improvement and assist with
change management

Objectivity: Organizational change can be emotional and challenging, creating

difficulty for internal teams in remaining objective and open. Change management
consultants can be instrumental in providing an outside perspective, helping to
identify blind spots and potential roadblocks. These experts can also help facilitate
difficult conversations and decisions, aiding alignment and clarity.

Efficiency: Managing change can be a time-consuming and resource-intensive

process, taking internal teams away from their core responsibilities and potentially
hurting productivity. Change management consultants can help you streamline the
process, ensuring that the change process is handled both efficiently and effectively
and in a way that allows employees to focus on their core duties as the change is
being implemented.

Governments affect smes because they set rules they have to follow through azing
them andf offering them financial help.