VCE Business Management cheat sheet

Business: an organisation that combines resources to produce goods or services to satisfy needs and wants, usually aiming to make a profit.

Needs are essential for survival (food, shelter); wants are discretionary desires (luxury goods); scarcity forces choices about resource allocation.

Three production factors: natural resources (land/raw materials), labour (human effort), capital (machinery, equipment, finance); entrepreneurship organises them.

Sectors: primary (extraction), secondary (manufacturing/processing), tertiary (services), quaternary (knowledge/information); economies shift through these as they develop.

Sole trader: one owner, unlimited liability, simple and cheap to establish; partnership: 2-20 owners, shared liability, governed by a partnership agreement.

Company: separate legal entity, limited liability, perpetual succession; proprietary (Pty Ltd) is private, public (Ltd) can list shares on the ASX.

Business objectives hierarchy: vision/mission, then goals, then SMART objectives (specific, measurable, achievable, relevant, time-bound).

Stakeholders (owners, employees, customers, suppliers, community, government) hold competing interests; conflict is resolved by prioritising objectives and legal obligations.

Business life cycle stages: seed, start-up, growth, maturity, decline/post-maturity (renewal or closure); each stage changes cash flow, staffing and risk profile.

Management functions (POLC): planning (setting objectives), organising (allocating resources), leading (influencing people), controlling (monitoring and correcting).

Management styles: autocratic (centralised, fast decisions, low morale), democratic (consultative, higher commitment), laissez-faire (hands-off, suits experts), situational (adapts to task and people).

Maslow's hierarchy (physiological, safety, social, esteem, self-actualisation) predicts that unsatisfied lower needs dominate motivation; satisfied needs stop motivating.

Herzberg: hygiene factors (pay, conditions, policy) prevent dissatisfaction but do not motivate; motivators (achievement, recognition, responsibility) drive satisfaction.

Goal-setting theory: specific, difficult but accepted goals with feedback raise performance more than vague 'do your best' instructions.

Corporate culture: shared values, beliefs and behaviours; strong cultures align staff, but can resist change and create groupthink.

Training types: on-the-job (coaching, job rotation) is contextual and low cost; off-the-job (courses, simulations) builds transferable skills but risks lost productivity.

Performance management cycle: set KPIs, appraise against them, give feedback, develop and reward; linked to pay and promotion to reinforce behaviour.

Change management (Lewin): unfreeze (create readiness), change (implement), refreeze (embed new norms); resistance arises from fear, habit, and perceived loss.

Operations management converts inputs (materials, labour, capital, information) into outputs (goods/services) through a transformation process that adds value.

Manufacturing is capital- and inventory-intensive with tangible output; service operations are labour-intensive, intangible, and inseparable from the customer.

Productivity = outputs ÷ inputs; efficiency = minimising resources per unit; effectiveness = degree to which objectives are achieved.

Process layout choices: job production (one-off, custom), batch (groups of identical units), mass (high volume, standardised), continuous (uninterrupted flow).

Quality approaches: quality control (inspection at end), quality assurance (process standards), total quality management (continuous improvement, employee involvement, zero defects).

Inventory management: JIT (minimise stock, needs reliable suppliers), FIFO (first in first out, reduces spoilage), safety stock (buffer against demand variability).

Supply chain management: supplier selection, lead time, logistics, and vertical integration decisions determine cost, flexibility, and reliability.

Technology in operations: automation (fixed program), CAD/CAM, robotics and CRM systems raise consistency and speed but require capital and reskilling.

CSR and sustainability in operations: triple bottom line (profit, people, planet), waste minimisation, ethical sourcing, and compliance with WHS and environmental law.

Business transformation is a fundamental change in strategy, structure, processes, or culture, not incremental improvement.

Drivers of change: technology, globalisation, deregulation, demographic shifts, competitor action, and changing customer expectations.

Globalisation effects: larger markets, cheaper inputs, offshoring and outsourcing, but exposure to exchange-rate risk and supply-chain disruption.

Digital disruption: new entrants use platforms and data to undercut incumbents; incumbents respond with digital strategy, partnerships, or pivots.

Kotter's 8 steps: urgency, coalition, vision, communicate, empower, short-term wins, consolidate, anchor in culture.

Restructuring options: downsizing, delayering, outsourcing, mergers/acquisitions, joint ventures; each changes cost structure, control, and culture.

Innovation types: incremental (improve existing), radical (new to market), disruptive (initially inferior, cheaper, then displaces incumbents).

Managing resistance: communication, participation, support/training, negotiation, and only as a last resort, coercion.

Evaluation of transformation: compare KPIs before and after (profit, market share, productivity, staff turnover) against the original objectives.