AQA AS Business Studies Revision Notes - Unit 2 (BUSS2)


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Business Studies: Unit 2 Exam PracticeRevision Notes
Business Structures
Hierarchy: A series of levels in a business where each level has responsibility for and authority over the levels below.
Tall Structure: Lots of levels. Narrow spans of control. Messages take a long time to get from one end to the other. A lot of paperwork.
Flat Structure: Few levels. Wide spans of control. People given more responsibility and freedom. Managers get overwhelmed by amount of
people reporting to them
Span of Control: The number of people who report directly to a manager.
Centralized Structures
All decisions are made by one person.
Business leaders tend to have experience, managers get an overview of the whole business, and senior managers understand central
budgeting restrictions and can make decisions to save the whole business money.
Not many people are expert enough in all aspects of the business, can be demotivating for other employees, decisions can take a long time.
Decentralized Structures
Shares out authority to more junior employees (delegation) and is usually used in national and multinational organisations.
Motivates employees, they can use expert knowledge of their own sector, decisions made more quickly.
Subordinates may not have enough experience to make decisions, inconsistencies may develop between sectors, junior employees may not be
able to see the overall situation.
When a business removes a layer of its hierarchy (usually from somewhere in the middle).
Helps lower costs.
Flatter structure broader spans of control.
Gives junior employees enhanced roles with more responsibility.
Measuring Workforce Effectiveness
Human Resource Management
Ensure the business has the right number of employees and that they're of the right quality in terms of qualifications and skills
Plans how to recruit staff
Strategies can be shortterm (seasonal employees) or long term
How to terminate staff
Performance management system: Labour productivity, absenteeism, labour turnover.
Labour Productivity
Labour productivity = Output per period
Number of employees
The higher the labour productivity, the better the workforce is performing
As labour productivity increases, labour costs per unit fall
Can be improved by improving worker motivation and also by training employees.
Consequences of Increasing Productivity
Paying workers a piece rate encourages staff to produce more, therefore managers should take care that quality doesn't suffer in the process.
Means redundancies and job losses unless sales increase.
Must balance productivity with things like longterm worker motivation.

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Absenteeism = Number of staff days lost x 100%
Number of working days
Low is best
Analyse figures in the context of the job (e.g. police officers may have higher figures considering the stress that comes with the job)
Causes include poor working conditions, poor relationships, stress and poor motivation.
It increases costs
Ways to decrease job enrichment, improving working conditions and relationships, flexitime etc.…read more

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Motivating the Workforce
Taylor and Scientific Management
Thought workers were motivated by money
He did time and motion studies, timing work activities with a stopwatch
He favoured division of labour ­ small repetitive tasks (scientific management approach)
Believed financial incentives would motivate workers and raise productivity
Increased productivity meant less workers needed they were worried about losing their jobs
Could lead to a reduction in quality so supervisors were needed
Wouldn't work for a modern business, would be seen as exploitation
Piece rate pay is…read more

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Financial Incentives
Weekly wage: The more hours you do the more you get paid.
Piecework: Get paid per finished item.
Commission: Get a percentage of the sales they achieve.
PerformanceRelated Pay: Gives more money to employees who reach targets.
Fringe Benefits: Staff discount, employed contributions to employee pensions, private medical insurance, a company car, profitsharing
schemes, shares in the company.
NonFinancial Motivation
Job Enlargement: Gives employee more work at the same level. Aka, horizontal loading.…read more

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Quality Awards
BS 5750: Given out by the British Standards Institution to firms with good quality assurance systems
ISO 9000: European quality award (equivalent to BS 5750)
To get the award, businesses must set quality targets and then make sure their production process achieves them. Should continually monitor
production quality. Can cost money.
BSI don't care too much about what the targets are, only that they meet the industry standard and have systems in place to meet their own
targets.…read more

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Capacity: Need suppliers who are able to meet any peaks in demand
Reliability: They need to deliver on time, or give plenty of warning if they can't
Flexibility: Need to be able to respond easily to changes in a company's requirements.
Relationships with suppliers
Linked Networks: Shared IT systems such as inventory (stock) control management allow both the company and its supplier to view stock
levels, so they both know in plenty of time when more supplies will be needed.…read more

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Advantages and Disadvantages
Increased productivity, improved quality, reduced waste, more effective and efficient delivery, more effective marketing, more productive staff
utilisation, reduced admin costs, better communications.
Initial costs of technology may be high, technology requires constant updating in order to stay current which can also be expensive, may create
an increased need for staff training.…read more

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Effective Marketing
Identifies customers needs and wants
Tries to anticipate what they'll want in the future so that the business can get one step ahead of the market
Ensure the business supplies goods and services that customers want in order to make a profit.…read more

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Boston Matrix
Question Marks: New products with low market share and high market growth. Could succeed or fail.
Stars: Have high market share and high market growth. In their most profitable growth stage.
Cash Cows: Have high market share but low market growth. In the maturity phase. Bring in plenty of money as costs are low.
Dogs: Have low market share and low market growth.…read more

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Other things the consumer considers to create a USP. E.g. customer service, moneyback guarantee's and availability of spare parts.…read more



found this reallly helpful!!

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