Unit 1 Business
- Created by: darkest_soul
- Created on: 15-05-19 07:37
Motives
Motives is the drive and the objectives of an entreprenaur.
Profit
Profits is the difference between the total revenue and the total cost.
Pros:
- Shareholders dividends
- Invest in research and development
- Use money elsewhere
- lower costs
- Retained profit (interest)
Cons:
- Competitive advantage is more important, not profit
- Social/ethical motives
- Reputation with shareholders (e.g. Gov./customers/employees)
Depends on long term vs short term/ level of competition/ brand image/ customers' perception.
Social and ethical motives
Pros:
- Competitive advantage is more important
- Can charge higher prices
- Reputation with shareholders (e.g. Gov./customers/ employees)
Cons:
- Shareholders dividends (happy)
- High costs
- Invest in research and development
- Use money elsewhere
- Retained profit (Interest)
Depends on long term vs short term/ level of competition/ brand image/ customers perception
Financial motives. 1. piecework/piece rates
Definition: Pay based on amount produced
Pros:
- Motivates theory x workers.
- Improves productivity & output
- less supervision required & better efficiency
- Creates positive competition
Cons:
- Reduced quality
- Some workers may not have the ability
- Theory y workers unhappy
Financial motives. 2.Comission
Definition: Employees are paid a percentage of the value of each good or service that is sold
Pros:
- Improves sales
- Attracts best sales person
Cons:
- Some emplokyees may not have good communication skills
- Aggressive environment-employee competition
Financial motives. 3.Bonus
Definiton: Money given at the end of the year due to employee's success.
Pros:
- Encourages teamwork
- Can drive high levels of productivity
- Employee appreciation
Cons:
- Frequent bonus without performance can create a culture of entitlement
Financial motives. 4. Profit share
Definition: Where workers are given a share of the profits, usually as part of their pay.
Pros:
- Allows employees to work harder.
- lower recruitment and salary costs.
- Improve efficiency and productivity.
- Staff take more responsibility - motivated/money
Cons:
- Negative focus on profits (e.g. Lowering costs thus lowering quality)
- Less retained profit (e.g. Less expansion)
Financial motives. 5. PRP
Performance-related pay: PRP gives workers extra pay for achieving targets.
Pros:
- Boost motivation and morale
- Productivity-connected to targets
Cons:
- Employee deficiencies.
- Hard to change
Non-Financial motives. 1. Delegation
Delegation: Passing down authority down the hierarchy.
Pros:
- Strengthen the self-esteem.
- Less pressure on managers.
- You fins staff who can take more of the workload in the future.
Cons:
- Employees can feel dumped on.
- Creates situations where a person does all the work but has no authority.
- Other work/more important work needs to be put aside.
Non-Financial motives. 2. Consultation
Consultation: Asking workers their opinion.
Pros:
- Employees feel part of the organization.
- Employees feel empowered.
- Less staff turnover & recruitment costs
Cons:
- Lack of skills and knowledge of employees making the decisions.
- Time consuming.
- Some workers may not wish to be consulted but to be told what to do.
Non-Financial motives. 3. Empowerment
Empowerment: Allowing employees to make decisions.
Pros:
- Faster probelm solving
- Increased morale and productivity
- Greater involvment leads to greater commitment.
Cons:
- Lack of experience increases risk.
- Potential for decreased efficiency.
- Poor decision-making.
Non-Financial motives. 4. Team working
Pros:
- Social factor met - Maslow's theory.
- results in common direction
- more ideas are shared
- increased efficiency
Cons:
- conflict among team members.
- takes time to organize
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