Economics: Demand and Supply

The quantity of goods and services that consumers are willing and able to buy at each and every price. Demand shows an inverse relationship between the price and the quantity demanded

Weather,Advertising,Seasonal,Popularity,Complementary goods,YIncome,Substitute goods,Trends,Shocks

The quantity of goods and services that businesses are willing and able to sell at each and every price.There is a positive correlation between the price and the quantity supplied as when price increases there is more profit available for firms

If there is a change in the weather then businesses may find it easier to sell a product or service

If a product or service is heavily advertised then more people will be aware of the product meaning higher demand

Regularly occurring conditions which vary with the time of year

Trends and peoples interests are changing all the time

A good which is used in conjunction with another good or service. The good may have little value without its complement

When consumer incomes rise there is more demand for luxury goods and if there is a recession and consumer incomes fall then consumers will chose to buy inferior goods which are cheaper versions of normal goods

Goods and services that perform very similar functions to another product or service so can replace one another

a general direction in which something is developing or changing unpredictably and changes in the make-up of a population

Events which are unpredictable and unexpected

Cost of production, introduction of new,technology,indirect tax,external shock,subsidies

The total cost of materials, labor, and other inputs required in the manufacturing of a product

Taxes imposed by the government on goods and services

New technology tends to reduce production cost meaning the amount supplied will rise

A grant or contribution of money from the government in support of an undertaking or the upkeep of a thing

If the demand curve moves to the right and rises then the price will move up and if the curve moves to the left and falls then the price will move down

If the supply curve moves to the right and rises then the price will move down and if the curve moves to the left and falls then the price will move up

Measures the responsiveness of demand to a change in price

percentage change in quantity demanded/percentage change in price

Between 0 and -1 the product is price inelastic and the demand is not very responsive to the changes in price

If the number is a negative number greater than 1 then the product is price elastic and the demand is very responsive to changes in price

Brand loyalty,addictiveness,necessity,time,substitutes

Can help businesses decide on the best pricing strategy for increasing revenue and also helps forecast sales and considers the likely impact of planned price changes

If demand is higher than the supply then the price of the product will rise and if the supply is higher than the demand then the price will fall to stimulate more demand so that the supply is sold.

percentage change in quantity demanded/percentage change in income

Inferior goods-negative income elasticity,Normal goods-positive income elasticity between 0 and 1,Luxury goods-positive income elasticity greater than 1

Necessity-basic items we would expect to buy so not as sensitive to changes in income.Indulgences-things we can live without but treat ourself to most sensitive to changes in income

Sales forecast-knowledge of likely reaction to a product to a change in incomes.Financial planning-because income elasticity gives sales forecasts so can be turned into budget and financial plans.Product portfolio management-firms wanting to spread risk will look to ensure that their portfolios contain products with a range of income elasticities

The benefits lost when a choice is made

Accounting less of something to achieve more of another

Means the demand for goods are very sensitive to changes in income so when the economy is growing demand for these goods is also growing and if the economy falls into a recession then demand also falls

Means the demand tends to be more stable during the different phases in the business cycle.This makes production planning and investment decisions a little easier

A change in price causes a movement along the curve a change in any other factor causes a shift of the curve

If income decreases then the demand increases as people switch to these products to save money

If income increases then the demand decreases as people stop buying cheaper substitutes and trade up now they have more money

If income increases then the demand will increase at the same rate as consumers are now able to buy a little more of this product

If income decreases then the demand will decrease at the same rate as consumers are more careful and so they will cut back a little on these products

If income increases then the demand will increase at a faster rate than real incomes as these luxuries are the ones that most of their extra income will be spent on

If income decreases then the demand will decrease at a faster rate than real incomes as these are the first products which will disappear when consumers need to be careful

Then the revenue will fall as a small increase in price leads to a large fall in demand.

Then the revenue will rise as a small decrease in price leads to a large rise in demand

Then the revenue will rise as a rise in price leads to a small fall in demand

Then the revenue will fall as a small decrease in price leads to only a small increase in demand

generic products which are similar in form and function huge potential number of customers high production levels allow economies of scale + lower production costs can use mass media advertising have a huge market large firms operate successfully even with a low market share and large brands develop with name+logo representing key point of differentiation

specialist products and services are required changes in consumer tastes can be fast and harmful to the market consumer needs are met more precisely so higher prices can be charged high profit margins easier to enter market for firms that have limited financial resources small market successful firms achieve higher shares differentiation achieved through product features and functions
Online retailing-Growth in online retailing has varied between markets, retailers that don't switch, fail as online rivals steal sales, Product has to be able to be brought wherever consumers want to buy it, vital to have online presence

PESTLE>political,economic,social,technology,legal,environment

Consumer loyalties change as competing firms develop new products+services that offer features no rivals offer,If innovation is successful, competition is forced to change to keep up with rival,Come up with own innovation to benefit from leading change in market.

having an understanding of general trends and doing market research,Identify subtle changes and adapt products to better suit these needs,Changing earlier than rivals offers major source of competition advantage

Competition stimulates the most change and development.Increased levels of competition create various pressures for businesses such as:
1. drive down costs
2. maintain competitive prices
3. develop innovative products+services
4. maintain high quality of products+services

Operating a business means facing risks and coping with uncertainties.Risk is quantifiable so can be identified and quantified.Uncertainties are factors causing the risk, they cause a lack of certainty in future events

Approach to decision making that considers internal factors before
considering market changes
These businesses can focus on their own key strengths and can lead to new ideas consumers wouldn't have thought of
Bad if business fails to adapt products in line with what consumers want

Most likely to lead to success because it places consumers views and behaviour in the heart of decision making.

Factual, numerate data that is meant to be statistically represented of the whole market.

Opinion, not gathered on large scale so not reliable. insight to reasons of why consumers behave the way they do.

Market research doesn't provide accurate or reliable data

• sample size: too small. chance that views are over-represented by lack of people
• sample bias: way that respondents are selected can over-represent certain types of people.

Websites: gather data on visitors to website to provide info about visitor's interests
Social media: info on attitudes to product+service, relationship can be built between business and consumers
Database: quantities of data relating to consumers to identify patterns that help to explain how consumers actually behave. e.g. loyalty cards

discovering useful ways to split up a market into different groups of
consumers who share similar characteristics and needs.

•products+services can be designed to suit specific customers
• meeting customer's needs precisely allows a high price to be charged
• promotional activity is easy to target

judgements needed for market mapping are:
• choosing right variables to place on each axis
• placing rival brands in right place on map, this reflects customer opinions of the brands
Business can identify market gaps easily, gaps also show whether a gap can be filled profitably. When the gap is identified, a firm has to decide how to use marketing tools at its disposal. Image needs to be created that matches product to gap.

Products with no competitive advantage have no long term future Have a lower sales price and produce cheaper and more effectively than other rivals, yet you are still making a profit. In any market there is a gap for the low-cost producer. CA has to be sustainable in long term.Strong brand+image can achieve this but only if whole business focuses on products+services that match+enhance brand.

attempting to make your product seem different, in the minds of consumers, to any of other rival in the market.
Purpose, isolate the product from actions of competitors, allowing prices to be increased without major fall in demand+sales,helps add value to products+services

difference between the cost of bought-in goods and services and the selling price of a product.Can come about through tangible, engineering methods. Such as, creating a great design or to find a way to produce in a far cheaper way. Can be added through perception through promotional methods

knowledge of likely reaction of a product to a change in real incomes allows a business to forecast sales if it has reliable economic forecasts available. reliability of economic factors isn't strong

income elasticity gives sales forecasts so can be turned into budgets and financial plans. if a recession is forecasted then a firm producing luxuries can plan ways to reduce costs in advance of sharp sale falls.

having a portfolio entirely of luxuries or inferior goods increases danger of changes in real income having
impact on sales. firms wanting to spread their risk will look to ensure that their portfolios contain products with a range of income elasticities

aesthetics-describes look, taste texture or feel of item
function -whether item actually does what it is expected to do and extent to which it does more than the expectations of quality of performance economic manufacture = ease and economy with which the item can actually be made on scale required firms will focus on just one aspect or on all three together

offer a wide and varied range of products, updated daily. chance to reach global audience

some services will never go online, and the customer will meet face to face. previous face-to-face industries have now moved online

introduction: •sales are low and rise slowly
• growth: sales begin to rise much more quickly
• maturity: growth in sales slows and sales stabilised at their highest level
• decline: sales begin to fall until product is phased out or extension strategy launched

a medium to long term plan for extending the life cycle of a product.

adding extra features+functions,changing ingredients+materials,launching slightly different varients shape+size

targeting a different market segment, finding new uses for the product,increasing use of the product among existing customers

large businesses normally sell a range+portfolio of different products.with a wide range of different brands+products to manage, marketing,managers have to continually develop new products and get rid of
declining products.analyse product portfolio by using the Boston matrix.

high growth products,strong in market competition,needs heavy investment to maintain growth,growth will slow, and they become cash cows

low market share in high growth,have potential but need substantialinvestment to grow as big as competitors

low-growth products with high market share,mature successful,products with little need for investment,managed for continued profits so they generate strong cash flows company needs for stars

low market share in low-growth markets,not worth investing in,usually sold or closed

term used to describe the general approach to marketing used by a business

whether to attempt to sell a standard product to almost all consumers in a market

high distribution levels,greater advertising and promotion control ,degree of influence over pricing within the market

to concentrate their efforts on selling specialised products to smaller subsections of the market able to meet consumer needs more precisely

able to charge higher price than mass market products,less direct competition

more sensitive as easier to compare prices. lower pricing as lower fixed cost, price comparison sites: encourages firms to price competitively so products show up as best value on these sites. most sites are just sales outlets for producers so have to check for correct deals

level of product differentiation: high differentiation has more control over pricing, potentially allowing them to use cost-plus.
price elasticity of demand: inelastic means firms can adjust prices without seeing major demand impacts, producer of price elastic is pushed into competitive pricing.
competition level: higher the competition, less scope a firm has for moving away from purely competitive strategy
brand strength: strong brand differentiate products, reduce their price elasticity. adds up to the ability to take control over own pricing, costplus approach.

launching a brand-new product at a high price while product is unique penetration launching a new product at very low price to entice customers to try it.

high price creates desirable image early buyers pay high price for exclusivity generates rapid profits and helping recover costs of innovation quickly deter some as seen as rip-off early buyers frustrated as price falls later image can suffer when price falls

deter some as seen as rip-off early buyers frustrated as price falls later image can suffer when price falls

launching a new product at very low price to entice customers to try it

price encourages lower-risk product sampling boost sale volumes, cutting production costs high volumes can
persuade retailers to buy, boosting distribution encourages habit of buying

image can be seen as cheap upmarket retailers unwilling to stock create price sensitivity among customers, higher price elasticity

can add value,provides point of differentiation,reduce manufacturing costs, boosting profit margins
improves brand image and therefore brand loyalty

environmental concerns: waste minimization+recycling
ethical sourcing: components+ingredients come from ethical sources.

more basic items that we'd expect to buy so they're not as sensitive to changes in real incomes

things we can live without but treat our self to, most sensitive to income change

negative income elasticity

positive income elasticity between 0 and 1

positive income elasticity greater than 1

The way employees are arranged to achieve the objectives of the firm and it shows communication flows and the hierarchy of the business can be described as tall,flat or matrix.

managers are in charge of relatively few workers this allows close supervision and should mean good communication.

Communication from the top to the bottom is slow and there is slow decision making larger possibility of miscommunication.

Communication from top to bottom should be quick and decision more likely to be made quickly

Communication between manger and subordinates is likely to be worse and supervision levels of workers is likely to be worse could be a good thing

the number of subordinates that a manger is responsible for

the way authority and power are passed through the layers of hierarchy

The power to instruct make decisions and control resources

operates for specific projects and takes people from different areas of the business

ensure good communication across many functional areas and helps to see different points of view across the business can be motivational and most likely to lead to a successful outcome

takes time and therefore costs money and cause cause conflict for workers who ay be unsure of which work to do

means keeping major responsibilities at the centre of the organisation

involves giving decisions making power to an organisation

few decision makers working at the head office so they have tighter control over the branches and quicker decisions are made as there is less need to get opinions from the branches and helps to maintain brands for businesses meaning that local branches can not respond to specific customer needs in certain areas.

a lot of decision making is delegated to the individual branches and frees up a lot of management time at head office and reduces uniformity and allows the business to adapt to the local area ,can provide motivation for managers at branches as their job may be more interesting, puts the emphasis for decision making in the hands of local managers who may not be capable

Decision making speed and accuracy,communication,supervision,efficiency of the business ( the amount of waste),relationship between departments,promotion prospects

identifying a vacancy and attracting a suitable candidate,can be external or internal

selection process identifying the best candidate

Identifying the vacancy,producing a job decription and a person specification,advertise the vacacny and short listing the applications,check references,assessing candidates,offering the position

Lower costs,better reputation,quicker,less induction pool of applicants,time,costly.

Less wide ranging,can cause friction

wide pool of talent,more applicants,new ideas

higher costs,friction,good interview may not equal good candidate.

Physical=appearance health and communication skills,Attainments=education/training,Experience=intelligence and analysing and evaluating skills in certain situations,Aptitudes=competency in certain skills(maths,ict,etc),Interests=social life,Hobbies,Disposition,Independent,Maturity Humour,Circumstances,Geography availability.

making job description and person specification,advertising,fees to agencies.

time,expenses,fees to assessment centres.

Cost of paying employee,cost of paying trainer,fees to external providers.

Helps with employee motivation,makes firms more attractive to work for,could mean workers may leave to take up other opportunities.

How a business trends its staff affects performance,motivation,turnover and mangement styles.

staff are seen as an expense/cost,best used in a tall structure,centralised decision making,Temporary or zero hours contracts,a lot of minimum wage workers will face this.

staff are seen as an asset to the business,lots of opportunities for development,training and promotion,empowerment,consultation,responsibility,however expensive best used in creative industries.

Output per input per time period(input is usually labour,but can also be capital,output/workers hours,

age+ maintanance,training of workers expensive,quality of materials,hours of work,breakdowns and powercuts

Output/worker hours

Training+skills,motivation,competition of the job

Increasing the output from existing input, machinery,materials,people

Increasing capacity utilisation, training of staff,increase machinery,optimising the resource mix,lean production techniques

Will reduce unit cost and can be achieved through training,motivation,technology,better working practices that are designed to reduce waste,better recruitment,

Incresing speed may mean a reduction in quality this will impact the customer satisfaction,companys reputation,waste.

same pay,more work done,benefits the business not employers,more work means increased stress so decreased motivation

Number of employees who left/ average number of employees x100

flexibikuty comes fin terms of skills,sde and location.These need to be able to change when there are changes in demand for products.

when workers are able to carry out a wide variety of tasks and jobs the reason for this is to be able to cover work when staff are absent but this can be expensive and could be a waste.

are cheaper and can job share

can be full time or part time used to meet short term needs less security so may not care and can be more expensive

Cheap,less contrast,easier recently with technological,developments,very much depends on the business/job.

using other firms to produce the god or secure really helps to fluctuations in demand,questions over quality and cost.

contract of employment is terminated due to a breach of terms, incompetence.

position still exists,requires recruitment,unfair dismissal,termination of a contract for no reason.

dismissal when the job no longer exists ,business closes,restructing,relocation,due to new technology and it requires a payment from business to employees.

a really important feature of how the business and its workers interact on a daily basis and there are a number of systems that can be put in place to help communication between these two parties like having a representative connection between the employer and the employees,if the business is large management of businesses cannot speak to each individual employers on a regular basis,therefore a graoup is elected to speak on behalf of the workers,this could take the form of work councils or trade unions.

national organisation with an instruction to protect their members rights and to improve their pay and working conditions.

secure jobs,maximising pay levels,ensuring health and safety is adhered to,ensure that staff are treated faulty

Improve the performance of the business,Improve international competitors,implement change,as the working conditions are better staff turn over should be reduced,better working conditions helps to increase motivation,the aim of trade unions is to avoid disputes between businesses and workers and tries to intervene as much as possible to avoid this.

Occurs when there is disagreements between businesses and the employe/trade union,industrials action may occur to solve this this can mean work to rule,strike and it is much better to solve a dispute before an action is taken

The asier the intervention comes the more likely it is to be solved quickly,ensuring communication is clear,if no agreemend is reached ,ACAS can be called in to come up with a solution for both parties.

some work places don't have work council or trade union involvement this means the employee has to work with management individually this means individual employers get individual responses some workers may get paid more than others,allows managers to make decisions based upon how worthy an employee is for a pay rise.

influencing factors to get people to behave in a way as to achieve the most amount of work

Salary/wages,Bonuses:paid when the company or individual does well,Comssion:% of sales,Piece rate:A payment per item produced,Profit share,Performance related pay

Consultation,empowerment,team work,flexible working,job rotation,job enrichment

Workers are more productive (output per time period),low labour turnover,high retention ( employees not leaving retaining them),high productivity and lower costs=less average costs,lower absenteeism,more compliance (no arguing doing as told),better service for customers,better team work

Thought that employees should be controlled and money is key best used in mass production for tedious,boring,repetitive jobs,piece rates

Workers need a sense of purpose and belonging therefore they should work in group,financial incentives are not really important,social needs are more important than money,workers especially well in creative industries and where teamwork matters and involves consulting on decisions,taking an interest in workers and their work encouraging team work and giving responsibility to workers.

Some factors motivate ,others demotivate if they are not present.

Achievement,recognition,work,responsibility,promotion,growth

Payenefits,relationships,working conditions,status,security

single product brands, little or no attempt to push company name, focus on single brand to provide focus

brand name used across range of related products,benefit is using umbrella brand name to encourage sales of each

company name as brand,convinces customers that all products share similar benefits/drawbacks

added value,ability to charge premium prices,reducing price elasticity of demand

USP/differentiation,advertising,sponsorship,use of social media

viral marketing,social media,emotional branding

deciding price by adding a desired % onto total costs per unit price charged = unit cost + (% mark-up)

this should guarantee a profit made on each unit sold good for market leading firms with little to worry about competition.

ignoring market may mean unrealistic price generated.

that sets price low enough to force a competition out of business

once a rival has been forced to close, prices are pushed higher up, increasing margins.

if proven to be designed only for driving rivals out of business, it is illega only works on small, local scale.

charging a price at the market average or at a discount to the average price in the market

should ensure that price will not put customers off buying the product

have little control of the price they charge and the revenue that's generated

tactic used to make fine-tuned decisions on the price to charge, set below major psychological levels £9.99 instead of £10

help nudge customers to make the purchase helping them to believe they aren't spending £10.

little effect on planned purchases and may mildly annoy customers

high differentiation has more control over pricing, potentially allowing them to use cost-plus.

inelastic means firms can adjust prices without seeing major demand impacts, producer of price elastic is pushed into competitive pricing-competition level: higher the competition, less scope a firm has for moving away from purely competitive strategy

strong brand differentiate products, reduce their price elasticity. adds up to the ability to take control over own pricing, cost plus approach.

introduction phase key decision; penetration or skimming. prices change as product moves through growth and into maturity

pricing below unit-costs leads to loss making, unsustainable in long term. balance must be struck between pushing price above costs to maximise profits and ensuring price is relatively competitive.

more sensitive as easier to compare prices. lower pricing as lower fixed costs.

encourages firms to price competitively so products show up as best value on these sites. most sites are just sales outlets for producers so have to check for correct deals

traditional physical channel,direct to retailer,be your own retailer,direct online,online retailer

pushes selling prices up as wholesalersetailers will both add their own mark-up,help smaller firms achieve wide distribution across many outlets

exert complete control so set up retail outlets,suffers significant costs running outlets

large producers ignore wholesalers and go direct, saving on wholesaler's mark-up instead exposes them to negotiation with retail chains on price and credit terms

sales are low and rise slowly

sales begin to rise much more quickly

growth in sales slows and sales stabilised at their highest level

sales begin to fall until product is phased out or extension strategy launched

significant cost producer keeps full price paid but excludes possibility of selling to consumers who are uncomfortable buying online

smaller who are unable to afford expense of building slick e-commerce platforms existing sites allow online retailing without the same investment, eBay does have a fee though.

a medium to long term plan for extending the life cycle of a product

adding extra functions/features,changing ingredients/materials,launching slightly different variants on the product - shapes/sizes

targeting a different market segment,finding new uses for the product,increasing use of the product among existing customers

permanent contracts,develop staff skills with training,pay staff a salary ,builds loyalty from staff

flexible contracts, perhaps zero hours,minimal training offered,low pay, often at an hourly rate,often leads to a high staff turnover rate

ability of a business to adapt its operations to change in demand patterns

rain staff for more than one role so can replace other staff. brings motivational benefits

short-term contracts. 1/3 UK workforce is part time. can fit work in alongside other commitments.

asset. staff choose when they work or where they work, developments in ICT made this possible.

using their businesses to perform business functions to increase capacity during high demand. demand surges can be met quick. may take time to work out arrangement.

reduction in demand or incompetence/disruption from staff, first case, staff will be made redundant,reduces ongoing costs however have to compensate those being made redundant,not a good way to resolve cash flow problem as significant cash outflow in short term,dismissal happens when an employee has been warned but is not up to the job or has breached employment terms,fair dismissal means no payment

when employer needs to discuss and agree changes with a group individual approach:treats on individual basis, stars singled for better treatment ,more time-consuming

existing staff leaving, growth of business, new activities needing new skills,Initial recruitment process designed to attract potential applicants,Selection part reduces applicant numbers

cost of recruitment method and size of budget, location and characteristics of likely candidates

quicker and cheaper than external recruitment,chance of promotion may boost morale within a business that often recruits internally,skills and attitudes already known

limits number of potential applicants,fails to bring in new ideas from outside firm,creates vacancy elsewhere that needs to be filled externally

most common,face to face or on the phone. holds a conversation,allows follow up questions, and freedom of areas to ask about

brings objectivity to selection process, aptitude tests can uncover how high skill levels are. profiling helps identify personality type of candidates

range of selection methods can be combined to better assess their abilities and performance in a stimulated environment

bias can skew results. undermines usefulness of method when used on its own

objective selection methods can mean screening out good candidates that don't fit the traditional profile

more expensive and only used for senior positions

boosts productivity and innovation,enhances business flexibility,motivates staff who feel they've been invested in by the business

large financial costs,normal business operations can get disrupted,better trained staff more attractive so other business may try to steal

tailored to company's own ways of working,after a mistake, get instant advice from fellow workers,saves the time and cost of sending people out

less knowledge acquired on methods used elsewhere,may take a lower priority as staff focus on production targets

helps in making sure work is co-ordinated effectively and organisation is following correct strategic path,most firms have a hierarchical structure; main decisions at top and decisions into practice at bottom.

decisions made at the top, restricting autonomy for local managers, but giving consistency to customers

decisions made locally, close to customers, giving local managers more responsibility, making them and staff more motivated

one with many layers and narrow spans of control

fewer levels but wider spans of control,forces increased delegation by managers who are unable to closely supervise far higher number of subordinates,leads to far greater motivation from staff who are expected to use their,own initiative,reduces number of layers between the top and lowest level,easier for senior managers to develop real understanding of challenges staff face every day, increase ability of firm to respond to changes in customer taste,boosting competitiveness.

allows close supervision of staff,communication within the immediate team is likely to be excellent,many layers of hierarchy means plenty of opportunity for promotion to the next level

staff may feel over-supervised and not trusted by their management,communications as a whole may be poor with so many layers for messages to pass through,with narrow spans, there may be little scope for staff to use their initiative

may have more than one-line manager,cross functional project teams are formed, staff from different departments working on a project

working together allows expertise from each department to be immediately available, preventing possible delays,focus should be the success of project rather than making functional department,more important than others,team members developed as you learn from views of colleagues in other departments

each project member will have at least 2 bosses,2 bosses means it can be unclear whose order take priority,getting staff from different functions areas to agree can be difficult Impact of structure on motivation and efficiency

poor communication leading to mistakes,duplication of tasks,tasks being overlooked and not completed,departments failing to work together effectively structure can affect motivation by encouraging or preventing following scope to show initiative,extent of delegation,responsibility,receiving all information required to perform a job,opportunities for promotion

money motivates. people only work in order to maximise their own income. for people to work harder, money has to be the incentive (piece rate/commission).approach was followed by ways of work being organised as a whole:break task down into small, repetitive parts,design a payment system that rewards worker every time they complete a task workers felt like pieces of machinery and denied opportunity to use their minds at work. resentful of level of control that the work process and payment method gave workers.

theory based on importance of interpersonal relations as a factor affecting productivity factors identified were: workers gain satisfaction from certain freedom level and control over their working environment, workers who feel part of a team work more effectively,group norms (what team players expect of each other) have a strong influence over workers behaviour and productivity,managers taking an active personal interest in their employees has a beneficial impact on workers performance

his beliefs about what explains human behaviour, both in general and workplace,basic needs at bottom and higher need levels at top. meeting each level of needs is a priority until they are met, when a person will focus on next unsatisfied level of needs

relies on accepting his definition of motivation doing something because you want to do it factors affecting people at work can be grouped into 'motivators' and 'hygiene factors. providing the opportunity for staff to experience motivation can lead to job satisfaction.

achievement,recognition for achievement,meaningful, interesting work,responsibility,advancement a sense of growth as a person

relate to the context, environment where you expect an employee to do their job. must be met so worker doesn't feel dissatisfied.

worker will give movement (not their best — only tough to gain reward or avoid threat)or employee resentful of their job and no matter how interesting the job is, poor performance and will look for another job

employees can focus on their job and will do it to the best of their ability

encourages speed as the quickest staff earn the most

leads to quality problems as staff rush to complete as many tasks as possible

incentivises staff to sell as much as they can

leads to mis selling as staff try to sell more expensive products or services to maximise their commission, causes customer dissatisfaction

provides excellent way of offering staff a valued extra thank you

large bonus can distort staff behaviour, emphasising the need to each the bonus target by whatever means possible

aligns staff goals with business goals

hard-working staff may resent others who receive the same profit share bonus without putting in the same amount of effort

allows individuals performance to be clearly rewarded financially

employees may feel the process used to decide on the award of PRP is unfair or biased against them

passing decision making power to staff over how to perform a task,allows staff to meet Maslow's esteem and self actualisation needs as well as being a motivator for Herzberg and problems could be staff must have the skills and experience to make good decisions

passing even more power to staff, to the extent where they may be given authority to decide what jobs need doing,allows staff to meet Maslow's esteem and self-actualisation needs as well as being a motivator for Herzberg,the need for appropriate skills and experience is even greater than that needed for successful delegation

seeking staff's opinions before making a decision,may help to meet esteem needs on mallows hierarchy problems may be many decisions will appear to go against the views of many staff — consultation may be seen as a meaningless process

allowing staff to work in a group rather than individually,allows staff to meet maslow's social needs,recognises mayo's belief that human relations are necessary to motivate staff the problem may be the performance of more productive individuals may be dragged down to a team average level

allows staff to adjust where and/or when they work to suit their lifestyle,helps to ensure,maslow's lower-level needs are met, and can be a key factor in meeting Herzberg's hygiene needs,co-ordinating the workers can be harder to achieve

giving staff added responsibility and challenge by widening the scope of their job,meets Herzberg's motivators and Maslow's top two levels of need this could mean some staff may view extra responsibility as an unwanted burden

moves staff between different tasks of the same level of complexity helps to prevent boredom little theoretical justification this is because prevents the potential productivity benefits that come from specialising in one task

The ability to influence and direct people in order to meet goals and leaders inspire and motivate.

is the process through which resources are used and decisions made in order to meet objectives mangers are the people who set objectives and try to achieve them and allocate resources and run the business.They then review what they have achieved ,monitoring performance against objectives and take action.

Command and control and decision making

Inspiring employees,creating the vision for others to follow,shaping the values of the business,deciding the culture of the business and building effective teams.

Leaders inspire workers,build relationships,take risks and have followers.Managers enact the plan,use their authority,manage risks,have subordinates.Ultimately these roles ae closely linked and some leaders are managers and some managers are leaders,but they don't have to be.

Normally board of directors they set corporate objectives and strategic directions and the board is accountable to the shareholders,led by the CEO.

Accountable to senior management,run each department within the business.

Supervisory role,monitor and control day to day tasks and may manage other workers.

issue instructions and expect to be obeyed know exactly what they want done and pay little attention to what workers say • one-way communication, top down, managers not expectingesponding to feedback • Taylorite view of staff • payment by results e.g. piece rate • recruitment and training based on skills; appraisal linked to pay

role of traditional father figure • care about the best interests of staff/family and listen to their views • leader makes the decisions with staff beliefs in mind • mayo's work on human relations and Maslow's lower and middle order needs • consultation with staff • salary plus extensive fringe benefits • emphasis on training and appraisal for personal development

expect staff to be involved in decision-making • delegate authority to subordinates, believing it's the best way to get the job done • some democratic managers will agree clear objectives with staff, then let them get on with doing the job in order to achieve the objective • belief in Maslow's higher order needs or in Herzberg's motivators • salary, perhaps plus employee shareholdings • recruitment and training based on attitudes and teamwork

Faire-leader has little input on a day to day basis,almost all power is delegated and employees have the freedom to do what they think is best this is most effective when staff are well motivated and staff must also be willing to take on responsibility this does not mean that staff have all of the responsibility as the leader is still accountable.

Theory X managers> Believe that workers are fundamentally lazy and don't like work so therefore workers need lots of close supervision and need to be constantly told what to do these are best suited to centralised structures.

Theory Y managers>Believe workers want to enjoy work and workers like to take responsibility for their work and are capable of organising themselves.

Society has changed,workforce are now more educated/skilled,organisational structures have changed,legislation,motivation has a more important role.

personal experience,personality,confidence in workers,confidence,security,type of organisation,effectiveness of team,skills+experience of the team,Pressure

Totally depends on the situation,autocratic is good when the business is in trouble ,however this style is completely ineffective when leading a large team,in a decentralised structure and it also matters at what stage the business is in, start up v established

main sources of business ideas are: observation, thinking ahead,personalusiness experience, innovations, sources of opportunity are based on changes in the world such as:technology, society, economy

successful entrepreneurs' habits in running a business:measure performance in an unbiased way,eye for detail,ability to step back from day-to-day issues,love what they're doing

over estimating demand,failing to raise sufficient finance,not recruiting enough or the right people

entrepreneurs are loosely defined as those who can generate and develop new business ideas,larger firms want entrepreneurs, they want to nurture innovation within their business as a way of maintaining a competitive advantage.

funding: banks less willing to lend money to small businesses and startups, high risk for low return as generally are unprofitable. no lending=no entrepreneurs,gender bias: 3x likely to be male than female. means much entrepreneurial talent is going to waste,lack of public sector support: public sector still views entrepreneurs sceptically, suspecting tax avoidance or motives based on greed

risk and uncertainty characterise environment for many firms because of wide number of variables that can't be controlled/influence,entrepreneur has to understand the ways uncertainty affects the business,main cause of uncertainty can be reduced by introducing new products and reducing the dependence on sales of one brand

main characteristics of entrepreneur: understanding the market,determination, passion, resilience, ability to cope with risk.Common skills: financial skills, persuasive ability, problem solving skills,networking skills

profit maximising: continually seek and get the most profit from each transaction. causes long term problems with customers feeling exploited/cheated with substandard work caused by skimping on materials and workmanship,profit satisficing: need to accept lower than possible profits in short term to build brand or reputation.independence: avoids need of taking orders from others or fit in with company policy.home-working: another form of independence, fits in with family commitments.ethical stance: strong beliefs how business should be done so set up their own.social entrepreneurship: to make positive contribution to community, some pretend whilst profit is the goal

person who starts and runs business without turning it into a company. law sees business and owner as the same. owner is personally liable for any debts built up in running their business. owner has to pay personal assets to repay costs

owner has full control over decisions owner keeps all profits made minimal paperwork needed to start up

owner has unlimited liability for debts hard to raise finance

sole trader but with several owners. helps to raise finance as each partner can bring capital into business. responsibility can be shared, among skills and experience. unlimited liability for debts, like sole trader.

more owners can allow more finance to be raised partners may bring varied skills and experience shared burden of responsibility

partners have unlimited liability potential for disagreement

offers great safety net from which to build much larger business,without protection, far fewer investors

no minimum share capital. increased legal formalities include having accounts independently audited each year at probable cost of several thousand pounds,public limited company

sell shares via stock market to general public. allows them to raise vast sums of share capital. must have minimum £50,000 share capital. regulatory requirements involved in floating company onto stock market. continuing to meet annual requirements of stock market will cost tens/hundreds times more than running a Ltd.

offers opportunity to start business using tried and tested formula. cheap and quick way of expanding business rapidly